A ballot measure campaign to cut California’s public pensions will be launched in May by a coalition of politicians and business people led by former San Jose Mayor Chuck Reed, with the state’s largest retirement system a prime target.
The measure would take aim at California’s $300 billion giant Calpers, which has a near-iron grip on the state’s pensions. Calpers, America’s largest public pension fund and administrator of pensions for more than 3,000 state and local agencies, has long argued that pensions cannot be touched or renegotiated, even in bankruptcy.
“Calpers has dedicated itself to preserving the status quo and making it difficult for anybody to reform pensions,” Reed said in an interview. “This is one way to take on Calpers, and yes, Calpers will push back.”
Calpers spokeswoman Rosanna Westmoreland said: “Pensions are an integral part of deferred compensation for public employees and a valuable recruitment and retention tool for employers.”
The CalPERS push back will no doubt involve millions of dollars hijacked from California taxpayers spent on an ad campaign that makes it seem as if we are about to take food out of a retired DMV clerk’s mouth and ruin Christmas for her grandchildren.
In reality, California public employee pensions are an obscene example of greed built into the system (and onto the backs of taxpayers) and are sending the state careening towards financial disaster. The defined benefits approach guarantees pension payouts and uses a formula based on salaries that are usually well above market value. When the benefits formula can pay a lifeguard a pension of over $100K a year when he hits 50 it’s easy to see how that would get out of hand in a hurry in the most populous state in America.
Unless, of course, you’re a liberal. Long-term financial consequences are never considered because they truly don’t understand that you can’t just keep raising taxes forever.
Thus far, some barely audible lip service has been paid to the need for pension reform. The fact that a Democrat is leading the charge here takes away the “Republican war on the middle class” nonsense that Big Labor loves to trot out for fights like this. As a former mayor, Reed is extremely aware of just what a cancer these unfunded pension liabilities are.
This may only be Round One of this fight. All that remains to be seen is if concessions will be made before we hit fiscal Armageddon.