Guv Gets 4 Unions to Cut Pay AND Benefits

[Stephen Frank]

The Governor has added to the woes of the California government unions. Now he is trying to role back the economic problems of the past seven years.

Due to his efforts four unions agreed to, per his press release: The four union agreements include a major step towards pension reform in rolling back retirement formulas used to calculate pension payments for new employees by:

• Requiring new employees to work additional years to receive full benefits
• Basing final retirement compensation on the highest three years of wages instead of the highest year, ending pension spiking in the last year of work
• Increasing the amount employees must contribute toward their retirement to a minimum of 10 percent

Plus: “They contain roughly a 5 percent pay cut and approximately a 5 percent increase in the workers contribution to the state pension program, said Terry McHale, a lobbyist who represents the firefighters and the Highway Patrol officers.”
The unions lost at the ballot box in Vallejo, Rialto and Chula Vista last week. Now they are agreeing to cut pay and benefits. Is this because they understand the economy of the State is collapsing--yesterday Controller John Chiang announced the State is out of cash and running on borrowed money, most if it illegally borrowed?

This is a good start--now we have twenty more unions to do the same--plus all the unions in local school districts and municipal governments. Then we just have to figure out how to pay for the $525 billion in unfunded pension liabilities and the $800 billion debt (over 100 billion created by the Guv).



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