2010 Budget To Take a Bite Out of State Pension Burden
By Nathan Mintz | January 16, 2010
Good News: In this year’s budget, the governor proposes increasing employee contributions to increase what state employees pay into CalPers. This will increase it to 10% of employee pay (on average) from 5% today. So they are making state employees share more of the burden for their own retirement– that’s a good thing.
Bad News: they won’t touch existing pension obligations- so the hole in the budget will continue to grow. Arnold thinks those are a sacred contract that cannot be broken. Yet this is a contract we cannot afford to pay: a 120 billion dollar liability we are putting onto our children today, which will continue to grow for years to come.
If a contract was signed under false pretenses– shouldn’t one of the parties have the right to demand we come back to the table? How sacred of an obligation is a 90% of salary pension at age 50 with cost of living increases? Nothing should be off the table from re-examination.
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