The governor has put the question of out-of-control public employee pensions square in the middle of the budget fight. Good for him. The pension question must be tackled and there is no better time.
While public employee unions create a list of 31 tax increases and cry “corporate greed,” in justifying some of the tax increase proposals, it is time to balance the discussion with an examination of what might be labeled “pension greed.”
I don’t know of anyone in the private sector who enjoys retirement benefits anywhere close to those offered to retired public employees in health care benefits or early retirement age. Many who use Social Security as their retirement fund are doing the math and putting over retirement not at age 62 or 65, but hoping they can reach age 70 to get a fuller benefit. That payout still pales against the public retirement dollars paid out at age 55, or even 50 for many public employees. Let’s not even talk about the health benefit.
And, this discussion doesn’t cover some of the egregious situations, in most cases at the local government level, in which some public employee retirees receive more in retirement than he or she got on the job.
The fact that the new pension plan proposed by the governor only covers new hires and not current government employees should be acceptable to all.
The public employees who constantly rally for funding for services they provide should see that this two-tier plan supported by the governor will allow billions of dollars for those services in coming years. As the governor’s special adviser on jobs and the economy, David Crane, put it, the state could save as much as $95 billion over 30 years. Looked at another way, that is billions of dollars that can be used to fund state services.
Reforming the public pension system is not removing some long time benefit from the employees. It was only a decade ago that the state went off track in what Dan Walters called a “milestone on California’s meandering journey toward fiscal insolvency” when the state made huge increases in state employee pensions. Good pensions were always considered a part of the package a public employee should receive because the public sector employee was paid less than a private employee counterpart. That is no longer the case.
The governor’s plan is measured and appropriate. It still leaves the state’s employees with one of the best retirement plans in the nation, while saving taxpayers billions. Now is the time to get it done.