Categorized | Politics, State

Governor Brown Targets Pension Envy

Major Pension Reforms to be Introduced to California Legislature Soon

 

Skippy Massey
Humboldt Sentinel

 

William Dotinga
Courthouse News Service

 

LOS ANGELES (CN) – Gov. Jerry Brown on Tuesday unveiled a “sweeping pension reform agreement” he claims will save taxpayers billions of dollars by capping benefits and increasing the retirement age for state workers.

Brown said the agreement with state Democratic leaders will stop abuses and require state employees to pay at least half of their pension costs.

“These reforms make fundamental changes that rein in costs and help to ensure that our public retirement system is sustainable for the long term.  These reforms require sacrifice from public employees and represent a significant step forward,” Brown said.

Brown said that if the Legislature passes the reforms, public retirement benefits would be lower than when he took office during his first go-round as governor in 1975.

Brown said the agreement includes benefit rollbacks for public employees.  It will require all current and future state employees to fund at least 50 percent of their own pensions, something Brown hopes becomes “the norm for all public workers in California,” since the agreement removes state barriers that prevent local governments from increasing employee pension contributions.

Brown’s plan also raises the retirement age for new state workers by two years and allows cities and counties to raise the retirement age of their employees as well.

The governor said the agreement bans abusive practices state workers have used to enhance pension payouts, such “spiking” and “air time.”

Spiking gives employees big raises during their last year of employment to inflate their pensions.

Air time – which allows state employees to pad their retirement benefits by buying service credits – is one of several scandals rocking California’s Parks Department.

“No more spiking, no more air time, no more pensions earned by convicted felons,” Brown said.  “We’re cleaning up a big mess and the agreement reached with legislative leaders today is historic in its far reaching implications.”

Pension reform has been on legislators’ minds this year, particularly since the state’s two main pension funds are underfunded by at least $150 billion.

Democrats seek to appear fiscally responsible as voters prepare to decide the fate of Brown’s tax hikes in November.

If the initiatives fail, another sweeping round of trigger cuts will sting the Golden State again.

It remains to be seen whether the Legislature will send a bill to Brown’s desk before the session ends Friday – especially in light of disapproval from of California’s powerful public employee unions.

“We’re upset that a Democratic legislature and Democratic governor feel obligated to take this out on working men and women in California,” SEIU spokesperson Terry Brennand told KGO-TV Monday.  “That’s going to damage the ability of working men and women to retire in dignity.”

(Article by William Dotinga and courtesy of the Courthouse News Service.  Pictures by the Humboldt Sentinel)

* * * * * * * * *

With municipalities struggling with pension costs overwhelming local budgets, it looks like Governor Brown’s pension reform is on the table a year earlier than he promised.  With the bankruptcies of Stockton, Vallejo, and San Bernardino, the Governor is promptly getting down to the brass tacks of fiscal responsibility.

It’s happening.  Voters in San Jose and San Diego Tuesday overwhelmingly approved public pension reform for their cities.  These results send a clear and unmistakable message to municipalities everywhere failing to meet pension obligations.  If pension reform can pass in major California cities, it can pass anywhere.  Cities and counties across the country will surely  follow suit putting pension reform on their ballots, too.

The subject isn’t so much about unions as it is about finance and cities struggling to remain solvent.  Public unions did put up some resistance to these measures, but they, too, appear resigned to the fact they would pass.  It’s a fiscal reality and quite the pickle we’ve found ourselves in.

San Diego, for example, currently spends 20% of their general fund budget on their retirement fund.  In San Jose, it is 27%.  Clearly, these kinds of obligations are unsustainable.  This means the cities are forced to spend money on pensions badly needed elsewhere.  Looking forward, their financial situations are even direr. Unfunded public pension obligations reach into the billions for both cities.

The reforms?  In San Jose, public employees will now pay more to keep existing pensions or accept more modest benefits.  New hires would get less comprehensive benefits.  The San Diego pension measure freezes pay levels for six years which will lead to lower costs– but can be overridden by a city council vote each year.  New hires get 401k-type plans rather than the current defined benefits packages.  Both plans are noteworthy because they address what was once untouchable:  lowering benefits for existing employees.

It’s not a pretty picture.  When times were good, no one complained.  Now it appears everyone’s leaping on the bandwagon to shrink the State’s pension envy with a cold shower.

The Humboldt Sentinel received from sources the following semi-confidential letter below, signed by the eight mayors of California’s largest cities pleading to the Legislature and Governor for help and fast tracking the issue– lest they, too, become overcome by the rising tide of their unfunded pension obligations. 

Shhh– this is for your eyes only:

Pension Reform Letter

Pension reform has arrived.  Except in Humboldt County.

