Little Hoover Commission on Public Pensions in California

The nonpartisan Little Hoover Commission meets today to hear testimony about public pensions, aiming to dispassionately analyze the impact of retirement costs on governments and then, if needed, suggest changes.

Heaven knows we need a dose of level-headed analysis, given the wide-open rhetoric that “pension reform” provokes.

Unions see such efforts as a call to arms, “an attack on public employees,” union lobbyist Dave Low once told The State Worker.

Last year when it looked like an initiative might make the ballot to cut benefits for future government hires, Low warned it would provoke a “nuclear response” from labor.

Context and moderation don’t score political points on either side.

Gov. Arnold Schwarzenegger has made rolling back state retirement benefits a top priority and has adroitly linked pensions to just about everything that ails the state.

Welfare? Kids’ health care getting whacked? State aid for seniors? All on the chopping block all because … of … PENSIONS!!

Earlier this year, administration spokesman Aaron McLear said that the public is tired of a public pension system that is “crushing the rest of state government.” David Crane, the governor’s pension point man, calls the current retirement funding system “intergenerational theft” that has added to higher college tuitions.

It’s a provocative narrative. It’s also like a lifelong chain smoker cursing one pack of cigarettes for giving him lung cancer.

For some context, consider the tentative contracts agreed to last week by four unions representing about 23,000 state workers, including Highway Patrol officers and firefighters.

The deals, seen as a win for the governor, increase employees’ pension contributions and lower retirement benefits from new hires. The state won’t realize savings from that second provision for many years.

Those concessions and a few others in the four contracts translate into $72 million saved for fiscal 2010-11. About $43 million of that is savings for the $83 billion general fund, the shrinking pot of money at the center of the state’s seemingly eternal budget crisis.

If all 235,000 or so state workers came under the same terms, the savings would be about $2.2 billion. The general fund, which is $19.1 billion short going into the July 1 start of the 2010-11 fiscal year, would realize about $1.1 billion of those savings. That’s about 5 percent of the money needed to bridge the budget gap.

Meanwhile, Schwarzenegger’s plan calls for the state to kick in $3.8 billion for pensions next year, a little more than half of that from the general fund.

Those are big dollars and an expense that can’t be ignored. But pensions aren’t the big fix to this year’s budget mess, either.

Still, that won’t keep either side from the over-the-top rhetoric.