The Bay Area Council and Silicon Valley Leadership Group welcomed Governor Jerry Brown’s announcement today of a plan that takes a first step in reforming California’s financially unsustainable public pension system, an issue the two groups have made a top priority in stabilizing the state’s financial and economic climate.
“The plan announced today represents a big step forward and more work lies ahead,” said Jim Wunderman, President and CEO of the Bay Area Council. “Creating a financially sustainable public pension system is critical to California’s economic recovery and future economic growth. The scale of the problem is immense and we’re looking forward to reviewing the Legislature’s plan and continuing to work with lawmakers and the Governor to solve a problem that we know can’t be fixed in one fell swoop.”
The two business organizations, which together represent hundreds of the state’s largest employers, have strongly supported Governor Brown’s 12-point pension reform plan released last year as a good first step in reining in the spiraling cost of pensions, and applauded the progress the Governor announced today toward implementing that plan. Unsustainable pension costs were a leading culprit in the bankruptcies of four cities, have put a number of other cities on the brink of the same fate and are the fastest-growing segment of municipal spending.
“If this was easy, this would have already been done,” said Carl Guardino, President and CEO of the Silicon Valley Leadership Group. “That’s why we applaud the Governor’s 12-point plan and the progress that he has announced today in working toward implementing that plan. Make no mistake, this does not go as far as the Leadership Group and Bay Area Council think California needs to go, but it certainly includes several steps in the right direction. We believe more steps still will need to be taken, which is why we’re having the details of today’s announcement independently analyzed.”
In response to today’s announced plan, the Bay Area Council and Silicon Valley Leadership Group have retained the services of two leading pension experts – John Bartel of Bartel Associates and Jon Holtzman of the Public Law Group – to review the legislation and analyze how much progress it makes in addressing the state’s unfunded pension liability, which has been estimated between $250 billion and $750 billion.
The Bay Area Council and Silicon Valley Leadership Group have led a coalition of the state’s largest and most prominent business organizations over the past year to push the Legislature to adopt meaningful pension reform legislation this year, to help stabilize the state’s shaky finances and create a better climate for economic growth.