San Diego’s NBC affiliate KNSD-TV (Channels 7/39) produces a regular feature called “San Diego Explained.” This segment does a good job of explaining the difference between the guaranteed defined-benefit pension plans enjoyed by public employees and the 401(k) plans that most taxpayers are familiar with. Watch for an especially on-target comment by city council member Carl DeMaio.

This video can be found here.

The Contra Costa County Retirement Board took up the issue of pension ’spiking’ at its meeting Monday. CFFR’s president Marcia Fritz participated and was interviewed in this report by Laura Anthony of San Francisco’s KGO-TV. Read the accompanying news story here.

Also read Daniel Borenstein’s column on the controversy in the Conta Costa Times.

Following quickly on the heels of the publication of his new book PLUNDER!: How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation, pension-reform advocate Steven Greenhut has launched a new website called CalWatchdog.com under the auspices of the Pacific Research Institute in Sacramento. On today’s FlashReport, Steve explains the goals of the new venture in his own words.

The Orange County Taxpayers Association has sent the following letter to the Board of Supervisors saying that  “structural reform of future benefits is essential” in bargaining with the Association of Orange County Deputy Sheriffs:

OCTAX

Orange County Taxpayers Association  �
30205 Hillside Terrace
San Juan Capistrano CA 92675-1542  

January 10, 2010 

The Honorable Pat Bates, Chair, Orange County Board of Supervisors
333 West Santa Ana Boulevard
Santa Ana CA 92701 

Dear Chairwoman Bates, 

The Orange County Taxpayers Association (OCTax) understands that your Honorable Board of Supervisors is bargaining with the Association of Orange County Deputy Sheriffs (AOCDS).  

The time is propitious.  When public employee advocates such as former Speaker Willie Brown, the Public Employees’ Retirement Journal and CalPERS’ chief actuary all acknowledge that existing retirement and health benefits are “unsustainable,” even the most fervent unionists probably would agree (if only behind the closed doors of the bargaining room).

OCTax can’t hear the discussion in your meetings with AOCDS.  We hope it isn’t quibbling over “a little more of this, a little less of that.”  Structural reform of future benefits is essential.   

Since – oh, about 1889 – previous Boards of Supervisors lacked the gumption to tackle this issue. 

Your Board has a good record so far.  In 2006, you reduced the costs of two other unions’ retiree health care by about $900 million.  In 2008, voters approved your Measure J, which gives the public the power to approve future pension increases.  (OCTax co-signed the ballot argument with then-Chairman Moorlach.)  In 2009, you gave employees a choice between the traditional defined-benefit pension and a new defined-contribution plan; it is unclear how much money this will save, but simply introducing the defined-contribution concept was a dramatic step forward.       

Please continue this course of structural reform.  Act decisively and judiciously now.  Otherwise, a future Board will be forced to act decisively, but will be unable to act judiciously because the   County budget will have been eviscerated.  Carpe diem quam minimum credula postero.  At a bare minimum, you and AOCDS must negotiate a new tier of less lavish benefits for future employees, and existing employees should contribute substantially toward their existing benefits.    

OCTax harbors no malice toward AOCDS or other public employees.  On the contrary, we say often and publicly that they are equal to employees in the private sector and deserve equal pay and benefits.  We want them on the job.  But if the County goes broke, their jobs will disappear.    

Sincerely,

Reed L. Royalty, President

cc: Vice Chair Nguyen; Supervisors Moorlach, Campbell, and Norby

You can download the letter (MS Word) here.

According to the Sacramento Bee, the Legislative Analyst’s Office has completed its analyses of the two pension reform initiatives that CFFR plans to place on the 2010 ballot in California. You can read the two fiscal impact reports by clicking here and here.

In his column today in the Los Angeles Times (“Arnold Schwarzenegger hits the right note”), veteran Sacramento-watcher George Skelton gets Willie Brown to explain what caused him to come to the conclusion that public employee pensions have become a problem:

The second intriguing Schwarzenegger move is his stab, one final time, at scaling back state employee pensions. The governor said that state pension costs have risen 2,000% in the last decade while revenue has increased only 24%.

“We are about to get run over by a locomotive,” he said. “We can see the light coming at us.”

Last June, Schwarzenegger proposed that future pensions of new hires be scaled back to what they were before Gov. Gray Davis and the Democratic Legislature generously enhanced benefits in 1999. The governor still embraces that modest plan, which seems reasonable.

The prospective pensions of current employees would remain intact. “These pensions cannot be changed — either legally or morally,” the governor said Wednesday. “It is a done deal.”

If Democrats won’t listen to Schwarzenegger, they should at least pay attention to their icon: legendary Assembly Speaker Willie Brown.

In his weekly column in the San Francisco Chronicle on Sunday, Brown wrote about the “out of control civil service.”

“The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life,” Brown asserted. “But we politicians — pushed by our friends in labor — gradually expanded pay and benefits . . . while keeping the job protections and layering on incredibly generous retirement packages. . . . This is politically unpopular and potentially even career suicide . . . but at some point, someone is going to have to get honest about the fact.”

Brown attended Schwarzenegger’s speech, sat in the Assembly balcony and was introduced by the governor. I asked him when he had concluded that public employee unions were out of control. After he became mayor of San Francisco, Brown said.

Read George Skelton’s entire column here.

CFFR’s president Marcia Fritz was interviewed after Governor Schwarzenegger’s “State of the State” address yesterday by reporter Rick Boone of KTXL-TV (Channel 40) in Sacramento. Here’s the report:

The text of the report is available here.

In his final State of the State address today in Sacramento, Governor Arnold Schwarzenegger had this to say about California’s growing public employee pension crisis:

Now, another priority relating to the budget is pension reform.

