Home > Public Employee Unions > ‘We are about to get run over by a locomotive,’ says Governor Schwarzenegger regarding pension issue

‘We are about to get run over by a locomotive,’ says Governor Schwarzenegger regarding pension issue

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:

  1. Tough Love
    January 6th, 2010 at 17:59 | #1

    Arnold ….. what is this crap … I can see not reducing accrued pensions for PAST years of service, but to say it can’t/shouldn’t be changed for FUTURE years of service for CURRENT employees is ludicrous.

    Such changes are ROUTINE in the Private Sector. ….. and CIVIL Servants are NOT “sepcial” !

  2. Marcia Fritz
    January 6th, 2010 at 18:21 | #2

    Unfortunately, judges treat government workers differently from private sector workers. Once you are given a benefit it can’t be taken away on future work. Rather than fight, let’s reform for new workers and THEN challenge the laws for current workers.

  3. Generation X
    January 7th, 2010 at 07:56 | #3

    Then let’s just bring on bankruptcy and the the courts scale back the benefits of current public employees. Hiding behind a nebulous arguement that one can’t touch current benefits simply shows a lack of effort and ingenuity.

    I will not silently stand by as my services are cut and my taxes are raised to support an unsustainable entitlement program and a bunch of 50 year old retirees. Be careful about the revolt the lack of action on this issue will create.

  4. Larry Littlefield
    January 7th, 2010 at 08:25 | #4

    It isn’t liberal. It isn’t conservative. And it isn’t moral. It’s Generation Greed.

    “Liberal” members of Arnold’s generation promised themselves lots of senior benefits, often retroactively enhanced, with early retirement after short careers. “Conservatives” went along.

    “Conservative” members of Arnold’s generation wanted tax cuts, without politically unpopular spending cuts, funded by debts someone else would have to pay. “Liberals” went along.

    Pensions cannot be changed? Well the amount that EXISTING employees have to pay into them CAN be changed, and the amount that those less well off have to contribute CAN thus be limited. Existing retirees off scott free? Well they CAN be asked to pay for their own retiree health insurance. All of it.

    This is just a prelude to discussions about Social Security and Medicare. It’s all about more for those born before (say) 1958 or so, and less for those coming after. Doesn’t anyone in this country care about their own kids?

  5. Pru
    January 7th, 2010 at 10:45 | #5

    I think it’s ridiculous we can’t go after current retirees who are retired young and with as much (or more) than they earned while working. What was immoral is the backroom deals that brought them this benefit in the first place. I do agree with Ms. Fritz tho’. First things first. Believe me the whole idea will gain more and more steam as new workers realize that they make and will continue to make substanially less than their older counterparts residing in their hammocks.

  6. Sally
    January 7th, 2010 at 11:20 | #6

    No worries. Current state employees will not receive their promised benefits….they will lose them in bankruptcy court soon….very soon. The law of math superceeds man’s written laws.

  7. StevefromSacto
    January 7th, 2010 at 11:38 | #7

    “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.”

    Perhaps our lame-duck Governor could eliminate some of the huge corporate tax breaks to replace some of this money? Or perrhaps he could propose a tax on oil production, like every other state (including liberal bastions like Texas and Alaska) already has?

    You would think, in his last year in office, he could find the courage to stand up to the anti-tax zealots who want to destroy state government.

    Afraid not. It’s easier picking on public employees.

  8. Marcia Fritz
    January 7th, 2010 at 11:53 | #8

    What corporate tax breaks do you propose he eliminate? Keep in mind that corporate profits are taxed twice–at the corporate level and on dividends distributed to shareholders. The biggest tax breaks by far are at the individual level–there is no tax on medical insurance benefits, and mortgage interest is deducted from taxable income. Would you be open to taxing these items instead in order to balance the budget?

