Can’t blame this one on Republicans. Over the last couple decades, the GOP’s share of the control in Sacramento has ranged in varying degrees from small minority to smaller minority, so you can’t blame this one on them, even if the ruling Democrats sought to put together a commission that could be called “bipartisan”.
The bipartisan Little Hoover Commission recommended today that California state and local governments roll back pensions for existing employees, dump guaranteed retirement payouts and put more of the pension burden on workers.
Although any attempt to reduce pensions for current workers would prompt a legal battle, the commission says that public pension funds are in such dire financial straits that they’ll never right themselves by reducing benefits for new hires.
- The most controversial Hoover proposal would allow state and local governments to freeze existing employee pension benefits and then lower them for future years worked.
- Move public pension from the current defined benefit model that guarantees retirement payouts, to a three-legged hybrid system that includes a small defined benefit pension, Social Security and an employer-matched 401(k) component that is professionally managed.
- Establish uniform rules to prevent “pension spiking.”
- Establish an annual salary cap of no more than $90,000 for purposes of figuring out pension benefits.
- Prohibit “pension holidays” that allow government to skip contributions when pension funds are flush.
- Prohibit retroactive pension benefit hikes.
- Split pension contributions between employer and employee.
The steps the Democrats are being forced to consider taking in Sacramento makes what they’re doing in Wisconsin seem pretty tame.
The unions are given license to automatically deduct the dues from their member’s paychecks, these dues fund the political campaigns of politicians who will then grant them bigger salaries, better benefits and more generous pensions, and when you repeat the process election after election after election . . . is it any wonder that sooner or later the salaries and benefits and pensions of the state workers are going to be larger than anything the taxpayers and the economy can bare?
You end up with public sector salaries, benefits and pensions that are UNSUSTAINABLE. There are about a dozen states now where the collusion between big labor politicians and state unions has plundered the economy to a point where the only choices left are either drastic and brutal adjustments now or a full, Greek-style meltdown not far down the road.