California lawmakers are moving forward with a package of bills that would sweeten pay and retirement benefits for police officers and firefighters, even as the state braces for a rockier fiscal future.
Three measures advancing through the Legislature would either boost pay for Cal Fire firefighters or expand retirement benefits for public safety workers across California. Backers say the changes are a fair trade-off for people who put their lives on the line and endure the kind of physical toll that can cut careers short. So far, the bills have drawn strong bipartisan support in the Legislature.
“Every day has a cost, and it’s one that we pay with our lives,” Darrell Roberts, president of California Professional Firefighters, told lawmakers at a recent hearing on a bill that would let public safety employees retire at 55 instead of 57. “This job is physically and mentally demanding in the extreme, and asking us to work until 57 is pushing us not just to our limit but beyond it.”
The proposals aren’t cheap. Together, they could add hundreds of millions of dollars a year in new state spending and billions more in long-term financial obligations — a tough pill for Gov. Gavin Newsom to swallow given warnings of budget deficits ahead.
The retirement-related bills, in particular, are stirring memories of California’s pension crisis during the Great Recession, when the state’s major retirement funds lost tens of billions of dollars almost overnight. Critics point back to benefit increases signed by then-Gov. Gray Davis in the years before that crash as a cautionary tale.
Marcia Fritz, an accountant and longtime pension watchdog, sees history repeating itself. She noted that during Davis’ time in office, pension funds were riding high on a booming stock market driven largely by tech stocks — much like today. CalPERS and CalSTRS, the state’s two largest pension systems, still haven’t fully recovered from recession-era losses, though both have recently exceeded their investment targets thanks to a tech-fueled market rebound.
“They’re drinking the Kool-Aid that the markets are never going to go down,” Fritz said of lawmakers backing the bills. “We’re the ones paying for it with reduced services.”
California reined in retirement benefits for employees hired after 2012 under a law signed by then-Gov. Jerry Brown, which required workers to stay on the job longer to earn a full pension and to contribute more toward their own retirement. CalPERS estimates that reform saved government agencies $4 billion in its first decade and projects it will save another $24 billion over the next 10 years.
To taxpayer advocates, those savings are proof the Brown-era reforms are working as intended. Public safety unions see it differently, arguing that the savings show government agencies can afford to sweeten benefits without abandoning the 2012 framework altogether.
Here’s what the three bills would do:
Assembly Bill 1383 would lower the retirement age for public safety workers from 57 to 55. It would also let unions negotiate richer pension formulas — up to 3% of salary for every year worked — and raise the cap on pensionable earnings by nearly $60,000, to $249,000 annually.
Assembly Bill 1054 would establish a new deferred retirement option for California Highway Patrol officers and Cal Fire firefighters, allowing them to bank money during their final years on the job and collect it as a lump sum upon retirement — an incentive meant to keep experienced personnel working longer.
Assembly Bill 2129 would push for a new pay formula for Cal Fire firefighters, encouraging the governor’s office to bring their salaries closer to — though not necessarily equal to — the average paid by 20 local fire departments around the state.
The cost question
The bill lowering the retirement age carries the steepest price tag. CalPERS estimates it would require $282 million more in annual contributions and add $4.8 billion to the fund’s long-term liabilities. If local governments choose to offer even more generous pension formulas under the bill, that cost could climb to $353 million annually, with additional strain on the fund’s finances. Those figures don’t include California’s 20 independently run county pension systems.
That price tag has put city and county governments in opposition. “We do definitely support strong retirement benefits, but those benefits must remain sustainable and fiscally responsible for our local agencies,” said Johnnie Pina, a lobbyist for the League of California Cities, during a recent Senate hearing.
The financial impact of the other two bills is murkier. Supporters of the CHP and Cal Fire deferred retirement plan say it’s designed to be cost-neutral, though similar programs run by cities and counties have ended up costing more than expected. The bill would require CalPERS to review the program every five years, giving lawmakers room to make adjustments down the line.
The Cal Fire pay bill is even harder to pin down financially, since it’s written to give the governor’s office flexibility rather than a mandate. It calls on Newsom to negotiate “in good faith” toward narrowing the pay gap between Cal Fire and local fire departments — a gap a 2023 state compensation survey put at 11% to 29% in favor of local departments.
“Instead of being the lowest paid, we will inevitably be somewhere in the middle” if the bill passes, said Terry McHale, a lobbyist for the firefighters union, at an earlier hearing this year.
Newsom vetoed a similar, more forceful version of this bill last year, warning it would “create significant cost pressures for the state and circumvent the collective bargaining process.” That earlier proposal was projected to cost between $373 million and $609 million in its first year alone.
Cal Fire’s union is essentially seeking a benefit that only one other state employee group enjoys: automatic raises tied to what other agencies pay. CHP officers already receive annual pay bumps based on compensation at several major California police departments, a perk no other state employee union has secured through legislation rather than negotiation.
What happens next
All three bills face a critical test later this month in the Senate Appropriations Committee, which can shelve legislation over cost concerns. Bills that clear that hurdle typically have a strong chance of reaching the governor’s desk.
At a recent hearing, several lawmakers said recruiting and retaining first responders was worth the cost, even if it meant trimming other programs. They pointed to the response to a chemical spill in Orange County this past May as an example of the risks emergency workers take on without hesitation.
“I still get goosebumps for these firefighters and their families that had to know that they were putting their lives on the line to save that explosion from happening, which they actually ended up doing,” said Sen. Tony Strickland, a Huntington Beach Republican. “You can’t put a price tag on that.”
Public safety unions have long been a fixture at the Capitol. Since 2019, firefighter unions have contributed $6.2 million to lawmakers and campaigns, while the Peace Officers Research Association of California has spent $4.5 million, according to CalMatters’ Digital Democracy database. Both California Professional Firefighters and the California Correctional Peace Officers Association were also major donors backing Newsom during the 2021 recall election.
Still, that support doesn’t guarantee the governor’s signature. As mayor of San Francisco during the Great Recession, Newsom championed a ballot measure requiring city workers to contribute more of their own money toward their pensions — a track record that suggests he may scrutinize these latest proposals just as closely.
Original source: CalMatters
