Gov. Arnold Schwarzenegger left little doubt today that cutting state employee pensions remains one of his top priorities in budget negotiations. He is demanding that lawmakers roll back pension guarantees for future state hires as a condition to signing the budget.
The state is scheduled to pay $2.1 billion in general fund dollars (and $3.8 billion overall) for state pensions in 2010-11, while the general fund deficit is $19 billion. Any pension reductions would have minimal impact on the current budget deficit, since most savings would come in future years. But it has become a signature issue for Schwarzenegger, who believes pension costs will crowd out other state expenditures in the future.
"The question we have to ask ourselves is, is it pensions or is it parks?" he said today in a budget press conference. "Is it pensions or higher education? Is it pensions or child care? And the list goes on and on, because that's where the money comes from. Those are the areas where we are taking this money because of the pensions."
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PHOTO CREDIT: Gov. Arnold Schwarzenegger talks about the state budget at City Summit 2010 on Tuesday in San Francisco. (Photo by Justin Sullivan/ Getty Images)