When Gov. Jerry Brown last year signed two bills changing state pension laws, he correctly insisted more reform was needed. From our perspective, he had just begun.
He now has a chance to advance a key item on his pension agenda that was left out of last year's bills: changing the makeup of public employee retirement boards.
Assemblyman Marc Levine, D-San Rafael, has introduced legislation that comes, word for word, out of the governor's original 12-point reform blueprint. The bill seeks to alter the labor-dominated governing board of the California Public Employees' Retirement System, the nation's largest pension fund.
The bill needs not only backing by the Legislature and the governor, it also requires voter approval.
Yet, unless Brown speaks up quickly, union-backed Democrats are likely to kill the legislation, AB1163, in committee by week's end.
Thus far, the word from his spokesman is, "While we generally do not comment on pending legislation, the governor continues to support increasing independence and expertise on the CalPERS board." Brown needs to spend more political capital than that.
If ever there was an agency that badly needs leadership change, it's CalPERS. For more than a decade, no governing board has done more to bury California taxpayers in pension debt.
The retirement system made wild promises starting in 1999 of minimal costs for huge benefit increases. State legislators and local government officials, who failed to think rationally, took CalPERS at its word.
We know how that turned out. CalPERS' racked up, at last count, $100 billion of unfunded liabilities due to its unrealistic forecasts and questionable accounting methods. That's debt for past labor costs that we are now foisting on future generations.
It's easy to see why it happened. Simply put, the board is dominated by public employees and elected officials beholden to public employee labor unions. It was politically expedient to promise expensive benefit increases for workers and devise a system so our children would pay most of the bill.
The governor's proposal, which Levine adopted for his legislation, AB1163, would make very modest changes to the current 13-member board. As now composed, the board consists of six employee and retiree representatives; an appointee of the state Legislature; two appointees of the governor; the state treasurer; the state controller; the director of the state Department of Human Resources; and a designee of the state Personnel Board.
The change would replace the Personnel Board designee with the governor's finance director, someone with more budget accountability, and would add two new members appointed by the governor who would have to have financial expertise and no financial interest in the pension system.
It's a reasonable start. It's the governor's own proposal. If he really means what he says, he should step up to the plate.