A new report from the non-partisan Legislative Analyst’s Office criticizes California Gov. Jerry Brown’s proposed overhaul of state worker retiree health care benefits – just as labor negotiations are getting under way.
California faces more than $70 billion in unfunded retiree health care for state workers – and the governor says it’s time to act.
“We can do things more effectively,” Brown told Scott Simon in January on NPR's Weekend Edition Saturday. “That applies to retiree health care. We need contributions and we also need changes in the program of benefits,” such as pre-paying, offering lower-cost plans, and requiring employees to work longer before claiming benefits.
Brown wants to make these changes through collective bargaining – starting with four unions whose contracts expire in July. California Association of Professional Scientists President David Miller says his union recognizes the governor’s concern over the $70 billion liability, “but that’s really not our problem in terms of the overall compensation picture.”
Miller says there’s a tradeoff in working for the state: “You know you’re not necessarily going to have the kind of income that gives you a lot of expendable income to stock away for your retirement years, and you really count on those retirement benefits,” he says.
But a new report from the non-partisan Legislative Analyst’s Office notes that California’s retiree health system pre-dates Medicare, Obamacare and recent state pension changes. The LAO’s Nick Schroeder says lawmakers should take their time in examining the governor’s proposal.
“We wonder whether the Legislature should first consider what a retiree health benefit should look like going forward – and maybe it should look very different from the benefit that we’ve offered in the past. Or maybe there shouldn’t be one at all,” Schroeder says.
The governor’s office says he remains willing to discuss his proposal with unions and lawmakers. Labor talks will start later this month.