Glazer, Baker join for discussion on state pension debt

Full house for first installation of 2018 Bipartisan Speaker Series

The 2018 Bipartisan Speaker Series, hosted by Assemblywoman Catharine Baker (R-San Ramon) and State Senator Steve Glazer (D-Orinda), kicked off with a full house in San Ramon on Monday night, as locals turned out for a discussion on pension reform.

Glazer and Baker, who represent the Tri-Valley in the State Legislature, have held over a dozen bipartisan town hall meetings over the last two years, and they plan to continue the tradition in 2018, focusing on California’s critical issues.

“I really want to underscore my gratitude for having a good colleague in the senate as well,” Baker said. “There are a lot of things that people can focus on that divide them ... And we've had an opportunity to find ways (to determine) what we're both for, and what we can both be fighting for in our area. And we just find that we're so much more effective, both of us can be more effective when we work with people that way.”

At the series-opening event Monday, the politicians hosted guest lecturer David Crane, a pension expert and president of Govern for California, a group that supports legislators in confronting difficult fiscal issues.

The hour-long discussion at San Ramon City Hall was dominated by a presentation by Crane, who then took questions from attendees on the issue of the evening: California’s growing pension liability crisis.

Crane opened with an overview of the problem at hand.

“The key point I want you to take away, right now, is that defined benefit plans are not the issue, they can work just fine,” Crane said. “And you can look at public ones and private ones and see good examples...The difference is, defined benefit pension plans that don't honestly fund the promises, as those promises are made, create enormous deficits down the road.”

The deficits grow and compound over time, he said, and ultimately have to be funded by the government, taking money out of the current General Fund.

A big part of the problem was created, he said, when Senate Bill 400 passed in 1999, a bill that granted significant pension benefit increases to state employees through the California Public Employees’ Retirement System (CalPERS), which is a defined benefit pension plan.

Right now, California’s unfunded pension liabilities comes out to about $270 billion, according to the speakers.

“The net result is, in the California state budget this year for example, the amount of money that is going out to pay for these unfunded pensions and retiree healthcare is grabbing money from -- among other things -- UC, CSU, courts, parks and social services,” Crane said.

This is one reason that the amount of money allocated for the University of California system, he said, is down 15% from a decade ago -- if UC received the same portion of the budget as it did 10 years ago, the university system would have an additional $600 million.

It affects staffing at K-12 schools as well. This year, San Francisco Unified School District can only devote 29% of their funds to salaries for current, certificated teachers, Crane said.

At the heart of the conversation was the question of what could be done to address the crisis.

Crane pointed attendees to the website as a way to view unfunded liabilities at a local level.

In terms of specific action steps, he said, Gov. Jerry Brown has just filed an amicus brief to amend the “California rule,” which prevents the reduction of promised state employee pension benefits.

Crane also singled out the CalPERS board and state legislators as sharing both the blame for the problem and the responsibility to fix it, and encouraged the public to take a vested interest in whom they elect to the State Legislature.

“You obviously know the names of your representatives,” he addressed the crowd, referencing Baker and Glazer, “but the vast majority of your fellow citizens don’t. These two people and their counterparts in other parts of the state, have more influence over the lives of Californians, especially non-rich Californians who have no choice, who send 6 million kids to public school, whose budgets are being drained now by these costs.”

He commended Baker and Glazer for confronting the issue and attendees for “electing people like this.”

As the event neared its end, Glazer thanked the event’s participants for their questions.

“This is an ongoing conversation, so it's just starting, maybe, for some of you tonight,” Glazer said. “It's not been a new one for us, so we're going to dig in and try to think about what we can do about it.”

Glazer and Baker will be holding five joint appearances in the area over the next six weeks: an education forum at Stanley Middle School in Lafayette on Feb. 8, a town hall in Livermore Feb. 20, a Walnut Creek town hall on Feb. 22, a Pleasanton town hall on Feb. 27 and a town hall in Orinda on March 5.

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2 people like this
Posted by David
a resident of Alisal Elementary School
on Jan 24, 2018 at 9:29 am

David is a registered user.

California is bevoming an entitlement State. No wonder we have the extremely rich, the upper middle class government employees, and the poor.

Like this comment
Posted by Stephen Douglas
a resident of another community
on Jan 24, 2018 at 11:46 am

The biggest difference in wages and benefits is not between private and public workers. It is between small employers and large employers (which most governments are.)

Large corporations (over 500 workers) have total compensation (wages plus benefits) about equal, on average, to public workers, and they employ slightly over half the private sector workers.

Like this comment
Posted by Ron
a resident of Alisal Elementary School
on Jan 25, 2018 at 6:07 am

“Defined retirement benefits” are creeping into budgets, especially when those benefits are underfunded. The unintended consequences are that it’s unfortunate that future generations, unable to vote today, will bear the costs of many enacted pension programs, entitlements and boondoggle projects, requiring them to pay higher taxes and work later into their lives to pay for these promises.

The international business world is intelligent enough to know that DEFINED BENEFITS, neither capped nor precisely quantifiable in advance, financial disasters to any business, thus all businesses focus on the known, i.e., defined CONTRIBUTIONS alone.

Since the public pension system is severely underfunded, city governments need to fund the retirements of former employees by taking money from government services as the increasing pension costs will likely continue to crowd out resources that otherwise would go to public assistance, recreation, libraries, health, public works, and in some cases public safety. Benefit costs are slowly crowding out the discretionary money available for states, districts, and schools to spend on other priorities.

Stealing from the young who have no votes, but silently shoulder the costs and bear the burden of unfunded promises of these programs to enrich the old seems to describe the Governments expansion of entitlement benefits and other government services, along with the taxes young people will have to pay to support them, mostly to subsidize older Americans.

Even before those young folks can vote, our Golden State schools are on track to force substantial budgetary cutbacks on core education spending, as public schools around California are bracing for a crisis driven by skyrocketing worker pension costs that are expected to force districts to divert billions of dollars.

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