How will Humboldt County, Eureka, and our other cities handle their pension obligations in their administrative top-heavy pension hierarchy?  Good question.  The figures may surprise you.  No wonder Eureka streets are crumbling while City Hall needed Measure O to pass.

The Sentinel will be having a report on the surprising sums of the city of Eureka soon.  Stay tuned.

 

One Response to “Governor Brown Targets Pension Envy”

Trackbacks/Pingbacks

  1. [...] weren’t included in state projections, such as pledges to provide health care benefits and pensions for retired public workers. They also cited unpaid bills from previous years in the new [...]


Leave a Reply

HumSentinel on Twitter

RSS Progressive Review

  • Another corporate myth dismantled
    USA Today -  Bosses who yell, threaten and micromanage their way to the top, often at the expense of miserable underlings are all too common in today's workplaces.But the Tony Sopranos and Darth Vaders of popular culture are not the most effective CEOs in the real world, according to a new study from the W.P. Carey School of Business at Arizona State Un […]
  • Americans still overwhelmingly negative on a lower drinking age
    Alternet - A newly released Gallup study confirms that Americans on the whole are still very much a conservative bunch when it comes to alcohol. The majority still reject a federal law that would lower the minimum drinking age to 18.  A whopping 74 percent of the 1,013 adults aged 18 or older who were surveyed said they would oppose such legislation, which i […]
  • Corporate money causing civil rights group to go off course on net neutrality
    Huffington Post - The NAACP and several other major civil rights groups have emerged as flashpoints in the debate over net neutrality, the idea that all Internet traffic should be treated equally.More than 40 civil rights groups are supporting broadband providers that oppose strict net neutrality rules. The civil rights groups say they're siding with th […]
  • The People's Party on campaign financing
    How Americans are distanced from both their major parties A majority of likely voters among Democrats (75%), Independents (64%) and Republicans (54%) see the wave of spending by Super PACs this election cycle as “wrong and leads to our elected officials representing the views of wealthy donors.”MORE […]
  • Meanwhile. . .
    The difference between Orwell and HuxleyStudents protesting against North Face Another bomb in DC's school test mania […]
  • How sanctions will really affect Russian oil
    Richard Heinberg, Ecowatch - The New York Times reports that “The United States and Europe kicked off a joint effort on Tuesday intended to curb Russia’s long-term ability to develop new oil resources.” The new sanctions would deny Russia access to western technology needed to access polar oil and deepwater oil, as well as tight oil produced by hydrofracturi […]
  • Action links
    NEWS   Action news   How to plan your own Moral Monday Building peace teams ACTIONS Detroit Water Brigade Moral Mondays Tar Sands protests Occupy ACLU Bad Ass Teachers BOYCOTTS Hobby Lobby IsraelAcademic/Cultural Koch Brothers Nestle Staples Walmart Monsanto Essays Where change really comes from Running out of change The Clinton-Obama-Alinsky myth   Activism […]
  • Pocket paradigms
    If global dumbing is not halted, we may wake up one morning and find that no one in this country knows how to make anything anymore. We may discover our dearest friends and relatives in a catatonic state before the TV and the device won't even be on. When we call for help we may find that 911 has become an endless loop voice mail system from which one c […]
  • Word
    The censorial power is in the people over the government and not in the government over the people -- James Madison […]
  • Bass players
    From 50 years of our overstocked archivesSam Smith, 2003 - Your editor has long held the view - although quietly for fear of being mugged - that one of the earliest signs of America's cultural collapse was the introduction of the disco drum machine. I was, to be sure, a drummer at the time, so the opinion may have been a bit premature and biased. Noneth […]
  • Young news
    Young news Colleges & universities Millenials down on marriage Generation gap Student loans & debt ESSAYS An apology to younger Americans Skull & Bones […]
  • Obamaadmin claims right to force Muslims to become snitches
    Firedog Lake - The United States Justice Department has moved to dismiss a lawsuit in which American Muslims allege that that twenty-five law enforcement officials, particularly FBI agents, had them placed on the No Fly List after they refused to become government informants in their community.In April, the Center for Constitutional Rights and Creative Law E […]
  • Water facts
    Earth Policy InstituteSeventy percent of world water use is for irrigation.Each day we drink nearly 4 liters of water, but it takes some 2,000 liters of water—500 times as much—to produce the food we consume.1,000 tons of water is used to produce 1 ton of grain.Between 1950 and 2000, the world’s irrigated area tripled to roughly 700 million acres. After seve […]
  • Water facts
    […]
  • Brazil farmers say GMO crops no longer resistant to disease
    Common Dreams - Brazilian farmers say their GMO corn is no longer resistant to pests, Reuters reported.The Association of Soybean and Corn Producers of the Mato Grosso region said farmers first noticed in March that their genetically modified corn crops were less resistant to the destructive caterpillars that “Bt corn” — which has been genetically modified t […]