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Commission wants cuts to state worker pensions

March 2, 2011 12:00:00 AM PST
A controversial plan to cut state workers pension benefits came under fire in Sacramento Wednesday. A watchdog group recommended the cuts, but state workers are calling foul. Debate on the cuts is heating up.

A state oversight commission run by citizens says the state can no longer look to new hires as a way to solve the pension problem. It's recommending that benefits be changed for current state workers before they retire.

The Little Hoover Commission Executive Director Stuart Drown defended its report to the state legislature that warns public pension systems face soaring liabilities and will become unsustainable in the future.

So much liability that taxpayers will have to be asked to live with fewer government services in order to meet pension obligations.

The commission estimates unfunded liabilities are $240 billion.

"The commission feels that we've lost a sense of purpose of public pensions," said Drown. "They started as a way to provide old-age security and they've become a vehicle for wealth accumulation."

The problem has become so bad the commission is suggesting a drastic move: cutting or freezing the benefits of current government workers.

But Democrats, whose core constituents include public employee unions, were cool to the idea, especially since contracts are in place.

"To re-open those unilaterally also raises legal and constitutional red flags," said state Sen. Alex Padilla (D-Los Angeles).

"Most of these have to be dealt with at the bargaining table," said Drown.

Talk of touching the pensions of current workers strikes a nerve among union members who say it's not right to change the game mid-stream after putting in years of service.

"I feel it's wrong because what it's doing is balancing the budget on the backs of the working people, the working class," said state worker Richard Godina.

Public employee labor unions point out they've already agreed to numerous givebacks, which last year totaled $400 million, and that benefits are hardly generous.

"Our members retire, on average, at $2,500 a month. I hardly think that meets the standard of wealth anywhere," said Terry Brennand, a spokesperson for Service Employees International Union (SEIU).

It should be emphasized that they're not talking about changing benefits for current retirees, just current state workers who have time left before retirement.

Meanwhile, the Hoover Commission is also recommending that the city and county level change their benefits too because the problem is even worse if drastic measures aren't taken.