  9. Taxpayer
    January 7th, 2010 at 12:02 | #9

    The Governor is wrong! Government employees do not become “vested” in their CalPERS defined benefit pension until they are in CalPERS for 5 years. Also, if you read all the California case law regarding government pensions, it is clear that current employees do not have a right to a particular pension that is set in stone. Under dire financial circumstances, that pension can be modified. Why isn’t anyone making an effort to change the overly generous pensions of CalPERS participants who have have less than 5 years tenure? Ms. Fritz, perhaps you can address these points?

  10. Truth
    January 7th, 2010 at 12:26 | #10

    Nonsense.

    The government has a long history of breaking promises. How has social security’s promise changed during our lifetime? How has the value of our currency changed during our lifetime?

    Honestly, I hope Arnie lets the pensioners keep their pensions and we break the currency, decay into anarchy and fall into massive bankruptcy, wiping the institutions. Then, and only then, can we start on a sustainable path.

    Batten the hatches.

  11. Alan Keats
    January 7th, 2010 at 16:13 | #11

    Just hang in there Arnold and keep an eye on that train. Best to stand right in the middle of the rails; hold Barbara under one arm and Nancy with the other. If you can, it would benefit the state to mash Dianne in there as well. Once the train takes you four out, things might begin to improve.

  12. Brent
    January 8th, 2010 at 00:49 | #12

    I think, Gray Davis is the culprit that changed the 2% to 3% payout @30yrs. My question is, If the public is on the hook, why didn’t this go to a ballot vote before it gained approval ? Where were the actuarial reports ?
    Aren’t these judges biased because they benefit from these same gov. retirements? And if we are on the hook, why don’t we take the Calpers, CalSters & others, monies to balance California’s budget. Then they might be concerned about raiding California and live within the means of what the cities & state can afford. In addition, we should be outsourcing 50% of all Gov. Starting with the fire service and go right down the line. When a job opens for a fireman you get 5,000 + apps. in the good times, you know there’s something out of whack. I know a group of firemen that work in So Cal. and live in Idaho.. How does that work ?

    (Marcia .. Great work we owe you so much.. please stay with it )

  13. Marcia Fritz
    January 8th, 2010 at 11:12 | #13

    Thanks, Brent. Judges benefit from pensions and so do most city councilmembers and county supervisors who approve pension benefits for their workers. The taxpayer is left out of the decision process almost entirely.

  14. amy
    January 9th, 2010 at 06:38 | #14

    All pensions should go! ALL except for those who put their lives on the line for the service and safety of the nation. No one watches out for the regular hard working individual who gets taxed to death to supply unproductive unfire’able government workers with money they get when they stop monitarily contibuting to society. When work stops, the pay stops. I’m not talking about just government workers. ALL those in politics,..those selfless public servants, who vote themselves raises and have so many stinkin perks its sickening. But I guess as long as the theives run the show things won’t get any better. And how about having those in jail pay for their food and “lodging” instead of little taxpayer me. Has no one noticed the giant cheap captive labor pool we have in..jail?
    So in a more sustainable and equitable world….gov workers have a 401k and inmates work off their “debt”. Problem solved..at least better.

  15. Bob
    January 10th, 2010 at 12:31 | #15

    “Where there is a fortune, there is a crime” Honore De Balzac. Of course these union guys are stealing the taxpayer blind! Remember,what goes around,comes around! When the federal govt implodes from their 20 trillion dollar deficit,all these union folks will be sitting around like GM execs with their faces in shock! No way they get away with it! Check out pensiontsunami.com and championnews.net for more on this insanity.

  16. earth
    January 10th, 2010 at 23:07 | #16

    Hate to tell you Sally, but STATES do not qualify for bankruptcy protection, although municipalities can weasal out of their committments. That being said, state employee beneifts are protected by law and must be supplemented by the taxpayer in case CALPERS is unable to. If Marcia’s group can get the signatures, her initiative will surely pass, although court battles may follow since the initative conflicts with the spirit of the Dills act. Arnold will find out his proposed paycuts come July will face the same court challenges. He just wants to push the problem to the next administration.

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