A proposed public pension overhaul could save state and local governments between $40 billion and $60 billion by doing two things -- cutting the benefits for new hires and requring employees to pick up more of the cost of their benefits.
From Ed Mendel in Cal Pensions: "Instead of negotiations, the plan simply imposes lower pension formulas on new employees in CalPERS and CalSTRS and authorizes employers, if there is no agreement, to use bargaining impasse to raise employee contributions to half of the “normal” cost by 2018."
“I do not know what portion of the savings are due to increased member contributions,” Alan Milligan, the CalPERS chief actuary, told the board yesterday. “I do know that the two biggest pieces of that savings are the benefit changes and the member contribution changes.”
"Brown issued a 12-point pension reform plan last October that was opposed by unions. He proposed a “hybrid” plan for new hires aimed at replacing 75 percent of final pay with a smaller pension, a 401(k)-style plan and Social Security. The plan replaces the hybrid with the lower pension formulas and a cap on final pay used to calculate pensions. The cap is tied to the maximum income taxed for Social Security, now $110,100. For pay above the cap, employers can offer a 401(k)-style plan."
The pension debate is joined in Sacramento, but the outcome of the discussions will affect local government workers across the state, too.
From the Riverside P-E's Jim Miller: "There are thousands of local government agencies around the state, employing hundreds of thousands of workers covered by a variety of retirement plans."
"By Friday, the Legislature is scheduled to consider imposing its plan to overhaul public-employee pensions on them."
"The pension-overhaul proposal that emerged this week after months of private negotiations between Gov. Jerry Brown, Democratic leaders and public-employee unions would make sweeping changes to the retirement plans not only of state workers, but also to those of firefighters, police, code enforcement officers and other local employees."
And even if the plan goes into effect, will it have a dramatic impact on the the costs of the system?
From the LAT's Evan Halper and Anthony York: "Some of the country's most respected investment gurus, including Berkshire Hathaway Chairman Warren Buffet and Vanguard founder John Bogle, say the burden on taxpayers will be much larger."
"Their forecasts would leave Californians saddled with at least a $270-billion gap, and the Wall Street credit rating agency Moody's suggests the gap could be at least $100 billion more than that."
"Put another way, every California household may be on the hook for roughly $23,000 for public retirements over the coming decades. Brown's plan might whittle that tab to $18,000."
There's going to be a dress rehearsal Thursday on a crucial part of California's law curbing greenhouse gases, It's the so-called "cap-and-trade" system, in which emission "allowances" can be sold, traded and auctioned off to allow polluters to fix up their equipment and remain in operation as the new rules take effect over time.
From the Mercury News' Dana Hull: "So on Thursday, the state will stage a trial run of the online auction of emissions permits for roughly 150 major emitters of greenhouse gases to give the state time to work out any glitches before the official Nov. 14 launch of the program."
"This is the first time the program will be put through its paces," said David Clegern, a spokesman for the California Air Resources Board. "It's a chance to kick the tires, and it's a chance for us to run the system in real time and see how it works."
"California's landmark global warming bill, known as AB32, was signed into law by former Gov. Arnold Schwarzenegger in 2006."
Meanwhile, a bill dealing with those who openly tote around firearms has been expanded in the Legislature.
From Josh Richman in the Oakland Tribune: "A bill to extend the state’s ban on “open carry” of handguns to include long guns as well has been sent to Gov. Jerry Brown’s desk."
"AB 1527 by Assemblyman Anthony Portantino, D-La Canada Flintridge, passed an Assembly concurrence vote 45-30 after about an hour of debate Wednesday, according to the lawmaker’s office. The state Senate had voted 23-15 Monday to pass the bill; the Assembly had approved an earlier version of it May 3 on a 44-29 vote."
"Portantino issued a statement saying the law “will safeguard families confronted by rifle-toting gun enthusiasts and will shield law enforcement personnel from tense situations where they don’t know if the rifle is loaded or unloaded.”
