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Whitman?s ad suggests unions are backing Brown because he provided state employees with generous benefits while governor in the late 1970s and early 1980s. When asked back up this claim, the Whitman campaign said Brown signed into law the Ralph C. Dills Act, which gave public employees collective bargaining rights, and charged that the Dills Act "resulted in billions in unfunded pension liability." That?s not true. The state?s staggering pension problems stem from numerous actions that occurred long after Brown left office.
The state?s pension system has an estimated deficit of more than $500 billion, according to an April study by graduate students at the Stanford Institute of Economic Policy Research. That study cited three reasons for the state?s pension problems: risky investments (which hurt the state funds during the recent stock market collapse), inconsistent contributions (including skipping contribution payments in years when investment returns were high), and generous benefits. As for those benefits ? the heart of Whitman?s charge ? the study did not even mention the Dills Act as a factor. Instead, the Stanford students ? and others, including Republican Gov. Arnold Schwarzenegger ? largely blame a bill (SB 400) signed into law in 1999, when Gray Davis was the governor.
Stanford Institute for Economic Policy Research, April 2010: In 1999 California passed Senate Bill 400 (SB400), substantially raising benefit factors and lowering retirement ages for public employees (see Table 3). Based on a National Institute on Retirement Security report, average monthly public pension benefits in California were $2,008 in 2006, the eighth highest nationwide.
Joe Nation, an economist who teaches public policy at Stanford University and who served as advisor on the study, called SB 400 ?a remarkably generous bill? that passed with overwhelming support at the time. The state Senate approved the bill 39 - 0, and the Assembly 70 - 7. A former Democratic assemblyman, Nation told us: ?SB 400 was a bipartisan failure. There is enough blame to go around, but you really can?t tie Brown to this specific law.?
Schwarzenegger also blames the 1999 law and has been negotiating with the state unions to roll back the benefits provided by that law. In a July 8 press release, the governor discussed the problems caused by the 1999 law:
Office of the Governor, July 8: California has long provided generous pension benefits to its employees, but in 1999, the legislature and Governor Gray Davis significantly and retroactively boosted benefits after being assured by the California Public Employee?s Retirement System (CalPERS) that doing so would not cost ?a dime of additional taxpayer money.? But since the passage of that legislation, taxpayer spending on pension benefits has skyrocketed by more than 2000 percent (nearly 3000 percent in the General Fund) while spending on University of California and California State University, parks and recreation and environmental protection has either declined or failed to keep up with inflation.
Yes, the unions are backing Brown and they and others are prepared to raise and spend millions on his behalf, according to the San Jose Mercury News. The paper said in a Feb. 10 article that California Working Families plans to raise $20 to $30 million and spend 70 percent of that on helping Brown?s campaign. But the Whitman ad goes too far when it seeks to blame Brown for the state?s current pension problems.
http://www.factcheck.org/2010/07/whitman-unions-swap-misleading-charges-in-ca/
