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Commentary: Pensions Will Crush CA's Government



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(Sacramento, CA)
Friday, March 11, 2011

The report pulls no punches. It calls the situation dire.  If something is not done to reduce retirement liabilities, the Little Hoover report says "pensions will crush government."

Local governments:  cities, counties and special districts, are in worse shape than the state. The report predicts that in coming years, cities like Los Angeles, San Jose and San Francisco will spend one-third - let me repeat that, one-third of their operating budgets to finance their pension systems. 

It's not just the public that will suffer in reduced services. Government employees will pay a price,  in salary freezes, increased payroll deductions, and layoffs. 

So, what to do about it? Commissioners have recommend what no other public entity has suggested before - cutting benefits for current workers. That is, freeze pensions: allow workers to keep what they have already earned, but institute much lower pension formulas for the future.

Is it legal? Union leaders say absolutely not. But, why not? In the private sector, such pension freezes are imposed routinely.

If the choice is between a job, and a pension that is a little less rich, most workers would prefer to keep their jobs. After all, one point the report makes is irrefutable.  "A pension not tied to a job is worthless."

 

Ginger Rutland writes for The Sacramento Bee opinion pages.

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