The State Worker

Chronicling civil-service life for California state workers

October 27, 2011
Rapid Response: Reactions to Jerry Brown's pension proposal

Gov. Jerry Brown unveiled a 12-point public pension reform plan this morning, and the reactions are already coming in. We'll keep adding to this post, so keep coming back to see what lawmakers as well as political, business and union leaders and others are saying.

Senate President Pro Tem Darrell Steinberg, D-Sacramento:

We agree with the Governor that ensuring the health and sustainability of our public employee pension systems is critical to both public sector workers and the taxpayers. A Legislative conference committee has already begun hearings to break through the hyperbole surrounding the pension systems and to examine the best approaches to balance two objectives - ensure the pension systems' solvency for decades to come while maintaining a fair defined benefit program for hardworking employees.

The Governor is proposing a provocative set of reforms, and I intend to approach them with an open mind. The idea of raising employee retirement age deserves consideration in light of higher life expectancy. However, one size does not fit all when it comes to workers performing physically demanding duties.

The abuses that a small number of people take advantage of absolutely must be resolved. But we can't forget that the vast majority of public sector employees are middle class workers and their average pensions are far from exorbitant.

Everyone, workers in both the private and the public sector, deserves to able to retire with dignity. Our goal should be to strengthen the middle class, not reduce it.

Assembly Speaker John A. Pérez, D-Los Angeles:

I appreciate Governor Brown's efforts to ensure the long-term stability of California's pension system, and the Joint Conference Committee will carefully consider all aspects of his proposal. I believe the Governor is working hard to solve California's long term fiscal challenges, and the Assembly will work with him to bring stability to our pension system in a manner that does right by taxpayers and public servants alike.

California Republican Party Chairman Tom Del Beccaro:

Experts say that California's unfunded pension liability could be $500 billion. Brown's plan, while a small step in the right direction, proposes to save only $1 billion per year. California can't wait 500 years for a solution. We need a bold plan today that recognizes that California taxpayers have lost 28 percent of all homeowner equity lost in the country and don't have the money to bail out Sacramento anymore.

Assembly Republican leader Connie Conway, R-Tulare:

There's no question that we must take immediate action to curb the state's rocket-fast growth of public pension obligations. These unfunded obligations may be as high as $500 billion, which means every dollar we have to spend on pensions is money we won't have in the future to spend on education for our children or critical services for Californians in need. Pension spiking and other abuses must be ended to so that retirees receive fair compensation for their public service without bankrupting our state, schools and local governments.

It's encouraging to see the Governor embrace ideas that Republicans have pushed for years. Assembly Republicans hope that he will encourage his fellow Democrats in the Legislature, as well as his union allies, to follow suit.

Assembly Republicans believe the entire package of reforms must be locked in by the voters. Otherwise, savings could be lost at the drop of the hat if a future legislature decides to unravel the reforms to curry political favor, just as former Governor Gray Davis did in the face of a tough recall election.

We continue to stand ready to work with the Governor and our friends across the aisle to enact real reforms that will protect taxpayers and give public workers a financial stake in their own retirement system.

California Business Roundtable President Rob Lapsley:

Governor Brown has demonstrated real leadership in his proposal to reform California's pension system. He has outlined a plan that is a critically important step in bringing our state's spending and budget under control for the long term future.

Now we ask the Legislature to pass these reforms so that we can continue to build a better economic climate that will create more jobs for all Californians.

Assemblyman Warren Furutani, D-Gardena, co-chairman, Conference Committee on Public Employee Pensions:

I look forward to carefully reviewing the Governor's pension reform proposal released today and to working with him and other stakeholders to adopt reforms that protect pension benefits for future generations, eliminate abuses and save money.

The Conference Committee's next hearing in November will focus solely on the Governor's proposal so that details can be carefully examined and questions asked. As the Governor stated today, there are numerous pension systems in California, therefore this is a complicated issue that deserves our full attention and careful review.

The Conference Committee was established at the end of the legislative year to craft responsible, comprehensive legislation to reform state and local pension systems in California. The first of three hearings was held yesterday which provided conference committee members with an overview of the current condition of public employee benefits in California and recapped reform efforts that have already taken place. Future hearings will review the Governor's proposal and pending pension reform legislation.

