The California Chamber of Commerce recently launched the CalChamber Coalition for Pension Reform to urge legislators to support the pension reform principles Governor Edmund G. Brown, Jr. announced last October.
Just in case you have been living in a cave for the last year or so, here is a brief overview of why pension reform is vitally needed today.
- Governor Brown and legislative leaders have said their top priority before the end of session is to reform our “broken pension system.” As pension costs rise, funding for higher education, parks, courts and social services is crowded out. It is important for state leaders to heed the Governor’s advice to “do something real” on pensions.
- Pension costs are the fastest-growing expenditure for city and county governments. In 1999, pension costs were 4.1% of aggregate municipal spending; by 2011, that figure had more than doubled to 9.6%. Between 1999 and 2010, pension spending grew at 11.4% per year, twice the growth rate for education, public safety, parks, health and sanitation. According to the Los Angeles Times, this will mean “more layoffs or pay cuts for public employees, higher taxes, fewer services, or all of the above.”
- Voters in three of the four largest cities in the state—San Diego, San Jose and San Francisco—have approved sweeping reforms to their employees’ pension plans. Other cities, large and small, are prepared to follow suit to avoid the fate of Stockton and San Bernardino, two cities that have recently declared bankruptcy.
- The Santa Clara Chamber of Commerce and the CalChamber Coalition for Pension Reform believe that Governor Brown’s proposal is an important first step toward pension reform. Much more needs to be done to fix our broken pension system, but this plan is an important step in the right direction and a clear sign to Californians that the issue is being taken seriously.
Sign The Statement of Principles
The Santa Clara Chamber of Commerce and CalChamber are urging businesses to sign and return to the CalChamber the Statement of Principles to express support of each element of Governor Brown’s pension reform package, as introduced on October 27, 2011.
Copies of the Pension Reform Principles are also available at the Santa Clara Chamber of Commerce office. Please contact the CalChamber, PensionReform@calchamber.com, if you would like a form emailed to you. By working together, we can make a difference in Sacramento and reform the State pension system today!