California voters OK pension cuts

The botched gubernatorial recall campaign in Wisconsin got all of the headlines last week, but equally noteworthy were two elections in California.  Voters in San Diego and San Jose approved cuts in pensions for local government employees.  The NYT report indicates that new employees will be converted to defined contribution plans, whereas continuing employees would contribute more and see smaller payouts.  Retirees would not be affected.

If voters in California and Wisconsin support pension cutbacks, the writing appears to be on the wall for many other states.  Voters see government employees getting better benefits than they can get in the private sector.  They also see the loss of public services, including rotating closures of firehouses in San Diego and laid-off teachers and police.

The story is not over, as there will be court challenges.  I find it ironic that California and Wisconsin voters have way more courage to face long term budgetary imbalances than our elected officials of both parties in Washington DC.