Dan Walters

Dan Walters

Dan Walters: Pension overhaul plan falls short

Published: Friday, Aug. 31, 2012 - 12:00 am | Page 3A
Last Modified: Tuesday, Feb. 26, 2013 - 8:16 pm

Ten months ago, Gov. Jerry Brown proclaimed California's public employee pension system to be "unsustainable" and proposed a very mild, 12-point reform plan.

This week, he embraced a much-weaker version drafted in secrecy by the Legislature's Democratic leaders, who insisted that it is "a strong proposal" (Senate President Pro Tem Darrell Steinberg) and "comprehensive" (Assembly Speaker John A. Pérez).

Brown was only slightly less effusive, calling it a "significant step forward" that will "help to ensure that our public retirement system is sustainable for the long term."

None of the self-praise is warranted. The plan is mostly fluff, such as eliminating "spiking," the buying of "airtime" to boost pensions, and pensions for felons, and placing a theoretical cap on salaries qualifying for defined-benefit pensions that will affect only a tiny number of those on the public payroll.

The new plan's promoters say it will reduce future pension obligations by tens of billions of dollars, but the basis for that assertion is squirrelly, and even if accurate, does little to reduce unfunded liabilities that are at least $250 billion and could be twice as high.

That's the real issue. The stuff that grabs headlines, such as spiking or over-the-top pensions for a few malefactors, doesn't really mean anything.

What's important is what Brown said 10 months ago, that the system is unsustainable, based on pie-in-the-sky assumptions of pension fund earnings and gobbling up ever-larger shares of state and local budgets and thus compelling offsetting reductions in vital services.

Brown's original proposal would have had a minimal effect, at most, on that ever-growing debt, and the one he now accepts would have even less. Rather than take on his fellow Democrats and the state's powerful public employee unions, he meekly accepted a pension reform fig leaf.


Because neither Brown nor the Democratic legislative leaders were truly interested in overhauling an unsustainable system and preventing its massive debt from falling on future generations. Their goal was to enact something that they could call reform to help pass Brown's tax increase measure, Proposition 30.

A tipoff to that motive is the outpouring of denunciation from the unions. Their harsh criticism of the plan will be used by the tax campaign to make Brown and other Democratic politicians look like they're being tough and courageous on pensions.

Finally, as a statute, the new pension plan could be changed after November's tax election, no matter how it turns out. It's happened before.

A two-tier pension plan adopted in the early 1990s was repealed a few years later after Democrat Gray Davis was elected governor with union support, and benefits were increased sharply.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Dan Walters

Dan Walters, political columnist

Dan Walters

Dan Walters has been a journalist for more than a half-century, spending all but a few of those years working for California newspapers. At one point in his career, at age 22, he was the nation's youngest daily newspaper editor.

He joined The Sacramento Union's Capitol bureau in 1975, just as Jerry Brown began his first governorship, and later became the Union's Capitol bureau chief. In 1981, Walters began writing the state's only daily newspaper column devoted to California political, economic and social events and, in 1984, he and the column moved to The Sacramento Bee. He has written more than 7,500 columns about California and its politics and his column now appears in dozens of California newspapers.

Email: dwalters@sacbee.com
Phone: 916-321-1195
Twitter: @WaltersBee

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