As our own Steven Greenhut noted yesterday, the big story in California politics this week has been the anticipation of Governor Jerry Brown's roll-out of a pension reform plan aimed at curbing the runaway benefits of public-sector workers in the Golden State. That plan began to take shape at a press conference in Sacramento earlier today, where Brown delineated 12 proposed changes to the current system.
Surprisingly enough for a Democrat elected on the strength of union money, nearly all of Brown's proposals have merit. He would increase the retirement age for public employees, move new hires to a hybrid defined contribution/defined benefit system, seek to tamp down on "double dipping" and "pension spiking", and require longer terms of service before public employees had access to state-funded health care in retirement. The only problem is that these gestures won't come close to solving the problem. The total estimated savings of Brown's proposed reforms are about $900 million a year. The State's total unfunded pension liability? Estimates run as high as $500 billion.
Surprisingly enough for a Democrat elected on the strength of union money, nearly all of Brown's proposals have merit. He would increase the retirement age for public employees, move new hires to a hybrid defined contribution/defined benefit system, seek to tamp down on "double dipping" and "pension spiking", and require longer terms of service before public employees had access to state-funded health care in retirement. The only problem is that these gestures won't come close to solving the problem. The total estimated savings of Brown's proposed reforms are about $900 million a year. The State's total unfunded pension liability? Estimates run as high as $500 billion.
Brown has picked some low-lying fruit in order to propose sensible, if insufficient, changes to the benefits that future state employees will enjoy. But his preferred course of action does nothing to address California's present emergency: how to deal with the astronomical obligations owed to current employees. Brown's focus on the long term is laudable; but staving off short term disaster has to take priority.
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