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Schwarzenegger, Villaraigosa back plans to rein in pension costs
They say public employees’ retirement packages are more generous than taxpayers can afford.
April 21, 2010|By Evan Halper and Phil Willon, Los Angeles Times

Reporting from Sacramento and Los Angeles —

Warning that retirement benefits for public employees are escalating out of control, Gov. Arnold Schwarzenegger and Los Angeles Mayor Antonio Villaraigosa said Wednesday that they supported controversial plans to rein in the costs.
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The mayor and the governor, appearing at separate events, said the retirement packages — which allow some public employees to stop working at age 50 with a pension nearly equal to their entire salary — are more generous than taxpayers can afford.

"The single biggest threat to our fiscal health and California's future is our public pension system," Schwarzenegger said at a Capitol news conference, declaring the growing costs a "crisis."

"Here in Sacramento, pension reform must be our No. 1 priority," he said.

Earlier in the day, Villaraigosa declared in Los Angeles that the city's "pension system is no longer sustainable.''

Retirement benefit costs will consume 19% of the city's general fund budget in the coming fiscal year, he said.

The mayor and the governor are advocating plans to give newly hired government workers less generous retirement packages than those currently offered. The city and the state are legally prohibited from taking existing benefits away from people already on the government payroll or receiving a pension.

Schwarzenegger said he was supporting legislation proposed by California Senate Republican Leader Dennis Hollingsworth of Murrieta that would raise the retirement age for new state workers and decrease the size of their pension payments.

Prison guards, California Highway Patrol officers and state firefighters would see the age at which they could start collecting a pension rise to 57 from 50. The amount the pensions of such public safety workers increases for each year of service would be reduced 10%.

The proposal also calls for a jump in the age at which many other state workers could start collecting a pension, to 65 from 55.

"I refuse to pass this crisis onto the next governor or the next Legislature," Schwarzenegger said.

The political viability of the Hollingsworth bill remains in doubt, however. Schwarzenegger has pushed to scale back pension benefits for much of his time in office without success.

Meantime, state pension system officials have said the administration has exaggerated the size of the problem by citing studies that don't take into account investment profits that are likely to offset the cost to taxpayers.