Reading Daniel Borenstein’s article in the Contra Costa Times on pension spiking earlier in the week brought back a memory of a fight against pension spiking in a different part of the state.
Los Angeles County had a bout with pension spiking in the early 1990s. Top county officials – not the average employee – worked under a relatively new salary structure in which they received both bonuses that were not considered part of the salary, and lucrative benefits. The value of the benefits was then included in calculating retirement pensions.
This pension spiking scheme was roundly criticized from the Howard Jarvis Taxpayers Association to the editorial page of the Los Angeles Times. In fact, when the Jarvis Association called a press conference to announce a lawsuit against the pension spiking, the Times reporter assigned to the press conference told Jon Coupal, then Jarvis attorney, and me, then the association’s president, that his editor already set aside a portion of the front page for the article.
The story did not make the front page. A short time after the press conference the Simi Valley jury acquitted the police officers in the Rodney King incident and the 1992 Los Angeles riots began. Coupal remembers taking off from the Burbank airport that evening and looking down at Los Angeles on fire.
The article on pension spiking appeared much further back in the paper the next day. However, that pension spiking scheme was finally ended by action of the Board of Supervisors. Later, the legislature passed a bill signed by Governor Pete Wilson to prevent that particular pension spiking method from becoming widespread.
But the problem with fast growing public pension liabilities did not go away. Now, the issue has finally made the front page in a big way. The issue of public employee pensions is getting the attention of the press and the people.
Everyday at the Pension Tsunami website, editor Jack Dean lists a number of stories on public employee pensions, most dealing with California. Everyday!
The articles flow from all perspectives. From Borenstein’s constant reporting on the issue, to public officials like San Diego Councilman Carl Demaio’s op-eds, to editorials such as the Los Angeles Times call for a reformed pension system, to Ed Mendel’s dedicated website, the issue is pounded relentlessly.
Even more noteworthy is big name Democrats like Willie Brown and Bill Lockyer pointing out the need to reform the public pension system.
There’s a simple reason for all the attention on public pensions. Public pension payments are squeezing government budgets so that the services governments provide will have to take a back seat to the obligation of providing pensions.
Taxpayers understand that pensions are a part of a public workers’ remuneration for doing their jobs. But, they want the retirement packages to be fair. One-hundred and two-hundred thousand dollar pensions don’t sit well with people who will only rely on Social Security and small returns on investments. Retiring at age 50 or 55 doesn’t appeal to people who figure they will never be able to retire to maintain a decent standard of living.
Voters don’t want to pay taxes for lavish pensions of public workers while scrambling to meet the needs of their own retirement. That is why the public pension debate, as arcane as it is, is gaining traction with the public.
Three initiatives to deal with the pension problem have now been cleared for signature gathering. Governor Arnold Schwarzenegger called for pension reform in his State of the State address. The pension issue will continue to dominate until the public employee pension system is made reasonable in the eyes of the voters.