Soaring pension costs force service cutbacks in Marin County

By Nels Johnson | Marin Independent Journal – Soaring pension costs and flat property tax growth have wedged Marin County in a budget chasm that could reach $15 million in two years, requiring more cutbacks, collaboration, advance planning and creative thinking at the Civic Center.  Continue reading . . .

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Former Schwarzenegger adviser renews call for pension reform

David CraneDavid Crane, the jobs and economic growth adviser for former GOP Gov. Arnold Schwarzenegger and now president of Govern for California, says that pension changes need to be part of solving the multibillion-dollar state budget deficit expected next year.  Continue reading . . .

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Legislative Analyst says state’s retirement costs to increase by $200 million over 5 years


By Jon Ortiz | Sacramento Bee
— State pensions will cost government employers about $200 million more in fiscal 2016-17 than expected next year, according to a new report from the Legislative Analyst’s Office. About half of those rising costs will hit the general fund.

The chart above comes from page 40 of the LAO report released this morning. It depicts California’s general fund employee retirement expenses past, present and future.  Continue reading …

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Amendments submitted to clarify two CPR initiatives

Press Release | California Pension Reform — Today California Pension Reform submitted to the Attorney General amendments to its two pension reform initiatives designed to clarify its provisions. The Attorney General allows amendments to be made within 15 days of filing. The following statement is from Dan Pellissier, President of California Pension Reform:

“After we submitted our initiatives the number one concern raised by our critics and discussed by neutral observers was not whether this reform is needed but if the reform is constitutional. As a result, we have contacted noted constitutional scholars across the country.  They have made recommendations they believe will enable the courts to say this initiative is constitutional.

“First, we ensure government funds and those contributed by government employees go to address our unfunded liability crisis.  Second, where there was concern our language could include conduct we did not mean to restrict, we tightened that language up.  And finally we made clear that future retirement benefits vest only upon performance of work.

“Every poll shows the people of California want pension reform.  With these filings we believe we are one big step closer to bringing Californians the reform they want and that the courts will approve.”

Copies of the initiatives’ with amended language have been posted on the Attorney General’s website:
Amended Version 1
Amended Version 2

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Some believe the constitution doesn’t prevent the state from changing costly public employee pension plans

By George Skelton | Los Angeles Times — In Philadelphia, 224 years ago, some men tucked these words into the nation’s new Constitution: “No state shall … pass any … law impairing the obligation of contracts…”

George SkeltonThose words, squeezed into a very long sentence in Article 1, Section 10, listing powers denied the states, became known as the “contracts clause.” And it is playing havoc with modern-day public pension reformers, including Gov. Jerry Brown.

As widely interpreted — most importantly by the courts (or so we laymen are told) — the clause means that pensions promised state and local government workers on the day they were hired cannot be reduced without giving them a new compensating benefit.  Continue reading . . .

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$100,000 pensions for California’s public employees are not so rare

Editorial | Appeal-Democrat — Six-figure pension incomes for retired public employees in California are rapidly becoming more common. The number of state government retirees receiving at least $100,000 in taxpayer-backed benefits has risen 99 percent in two years. Faced with such escalation, characterizing the public-sector pension problem a tsunami may be an understatement. Continue reading . . .

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Pension Prop 13

By Girard Miller | Governing Magazine — Last week I discussed the primary features of California Gov. Jerry Brown’s thoughtful 12-point plan to reform the state’s unsustainable pension mess. The night before my column published, a group called California Pension Reform (or CPR, an artfully chosen name) filed two ballot proposals Girard Millerthat called the governor’s bid and raised him two. Their plan is to test the waters with two proposals and pick one to begin collecting petition signatures. This is the long-awaited “Pension Prop 13” — the pension-reform descendent of the legendary grassroots tax-limitation measure that swept through California and several other states three decades ago. It is the most comprehensive pension reform language ever filed in any state in the country, yet less severe than Rhode Island’s recent narrower, sharper proposals to actually freeze, modify and cut incumbents’ benefits.

In this column, I will explain the key features of these two proposals, how they differ and how they compare with the governor’s plan. Then I’ll try to analyze what may happen next, as these two announcements are just the opening act of what will be a year of political theatre in the Golden State.   Continue reading . . .

