Gov. Jerry Brown has delivered on his campaign promise to tackle pension reform. The plan he put forward is bold and comprehensive. It is also politically risky.
Public employee unions, longtime allies of the governor, will strongly oppose key portions of it, as will many of Brown’s fellow Democrats in the Legislature. Even Republicans may balk when it comes to rollbacks for police officers and firefighters, the most politically powerful public employees who enjoy the most robust pensions.
Despite the risk, Brown must not relent. The chronic funding crisis that state and local governments face cannot be resolved without reducing pension obligations.
Government retirement benefits are too rich, particularly for public safety workers who typically retire in their early 50s with 90 percent of pay or more. Unions that persist in denying that reality seem hell-bent on inviting a ballot initiative that could be far more onerous to their members than what Brown has proposed. Brown needs to remind them of that. But he also needs to provide the public with a full financial analysis of his plan, so taxpayers can better understand the stakes involved if lawmakers stick with the status quo.
The majority of Brown’s reforms apply to new hires, not current workers. Even widely popular anti-spiking provisions in Brown’s plan won’t cover existing workers. Obviously, the governor has decided not to take on a risky legal battle over vested rights that would ensue if he attempted to roll back benefits or change the rules for current workers. That’s probably a smart move. Local government leaders in cities where pension-fueled fiscal crises are even more acute will likely initiate that necessary fight.
The most important reform in Brown’s proposal that would affect all workers would require government employers and their employees to share pension costs equally. With the exception of prison guards, California Highway Patrol officers and firefighters, most state employees pay an equal share now. In fact, under recently negotiated contract concessions, some workers pay even more than half. But many local governments still pay the entire employee’s share of pension costs for some workers. A 50-50 split in contributions not only would provide fiscal relief for government employers, but would give workers a stake in reducing costs.
Taxpayers and union workers both have a stake in fair pension reform. Brown has provided a good blueprint to make that happen.
Editorial reprinted from the Sacramento Bee