The Governor's proposal included several pension reform measures that were introduced in the last legislative session including prohibiting "pension spiking" and "double dipping" (AB 340-Furutani), prohibiting "pension holidays" (AB 1320-Allen) and restricting the number of hours that a retiree receiving a pension can work as a public employee (AB 344-Furutani).

At yesterday's hearing it was clear that elected leadership, public employees and all interested parties are committed to adopting pension reforms that will save taxpayers money and secure pension benefits for future generations.

Dave Low, chairman of Californians for Retirement Security:

We are disappointed that the governor is proposing pension changes that will undermine retirement security for public employees. It is unfortunate that he has proposed to increase the retirement age, shift greater costs to workers and impose a hybrid plan on new employees, when public employees already have agreed to hundreds of millions of dollars in pension concessions at the state and local level. Workers across California have negotiated contributing more to their pensions and two-tier benefits. We simply cannot stand for imposing additional retirement rollbacks on millions of workers without bargaining.

We will continue to work with the Governor and the Legislature on reasonable, common sense measures to sustain our state's retirement system. We will continue to act as partners with taxpayers in finding solutions to help rebuild our state's working class. Our goal is simple. We must provide adequate retirement benefits, eliminate abuses and tackle fiscal realities in a balanced and fair manner.

Yvonne Walker, president of Service Employees International Union Local 1000, and Jon Hamm, executive officer of the California Association of Highway Patrolmen (joint statement):

Gov. Brown's proposal starts the conversation on retirement security that will help shape the future for the millions of people reaching retirement age. We support curbing abuses and putting an end to special deals like those in the City of Bell. At the same time, we cannot jeopardize the secure retirements of hard working Californians whose modest pensions are often the difference between living out their years in security and retiring into poverty.

Yvonne Walker, president of Service Employees International Union Local 1000:

A new UC Berkeley study shows that nearly half of all Californians are headed into a retirement of poverty. In this day and age, that's just wrong. ... Any reform proposal must include security for the private sector. Vehicles like CalPERS that offer expertise in making sound investments and achieving returns higher than market averages should be available to public and private sector employers and their employees.

California Chamber of Commerce President Allan Zaremberg:

We commend the Governor for a bold and substantive proposal that addresses California's unsustainable state and local pensions and retiree health care costs. The Legislature should embrace this common sense plan that, among other things, recognizes that pensions need to change as life expectancy is lengthened. Addressing pension and health care costs will allow state and local governments to fund programs critical to our economy including higher education, K-12, public safety, and the courts.

Former Schwarzenegger Finance Director Mike Genest:

The Governor's proposal is more substantial than I expected, particularly with regards to new employees, but it doesn't go nearly far enough. While it's a good start, any proposal that does not require current employees to share in the responsibility of reducing our unfunded liability falls short of averting this crisis.

Former Assemblyman Roger Niello, R-Fair Oaks:

I applaud the Governor for raising this issue and I have always maintained that a legislated solution is the preferred solution. However, I encourage the Governor to become much more aggressive in his approach. Without substantial reforms we will continue to see a steep, dramatic decline in the funds available to meet our most pressing needs such as public safety, education and critical safety net programs.

State Treasurer Bill Lockyer, a Democrat, and member of the CalPERS board:

Public pension reform must be fair to both taxpayers and employees, and begin to close the security gap between public and private sector workers, without consigning retirees to poverty. Those should be the fundamental objectives. Meeting them requires a triad of reforms: lower guaranteed benefits, greater coordination of benefits with Social Security and supplementing defined benefits with an employee/employer savings component that's well-managed and secure.

The Governor is hardly a newcomer to these issues. But he has made a welcome and thoughtful reentry into the pension reform arena. Hopefully, the end product is a package that makes sense for workers and taxpayers, and restores public confidence by eliminating abuses and providing more uniform, simpler benefits at the State and local levels. As policymakers craft a plan, they should remember that closing the gap between public and private sector workers requires addressing both sides of the equation. We have to do everything we can to rebuild a private sector retirement system that is crumbling away.

Sen. Tom Harman, R-Huntington Beach:

The Governor has done something very bold. He has reached across the aisle by taking many of the reforms Republican brought to him during budget negotiations earlier this year and presented them in his plan. Is this everything I had hoped for in reforms? No. But is it something I can support ... absolutely if the plan includes supermajority protection and a vote of the people to ensure future legislatures can't undo these reforms.

