Gov. Brown's Pension Reform Deserves Vigorous Support

by Gary Toebben

Last week, Gov. Jerry Brown released a forward-looking pension reform plan that will apply to current and future public employees, including state, local and school employees. His 12-point plan is aggressive and comprehensive, and deserves the support of the taxpayers and the state Legislature. It acknowledges the runaway and unsustainable costs of public employee pensions that have been staring the state in the face for far too long and can no longer be ignored.

Earlier this year, the Chamber met personally with Gov. Brown to address our two major statewide concerns, pension and California Environmental Quality Act (CEQA) reforms. During that meeting Gov. Brown pledged to take action on both issues. He kept his promise and presented a pension reform plan last week that focuses on fair and reasonable standards for public employee retirement benefits. Among the most important aspects of the Governor’s plan:

• Employees will contribute at least 50 percent of their pension costs
• Retirement age for non-safety employees will mirror the Social Security standard of 67 years old
• The common practice of pension spiking will be stopped by requiring that the calculation of retirement benefits be based on the final 3 years of employment and not on just the last year
• Other frequently used practices to boost retirement benefits like "double dipping," retroactive pension increases and pension holidays will be eliminated
• The independence and expertise of pension boards will be increased so that taxpayers, not just retired employees, are involved in decision making that impacts California's long-term liabilities and financial stability.

While Gov. Brown's reforms are very reasonable, they will face strong opposition in the state Legislature. It will be incumbent on all of us, individuals and business organizations to vigorously remind our elected officials that Gov. Brown's plan is fair and that taxpayers are tired of footing the bill for a pension plan that the state and local governments cannot afford.

The business community wants a public pension system that is fair to public employees and the rest of hardworking Californians as well. We want a transparent, honest calculation of benefits without gimmicks and loopholes, and a system that does not put the state budget in a deeper fiscal crisis. Gov. Brown has provided a plan. He needs your support today.

And that's The Business Perspective.