It’s great to finally see the pension reform debate on the front page. Last week Governor Jerry Brown unveiled a pretty good proposal. It didn’t go nearly far enough to solve the problem, but he certainly went further than most people expected. Also last week, the Legislature held its first hearing on the issue. No one expects them to do much, but it’s nice to know they are finally looking into the problem.
Against that backdrop, yesterday California Pension Reform, a group including myself, former state Finance Director Mike Genest, and former Assemblyman Roger Niello, filed two pension reform initiatives with the Attorney General. After we get the titles, summaries and fiscal reviews back, we’ll put the best option on the November, 2012 ballot. Specifically, the two proposals will do the following, with a couple key differences:
- Requires current government employees to pay their fair share of retirement benefit costs, especially while their pension funding levels are less than 80% — deemed “at-risk” under federal regulations
- Makes retirement benefits for new government employees more comparable to private sector benefits — reducing taxpayer responsibility for pension fund losses
- Stops the accumulating debt caused by unfunded pension and retiree benefit liabilities — official figures are more than $20,000 per California household
- Raises retirement ages to 67 for non-safety employees and 58 for safety employees
- Requires pension boards to be more transparent and accountable, with protections against conflicts of interest
- Ends abuses such as salary spiking, retroactive benefit increases and payment holidays
As the Legislative Analyst, the Little Hoover Commission, and countless academics have pointed out, our unfunded pension liabilities are crushing every other part of state government. Every new employee promise we make for an unsustainable government employee pension squeezes more money out of the education, parks, public safety, and social programs Californians depend upon. As former United States Secretary of State George Schultz said about our initiatives, “This effort is a full and thoughtful solution that, in the short term, will stop the fiscal hemorrhaging and, in the long term, sets an example of how to get this state back on track.” This $240 billion pension debt crisis is far too big for the half-measures being considered by politicians. It’s time for voters to fix our pension system once and for all.