California’s Next Governor Must Tame the Pension Boom

When voters ousted Governor Gray Davis in 2003, they thought they’d hit the reset button on a broken system. Sadly, one of the biggest leftovers is a pension program that’s gotten richer while the state’s coffers stay thin.

Today more than 63,000 former state employees collect six‑figure pensions – that’s double the number recorded in 2018 and, unbelievably, about thirty times the tally back in 2005. There are dozens pulling in over $300,000 a year, and three lucky retirees pocketing more than $400,000. It sounds almost like a punch‑line, but it’s a very real drain on taxpayers.

To put it in perspective, Governor Gavin Newsom draws a salary of $245,929 and he’s still in office. He isn’t even retired, yet his paycheck is dwarfed by the annual pensions of many former civil servants.

We do owe a small thanks to former Governor Jerry Brown, though. In 2012 he pushed through the Public Employees’ Pension Reform Act (PEPRA), a package that tried to curb the runaway promises made to state workers. At the time it was hailed as a model for the nation – a rare bipartisan effort that put a lid on the pension time bomb.

Unfortunately, public‑sector unions have been working overtime to roll back those safeguards. The latest attempt was Assembly Bill 1383, which tried to lower the retirement age from 57 to 55 and make other changes that would boost benefits even further. The bill sailed through the legislature, even gaining some Republican support, before Newsom exercised his veto.

Newsom’s veto was a good start, but it’s far from a solution. Private‑sector workers usually rely on defined‑contribution plans – they know how much they put in, but not exactly what they’ll get back. California, by contrast, still offers defined‑benefit pensions that promise a fixed payout regardless of market swings. That works fine in a bull market, but in a bear market the system can implode, leaving the state scrambling to meet obligations.

California already faces looming structural deficits that stretch beyond the horizon. Adding a pension system that rewards a handful of “fat‑cat” retirees at the expense of schools, roads, and health care is simply unsustainable. The next governor will have to pick up where Brown left off, close the loopholes, and restore fiscal sanity.

In short, we need bold, pragmatic reforms – not just more vetoes or half‑measures. If the state wants to keep its promise to everyday Californians, it must finally put the pension pipe‑dreams on a realistic footing before the budget breaks.