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Pensions called a time bomb

Former Assemblyman Keith Richman says benefits for public employees must change.

January 31, 2007|Catherine Saillant | Times Staff Writer

Although out of office for two months, former Assemblyman Keith Richman is still sounding the alarm about the "ticking time bomb" effect of public employee pensions, calling it the greatest fiscal issue facing the state.

Richman told a group of Ventura County taxpayers advocates Tuesday that unless changes are made, the pension debt will overwhelm the state's ability to fund higher education, build roads and develop technology.

Some estimates show the state has promised its government workers at least $100 billion more in cash payments and healthcare benefits than its pension funds are projected to be able to cover. Billions more are owed to local government employees statewide, Richman said.

"This really is about our ability to compete in the future," Richman told the taxpayers group and about 100 business leaders also in attendance.

It's a familiar theme for the doctor, 53, a Republican who was termed out of his Northridge seat last year.

Richman estimates he's given the same talk more than 100 times during his six years in the Legislature.

Rising pension costs were a centerpiece of his failed bid for the state treasurer's post last year, he said.

He isn't bothered that attempts to change the system haven't gotten anywhere, or that the complex issue hasn't gained traction with the public.

The topic is so vital to the state's financial stability, he said, that he recently formed the nonprofit California Foundation for Fiscal Responsibility.

Richman said he will use it as a base to continue advocating for changes.

"Look, I'm not running for anything," he said after the noontime talk at the Las Posas Country Club in Camarillo. "I don't have an office picked out. I truly believe this is the biggest fiscal issue facing the state."

Business leaders, taxpayer advocates and a sprinkling of local government officials gave Richman a favorable reception. Several of those in the audience said they were unaware of the details of the pension debt.

"It's scarier than I thought," said Tom Kelley, executive director of the Camarillo Chamber of Commerce.

Ventura City Manager Rick Cole said his city is having trouble paying for police and fire services, in part because of rising pension debts.

But he worries that public employees are unfairly being painted as greedy and selfish. "I'd like to see a more centrist approach to the debate," he said.

Steve Mehlman, spokesman for the 140,000-member California State Employees Assn., noted that Richman introduced several pension bills while in office, each one of them failing.

Governments need only to plan prudently for retirement costs of their workers, not slash benefits, he said.

"He is cherry-picking numbers and taking statistics out of context to try to create a crisis when there is none," Mehlman said.

Gov. Arnold Schwarzenegger withdrew a 2005 pension proposal after labor unions lambasted it as endangering death and disability benefits for police and firefighters.

It took the governor until December to raise the issue again. From his hospital bed, where he was nursing a broken leg, he signed documents creating a bipartisan commission that will study potential reforms. Since then, however, none of the commission's 12 appointees have been announced by either Schwarzenegger or Democratic leaders.

A Schwarzenegger spokesman said the delay should not affect the commission's goal of producing recommendations by the end of the year.

"We're still working with the legislative leadership, both Republicans and Democrats, to determine the makeup of the commission," said Adam Mendelsohn. "We're going through the final list of appointees."

Richman said he has little confidence that the commission, or the Democratic-controlled Legislature, will make real progress in addressing the issue.

"It will ultimately need to be addressed through the initiative process," he said.


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