4 State Worker Unions Reach Tentative Deal To Trim Pension Benefits

On Wednesday, the leaders of four California workers' unions reached a tentative agreement with Gov. Arnold Schwarzenegger's (R) administration to roll back pension benefits, the Los Angeles Times reports (Goldmacher, Los Angeles Times, 6/17).

The unions, which represent about 23,000 state employees, are:

• The American Federation of State, County and Municipal Employees Bargaining Unit 19, which represents health and social service workers;
• The California Association of Highway Patrolmen;
• The California Association of Psychiatric Technicians; and
• The California Department of Forestry Firefighters Local 2881 (Howard, Capitol Weekly, 6/16).

Agreement Details

The new pension agreement would:

• Increase the retirement age for new hires;
• Base final retirement compensation on the last three years of earnings; and
• Increase annual pension contributions to at least 10% (Theriault, San Jose Mercury News, 6/16).

In addition, AFSCME and the psychiatric technicians group agreed to take one unpaid personal leave day per month.

Potential Savings

According to the Schwarzenegger administration, the pension adjustments would reduce state spending by an estimated $72 million for the fiscal year that begins July 1 (Ortiz, Sacramento Bee, 6/17).

Ana Matosantos, director of the state Department of Finance, said projected savings could reach $2.2 billion if the remaining 170,000 unionized California workers adopted similar contracts (Los Angeles Times, 6/17).

Moving Forward

Union members and the Legislature still must ratify the tentative agreement. If ratified, union members would be protected from future furloughs and from temporary wage reductions if lawmakers fail to pass a final budget by the end of June (Ortiz, Sacramento Bee, 6/17).

Editorials

The deal reached on Wednesday is "[o]ne small, but important, step forward to fiscal responsibility," a Santa Cruz Sentinel editorial states. The editorial concludes that the "time is now" for state and local governments "to make further inroads on unsustainable pension benefits" (Santa Cruz Sentinel, 6/17).

"The tentative pacts announced Wednesday suggest that bargaining can work, but without pressure from the Legislature, other unions are unlikely to fall in line," according to a Sacramento Bee editorial. The editorial criticizes Senate Democrats for voting against a bill (SB 919) last week that would have reduced pension benefits and raised the retirement age for newly hired state workers (Sacramento Bee, 6/17).