Republicans Join Governor’s Call for Action on Pensions

By Senator Bill Emmerson

Also published at MyDesert.com.

In Gov. Jerry Brown’s State of the State address in January, he asked the Legislature to act on public employee pension reform this year saying “please take up the issue, and do something real.” I agree. The Legislature should act immediately and set the governor’s pension proposal for a hearing. That’s why legislative Republicans signed on to author legislation to enact the governor’s 12-point pension plan.

Last year during budget negotiations, Sens. Tom Berryhill, Anthony Cannella, Tom Harman and I discussed pension reform with Brown, and there was much agreement on how to best reform our public employee pension system. As a reflection of that agreement, we introduced Senate Constitutional Amendment 13, a reform measure that controls pension costs, reduces unfunded liabilities and ends abusive practices. Regardless of the lost opportunity for Democrats to negotiate a meaningful and honest budget last year, Brown assured Californians that he would bring his pension reform ideas forward in 2012.

Despite our failed negotiations with the governor, it was clear to us that he supported virtually every tenet of our proposal. When Brown finally introduced his pension reform language a few weeks ago, none of us was surprised it mirrored SCA 13. Unfortunately, legislative Democrats have refused to set either measure for a policy hearing — effectively shutting down discussion on real reforms.

Both the governor’s proposal and SCA 13 seek to address not only the “easy” fixes we all agree on such as spiking and double dipping, but also addresses the underlying structural issues that contribute to the pension problems faced by state and local governments.

Specifically, both plans offer new public employees a hybrid between the defined-benefit plans most public employees have and the defined-contribution plans most private-sector companies’ offer. New employees would be required to contribute more toward their benefits, but would have the additional opportunity to take advantage of a 401(k)-style plan they could manage themselves.

With regard to abuse, both proposals end pension-spiking practices by requiring that benefits be based on an employee’s highest salary, averaged over multiple years. Furthermore, pension benefits could be calculated based only on an employee’s salary — not counting overtime, uniform allowances, car allowances and other perks. Double-dipping and so-called “airtime” purchases are also eliminated.

In addition, prohibiting payment of pension benefits to public officials who are convicted of a felony related to their employment is good public policy. Both SCA 13 and the governor’s proposal will end this unacceptable practice of awarding pensions to felons convicted of embezzlement, bribery, extortion and other crimes.

The amount employees receive from their pension will be capped under SCA 13 — a simple, direct way to end outrageous pension payouts that further drain our limited state and local resources. Moreover, we think the governor’s tougher increase of the retirement age also makes demographic and economic sense.

According to a recent poll by the nonpartisan Public Policy Institute of California, 83 percent of Californians support reforming our public employee pension system. With the average debt of both state and county pensions at $30,500 for each California household, it’s no wonder that an overwhelming majority of Californians are demanding meaningful reform.

It’s time to stop the charade and get serious about pension reform. That’s why we are calling on our Democratic colleagues to engage on public employee pension reform in a meaningful and responsible way by giving the governor’s pension proposal and SCA 13 a true hearing.

California is watching.