SACRAMENTO — The California budget that Gov. Jerry Brown proposed this month marks a shocking financial turnaround for a state that just a few years ago faced a $26 billion deficit.
But even as the governor and lawmakers debate how to spend a budget surplus, there’s a looming financial hurdle: Unfunded pension and health care liabilities of $220 billion for future retirees who work for the state and the University of California system.
As the Brown administration prepares to enter labor talks this year, the governor is seeking changes to help the state cut future costs, warning there’s “a serious long-term liability.”
Over the past four years, the Legislature moved to improve the financial outlook for the state’s largest public employee pension systems, the California Public Employees Retirement System and the California State Teachers Retirement System. Brown is now setting his sights on a rapidly growing retiree expense, health care. He’s asking workers to pay more to fund those benefits.
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