Finally someone is starting to use a few of the correct characterizations of the pension gifts. Illegal gifts.

There are two different worlds. The legal and the PR. When hints of the rationales from the legal world finally start making appearances in the news editorials then this is itself newsworthy.

Sacramento Bee

http://www.sacbee.com/110/story/315785.html

Daniel Weintraub: Orange County considers taking back pension hike
By Daniel Weintraub - Bee Columnist

Published 12:00 am PDT Thursday, August 9, 2007
Story appeared in EDITORIALS section, Page B7

Ever since the Legislature, former Gov. Gray Davis and local governments across California boosted pensions for public employees amid the stock market boom early in this decade, critics have been looking for ways to reduce the cost of those benefits to the taxpayers.

A rollback has always been unlikely, given the influence of public employee unions on the political process. But almost everyone seemed to agree that any changes that did occur could apply to new employees only.

Current employees and retirees who had been given higher pensions, and then made life-changing decisions based on those payments, were considered safe.

Until now.

The Orange County Board of Supervisors voted late last month to consider taking back a pension increase granted to public safety employees in 2001 -- on the grounds that a portion of that increase represented an unconstitutional debt and an illegal gift of public funds. The reduction would affect sheriff's deputies and other safety employees who are still working, and hundreds who already have retired.

If the board follows up next month and actually votes to cut the benefits, the case will be watched around the state, and probably across the country. Hundreds of other public agencies in California did the same thing that Orange County did. If it turns out that their actions were illegal, those agencies might have no choice but to undo them.

At issue are retroactive pension hikes that cities and counties gave to public employees at the same time that they increased benefits generally.

The broader benefit increases are not in question here because they were financed by future contributions to the retirement funds from employees and the taxpayers, and investment earnings on those contributions.

But the retroactive benefit increases were a windfall, especially to workers who had already put in a long career and were ready to retire.

In Orange County's case, the county increased pension benefits by 50 percent for public safety employees in 2001. Under the former system, a sheriff's deputy who retired after 25 years with the county would get a pension equal to 50 percent of his pay. After the change, that same deputy gets a retirement check equivalent to 75 percent of his final salary.

For a deputy earning $70,000 a year at retirement, the change meant the difference between a pension of $35,000 a year and one totaling $52,500 a year.

Deputies can retire at age 50, which means they can draw on their pensions for decades. Over the projected lifetime of such a retiree, the benefit boost would mean the county has to invest an extra half-million dollars in the pension fund to cover the cost. And all of that money would come from the taxpayers.

John Moorlach, the Orange County supervisor who is pushing the board to consider repealing the benefits, said the county might not have a choice -- if the retroactive portion of the benefit increase is found to be illegal.

"You really can't encumber your municipality with a debt you can't pay in the year you create it," he said. "Otherwise, you have to go to your voters and get a two-thirds approval." On top of that, he added, the retroactive benefits represented an illegal gift of public funds to the employees who are receiving them.

[. . .]