Gov. Jerry Brown’s pension overhaul for public employees — one of the most significant rollbacks of its kind in state history — is a huge victory for hundreds of municipalities across the state that, until now, have had to labor through exhaustive negotiations with local unions to extract the same concessions rolled out in the legislation signed Wednesday.
As Burbank’s city manager said this week, the impact could mean savings of thousands of dollars per employee after the law takes effect Jan. 1. In Glendale, where many of the new state reforms have already been achieved — albeit after rounds of negotiations with employee unions — the impact will surely be the same.
Under the new law, new public employees will have to work longer before they retire with full benefits. At the same time, employees will eventually pay at least 50% of the contribution to their retirement plan through the California Public Employees’ Retirement System, known as CalPERS. High earners will also have their benefits capped — a response to so-called spiking, in which a public employee will take a huge pay increase a year or so before retiring to lock in that higher pension payout for life.
For cities constrained by arcane restrictions on how they can generate money or raise taxes, the ability to better control costs is essential, and Brown just gave them a valuable tool.
Of course, labor leaders have criticized the new law as an attack on retirement security and unions, while conservatives say it doesn’t go nearly far enough. And even city administrators say the rollbacks could jeopardize their ability to remain competitive in the employee market.
But huge reform has never been for the faint of heart, which is why it’s gone lumbering on untouched for so long. That it appears to have somehow pinched everyone in some way can only mean it hit its intended target.