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Labor Distress Is Jerry Brown's Campaign Weapon

Vocal outcry over pension reform helps the governor's call to raise taxes

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    NEWSLETTERS

    Disagreements can be uncomfortable among friends. But when it comes to Big Labor's outcry over a pension-reform package jammed through the legislature on Friday, Jerry Brown should hope his union allies become even more loud and vocal.

    The governor knows that one of his best chances for convincing the public to pass Prop 30 in November, his package of temporary taxes, is evidence of some progress toward fixing the state's pension mess.

    That point is in fact underscored by a new poll released Thursday by the California Business Roundtable and Pepperdine University. The poll shows that 71 percent of those surveyed believe that a pension fix is important in order to address the state's budget woes.

    "As the session comes to an end, the legislature seems poised to take a much-needed step toward reform," Dr. Michael Shires of Pepperdine University said in a statement. "While these reforms don't resolve the current unfunded liability or go far enough to address the entirety of the problem, they are a good start."

    In fact, critics note, the plan passed by a strong margin by the Assembly and Senate falls far short of comprehensive reform. In particular, the plan doesn't address reducing benefits enjoyed by current employees. That means a continued increase in what the state will owe in coming years, as workers retire. Savings in the plan, which CalPERS is estimating at between $40 and $60 billion, will come far into the future.

    But in closing remarks, Senate President pro Tem Darrell Steinberg, D-Sacramento said, "I think this is a very significant step."

    The measure is estimated to save taxpayers as much as $55 billion over the next 30 years, in part by capping the salary level at which benefits are set.

    Labor could've had it much worse in the plan now awaiting the governor's signature. It could've included a move to a hybrid 401k-style system, as is common in the private sector. It does not. Instead, the Democrats' plan is much more limited, focusing on raising the retirement age and cracking down on abuses like pension spiking.

    You wouldn't know that by the outcry. Labor leaders are doing what's expected of them, by denouncing the reforms.  But the louder they complain, the better it is for Jerry Brown. It's the kind of wedge politics he can point to, when he asks voters to approve Prop 30.

    Author Kevin Riggs, an Emmy-winning former TV reporter in Sacramento, is Senior Vice President at Randle Communications.

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