Governors Brown of California and Christie of New Jersey were joined together in the news after Christie criticized Brown’s leadership Monday, but oddly the two are connected again one day later because of Christie’s keynote address to the Republican National Convention and Brown’s release of his pension reform package the same day.
Brown declared that his measure would save $18 to $30 billion in 30 years if implemented. Christie said in his speech when he took on public sector unions to reform pension and health benefits he saved taxpayers $132 billion over 30 years.
Christie said he included retirees’ health care in the reform, which Brown did not. Health care for retired public employees, free to some former public workers, is a soaring cost to taxpayers.
Yesterday, CalPERS reported savings will be in the $40 to $60 billion range for Governor Brown’s plan. Frankly, I don’t know if any of the numbers being thrown around can be verified, but I’ll be a little suspicious of CalPERS number coming from folks who still believe investments will bring a 7.5% return in these times. However, even at $60 billion, it is less than half what Christie says the less populous state of New Jersey will save.
Using the Christie numbers as a yardstick, it seems the reforms Brown put forward are wanting. That appears to be the consensus of those who follow the efforts to cut down California’s unfunded pension liability.
Dan Borenstein of the Contra Costa Times, who’s made a career of late of delving into pension issues, tagged the governor’s proposal, “pension reform lite.”
A Sacramento Bee editorial on the subject headlined the pension deal, “modest at best.”
And, California Pension Reform president, Dan Pellissier on Fox and Hounds declared the pension reform to be “meager.”
Let’s acknowledge that the governor’s proposal contained some good reforms and is a step in the right direction. But, as the analysts commented, it doesn’t seem to be nearly enough. The proposal falls short of the governor’s own proposal from last October, which he called minimal at the time.
With California sitting on anywhere from a $250 billion to $500 billion unfunded liability for retirement costs depending on who is doing the measuring, $18 billion or even $60 billion savings over 30 years is something, but not nearly enough, especially considering the Christie figure of $132 billion. Such a number would be much better for California taxpayers.