WHO'S COT A solution to the government employee pension crisis that's bolder than Wisconsin Gov. Scott Walker's, more extreme than New Jersey Gov. Chris Christie's? What rabid extremists want to renege on existing contracts and squeeze the hard-working teachers, cops, and fire fighters of America's most populous state?
Would you believe ... the Little Hoover Commission?
If you are part of the growing percentage of Americans who choose to live outside the state of California, you probably haven't heard of Little Hoover. But this oversight agency is the closest the Golden State comes to gray eminence. Created in 1962, the commission makes measured and judicious suggestions on the governance of the state. The panel's 13 members are chosen by a scrupulous process, described over four pages of the California code, that limits overt partisanship and emphasizes separation of powers. The commission's judgments are generally considered as reliable as a Moffat & Company gold coin.
So Little Hoover's February report, Public Pensions for Retirement Security, came as a shock. Even the most far-reaching state governors have focused their plans for reduced pension benefits mostly on new hires. While a few (such as New Jersey's Christie) have imposed later retirement dates, all have stayed within currently accepted legal practice for the ways existing government employees accrue retirement benefits. Broadly speaking, this means the reform proposals are confined to asking current workers to contribute more to their plans, not tampering with final payouts or accrual rates.
Little Hoover, by contrast, concludes that another two-tiered system--in which new hires come in with a less generous retirement package--will be inadequate. The report argues repeatedly that the state must find a way to pare back existing contracts. "The state and local governments need ... to restructure future, unearned retirement benefits for their employees" it states. "The Legislature must pass legislation giving this explicit authority to state and local government agencies." The commission acknowledges that any such law "may entail the courts having to revisit prior court decisions."
And where many Republicans--including Wisconsin's Walker and California 2010 gubernatorial nominee Meg Whitman--have made a point of excluding cops and fire fighters from their pension reform plans, Little Hoover states: "Public safety pensions cannot be exempted from the...