Let's make a deal

Aug 29, 2012

Just days before the end of the two-year legislative session, Gov. Brown proposes changes in the state's public pension system that reflect hard negotiations between rival interests but do not include key elements of his earlier proposal.


From the LAT's Patrick McGreevy and Anthony York: "Gov. Jerry Brown announced a new plan Tuesday to rein in public pension costs that would raise the retirement age, cap benefits for the highest-paid employees and eliminate "spiking" — but lacks key parts of the bolder system overhaul he proposed months ago and would even increase some payouts."


"The governor described as "radical change" the program he and lawmakers agreed upon to address what has become a heavy burden on state and local governments and generated voter anger over rich benefits for government workers."


"It does not contain a linchpin of his original plan, however: a requirement that new employees have a substantial portion of their retirement money in 401 (k)-style accounts. Such a mandate would have shifted considerable financial risk from the state to the employees."


Almost immediately, public employee unions denounced the governor's plan as a slap at government workers.


From Patrick McGreevy in the LAT: "The proposal bypasses collective bargaining and represents the biggest rollback in public pensions in the history of California, according to Dave Low, chairman of Californians for Retirement Security, a coalition representing 1.5 million public employees and retirees."


“We are outraged that a Democratic Governor and Democratic Legislature are taking a wrecking ball to retirement security for teachers, firefighters, school employees, and police officers," Low said in a statement. "While we support common-sense changes to end spiking and abuse of the system, this package is unfair and wrong."


"Appearing with a dozen public employees and labor leaders, Low objected to the proposal to put a $110,000 cap on the salary that pensions can be based on while raising the age for full retirement to 67 for new employees not involved in public safety jobs."


The pension changes, if ultimately approved, could have a dramatic impact on teachers and school administrators.


From John Fensterwald in EdSource: "The retirement age for new teachers will be pushed back two years; they’ll have to fork over about another 1 percent of their pay into the retirement system. And their bosses – principals and administrators ­– will see a ceiling of $132,120 as the portion of their pay used to calculate retirement pay. Those in the highest-paid jobs, earning $200,000 plus, may see pensions reduced by tens of thousands of dollars."


"These are the primary changes specifically to members of the California State Teachers’ Retirement System, or CalSTRS, from pension reforms negotiated between Gov. Jerry Brown and Democratic leaders. The package, which will affect every state and local public employee to various degrees, was unloaded on lawmakers Tuesday, four days before the end of the legislative session...."


"What’s not yet known is how much the combination of decreased benefits and higher contributions for public workers would chip away at the huge unfunded liability in state and municipal pension systems: $65 billion alone for CalSTRS, the nation’s second-largest pension system, behind only CalPERS, the California Public Employee Retirement System."

Meanwhile, a mega-deal was in the works in the Capitol between trial lawyers and insurers  -- two of the Capitol's venerable, rival interests  -- targeting everything from health care to uninsured drivers.

From The Recorder's Cheryl Miller: "Trial lawyers and insurers late Monday were negotiating a blockbuster, end-of-session legislative deal that, as proposed, would affect recovery of medical damages, the use of after-market car parts and coverage of underinsured motorists."


"The last-minute negotiations had lawmakers and lobbyists scrambling, as the scope of a bill once dealing only with plaintiffs' recoveries expanded to include unrelated topics and new political players. One person familiar with the issues placed the odds "around 50-50" that any of the proposals would be adopted by the time the legislative session ends Friday at midnight."


"The centerpiece of the talks is Senate Bill 1528, the Consumer Attorneys of California-backed legislation aimed at ameliorating the impacts of Howell v. Hamilton Meats & Provisions. The 2011 state Supreme Court decision allows accident victims to collect only the negotiated amount their insurers paid for medical care, not the actual cost."


A move is afoot to put a statue of Ronald Reagan in the Capitol -- the bill easily passed one house and is likely to be approved with equal ease in the other.


From Greg Lucas in California's Capitol: "The statue’s design, placement and upkeep would be paid for by the Ronald Reagan Centennial Capitol Foundation, created last year to help celebrate the actor-turned-politician’s 100th birthday."


 “A bronze statue of Jimmy Carter greets visitors in Atlanta, Georgia; John F. Kennedy in Boston, Dwight Eisenhower in Topeka and Abraham Lincoln in Springfield, Illinois,” said the bill’s author Assemblyman Curt Hagman, a Chino hills Republican in a statement."


"The bill passed the Senate August 28 but has received no opposition and will likely be sent by the Assembly to the Democratic governor – who succeeded Reagan 38 years ago."



Get the daily Roundup
free in your e-mail

The Roundup is a daily look at the news from the editors of Capitol Weekly and AroundTheCapitol.com.
Privacy Policy