It’s been more than 10 months since California Governor Jerry Brown unveiled a plan to tackle the state’s growing pension crisis, but the legislature hasn’t been feeling any particular urgency. They’ve only now begun to talk with the Governor about ways to make the bill more palatable. Many expect something to be passed before the session ends this Friday.As the San Francisco Chronicle reports, both the Governor and state Democrats appear certain that an agreement can be reached. Unfortunately, though that bill has to be introduced and voted on in just a couple of days, we still have no idea what might be in it:
The 12-point plan that Brown unveiled last year included proposals to increase the retirement age and create a hybrid system between defined and 401(k)-style benefits. It aimed to increase the amount state workers pay toward their benefits and curb the practice of “spiking” – in which an employee receives a raise shortly before retiring to boost his or her pension payout.Democratic leaders have been negotiating with Brown for months, and one of the main sticking points has reportedly been the hybrid model. But last week, Senate President Pro Tem Darrell Steinberg, D-Sacramento, said that issue is no longer a problem, though he would not elaborate.Assembly Speaker John Pérez, D-Los Angeles, said a Democrat-led joint conference committee has been meeting since October and will unveil a proposal this week that is “much more expansive than what the governor proposed.”
While Governor Brown’s proposals were just a beginning, at least they gave us something to go on. Have the Democrats strengthened Brown’s proposals or watered them down? Almost certainly the latter, but still don’t know.Yet while we are disappointed with the lack of information, we sympathize with the Democratic Party’s plight in California. The Democrats desperately need to appear to be independent of the state’s voracious public sector unions in order to win voter support for a big tax increase. But they also cannot afford to alienate the motor of their party—the public union movement. To look independent while serving one’s master is a tough proposition. Let’s see how they manage.Meanwhile, the stakes are high. On the one hand, state workers past and present have legitimate concerns. Most of the pensions they receive are quite modest (and in lieu of Social Security), and workers should certainly get them. On the other hand, all across California, poorly structured, poorly paid for pensions are now literally destroying the ability of cities, towns, and the state itself to provide basic services to constituents. Balancing these two conflicting interests is a tough if not impossible proposition, but it’s also in state officials’ job descriptions.Aside from pandering to the unions while pleasing the voters, at some point the legislature must also deal with the real problems the state is facing. Perhaps they will succeed, but California’s disastrous governance record over several decades now suggests that, as usual, they will disappoint.