Last Friday, the California Assembly and Senate approved legislation encompassing sweeping changes to public pension programs. The bill is now on Gov. Jerry Brown’s desk, where it will almost assuredly be approved.
The content of the bill represents a series of compromises between Governor Jerry Brown and Democrats in the legislature, a fact Republicans aren’t very happy about. They claim that the pension reform package is simply a watered-down version of Brown’s original proposal, and it doesn’t go far enough to make significant changes to the troubled program.
"I believe that this was a very robust pension reform package," Senator Daryl Steinberg told AirTalk. "We rolled back formulas for new employees, we raised the retirement ages for new employees, we capped pensionable income for new employees, then for current employees we insisted and the law reflects that over the next 5 years they contribute 50 percent of their pensions."
Supporters point to the fact that the changes should save California upwards of $60 billion over the next three decades, but that’s admittedly a minor dent in the $164 billion needed in funds.
The bill will raise the retirement age for most public employees and place a cap on payout amounts. Current workers will not be affected, but any new hires after January 1st, 2013 would be subject to these new conditions.
"Once employees start work they have a Constitutional and contractual right to the formula that they entered, the formula that they had when they entered the public service," said Steinberg.
There are a number of obstacles in the way, however, including workers' unions who think these new changes amount to denying public workers of rights.
"We made it possible for cities and counties to say 'we can increase the amount that employees have to contribute to their pensions.' They didn't have the right before they were given that right." said KPCC reporter Julie Small. "Unions see this as things that were bargained before are being taken off of the bargaining table … you must contribute half, and that's pretty significant."
But Governor Brown's signature doesn't write these pension reforms into stone, according to Sacramento Bee reporter Dan Walters. "Number one, you can undermine this very easily from a financial standpoint by adjusting salaries, and number two, its all on statute, it's not in the constitution, which means it can be repealed the day after the election."
Several other bills have been approved by the legislature and await the Governor’s signature or veto. Will he approve a new tax on timber that comes from outside California? What about the bill which overhauls workers’ compensation? What issues are you primarily concerned with?
Darrell Steinberg, President Pro Tem of State Senate, California State Senator, D-6th District (most of Sacramento County)
Mimi Walters, California State Senator, R-33rd District (Orange, Tustin, Mission Viejo areas)
Julie Small, KPCC’s capitol reporter
Dan Walters, political columnist for The Sacramento Bee