There is no question this issue needs immediate attention. I say we put it before the Legislature right now and vote on it. Once the unions and special interests start hitting the halls of the Capitol this proposal will only get weaker. The Governor should call a special session of the Legislature. It's that important. Do it today. Every day that goes by without pension reform means less money is available for public safety and education. The Governor has my vote.

Sen. Bob Huff, R-Diamond Bar:

The Governor's admission today that California is not on a sustainable path when it comes to unfunded pension liabilities is a refreshing step in the right direction. While I believe that all of the Governor's proposed reforms should be placed on the ballot for voter approval, I am ready to support his ideas to rein in costs by raising the mandatory retirement age for all new employees and the adoption of a hybrid risk-sharing plan. These proposals are similar to what Senate Republicans brought to the Governor last year, and I believe the Governor is on the right path.

Sen. Anthony Cannella, R-Ceres:

The reform measures Governor Brown proposed today largely mirror those my colleagues and I proposed earlier this year in Senate Constitutional Amendment 13, and I'm encouraged by his willingness to embrace our efforts to craft a sustainable, actuarially sound pension system by pursuing reforms that end pension abuses, reduce unfunded pension liabilities and control ongoing costs.

Clearly, we must act now to fix our state's broken pension system, and I remain willing to work with Governor Brown and legislative Democrats to craft a comprehensive pension reform plan to be put before the voters. The Governor's proposal appears to be a step in the right direction - and one that I would support. I urge Governor Brown to put these proposals before the Legislature immediately, so we can vote on the measures as he laid them out today.

Sen. Bill Emmerson, R-Hemet:

Show me the language. Show me the supermajority legislative vote and the Constitutional protections through a vote of the people to ensure the Democrats won't weaken this historic reform. Put it before me, and if that's all there, I'm in. I'll vote for it.

Sen. Mimi Walters, R-Laguna Niguel:

I am pleased that Governor Brown is moving in the right direction in addressing our pension problem. I believe a hybrid pension system is a positive shift in the pension conversation. I am also pleased that he is looking at raising the age-limit, depoliticizing the CalPERS Board, dealing with retiree healthcare and curbing abuses.

However, until we actually review the plan and can crunch the numbers, I will remain cautiously optimistic. I look forward to assessing the whole plan and working on resolving our massive unfunded liability, while maintaining fairness and security for those who are in public service while not sacrificing state programs.

Allan Clark, president, California School Employees Association:

CSEA has been pushing for responsible reforms to prevent abuse and fraud in our pension system. However, some of the governor's proposals go too far and run the risk of undermining retirement security for thousands of California school bus drivers, special education aides, custodians, school cafeteria workers and their families.

Let me be clear about one thing: There is no Armageddon looming for our pension fund and no reason to question the long-term sustainability of CalPERS. Despite a ruthless campaign by out-of-state billionaires to generate sensational headlines based on faulty assumptions, CalPERS is not bankrupting the state.

Jon Fleischman, Republican strategist and FlashReport publisher:

Because of the greed of public employee unions and the vast some (sic) of money they spent on the campaigns of state legislators, we currently are offering state employees more in benefits than taxpayers can afford -- experts have pegged the current unfunded liability for public employee pensions, for current employees, at $500 billion dollars. While Governor Brown has proposed some common sense reforms for new employees that will retire a generation from now, we cannot afford to let this plan relieve the pressure to solve our current pension fiscal crisis. This only comes from addressing the benefits of current employees.

David Miller, president-elect, California Association of Professional Scientists:

I am disappointed in the Governor's proposal. The plan doesn't acknowledge that state scientists and all state employees have already negotiated many of these so-called reforms. It would circumvent the collective bargaining process, when bargaining has proven to work as the best process to make needed changes. Worst of all, the plan would undermine retirement security for current and future state scientists by establishing a "hybrid plan" as the new gold standard for public sector retirement plans in California.

Rich Danker, project director for economics for the Washington, D.C.-based conservative nonprofit American Principles Project:

It will take a lot more than the proposals Governor Brown introduced to prevent California's pension system from running out of money, but his introduction of a comprehensive reform plan is an admission that big changes are imperative.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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