Last Thursday, Governor Arnold Schwarzenegger hosted a pension reform roundtable to discuss California’s pension situation. At the roundtable, the governor reiterated his position that he will not sign a budget unless it includes pension reform.
So what exactly does the governor want included in pension reform? The governor outlined four elements of pension reform that he claims must be done legislatively, separate and apart from any memorandums of understanding.
They include:
- Rolling back the expansion of pension benefits adopted in 1999 as Senate Bill 400.
- Requiring a permanent five percentage-point increase in employee pre-tax contribution toward retirement benefits.
- Calculating the retirement rate based on the highest three years of wages during employment instead of the highest single year.
- Requiring full disclosure by state pension funds and honest funding of pension promises.
The governor’s administration recently negotiated contract agreements with six state employee unions that include elements of pension reform and if ratified, would save the state nearly $1.4 billion in Fiscal Year 2010-11. The governor’s office has said that it will continue to negotiate in good faith with all state employee unions on all aspects of pension reform. The full one-hour roundtable discussion can be viewed here.
In other budget news, State Controller John Chiang released June 2010 cash figures, which showed that total General Fund revenues in June were $54.6 million lower than expected in the 2010-11 May Revision estimates. However, total General Fund revenues through June were above the year-to-date estimate by $538 million.
The summary analysis can be viewed here and the financial statement can be viewed here.