Taxes and pension reform


Our friends at CalBuzz, who are almost always right, have a point when they say that the right wing is going to use the lack of comprehensive pension reform against Jerry Brown's tax measure in the fall. That's unless the Legislature does something productive in August, which is always a challenge.

But whenever I hear this kind of analysis, I think about some of the political campaigns I've seen -- the tobacco tax is an excellent example -- and I wonder: Will it really make a difference?

No matter what the Leg does, Joel Fox and company are going to raise a ton of money and attack the tax plan -- and no matter what happens in August, they'll use public employees, and public employee pensions, as a flash point.

Brown could propose eliminating every dollar of pension spending tomorrow -- and he'd wind up in court, because a lot of this is mandated by contracts. But even if he could get away with it, the righties would still harp about pensions. Because even if we weren't paying modest pensions today, we used to -- and in these campaigns, the facts don't matter at all. See: Prop. 29. The truth is irrelevant when this much money is involved.

I guarantee the anti-tax groups will find some overpaid public employees and a couple of folks who spiked their pensions and they'll plaster it all over the airwaves. And the fact that Brown and the Democrats in Sacramento are working 23 hours a day to try to craft a reform plan won't matter a bit. Even if the reform plan passes, it won't be enough for these clowns -- and if they can outspend Brown's side by 5-1, well ... start holding bake sales for your local public school.

And by the way, who's going to put up a lot of the money for the Jerry Tax Plan? Public-sector unions.

My point is not that Brown and the Legislature should ignore pension reform (although, as Calbuzz also notes, public-employee pensions aren't the major cause of the state's fiscal problems). I know it's a huge political flashpoint, and the Righties have done an exceptional job at blaming union members for just about everything wrong with the state, and most people now believe that pensions are bankrupting us all and saddling our kids (who will work nonunion jobs with no pensions) with mountains of debt.

(Wait a second. Two wars? More than a trillion dollars wasted? The repeal of the CA vehicle license fee? Prop. 13? But never mind that; the debt's coming from pensions.)

The missed opportunity here, and the move I wish Brown had been willing to make, was to combine the two in the same package, to wit:

We're going to ask the public employees, who have already taken tens of millions in pay cuts and furloughs and suffered huge layoffs, to suffer even more and give up part of their pension package. And we're going to ask everyone who benefits from the Bush tax cuts and all of the corporations who benefit from loopholes in the state code to take a proportional haircut.

Proportional -- that is, if a union worker who gets a (typical) $30,000 a year pension has to pay 15 percent more of his or her paycheck a year into the pension fund, then a hedge-fund manager who makes $50 million a year has to pay 15 percent more of that paycheck to help fund for education and public services.

Everyone suffers, equally. Come on, Jerry -- put that on the ballot and make Joel Fox fight it.

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