Sacramento Bee, 6/26/10

Re “Are public pensions the root of all evil?, 6/24/10″:

Reporter Jon Ortiz is right that pension reform largely reduces future deficits. In fact, with or without pension reform, state spending on pensions will amount to at least $300 billion over the next 30 years. Pension reform can do nothing about that cost but everything to prevent $100 billion of additional costs over that same period of time.

Also, pension costs are just a fraction of employee-compensation costs that this year will be $32 billion, up 65 percent from 10 years ago, well in excess of both inflation and revenue growth. Had those costs grown at inflation (and even allowing for growth in headcount), the state would have an extra $5 billion to spend on programs this year.

As Willie Brown has pointed out, 80 percent of every government dollar goes out in employee compensation and benefits. Deficits will be tamed only when they are brought under control.

– David Crane, Special Advisor to Gov. Schwarzenegger for Jobs and Economic Growth