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Brown has two reasons to push pension reform

It's necessary for state and local governments, and it's vital to the rest of his own agenda.

October 31, 2011|George Skelton | Capitol Journal
  • Gov. Jerry Brown announces his public employee pension reform In October. His proposed overhaul of public pensions is a major step toward political reality.
Gov. Jerry Brown announces his public employee pension reform In October.… (Max Whittaker, Getty Images )

From Sacramento — Gov. Jerry Brown would be the first to admit that rolling out a 12-point pension reform plan is the easy part.

Brown has always belittled the notion of multipoint plans, dismissing them as targets for cheap shots.

Of course, he's usually most adamant about that when he doesn't have a plan and is being pressured to produce one.

But Brown is essentially correct. A plan without execution is merely an academic exercise. Plans are a dime a dozen. They can be found in any college faculty lounge. What's needed is political leadership capable of implementing a plan.

Brown's proposed overhaul of public pensions is a major step toward fiscal prudence and political reality. The governor should take even bolder strides, affecting current workers more. But that's unlikely, because he and the Democratic-dominated Legislature are indebted to public employee unions for campaign money.

Republicans, however, also feed at a shared trough: the prison guards union.

Abhorred by special interest financing of politics? Then move to public financing. But that's even less popular among the masses than generous public employee pensions.

Brown's pension proposal would be a significant achievement if enacted merely as is.

In brief, it would force most current public employees — state and local, including teachers — to pay more toward their pensions. And it would trim retirement benefits for future employees. They'd receive a pension-401(k)-type mix and their retirement ages would be raised.

Retirement pay, including Social Security, would replace 75% of their salaries. That's the goal. Still a good haul by private-enterprise standards.

The full retirement age for most new state employees would rise from 63 to 67. Current workers generally can quit and begin drawing partial pensions at 50, with some noted exceptions. Highway patrol officers and prison guards are entitled to full-boat pensions at 50.

"It's time to fix our pension systems so that they are fair and sustainable," the governor declared. "This is a program to protect the taxpayers as well as those who work to serve the taxpayers."

The plan won't go anywhere, however, unless Brown uses his brawn to shove it through the Legislature. And there wasn't much indication during the plan's unveiling that he would.

Brown said some of the right things to reporters: "I intend to work carefully with both parties" and "I'm asking them to take this seriously and get on with it." But he also emphasized, "I've got a lot on my plate coming up."

He listed them:

• A revenue shortage: Brown seems to be moving toward a ballot initiative to raise income taxes on the wealthy and increase the sales tax.

• Water: He apparently wants to pare down a pork-laden $11.1-billion water bond proposal that the Legislature has placed on the November 2012 ballot.

• Bullet train: He's quietly trying to head off a fiscal train wreck.

• Prisons: He's dumping thousands of lower-risk state prisoners into local custody and wants to ensure that the locals have enough money — and that there isn't a Willie Horton in the probation mix.

• Budget: Still the top priority. More cuts coming.

• Education: This is a mystery. It's anyone's guess whether the 73-year-old was serious when he told reporters: "I may never collect a pension. Because, after governor, I have some thoughts, maybe secretary of Education or something."

But here is why Brown should bear down hard on pension reform: Not only is it necessary for the long-term fiscal health of all California governments, it's vital to Brown achieving the rest of his agenda.

The public isn't going to give him more money until he and the Legislature convince the electorate that they can spend what they've already got more wisely. Voters have a long list of grievances and right near the top — at least for those in the private sector — are public employee pensions.

A poll by the Public Policy Institute of California in March found that 56% of likely voters considered the money spent by state and local governments on retirement benefits to be "a big problem."

A large majority, 57%, thought pension plans should be reduced for current employees. (That would raise legal questions.) And 74% favored scrapping pensions and adopting 401(k)-type systems for new workers.

Labor leaders are complaining about the pension plan offered by the man they bankrolled for governor. But they're fighting a losing cause. Out in the private sector, there's a lot of pension envy.

And here are two political realities: One conservative group is developing a ballot initiative that would even more drastically change the public pension system. Another is pushing an initiative that would make it far more difficult for unions to use members' dues for politics.

About the last thing either labor or the Democratic leadership should want is to look like an obstacle to popular pension reform.

Senate leader Darrell Steinberg (D-Sacramento) gets that. He's not going to carry pension water for either the governor or labor, he told me. "I've got an open mind."

This is a win-win issue for Republicans. If Democrats act like labor puppets, the GOP can attack them in next year's elections. If pensions are reformed, Republicans can claim some credit. They've been advocating it for years.

"The governor is on the right path," said Sen. Bob Huff (R-Diamond Bar), who's expected soon to be chosen as the new Senate minority leader. "I am ready to support his ideas."

That's good for Brown, because much of his plan will require a two-thirds majority vote. The stiffest resistance is expected from Democrats.

Brown will need to use all his muscle and moxie to turn his plan into more than a multipoint photo op.

george.skelton@latimes.com

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