On Tuesday, Gov. Jerry Brown (D) defended a pension reform bill (AB 340) and a compromise tax hike plan, saying the measures are imperfect but the best versions of the plans for gaining bipartisan support, the Contra Costa Times reports.
Brown made the comments during a discussion with the Bay Area News Group's editorial board (Richman, Contra Costa Times, 9/12).
Comments on Pension Reform Bill
Discussing the pension reform bill, Brown said, "What I got was the most that could be gotten." He added that the bill is "very far-reaching pension reform relative to where we were."
Brown suggested that the state later could take additional steps to reduce pension system costs (Siders, "Capitol Alert," Sacramento Bee, 9/11).
Brown is expected to sign the pension reform bill into law on Wednesday (Lin, AP/San Francisco Chronicle, 9/12).
Details of Pension Reform Bill
The pension reform bill -- developed by Brown and Democratic lawmakers -- would:
- Require all current and future public workers at every level of government to pay at least 50% of their pension costs;
- Increase the retirement age by at least two years for future public workers; and
- Cap the amount of future public workers' salaries that can go toward their pensions at $110,000 for those participating in Social Security and $130,000 for those not participating in the program.
The bill would apply to most public workers. However, it would not affect employees of the University of California system or of charter cities with independent pension systems.
Altogether, the bill includes 10 of the 12 points included in Brown's original pension reform plan.
The bill does not include the centerpiece of Brown's original plan, which was a requirement that new workers have a significant portion of their retirement money placed in 401(k)-style accounts (California Healthline, 9/11).
Comments on Compromise Tax Hike Plan
During the discussion, Brown also said that the compromise tax hike plan -- listed as Proposition 30 on the November ballot -- is not ideal for boosting state revenue, which already draws heavily on high-income earners.
Brown said that his original ballot measure did not include income tax hikes but that the original "Millionaires Tax" had more support among state residents. He said that combining his plan with the Millionaires Tax seemed the best way to pass a tax hike in November (Contra Costa Times, 9/12).
Details of Compromise Tax Hike Plan
Prop. 30 would:
- Increase the personal income tax by one percentage point for individuals who earn $250,000 annually or couples who earn $500,000 annually and by two percentage points for individuals who earn $300,000 annually or couples who earn $600,000 annually;
- Extend the income tax increases on wealthy residents from five to seven years; and
- Increase the sales tax by a quarter of a cent.
The sales tax hike would expire in four years (California Healthline