Republican candidate for governor Meg Whitman on Thursday proposed a major restructuring of state worker pensions that she said would dramatically lessen the billions of dollars that cash-strapped California would be required to pay out in future years.
Casting blame for the costs in part on the man she will face if she wins her party's nomination in June — former governor and current presumptive Democratic nominee Jerry Brown — Whitman said that pension liabilities are "like a train coming through the tunnel at every single Californian." She said liabilities amounted to almost $15,000 for every household in California.
"Think about what you could do with $15,000." Whitman told a gathering of voters in the City of Industry. "It's a child's tuition. It's a mortgage payment. It's a car. It's building an addition to your house. It's getting your life back on track after the economic crisis."
Thematically, Whitman was following in the footsteps of the man she hopes to succeed, Gov. Arnold Schwarzenegger. The Republican governor on Wednesday called the pension system "the single biggest threat to our fiscal health and California's future."
L.A. Mayor Antonio Villaraigosa also said Wednesday that he would push for a citywide ballot measure in November to scale back retirement packages for police officers and firefighters. Those benefits can only be changed by a public vote. Officials in other locales are also tackling the benefits issue, a fight which puts them in a direct clash with powerful employee unions.
Although emphasizing the economic reverberations of the pension system, Whitman took the opportunity to jab Brown on the issue.
"Back when Jerry Brown was governor nearly 35 years ago, in his first day in office, he gave public service unions the right to collective bargaining," Whitman said. "Then a number of years later, his chief of staff, Gray Davis, who became governor, actually gave away the store to the public service unions."
Brown did not actually give collective bargaining rights to state workers on his first day in 1975, her campaign later acknowledged. Her comment apparently referred to a statement Brown made that was supportive of such benefits.
"Once again, Whitman has her facts wrong," said Brown's campaign spokesman, Sterling Clifford. Clifford noted that collective bargaining measures were approved in 1976, 1978 and 1979, covering different workers.
Whitman favored raising the retirement age from 50 to 55 for current and new public safety employees and from 55 to 65 for non-safety state workers. Current workers also would have to contribute more to their retirement and more time would elapse before they were vested in the pension system under her proposal. Moreover, new non-safety workers would not take part in the pension program but rather in a 401(k) plan. Such plans, common in private companies, generally guarantee a specific contribution by the employer but not a specific benefit to the worker.
In an interview after her speech, Whitman left unclear whether workers now on the cusp of retirement would be required to work another 10 years before retiring, saying "I would leave that to collective bargaining and legislation."
She also said that details such as who would be covered and when new rules would take effect would be the subject of negotiation, were she to be elected governor.
Whitman said that the notion of offering state workers generous pension plans to offset stingy pay has become outdated since state employee salaries have risen in recent decades. She declined to say how much her proposal would cut into the state's pension liabilities.
"We would start working on this right away; it would be my top priority," she said.