It’s been more than six months since Gov. Jerry Brown revealed his 12-point pension plan, and Californians are still waiting on the Legislature to act on public employee pension reform.
According to the nonpartisan Public Policy Institute of California, 83 percent of Californians — including a majority of public employees — agree that the amount of taxpayer money spent on pensions is a problem and are in favor of reforming the system. With the average debt of both state and local government pensions at $30,500 per California household, it’s no wonder that an overwhelming majority of Californians are demanding reform.
To address this pension crisis, Republicans introduced several bills this year to enact Brown’s pension plan. Our proposal outlined the governor’s plan verbatim, with no strings attached. While not solving the entire problem, the governor’s proposal makes great strides toward addressing our unfunded pension liabilities.
Reforming our public employee pension system has long been a priority for Republicans. Last June Sens. Tom Berryhill, Anthony Cannella, Tom Harman and I introduced Senate Constitutional Amendment 13 — a reform measure that controls pension costs and ends abusive practices. During our failed budget negotiations with Gov. Brown last year, it was clear that he supported virtually every tenet of our proposal. That’s why it was no surprise that the governor’s plan, put forth last October, mirrored SCA 13.
Both the governor’s proposal and SCA 13 would offer new employees a hybrid between the traditional defined benefit pension and the 401(k)-style defined-contribution plan. This would help ensure the sustainability of our pension system while protecting taxpayers from rising costs. Pension spiking — the practice of artificially inflating an employee’s final compensation to maximize retirement benefits — would end along with double-dipping to prohibit the collection of a pension while simultaneously earning a government salary.
Unfortunately, legislative Democrats have failed to take up either measure for a vote. In fact, Democrats have referred all pension reform bills to interim study, further delaying action on this critical reform.
It’s clear that reforms are needed to fix our unsustainable pension system. Today nearly 4 percent of California’s budget goes toward pension and healthcare costs for retirees. Without any reform, experts predict that it could grow to 17 percent in the near future.
It’s even worse for many cities throughout California. In San Francisco, nearly 5 percent of The City’s general fund goes toward retiree healthcare while San Jose spends 20 percent of its budget on pension costs. Until we address our growing pension debt for both state and local government, essential funding is being diverted away from vital services, such as education and public safety.
In Brown’s State of the State address, he asked the Legislature to act on pension reform this year saying “please take up the issue and do something real.” We did and we’re ready to vote on the governor’s plan and SCA 13. We urge our Democrat colleagues to set both proposals for hearing so we can engage in an honest debate on pension reform.
It’s time to act. Californians demand it.
Bill Emmerson represents state Senate District 37, which is within Riverside County.