"Over the next seven years, rising pension costs will require cities to nearly double the percentage of their General Funds they pay to CalPERS.... Without fundamental changes, cities will have to choose between cutting services or raising taxes.... There are three things we should do now ... First, cities and the state should set aside 2 to 3% of their budgets to pay down their unfunded liabilities. Second, cities and the state should look for cuts and new revenue sources now, not wait until pension costs begin to crowd out funding for basic services. Third, and most importantly, we must revise the California Rule."

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