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Will poll stymie pension changes?

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POSTED August 7, 2012 1:39 a.m.

The Field Poll is rarely wrong in gauging public sentiment. Its final reading prior to a major election almost never deviates more than 4 percent or 5 percent from the final vote.

That’s why the poll’s midsummer finding that 53 percent of likely voters in California believe public employee pensions in the state are either about right or too low was the most surprising poll result yet in this highly political year.

The biggest problem with the poll:(http://www.field.com/fieldpollonline/subscribers/Rls2418.pdf): It might give state legislators an excuse not to follow up on Gov. Jerry Brown’s pension reform proposals, which would reduce some future pensions a bit while also raising retirement ages and demanding higher pension contributions from most state employees.

Because legislators have not yet acted, the crisis in pensions goes on. Make no mistake, that crisis is directly related to the crisis in state and municipal finances, which has thus far this year seen the very, very different cities of Stockton, Mammoth Lakes and San Bernardino go bankrupt.

What made the poll finding most strange was the fact that when directly faced with pension questions, voters in two big cities – usually conservative San Diego and generally very liberal San Jose – both opted to impose conditions on local public employees very like what Brown proposes for the state. They did this by wide margins barely a month before the poll was taken.

Voters, said Democratic San Jose Mayor Chuck Reed, “understand the connection between skyrocketing pensions and the cuts in services we’ve suffered.”

But the Field result gave those who want no change in public employee pensions reason to demur. “This poll shows voters are uneasy about radical pension cuts such as those being discussed in Sacramento to reduce retirement security for firefighters, school employees, teachers, police officers and other public workers,” said Dave Low, chairman of the anti-change group Californians for Retirement Security.

Exactly one day later came the surprise San Bernardino bankruptcy declaration.

Suddenly, even if voters felt as they told Field and not the way the real-life ballots went in San Diego and San Jose, everything changed.

Pensions were a major part of the San Bernardino problem. Yes, the city council there had been lied to for many years by former officials now replaced by a new city manager and finance director. Rising city worker pension costs, up $1 million – or about 16 percent – in just the last year, are only one factor there, along with other major items like the burst housing bubble, the closing of Norton Air Force Base in 1994 and an unemployment rate above 15 percent.

Combine the San Bernardino shock with the subsequent revelation that the California Public Employees’ Retirement System posted only a 1 percent return on all its investments during the last fiscal year, and it’s just possible that poll might have turned out differently if it had been taken a month later than it was.

For the lousy CalPERS investment performance means that cities, counties, special districts and the state will be dunned more than expected for pension costs later this year. This could push even more cities to the brink of bankruptcy, where they could renegotiate their obligations – salary, pensions and other benefits – with public employee unions.

If anything, the poll finding demonstrates many Californians remain in a state of denial about the fiscal troubles plaguing many public entities at all levels of government.

Even so, the poll did find that voters like some of the ideas in Brown’s pension proposal: 51 percent support a hybrid pension system combining the traditional system with a 401(k)-style arrangement. Fully 61 percent back the idea of raising the minimum retirement age, which is 50 for most state workers. Two-thirds support an upper limit on the salary levels used for calculating pension benefits. Support is even higher for basing pensions on an employee’s last three years of service, rather than the last one, in an effort to cut pension “spiking,” where employees pack large amounts of overtime into their final year to boost their future pensions.

Some analysts figured the poll result was due to voters not focusing when confronted with vague questions about pension levels, contrasted with their attitudes when faced with more specific ballot measures.

The bottom line: The longer legislators continue their ostrich-like approach to public employee pensions, the worse will become the financial standing of governments at all levels. Failure to act on Brown’s plan before the end of the current legislative session would be the epitome of irresponsibility.

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