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The state with the biggest pension problem is stumbling toward a solution

Editorial | The Economist — Jerry Brown, aged 73, likes to joke that he is not only California’s governor but also its “best pension buy”. After all, he has spent much of his life in public service (including a first stint as governor from 1975 to 1983), but neither draws a public pension nor plans to, if he can get himself re-elected. Nonetheless, his commitment to fixing California’s daunting public-pension problem has been in doubt. A Democrat, he was elected one year ago in a race against a self-financed Silicon Valley billionaire, largely with the help of independent spending by public-sector unions. The question has been whether he can stare down his own allies, those unions, and pass the necessary reform.

Mr Brown has now released a plan. Initial reactions suggest that he may pass his test: the unions were outraged, many Democratic legislators (often beholden to the unions) felt awkward, and several Republican legislators were supportive. But now everything is in flux, as all parties choose their tactics for the fight.   Continue reading . . .

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Cut public employee pensions, California voters say

By John Woolfolk and Steven Harmon | San Jose Mercury News — From San Francisco to Modesto, California voters Tuesday sent a strong message that they want to cut generous public employee pensions, whose soaring costs are devouring funds for cops, libraries and other services.

The results cheered local officials such as San Jose Mayor Chuck Reed, who’s seeking a March special election on his own controversial pension reform proposal, as well as advocates for a statewide measure aimed at slashing the costs of public retirement packages.

“It certainly demonstrates solid public support for pension reform,” Reed said Wednesday. “Even in a labor-friendly town like San Francisco, 68 percent said yes.”   Continue reading . . .

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Special session urged on pension reform

Senate Republicans today urged Governor Jerry Brown to launch a special session at the Capitol to fix California’s broken pension system. Mike Luery reports:

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Yes, Joe Citizen wants public pension reform

By Teri Sforza | Orange County Register — Tuesday’s advisory vote in the city of Modesto was a bellwether: Does Joe Citizen really want public pension reform? The answer is: Yes! Joe Citizen really wants public pension reform. A lot.  Continue reading . . .

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California’s ballooning state retirement costs

By Teri Sforza | Orange County Register — As vitriol over public pensions continues to rage, we find this simple chart from the state Legislative Analyst’s Office illuminating. It State Retirement Costsshows, quite graphically, that the state’s retirement costs have jumped from a bit more than $1 billion in 1998-99 to a bit more than $5 billion in 2010-11.

“State contributions to pension and retiree health programs for state employees, as well as contributions to the teachers’ pension program, have increased substantially in recent years,” the LAO dispassionately observes. “The primary reasons for this increase are the weak performance of retirement system investments in several recent years and rapid increases in retiree health costs. In addition, costs have increased due to increases in pension benefits adopted at the beginning of the last decade.”

  • Last year, retirement costs comprised about 6 percent of the state general fund budget –  $5 billion out of $86 billion.
  • In 1998-99, retirement costs comprised about 1.7 percent of the state general fund budget – $1 billion out of $57.3 billion.   Continue reading . . .
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California Pension Reform files initiative proposals

Press Release | California Pension Reform — California Pension Reform today filed two initiative proposals with the Attorney General’s Office. After reviewing the title and summary from the Attorney General and the fiscal summary from the Department of Finance, the group will qualify one pension reform initiative on the November 2012 ballot.

Mike Genest

Mike Genest

“Other than defenders of the status quo, no one disagrees that our unfunded pension and retiree benefit obligations are decimating the capacity of our state and local governments to deliver critical public services.  Unless we act now the situation will only get worse,” said Mike Genest, former California Director of Finance.

“While we would prefer to see a legislative solution to this problem, we know full well that there is little chance of that happening. We cannot afford to postpone decisive reform while our elected leaders debate half measures. We must act now.”

“We were encouraged to see the Governor come forward with a serious proposal and have added the elements where his proposal fell short,” said Dan Pellissier of California Pension Reform. “We will file this along with our original proposal and fully evaluate our options after the Attorney General’s Office releases the title and summary of each. There is more than one path to solving our pension crisis and we will work to qualify the best option for the November 2012 ballot.”

Continue reading the press release and read the complete text of both initiatives . . .

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