California Highway Patrol Sgt. Steve White, right, stands outside the office of Gov. Jerry Brown as protesters shouting “Black lives matter” block the hallway on Sept. 2, 2015, demanding passage of AB953, which would change the definition of “racial profiling” and require local law enforcement agencies to collect demographic data, including the race of those they stop. Brown later signed the bill. Rich Pedroncelli Associated Press file
California Highway Patrol Sgt. Steve White, right, stands outside the office of Gov. Jerry Brown as protesters shouting “Black lives matter” block the hallway on Sept. 2, 2015, demanding passage of AB953, which would change the definition of “racial profiling” and require local law enforcement agencies to collect demographic data, including the race of those they stop. Brown later signed the bill. Rich Pedroncelli Associated Press file

Dan Walters

Observations on California and its politics

Dan Walters

Brown says pension reform still on his agenda, but is it?

By Dan Walters

dwalters@sacbee.com

November 06, 2016 05:51 PM

UPDATED November 07, 2016 08:17 AM

Jerry Brown made an appearance in San Francisco last week and patted himself on the back for “what’s been accomplished” during his second governorship.

“But that doesn’t mean we are finished,” Brown quickly added. “There are some real things that you can always read about in the paper that haven’t been done. We’re not finished with pension reform. We still got to do much more there. It’s going to take a while, but that’s still on the agenda.”

Is it?

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Four years ago, Brown proposed a fairly modest reform of public employee pensions but, as is his wont, settled for less than a half-a-loaf when the Democrat-controlled Legislature, under pressure from unions, balked at a major overhaul.

Officially, the token reform would save taxpayers about $30 billion in non-teacher pension costs over 30 years, but that’s only 6 percent of the $500 billion they are expected to pay out for pensions over that period, as pension cost guru David Crane points out.

As a result, unless Brown makes good on his semi-promise to pursue deeper reforms, costs will continue to mount as the number of pensioners climbs and as the California Public Employees Retirement System and other pension funds fall very short of their ambitious earnings projections.

The state’s payments to CalPERS have climbed 69 percent during the six years of Brown’s governorship, from $3.2 billion a year to $5.4 billion, with no end in sight.

A recent audit of just one of the six state employee pension systems, covering state firefighters and non-Highway Patrol “peace officers,” reveals that its unfunded liability jumped 18 percent during the 2014-15 fiscal year, from $9.9 billion to $11.7 billion – and that assumes that CalPERS will meet its earnings projection, currently 7.5 percent a year.

A CalPERS document provides an even more telling set of statistics about the sharp increase in the percentage of payroll that the state must pay into the system.

For instance, in 1979-80, during Brown’s first governorship, the state paid 31.4 percent of Highway Patrol officers’ salaries into the pension fund. It dipped to as low as 13.4 percent in the late 1990s when CalPERS was seeing huge earnings in the go-go stock market of the era and – unwisely – reduced payments from government employers.

Simultaneously, CalPERS sponsored a big increase in pension benefits, promising it would cost taxpayers nothing, but then lost more than $100 billion in last decade’s recession. Ever since, it’s been ramping up demands on employers to cover its losses, as well as sharply increasing payouts to pensioners.

During this fiscal year, the state must cough up 50 percent of CHP officers’ salaries for pensions, a 59 percent increase during Brown’s second governorship.

The same pattern is true of other pension systems, both state and local, and the very mild reform that Brown and the Legislature enacted in 2012 – mostly to claim that they had done something – will not make a serious dent in the ever-deepening pension crisis.

Brown says it’s still on his agenda, but time is running out quickly and he’s shown no inclination to get serious.