The Reason Foundation, on "How to Fix California's Pension Crisis"
The Reason Foundation is a 501(c)(3) non-profit (donate today!) with two primary functions: 1) publishing all Reason-branded editorial content, such as this sentence, and 2) conducting a bunch of nonpartisan public-policy analysis to help lawmakers and their bosses (youse) make better decisions. Being headquartered in California, some of the best research behind Door Number 2 has to do with the clusterfudge that is the Golden State's public policy.
On that topic, the Foundation today has released a shiny new study called "How to Fix California's Pension Crisis" (summary here, whole PDF report here), by Adam Summers. Some lowlights about the state they're in:
* California's public pension and retiree health and dental care expenditures have quintupled since fiscal year 1998-99, from about $1 billion to $5 billion this year. Retirement spending is expected to triple again - to $15 billion - within the next decade. […]
* Since 2008, California has added over 13,000 employees to the state payroll during this recession. […]
* In the 1960s, just one out of every 20 California state workers received "public safety" pensions. Now, one out of three state workers receives the lavish public safety benefits originally intended for the firefighters and police officers who put themselves in harm's way. […]
* California taxpayers pay 85 percent of the health care premiums for most active state workers, 100 percent of the health care costs for most state retirees and 90 percent of health care costs for their families.
* CalPERS reported a loss of $56.2 billion for the fiscal year that ended June 30, 2009. CalSTRS posted a loss of $43.4 billion in 2009. California taxpayers are on the hook for funding shortfalls not made up by pension fund performance or employee contributions, so taxpayers will be paying more to make up for these pension investment losses. […]
* California is the only state in the nation that uses just one year – an employee's final year salary – to determine their long-term pension benefits. Most states use three- or five-year periods to determine pension benefits, making their systems less susceptible to pension spiking.
Among the many sensible suggested reforms:
* Close the defined-benefit pension plans for state employees and enroll all new employees in defined-contribution plans for pensions and other post-employment benefits, such as retiree health care and dental benefits. […]
* Adopt an amendment to the state constitution prohibiting retroactive benefit increases.