READER’Ss EDITORIAL: WHAT WILL IT TAKE FOR US TO GET SERIOUS ABOUT PENSION REFORM?

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By Russell Buckley

 

March 16, 2011 (San Diego’s East County) -- Last month, the Little Hoover Commission issued a report about California's pension system: Public Pensions for Retirement Security. The Report is filled with information about where our pension finances stand, explanations about how we got here, and dire warnings about where we will be without an immediate change of course.

 

The Little Hoover Commission is an independent government oversight commission created in 1962. By statute, it is a bipartisan board consisting of five members appointed by the Governor and four named by the Legislature, as well four legislators. Here are a couple of examples of the Little Hoover Commission findings:

 

About where we stand: "California's pension plans are dangerously under funded, the result of overly generous pension promises, wishful thinking and an unwillingness to plan prudently. Unless aggressive reforms are implemented now, the problems will get far worse, forcing counties and cities to severely reduce services and layoff employees to meet pension obligations." And … "Barring a miraculous market advance and sustained economic expansion, no government entity - especially at the local level - will be able to absorb the blow (of the considerably higher pension payments ahead of us) without severe cuts to services."

 

About how we got here: "Today's benefit structure for public employees is unrecognizable from the design, funding structure and goals of the original 1932 version. Instead of retirement security, the public pension became a wealth generator. The risks of maintaining a more expansive system have been pushed largely onto taxpayers, who are demanding more transparency and accountability as they begin to understand the scale of the state and local government retirement burden." The report further states,"Initially, state workers retiring at age 65 could expect retirement income at roughly half of their final compensation, based on an average salary earned during their last five years of employment. The retirement formulas and benefits began ratcheting up in the 1940's and never stopped."

 

About how to change course: The commission recommends many remedies. From my vantage point, it appears that almost all of our elected leaders, at almost every level, have chosen to ignore taking any of the necessary recommendations. Despite our dire financial situation, and cuts in worthwhile progressive programs, including education, the Governor did not include pension reform in his budget proposal. In 2008/2009 and 2009/2010, since the current financial problems began, many more public agencies increased their promised pension payments than curtailed them. La Mesa, where I live, faces a $32 million unfunded pension liability (a significant amount in La Mesa) - but it didn't even rise to the level of importance of being included in the Mayor's State of the City address.

 

We must give our elected leaders the backing and backbone necessary to implement meaningful pension reform. Get better informed by reading the Little Hoover Commission Report. It is online. It is informative. It is important. It recommends actions - at every level - that can be taken to mitigate the damage to our public finances posed by overly generous public sector pension promises. Once you are informed, get involved by urging our elected representatives to act - now!


The opinions in this editorial reflect the views of its author and do not necessarily reflect the views of East County Magazine. If you wish to submit an editorial for consideration, contact editor@eastcountymagazine.org.