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Pension Reform: Brown's Next Step to Securing More Taxes

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Opinion: Pension Reform: Brown's Next Step?

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With the passage of the 2012-2013 state budget, Gov. Jerry Brown and his Democratic colleagues in the state legislature have taken a giant step toward securing voter approval of his proposed temporary taxes hike in November.

The key was not the budget numbers as much as those impacted by them: welfare recipients.

In politics, those in power frequently have to give something to get something. That's why politics is sometimes defined as "the art of compromise."

In Brown's case, his compromising efforts are with the public since legislative Republicans have stubbornly refused to play ball.

Brown desperately wants the voters to approve his temporary tax hike in the fall, but he also knows that voters still believe that most of the state's budget problems stem from questionable expenditures rather than inadequate revenues. Regardless of the merits of such a claim, it's the perception that counts.

Which takes us back to welfare reform. Social welfare programs consume about one-fourth of the state general fund.

As such they attract a good deal of public attention and criticism. Bearing in mind the public's hostility, Brown and the Democratic majority agreed to reduce the time that families could be on the state welfare-to-work and child care programs to two years from four years, saving about $600 million in the process.

Needless to say, the governor and his allies will catch plenty of flak from liberals, the heart of the Democratic Party, but it appears that they made this miserable choice in hopes of gaining public support for their proposed temporary taxes.

Brown now has one more card to play to sweeten the deal: pension reform. Between now and Nov. 6, we can expect Brown and the Democratic majority in the legislature to enact new rules that reduce the state's commitment to public employee retirements.

The details remain sketchy, but no doubt the changes that emerge will touch mostly on future employees either in the form of new payment formulas, increased employee contributions, or payment caps -- or perhaps a combination of all three. The point is there will be pension reform of some kind.

If we take a step back and look at the big picture, some of this begins to make sense in the form of Brown's proposed "grand bargain" with the voters.

That's the trade: welfare cutbacks and pension reform for more taxes to keep public education afloat.

Whether the public goes along on Nov. 6 remains to be seen, but Republicans have already won by the governor bowing to two their long-term issues.

Larry Gerston teaches political science at San Jose State University and is the political analyst for NBC Bay Area.

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