Wednesday, February 16, 2011

Why am I not surprised?

California, of course, but I wouldn’t be surprised if it is happening in other states too:

State law allows the employees to increase their retirement benefits by tacking up to five fictitious years — known as "air time" — onto their public service. Although they pay a fee for the privilege and officials say it is high enough to cover the eventual payouts, critics of air time note that the boost can cost taxpayers millions when the state pension system's investment income falls short, as it has in recent years.

The inspiration for air time came from a group of Senate and Assembly staffers determined to recoup the pension credit they lost while running their bosses' election campaigns — when their salaries must be paid with private money, not by taxpayers.

Lawmakers helped them out in 2002 by passing a bill granting them the right to buy air time, but then-Gov. Gray Davis vetoed it. The next year, a measure was passed that gave the same rights to all state employees rather than just lawmakers' aides.

Davis, who at the time was collecting millions of dollars in contributions from public employee unions to fight a recall, signed it. The former governor did not respond to multiple requests for comment.

There are two surprising things in this article:  1) Davis's budget chief warned this would happen (surprising) but was overruled (not surprising) and 2) Brown is trying to eliminate the benefit.  Not a problem solver by itself but a least it would be one hole plugged.

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