Will pension reform be the counterweight to tax extensions?
Apparently, bills are being drafted that would require new state employees to be covered by a defined contribution plan in lieu of the costly defined benefit plan in effect for current employees. Higher healthcare contributions by all employees are also being considered.
The chances of Governor Brown pushing forth a ballot measure to extend taxes that have either just expired, or will by July 1, are slim without an agreement on pension reform.
Brown argues that he does not want to load up the budget process with too many issues and would prefer to deal with pensions separately.
That’s where he is wrong. If the tax extensions pass, all leverage will be lost as far as dealing with the high costs of retirement and health benefits.
What’s more, the tax extensions by themselves, even with accompanying cuts to services, won’t solve the structural deficit that is bleeding the state’s treasury dry.
I would vote for the extensions in a heartbeat if I knew we were concurrently resolving the long-term problem caused by the unsustainable costs of benefits.