The cost for state employee pensions is up 2,000 percent in the last ten years, while revenues have only increased by 24 percent.

The pension fund will not have enough money to cover this amount, so the state — that means the taxpayer — has to come up with the money.

This is money that is taken away from important government services.

This is money that cannot go to our universities, our parks and other government functions.

Now, for current employees these pensions cannot be changed — either legally or morally.

We cannot break the promises we already made. It is a done deal.

But we are about to get run over by a locomotive. We can see the light coming at us.

I ask the legislature to join me in finding the equivalent of a water deal on pensions, so that we can meet current promises and yet reduce the burden going forward.

Read the entire text of Governor Arnold Schwarzenegger’s State of the State address here, or watch the speech as he delivered it here:

In a confidential memo sent to council members Tuesday, Los Angeles City Administrative Officer Miguel Santana said the city’s current retirement system is “unsustainable”  according to an article in today’s Los Angeles Times by David Zahniser and Phil Willon.

The city’s proposal is being debated at the same time that a sweeping pension plan is being pushed by the California Foundation for Fiscal Responsibility, an advocacy group founded by former Assemblyman Keith Richman. That plan, being considered for the November statewide ballot, would reduce pension benefits and raise the retirement age for all new hires in city, county and state government.

“The public is getting the message,” Richman said. “People understand that they’re currently paying for two police departments or two fire departments — one that’s working and one that’s retired.”

To read the entire article “Los Angeles officials consider a ballot measure to scale back pensions”  click here.

California’s public pension crisis and CFFR’s ballot initiative were included in a news story in yesterday’s Sacramento Bee titled “Schwarzenegger sets the bar high for his last year in office” by reporter Kevin Yamamura. Here’s the relevant excerpt:

In various forms, the governor has sought changes to the state’s pension system but hasn’t persuaded lawmakers or voters to approve them. California is projected to have unfunded pension liabilities of more than $100 billion through 2014-15, according to the Legislative Analyst’s Office. Schwarzenegger economic aide David Crane said in December that the state needs to reduce retirement benefits for new workers and contribute more toward pension investments.

The governor met recently with backers of a proposed 2010 initiative that would lower benefits for state and local government employees who begin jobs in July 2011 or later. Schwarzenegger has not pledged support yet but is considering the idea, said Marcia Fritz, a Citrus Heights accountant who heads the California Foundation for Fiscal Responsibility, which is sponsoring the initiative.

“The people of California clearly know we have to get a handle on our labor costs in the public sector,” Fritz said. “It would be a wonderful thing for him to leave office setting the tide the other way.”

Unions warn that if the governor pursues a pension overhaul, he could face a repeat of 2005, when Schwarzenegger spent the year fighting with Democrats and labor. While Fritz said her plan still would offer pension plans better than those available in the private sector, Dave Low, chair of the union-backed Californians for Health Care and Retirement Security, said the change would cut benefits in half and make it difficult for state workers to retire.

“If he decides to go the ballot route, he will basically be declaring nuclear warfare,” Low said. “Every public employee association will put everything they have in defeating it.”

You can read the entire Sacramento Bee article here.

Steven Greenhut’s appearance on C-SPAN’s BookTV is now available for viewing online — click here. He talked about his new book Plunder!: How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation on December 10, 2009 at a book signing event at Barnes & Noble Booksellers in Orange, California.

He takes a critical look at government workers and the unions that represent them. He argues that public employees receive salaries, pensions, benefits, and a level of job security that far outpace workers in the private sector, and that they have become a huge drain on local, state and federal coffers.  

A former member of the Orange County Register’s editorial board, Steve is the director of the Pacific Research Institute’s Investigative Journalism Center and News Bureau in Sacramento. He is also the author of Abuse of Power: How the Government Misuses Eminent Domain.

The streaming video runs approximately 50 minutes. During his talk Steve makes reference to CFFR’s president Marcia Fritz and the organization’s pension reform ballot initiatives, and CFFR vice president Jack Dean makes a brief cameo appearance near the end of the question and answer session.

Is California’s former Assembly Speaker Willie Brown possibly thinking of supporting CFFR’s pension reform intitiative? In his “Willie’s World” column in Sunday’s San Francisco Chronicle, he made the following observation:
 

If we as a state want to make a New Year’s resolution, I suggest taking a good look at the California we have created. From our out-of-sync tax system to our out-of-control civil service, it’s time for politicians to begin an honest dialogue about what we’ve become. 

Take the civil service.

The system was set up so politicians like me couldn’t come in and fire the people (relatives) hired by the guy they beat and replace them with their own friends and relatives.

Over the years, however, the civil service system has changed from one that protects jobs to one that runs the show.

The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life.

But we politicians, pushed by our friends in labor, gradually expanded pay and benefits to private-sector levels while keeping the job protections and layering on incredibly generous retirement packages that pay ex-workers almost as much as current workers.

Talking about this is politically unpopular and potentially even career suicide for most officeholders. But at some point, someone is going to have to get honest about the fact that 80 percent of the state, county and city budget deficits are due to employee costs.

Either we do something about it at the ballot box, or a judge will do something about in Bankruptcy Court. And if you think I’m kidding, just look at Vallejo.

Read Willie Brown’s entire column in the Chronicle here.

Watch BookTV (C-SPAN2) at 7pm Pacific (10pm Eastern) to see pension reform advocate Steven Greenhut discuss his new book PLUNDER!: How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation. This presentation was recorded on December 10,2009 at Barnes & Noble Booksellers in Orange, California. If you don’t have access to BookTV via your cable provider, you can watch it on your computer (Windows Media Player required).