With Stockton’s bankruptcy battle decided on Thursday (Final score: Creditors, 0; CalPERS, 1), California’s public pension holders must be breathing sighs of relief. But taxpayers shouldn’t rest easy; the full extent of the state’s problems is breathtaking, and its politicians are just postponing the painful day when it finally must be sorted out. So says Steven Greenhut in a scathing takedown of the state’s pension policies in the American Spectator. When the going is good in California, it is very, very good:
Most so-called “public-safety” employees—police, firefighters, prison guards, billboard inspectors, school security guards, cooks at prisons, etc.—are eligible for the “3 percent at 50” plan. That means they receive 3 percent of their final pay times the number of years worked, and it is available to them at age 50. (It’s usually calculated on base pay and not overtime, but overtime counts in some jurisdictions.) Thus, if a Newport Beach lifeguard earns $150,000 a year, after thirty years he receives 90 percent of that pay—or $135,000 a year—for the rest of his life and his spouse’s life. The retirement ages are so low that in some cities taxpayers are paying for an entire second ghost workforce behind the one that’s actually doing the job. (New York City already is past that tipping point, as taxpayers there pay more retired cops than active ones.)
The state is generous, but is anyone making sure it can pay the tab?
[A] judge in Ventura County pre-emptively halted an election that would have asked voters to reform that county’s pension system. A Sacramento County judge even tossed the portion of the CalSTRS reform that required teachers to pitch in a little more toward their pensions (in exchange for vesting other benefits, given that it is illegal in California to reduce public-employee benefits without giving something equal or greater in exchange).
In late August, the CalPERS board—you know, the same board run by union activists and union-controlled politicians—voted on a measure that effectively obliterates even the modest pension reform that Brown and company passed as a tax-raising window dressing.
Here’s how it works: Currently, existing state and local employees get all sorts of special pay. There are ninety-nine extra-pay categories, most of which should induce mockery and anger. Librarians, for instance, are paid extra for helping library patrons find books. Police are paid extra for driving alone in patrol cars. Fire chiefs get special management pay. Gardeners get paid extra for fixing sprinklers. Those categories have existed since the 1990s, but a few years ago CalPERS decided that they should also be used when it’s time to calculate an employee’s pension—thereby inflating the final base pay and ensuring higher pension benefits for many years to come.
Read the whole thing here.