Balance the State Budget Without Raising Taxes

By Greg Conlon

Getting California's spending under control is a key component of creating an economic environment where private businesses have the confidence to create jobs.

California does not have a revenue problem, it has a spending problem.

First, we should examine all areas of the State's spending that has exceeded the combination of inflation and population growth. Those areas with excessive spending growth should be targeted for spending reductions.

One area in need of significant reform is state employee pension and health care benefits. California now has 356,000 employees whose compensation and benefits represent a significant part of the state budget. State employees can retire after 30 years with pensions of 60 to 90% of their highest annual pay with full health benefits for life. In addition, they pay very little for healthcare while working compared to employees in the private sector. California has not been setting aside sufficient funds to pay the promised future payments to current and retired state employees. The unfunded liability of these promised benefits is at least $60 billion. In order to bring California's pension costs under control, it is key that we implement 401(k) style defined contribution retirement plans which cap the State contribution. I also support increased employee contributions toward paying for their healthcare insurance.

Getting California's spending under control is a key component of creating an economic environment where private businesses have the confidence to create jobs.