Posted on 02/09/2012 9:48:05 PM PST by SmithL
SACRAMENTO -- The decision by a conservative group to drop its pension reform initiatives could mean that Democrats are off the hook for making substantial changes to California's pension system.
California Pension Reform suspended its campaign Wednesday after failing to muster any financial backing for either of its two proposed ballot measures, blaming the attorney general's office for a "misleading" title and summary that the group said would have turned voters against them.
It's a blow to Republicans, who have long maintained that unfunded liabilities -- at least $75 billion -- are unsustainable and will continue to weigh down the state's budget. But it's a breather for labor unions, who believe the issue has been hyper-politicized.
"We're happy a couple more pension initiatives bit the dust," said Dave Low, chairman of the union-backed Californians for Retirement Security. "That does open the field to take a look at what needs to be done in a deliberative policy way that doesn't get taken over by pure politics."
If the initiatives had stayed in play, observers say, Democrats would likely have tried to head them off with pension rollbacks that hewed closely to Gov. Jerry Brown's 12-point proposal, which has been called credible by proponents but largely assailed by labor groups.
With polls showing that voters support some form of pension reform, Brown has made it a priority, saying it's necessary to establish credibility with voters whom he will ask to raise taxes in the fall. It is also one of the keys to wooing the support of business interests for his tax initiative.
Now, Democrats may simply approve some of the low-hanging fruit in the governor's proposals, such as ending the practice of "spiking" pensions by artificially inflating final salaries.
If the pension reform campaign "had started getting signatures, I think the heat would have been really on," said Jon Coupal, president of the Howard Jarvis Taxpayers Association. "Now, the best we can expect is window dressing."
But Senate President Pro Tem Darrell Steinberg, D-Sacramento, said "absolutely not" when asked Thursday if the pressure is off to produce significant changes to the state's pension system.
"We are committed to getting pension reform done," he told reporters gathered in his Capitol office. "We are going to address all of (Brown's) 12 points, but that doesn't mean we'll do every point in the way he suggests. Our focus needs to be on ensuring that we don't reduce economic security for people in the middle and low end."
Steinberg said his caucus will work out details over the next month or two to resolve questions around how to set up a "hybrid" system, in which state employees would receive reduced "defined" pension benefits, coupled with Social Security and 401(k)-style benefits.
Determining whether the retirement age should be raised from 55 to 67 for non-public-safety employees, as Brown proposes, and deciding whether local government employees should be required to provide a certain percentage of pension contributions are two other things the Legislature will look at, Steinberg said.
Labor groups are vowing to resist any major rollbacks that they say violate collective-bargaining agreements or that would punish low- and middle-income workers. They say requiring current workers to contribute at least half of the cost to their retirement benefits is a nonstarter, as are hybrid retirement plans and increasing the retirement age.
They prefer to focus on the egregious examples that have enraged the voting public.
In addition to pension spiking, the abuses include "double dipping," which occurs when a worker collects a generous pension while working at a new public-sector job.
Accumulating years of vacation hours for huge payouts at the end of careers -- when salaries tend to be higher -- is viewed as another form of abuse.
"Clearly, the abuses we've seen -- the 1 percent of people playing the system, the top managers, we'd like to see rectified," said Low, a lobbyist for the California School Employee Association.
But Low said pension reform is "just not that urgent. It's not that salient an issue for voters. If we address these outrageous cases, most voters will be like, 'OK, you did take care of pensions.' "
In a December Field Poll, 51 percent of voters said they liked Brown's proposals, and a plurality -- 41 percent -- said that pension benefits are too generous, compared with 35 percent who said they're just right and 14 percent who say they're not generous enough.
Aaron McLear, a Republican consultant who worked with California Pension Reform, said Democrats need to produce "real" pension reform if they want voters on their side for tax increases.
"They need to demonstrate they're responsible stewards," he said. "For purely political reasons, they need to show they're doing something" that has wide support."
But that support apparently plummets when voters are told rollbacks would hit teachers, nurses and police officers, which is what Attorney General Kamala Harris said would happen in the title and summary for both measures.
"Now, we're talking about doing a campaign for something" that has the support of 30 percent of voters, McLear said.
"You don't," he said, "move forward with something like that."
Any state that won’t deal with these growing liabilities is simply warning off potential taxpayers (individual AND corporate); the debt won’t go away, and kicking the can down the road simply detracts from your property values (who wants to buy a share in that misery?) and your current earnings (they will pay the retirees regularly, with someone’s money).
“”Clearly, the abuses we’ve seen — the 1 percent of people playing the system, the top managers, we’d like to see rectified,” said Low, a lobbyist for the California School Employee Association.
But Low said pension reform is “just not that urgent. It’s not that salient an issue for voters. If we address these outrageous cases, most voters will be like, ‘OK, you did take care of pensions.’ “
Yeah, right Low! Just wait another year or two and you will see that “you didn’t take care of pensions,” and you and your PE union buddies are out in the street!
The quicker we can run this bloated state over the cliff.
Seeing none, we all know where this is headed.
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