As Professor Jacobson recently noted, California Governor Jerry Brown occasionally has moments of sanity and clarity.
In what can only be described as a Thanksgiving miracle, it is being reported that Brown is endeavoring to tackle the looming employee pension crisis by reforming the pension benefits for current government employees.
Gov. Jerry Brown got most of what he wanted when he carried a proposal to shore up the state’s underfunded public employee pension plans by trimming benefits for new workers.Five years later, he’s in court making an expansive case that government agencies should be able to adjust pension benefits for current workers, too.A new brief his office filed in a union-backed challenge to Brown’s 2012 pension reform law argues that faith in government hinges in part on responsible management of retirement plans for public workers.“At stake was the public’s trust in the government’s prudent use of limited taxpayer funds,” the brief reads, referring to the period when he advocated for pension changes during the recession.
Brown has been battling the public employee unions in California over the 2012 pension reform measures, and his office this month supplanted the attorney general in defending Brown’s pension reform law court. Legal Insurrection readers will recall that the state attorney general is Xavier Becerra, who has spent much of his time in office overseeing the states War Against President Trump.
The numbers behind California’s current pension woes are staggering.
The state’s unfunded pension liabilities are currently estimated at nearly $60 billion. Its annual contributions to the pension fund under current assumptions are expected to nearly double from about $5.8 billion now to $11.2 billion in 2031-32.The sources of the shortfall are etched into history; they include a period during the late 1990s when CalPERS felt so flush from market gains that it gave the state a contribution “holiday,” cutting required annual contributions by more than 80% even as it endorsed increases in pension benefits. When the markets crashed in 2000 and again in 2008, a yawning gap opened in the pension fund. The options for filling it today are to raise taxes, cut services, or deny workers promised benefits, none of which is palatable.
As it appears a robust economy helps with pension payments, maybe Brown and his Sacramento minions should declare a truce in the war against Trump. The president’s regulation-cutting, business friendly approach has already created four trillion dollars of wealth.
Perhaps Brown could at least have a chat with the White House on how to actually grow the state’s economy instead of slamming the administration with more social justice inanity? The only danger here is that Trump could tweet about his new friend!
Brown has a year to cement his political legacy forever. It would be wise for him to pursue this course, instead of continuing to pursue climate change glamour or constructing the bullet train to nowhere.
Furthermore, it could be a more meaningful,national legacy than the one that earned him the “Moonbeam” moniker. States with their own looming employee pension crisis (e.g., New Jersey and Illinois) could actually benefit by following the new California model.
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