The State Worker

Chronicling civil-service life for California state workers

November 17, 2011
Former Schwarzenegger adviser renews call for pension reform

Thumbnail image for 100126 David Crane 1.JPGDavid 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.

Crane, whose group aims to help elect state legislators who demonstrate the "courage" to tackle major issues facing California, issued a statement in response to the Legislative Analyst's forecast Wednesday that the Golden State is headed for a nearly $13 billion shortfall going into fiscal year 2012-2013.

State workers remember Crane as a leading voice for changing the public pension system during Schwarzenegger's last term. He continues to write about pensions, although he's not directly involved in efforts by Gov. Jerry Brown or California Pension Reform to put reform measures on the November 2012 ballot.

Here's what the Democrat and successful global investor says lawmakers need to do:

• Renew the temporary tax increase adopted in February 2009;
• Enact the mandatory single sales factor corporate tax reform proposed by Governor Brown earlier this year but dedicate the revenues from that change to the general fund; and
• Enact the pension reform proposed by Governor Brown but modified to include proposals recently outlined by some pension reform groups to save more money in the short term.

Here's the full press release:

Govern for California President David Crane Issues Statement on LAO Report

SAN FRANCISCO - David Crane, President of Govern for California, today issued the following statement on the California Legislative Analyst's report that the state is facing nearly a $13 billion shortfall for fiscal year 2012-13.

"Today the Legislative Analyst's Office reported that state revenues will fall far short of budgeted revenues, virtually assuring that billions in "trigger" cuts enacted as part of the state budget last June will be implemented. If so, those reductions would mark the third cuts this year to higher education and human services and now even impact K-12 education spending.

"State budget cuts have already decimated higher education and human services as well as other state services such as San Francisco's Superior Court system, which in response to the June budget laid off a quarter of its staff, lengthened wait times for trials and boosted costs even for impoverished litigants.

"It doesn't have to be this way. In a special session, Governor Brown and state legislators could immediately adopt the following legislation:

• Renew the temporary tax increase adopted in February 2009;
• Enact the mandatory single sales factor corporate tax reform proposed by Governor Brown earlier this year but dedicate revenues from that change to the general fund; and
• Enact the pension reform proposed by Governor Brown but modified to include proposals recently outlined by some pension reform groups to save more money in the short term.

"Together, those provisions would produce desperately needed revenue while ensuring that new revenues go to public services rather than to pension costs. As recently demonstrated by Illinois, which saw billions of new revenues from a tax increase last year go to pension cost increases this year instead of to services, there's little benefit for citizens if taxes are raised without reforming pensions.

"Perhaps there's a better way. But the key point is that the Governor and legislature have the power to make these changes, right now. No initiative ties their hands and none of these actions requires a vote of the people. In other words, our leaders have the power to successfully govern California, right now. All that's required is the courage to act."

# # #

PHOTO: Former Schwarzenegger adviser David Crane speaks during a January 2010 interview with the Sacramento Bee's editorial board. Hector Amezcua, Sacramento Bee.

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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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