2013-02-21 / Editorials
Time to take pension reform seriously
It’s been more than four years since the tsunami of toxic mortgages left millions of homes underwater and sent California’s economy into a tailspin. The poor housing and job markets left the state feeling less than golden. Small cities and public agencies felt the pain as well and only now are things beginning to turn around.
Critics pointed to the overburdened public employee pension obligations in California as a big contributor to the fall.
But as the dust begins to settle, local governments and jurisdictions seem less worried about the pension mess than leaders at the state level. That’s because Calabasas, Agoura Hills, Westlake Village and the Las Virgenes Water District have done a better job at fiscal management than their counterparts in Sacramento. The local budgets aren’t in such dire straits and the sense of urgency about pension reform just isn’t there. But finances can change, and there’s a feeling going forward that the public employees who work in these local jurisdictions are not taking seriously the need to contribute a bigger chunk of their paychecks to meet the cost of future pension payouts.
As part of his campaign to win voter approval for Proposition 30—the November 2012 ballot initiative that purportedly raised taxes to help education—Gov. Jerry Brown passed pension reform legislation that requires public employees to pay more for their benefits. The law supposedly guarantees that Prop. 30 revenues will not be siphoned away by public employee unions.
The pension reform law was intended to save billions in state taxpayer dollars by capping retirement benefits, increasing the retirement age and eliminating policies that gave way to pensionspiking abuses. Gov. Brown introduced a cost-sharing mechanism for current employees that must be phased in by 2018.
But from what we can tell, the law lacks teeth, and this is troubling.
While Brown’s pension reform says municipalities and public agencies should ask their employees to pay up to 50 percent of pension costs, there’s nothing in the law that requires all workers to begin paying these costs.
Most of the pension reform is aimed at changing the retirement and benefit packages of those hired after Jan. 1. The law does little to make city councils and local boards demand more of their current employees. Why should the grandfathered employees get special treatment?
All this seems grossly unfair to the many private sector employees who cannot rely upon taxpayer dollars to bail out their retirements.