The problem comes from the now infamous SB400, which passed with near-unanimous support in 1999. With the support of both parties, the unions, and the pension fund managers, it seemed a no brainer. Rosy estimations of future returns said that the increased costs could be borne with little impact on the state budget.
Back then the state was paying $800 million to pensions. In 2008, the state contributed $2.8 billion.
From the Redlands Daily Facts:
Unions wanted them. Pension managers said they were affordable. Elected officials approved them.
But improved pension benefits granted to public employees over the past 12 years are now costing local governments dearly. And for that, officials acknowledge, there’s plenty of blame to go around.
“I think everybody got it wrong,” said former state Sen. Jim Brulte, a Republican who represented much of San Bernardino County and voted in 1999 to give better pensions to state workers.
Read the full article here.