Governor Calls for Pension Cuts as Key Element of Budget Plan
On Thursday, Gov. Arnold Schwarzenegger (R) announced that he will refrain from signing a budgetÂ package until the state scales back pension benefits for state employees, the Sacramento Bee reports.
Schwarzenegger discussed his proposed pension changes during a roundtable discussion with former Assembly Speaker and former San Francisco Mayor Willie Brown (D) and other state leaders.
According to the governor,Â CalPERS' pension costs will reach $3.8 billion in fiscal year 2010-2011, an increase of more than 2,000% over the past decade. Schwarzenegger said California's high pension obligations have forced the state to cut back on social services and other state programs.
As part of his budget plan, the governor called for lawmakers to roll back pension terms to the level that existed prior to 1999, when the Legislature approved more generous benefits.
Also during the roundtable, researchers from Stanford University and Northwestern University presented reports finding that California has underestimated its pension liabilities.
Dave Low, spokesperson for the advocacy group Californians for Health Care and Retirement Security, called the research "flawed." He said unions were willing to negotiate over pension changes but did not support linking pension benefits to the state budget (Ferriss, Sacramento Bee, 7/9).
So far, the governor has reached agreements with six state worker unions over contracts that include pension changes. The contracts are awaiting approval from the Legislature (Herdt, Ventura County Star, 7/8).
Local Governments Also Eyeing Pension Cuts
Meanwhile, numerous city and county governments across California are taking steps to roll back pension packages and retiree health benefits for public employees.
CalPERS estimates that approximately 75 cities, counties and public agencies are considering pension changes (Lewis, Sacramento Bee, 7/9).
On Thursday, Capital Public Radio's "KXJZ News" reported on Schwarzenegger's push for pension reform. The segment includes comments from the governor and Brown (O'Mara, "KXJZ News," Capital Public Radio, 7/8).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.