The ticking timebomb has finally exploded. The cost of California pensions have grown 2000% in the last 10 years and growing. This must be changed immediately.
At least $600,000 million has been moved from the general fund to cover the pension shortfall for just this year. Treasurer Lockyer said last year that, if the pension system is not changed, it will, by itself, bankrupt the state. The new unfunded liability that you and I owe is $550 billion dollars. The numbers are staggering and we Californians are on the hook for it all. Willie Brown was quoted in the Wall Street Journal recently that "roughly 80 cents of every government dollar in California goes to employee compensation and benefits". There is nothing left for any other government program.
Obviously the system must change. I will fight for the immediate change of the pension formulas for new hires, otherwise known as a"second tier" system. The plan will be of a similar design to successful private retirement plans and other state pension reform programs. The new plan will be fair and profitable to the employee and more sustainable for the taxpayer. It will include a defined contribution program, increased vesting period, increase in age for full retirement, eliminate double dipping and other features. This is my first priority.
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