Thursday, July 14, 2011

Santa Barbara Think Tank Launches Assault on Public Pensions

On Tuesday, a Santa Barbara-based policy research organization called the California Center for Public Policy filed three pension reform initiatives with the state Attorney General's office. After looking them over ourselves, we're hoping AG Kamala Harris was sitting down when she read them.

Pension tsunami hazard!
Cal Watchdog has the think tank's full press release here. The CCPP's first proposal: abolish collective bargaining for public sector employees, by a constitutional amendment that prohibits any government body in the state from recognizing a union or association of public employees or entering into any collective bargaining activity or agreement. Proposal two? An amendment to apply steep taxes to public pensions over $100,000. Annual pensions between $100,000 and $149,999 would be taxed at a rate 15% above the standard state tax rate for pension income; pensions over $150,000 would be taxed at 25% above the standard rate. Finally, the think tank is proposing an amendment raising the minimum retirement age for sworn public safety employees (e.g., police officers and firefighters) to 58, and raising the retirement age of everyone else to 65. According to CCPP president and UCSB economist Lanny Ebenstein,
"Raising taxes and cutting services is the wrong approach to California’s permanent government budget crisis. The right approach is to pay public sector employees fair wages and benefits, particularly pensions. Whether the standard is salaries, benefits, working conditions, or especially pensions, hundreds of thousands of California government workers have total compensation that dwarves their counterparts in the private sector. Ending public sector collective bargaining is a necessary step to putting California’s fiscal house in order. The power of public sector unions over government spending and in other areas is much too great."
Assuming the three proposals get the thumbs-up from the Secretary of State's office, Ebenstein's next step will be to solicit donations to get them on the ballot. If he's successful, we actually think they'd stand a decent chance of passing. While a spokesman for the union front group Californians for Retirement Security says, "These proposals are wildly out of sync with California, and fortunately there's a $15 million gap between dumb ideas and the ballot box," we think he's overestimating how seriously voters are taking the state's financial crisis, and how receptive they are to ending that crisis by clawing back public pensions.

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