There are three statewide ballot measures that have tax increases as the main component. However, it should be of concern to California taxpayers that the Governor’s projected $7-$8.5 billion Tax Proposal on November’s ballot has been referred to as the “cornerstone” of the 2012-13 state budget.

This means the money has been spent without knowing whether or not it will be there. If the measure doesn’t pass, most of the cuts will be to education, but perhaps the Governor and State Legislature should start entertaining serious and meaningful pension reform.

To Governor Brown’s credit, he did release a 12-point pension reform plan last October. This plan should be looked at as a great guideline as the floor for acceptable pension reform. The bulk of the financial burden that the budget process looks at each year is funding its increasingly growing pension fund commitment.

The 2011-12 budget saw a deficit of approximately $16 billion. Studies have shown that between 67%-84% of the budget goes to employee compensation. 4% of the current budget goes to retirees pension and healthcare costs, but that will grow to 17% in the near future with no structural pension reform.

Many of the tax increases we see at all levels of government in California are to address growing pension liabilities. The threats of cuts to other sectors such as education and public safety is the smoke and mirrors that our elected representatives have used to address these pension contributions without having to take on serious mitigation reforms.

In June, the cities of San Diego and San Jose passed ballot measures that dealt with pension reform. Cities like these are staring at bankruptcy without meaningful reforms. Many of the key components of these ballot measures are found in the Governor’s 12-point plan. Following the passage of pension reform in these two cities, other cities are looking at introducing similar reforms on the local level. This trend should send a message to the state policy makers that pension reform is becoming the will of the people.

Sacramento needs to start entertaining the Governor’s 12-point plan. Using this plan as a minimum launching point on pension reform in the state will help on the road to economic recovery and preservation of many integral programs throughout the state. California’s rampant spending needs curtailing now in order to ensure the long term prosperity of the state and the economic welfare of its residents.