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This Year's Budget Hostage: The Pension System

by: Brian Leubitz

Mon Jan 24, 2011 at 12:23:13 PM PST


Every year when the budget comes around, there is always some sort of "hostage" that the GOP gets together and decide that's they want to take out.  In previous years it was things like workplace safety regulations, lunchtime regulations, and on and on.  You name a piece of progressive legislation, and there has been an attempt on its life during the budget season.

Well, on the plus side, we'll be seeing fewer of those under the new Prop 25 simple majority vote on the budget. But, as you likely know, we didn't get the whole enchilada with Prop 25. So, if we are going to go the easy route on getting taxes on the ballot, that is to say getting 2/3 vote to place them on the ballot, then we are once again open to the annual hostage situation.

Now, this year, it seems that the wizards of the GOP caucus(es) have once again focused on pension reform.  A reasonable subject to discuss. After all, we have an enormous outstanding pension obligation, much of which is underfunded.  But, a cordial conversation, some committee hearings and the like isn't how Mimi Walters wants to roll. Oh no, it's going to happen by the middle of March or there will be no GOP votes for putting revenue on the ballot:

Sen. Mimi Walters, R-Laguna Hills, is preparing a package of pension reform bills she said must be addressed before taking up taxes. Among her reforms is legislation requiring all new state employees to enter 401(k)-style benefit plans.

"We want reforms in place before there's any discussion about tax increases," said Walters, the GOP's nominee in the fall for state treasurer who was trounced by incumbent Bill Lockyer. "I do know there's not support at all to even put it on the ballot without significant pension reforms."  (MediaNews/Steve Harmon)

Now, you see the framing there? That's classic move the goalposts framing.  If you are a Democratic leader at this point, your ears should be perked up, just waiting for the next demand.  See, there's no support for placing the measure on the ballot sans pension reforms. And after you get your way? What then? Notice that she's hardly promising any votes.  Of course, she would then cross into the murky waters of vote trading, but you know, that's how the GOP rolls.

Of course, as Dan Walters pointed out a while back, there are ways to put these measures on the ballot sans GOP support.  There is certainly a lot of inherent risk in that approach, both politically and policy-wise, but the Democratic legislators will have to make up their minds on which odds they'll take.

UPDATE: One more thing that I wanted to mention. Before the Right pours on about the pension system, let's look at one critical fact.  The average annual pension for a state worker is $30,000. While it isn't a pittance, we can't simply portray all state workers as hogs on the system and end the conversation there. We need to ensure a stable future for all Californians, and part of that includes retired state workers.

Brian Leubitz :: This Year's Budget Hostage: The Pension System
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Democrats need to strike first (4.50 / 2)
The political problem is that it only takes a handful of pension-spiking executives or managers (like the retired UC a-holes) to rile up voters and poison the discussion.  When I lived in the East Bay I remember a local story about the Orinda-Moraga Fire Chief retiring with something like a $250K/year pension, and in otherwise totally non-political contexts (like playgroups) I heard this fact brought up and cussed about by otherwise reliably Democratic professional voters.

I'm not sure why the state D's haven't tackled pension reform for the most egregious cases yet.  Seems like a slam-dunk politically and could defuse the anecdotal events that drive this issue for the GOP.  Are the Unions really so dead-set against any changes that nothing can be done?


Slight correction (0.00 / 0)
$36K as per Calpers.

I could (5.00 / 1)
Live on either amount almost anywhere in California, I'd rather see a cap on the Yearly amount for a pension, Like the Max being, Oh lets say $36,000.00 a year which is $3,000.00 a month.

[ Parent ]
Living on $36,000/yr. (0.00 / 0)
In San Francisco, if you have a spouse to support, that would be cutting it pretty fine. There are places in L.A. where that would be tough. You'd be hard-pressed to buy a house in Santa Cruz or Monterey.

Honestly, I do think some of the top pensions need to be revised. That's the only way we'll be able to take the plans for the rank and file off the table. There have been abuses. And those have given the GOP fodder to try to do away with all pensions for everybody.

I also agree that this will not be the end of it. Blackmailers and hostage takers never stop. That's why so many countries refuse to pay off Somali pirates. They know it just encourages them.


Cap on overtime credit on pensions? (4.50 / 2)
As I understand it, the more outrageous pensions were based on the last couple years pay, when the retiree volunteered for extended periods of overtime, effectively inflating the base level of compensation for the pension calculation.  (If someone knows more and wants to provide details to correct me, please do.)

If that is correct, then the most logical way to control or limit these pension "abuses" would be to modify how overtime is credited towards that baseline.  Perhaps capping the amount of overtime allowed for the baseline credit to the mean for that level of employee plus a certain percent?  

I don't fault the workers for gaming the system.  So, let's see if there is a way to be fair.


[ Parent ]
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