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Trade pension reform for tax-hike on ballot?

January 24, 2011 12:00:00 AM PST
Governor Jerry Brown's game plan for dealing with the state deficit just got infinitely more complicated. His plan to extend temporary tax hikes is now linked to pension reform.Republican lawmakers don't like the idea of asking California taxpayers to extend temporary taxes, but a few might be willing to go along for a price.

Brown's budget proposal relies on asking voters to pay the temporary tax hikes for five more years.

Now Republicans are threatening to block the move to put the request on the ballot unless there's action on the public employee pension problem.

"It's very difficult to ask the people in the state of California to pay more money in taxes when Sacramento doesn't have its fiscal house in order," said state Sen. Mimi Walters (R-Laguna Niguel).

Among her ideas: convert retirement for state workers to a 401(k)-style plan.

"People are very upset that people who are making a living in government are getting astronomical pensions," said Walters.

While the pension problem has been brewing for years, the public started paying attention after the arrest of the former $800,000-a-year Bell City Manager Robert Rizzo, who'd be eligible for $600,000 in retirement, courtesy of taxpayers.

This year alone, $6 billion of the state budget is going toward pensions instead of other services.

"This is the kind of tumor that's growing on our body politic and it needs to be brought back down to size," said Dan Pellissier, California Pension Reform.

Public employee unions say it's not right to tie pension reform to the budget. They point out they already agreed to significant givebacks last year and the average retiree who left in 2008-09 receives $3,000 a month. Less than 1 percent are in the $100,000 club.

"The new 'welfare queens' are public employees. It's the mantra of the right wing who clearly won't be happy until there's no taxpayer funding of public employees," said Terry Brennand, Service Employees International Union.

Brown has said he wants to address the pension problem outside the current budget process, and he's willing to unveil his own proposal in the coming weeks. But he really needs those Republican votes to get the tax extensions on the ballot.