Published: Aug. 24, 2012 Updated: Aug. 25, 2012 10:17 p.m.


SACRAMENTO – Gov. Jerry Brown and the Democrats in the Legislature have made it clear that their No. 1 priority this year is getting voters to approve a tax increase in November.

But many analysts doubt that voters will approve the governor’s tax plan, Proposition 30, unless he and the Legislature enact pension reform – and the clock is ticking.

The plan would increase the retirement age for public employees from 55 to 67 for non-public safety workers and require government workers to pay more for their benefits.

Under the California Constitution, the Legislature must adjourn for the year at midnight Friday. Democrats swear they’ll get something done before then, but critics doubt that at this late hour it’ll represent serious reform.

“It’d be nice to know that they’re taking reforms seriously,” said Assemblyman Allan Mansoor, R-Costa Mesa, “but if they do it at the last minute I think that speaks volumes as to the importance they’re placing on it, or lack thereof. They’re passing other bills that are increasing expenditures and putting more burdens on our budget, but they’re not doing anything to reform our existing problems, such as pensions.”

For years, state and local governments have been struggling under the weight of rising pension obligations for current and future public employees. Pension costs are the fastest-growing expenditure for city and county governments, according to California Common Sense, a nonprofit group that analyzes government data for the public’s benefit.

Late last year, the Stanford Institute for Economic Policy Research calculated that the combined unfunded liabilities for the California Public Employees Retirement System, the California State Teachers’ Retirement System and the University of California Retirement Plan equal $290.6 billion. And the gap is just expected to grow over the coming years.

These obligations have increased thanks to a weak economy and generous retirement benefits approved by state and local leaders. In fiscal year 2011-12, for example, CalPERS posted a 1 percent return on investments when its goal had been a 7.5 percent return.

Meanwhile, a July 2011 report by Capitol Matrix Consulting for the California Foundation for Fiscal Responsibility, a pension reform group, found that public sector retirement programs in California are “much richer than those in the private sector for full-career employees.”

Such dismal findings are fueling a widely held belief that the state’s pension systems are unsustainable and that their spiraling costs will gobble up tax revenue needed for public safety, education and other vital services.

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