Freedom Line Blog

Here’s one reason to be cautiously optimistic about a pension reform deal announced between California Governor Jerry Brown and state Democratic lawmakers:

California’s public pensions are currently governed by a patchwork of contractual agreements and retirement-system rules. The deal, likely to win approval in the Democratic-controlled Legislature, would bring most of those systems under the same pension standards.

Yes, as critics correctly point out, Brown’s deal with his fellow Democrats is “insufficient to cut billions of dollars in unfunded obligations on governments’ books.”

But the value in Brown’s pension reform deal is that for the first time most of the state’s public employees will be under the same set of pension rules.

This is important for at least two reasons.

First, it makes the pension liability problem more understandable for everyday Californians.  Sure, we all know the state’s unfunded liabilities are huge – around $500 billion according a Stanford study – but what good does knowing that number do if reform opponents can sidetrack reasonable debate by citing a dizzying array of competing pension rules?  By consolidating most public employees under the same standards, citizens can begin to see the pension crisis in a simpler, more straightforward way.

The other potential improvement is related to the first.  Brown’s deal sets the table for a future reformer to make the changes Brown’s critics want now.  No one expects Brown to be that guy, so why not welcome a plan that at least moves the ball in the right direction?

Besides, a pension reform deal like Brown’s that puts most of California’s public employees under the same standards means that a future governor will have that many less obstacles to achieve the cost savings the state needs to get back its golden sheen.

H/T: Governing.com