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Robert Farley
By Robert Farley October 22, 2010

Meg Whitman ad blames Brown for too-generous state pensions

With California struggling with debt and burdened with costly pension obligations to state workers, Republican gubernatorial candidate Meg Whitman is running an ad against Democratic opponent Jerry Brown accusing him of being a shill for labor unions.

Here's the text of the ad:

How can you retire at age 55? Just ask Jerry Brown. He gave California state employees collective bargaining powers. Since then, the unions have grown stronger and stronger. Now, state employees can retire at 55 with much of their salary for life. And taxpayers are on the hook for $100 billion in unfunded pension liabilities. No wonder those unions are 100 percent behind Jerry Brown. He'll just spend and spend and spend.

Brown has a complicated history with labor unions.

It's true that as governor in the late '70s and early '80s, he was a champion of collective bargaining rights. And it's also true that under the current system, state employees in California with 25 years of service can retire at age 55 and receive half their salary for life.

But whether that's a cause and effect relationship, as the ad implies, is debatable.

A little history lesson on California public employee labor laws is in order.

In 1968, then-California Gov. Ronald Reagan signed the Meyers-Milias-Brown Act, establishing collective bargaining for California's municipal and county employees.

But most of the other major collective bargaining laws came during Brown's two terms as governor, between 1975 and 1983. They include the Educational Employment Relations Act of 1976, establishing collective bargaining in California's public schools and community colleges; the Ralph C. Dills Act of 1978, establishing collective bargaining for state government employees; and the Higher Education Employer-Employee Relations Act of 1979, extending collective bargaining to the state university system.

"As you can see, Brown signed the major collective bargaining laws for the state," said Dan Mitchell, professor emeritus of management and public policy at UCLA.

But whether Brown rightly deserves blame for the current state of the pension system is less clear.

"None of these laws directly involve pensions," Mitchell said. "Unions can bargain about pensions or other terms and conditions of employment under these laws. Ultimately, the legislature must approve any bargained deals for state workers."

That's essentially the position of the Brown campaign.

"Collective bargaining didn't create this system," said Brown campaign spokesman Sterling Clifford. "The bargaining created the system."

It wasn't until 1999 that the state adopted a policy that allowed employees to retire five years earlier, at age 55, and get 2 percent of their annual salary for each year of their employment. In other words, someone who retired at age 55 with 25 years under their belt could get 50 percent of their salary in an annual pension. That's why the Whitman ad -- which states that "state employees can retire at 55 with much of their salary for life" -- carries the prominent disclaimer that the scenario "assumes 25-plus years in state employment." Someone who retired at age 55 today, but who worked less than 25 years, would get less than half their current salary. According to the California Public Employees’ Retirement System website, the average years of service for all retirees is 19.6 years.

That was a bill signed by then Gov. Gray Davis, 16 years after Brown left office. And it was a measure that caused pension costs to skyrocket.

According to the Brown camp, if the pension plan is a bad deal for taxpayers, the governors and state legislators that negotiated them are to blame.

Since Brown left the governor's office in 1983, there have been four governors, three of them Republicans, Clifford said. "Any of them could have taken a harder stance on benefits and didn't."

Clifford notes that in the year after Brown signed the bill giving collective bargaining rights to state employees, "he then promptly vetoed raises for state employees twice."

That's true. In July 1979, Brown twice vetoed proposals to give state workers a 14.5 percent pay hike, at a cost of about $220 million to the state. In a move unpopular with the unions, Brown proposed smaller pay increases for the state workers. The state legislature overrode his vetoes.

It's also true that in 1980, Brown okayed a 10.5 percent pay hike for state workers, as well as a 10 percent pension increase for retired state workers.

Brown has, indeed, gotten the support of labor unions in his latest gubernatorial bid, but on his campaign website, he calls the pension programs adopted during the years of the Wall Street boom unsustainable. Brown says he would fight to raise the retirement age and lower pension contributions to all new state workers.

His unpredictable stance on labor was explored in a July 25, 2010, story in the Sacramento Bee, which ran under the headline, "As governor, Brown had complex relationship with labor."

"Like many politicians, Brown has seen his relationship with labor fluctuate, influenced less by ideology than by the state of the economy and public sentiment toward government spending," wrote the Bee's David Siders. "Labor leaders today believe public employee unions will be treated better by Brown than by Whitman, and rhetoric from both campaigns supports that view. But Brown's history with public employees suggests that, if elected, he might at times disappoint them."

The story quotes Marty Morgenstern, Brown's chief labor negotiator when he was governor, saying that Brown's relationship with labor was "up and down."

"We allowed collective bargaining," Morgenstern said, "but then bargained tough."

But the story also argues that Brown's collective bargaining greased the way for union negotiators in future years.

"The measure taken by Brown and the legislature (to allow collective bargaining) was significant, improving employees' ability to negotiate and strengthening the stature of employee unions in state politics," the story states.

In an Oct. 2, 2009, commentary piece in the Sacramento Bee, Dan Wallter argued Brown "created the almost hegemonic power of public worker unions by giving them collective bargaining rights."

So what to rate the Whitman ad's claim that Brown "gave California state employees collective bargaining powers. Since then, the unions have grown stronger and stronger. Now, state employees can retire at 55 with much of their salary for life"?

Individually, those facts are all true (although as we noted earlier, you'd have to have worked for 25 years to get at least half your working salary, and most retirees have not). But the implication is that Brown's support of collective bargaining for state employees was responsible for a sweetheart pension deal that many now argue is unsustainable and poses one of the biggest threats to California's future financial health. Perhaps, as some argued, collective bargaining laws set the ground rules that strengthened the unions' position. But subsequent governors and the state legislature still had to negotiate those deals. Brown's track record shows he was sometimes a tough negotiator with the unions. And the most expensive change to the pension program (the one highlighted in the ad) came 16 years after Brown left office. And so we rate the ad's claim Half True.

Featured Fact-check

Our Sources

Meg Whitman campaign ad, "Pensions," Oct. 15, 2010

Sacramento Bee, "Ad Watch: Whitman attack on Brown twists facts," by David Siders, Oct. 21, 2010

Los Angeles Times, "The perils of state pensions," by George Skelton, April 29, 2010

California Republican Party website, "Jerry Brown's 40 Year Affair With Government Unions," Sept. 1, 2010

Sacramento Bee, "As governor, Brown had complex relationship with labor," by David Siders, July 25, 2010

Sacramento Bee, Commentary, "Walters: Brown momentarily leads California race," Oct. 2, 2010

Jerry Brown campaign website, Issues: Pension Reform

The Daily News of Los Angeles, "Pension comes early to some; state workers get full benefits at 55," by Sherry Joe Crosby and Troy Anderson, Dec. 6, 1999

Washington Post, "Presidential Hopeful Brown Has Trouble Aplenty at Home; California Disenchantment," by Joel Kotkin, July 30, 1979

California Public Employees’ Retirement System website, Facts at a Glance: Retirement and Membership, October 2010

California Public Employment Relations Board website, Laws

E-mail interview with Dan Mitchell, professor emeritus of management and public policy at UCLA, Oct. 20, 2010

Interview with Brown campaign spokesman Sterling Clifford, Oct. 20, 2010

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