SAN FRANCISCO (Reuters) – California’s largest companies spend less than a third of what the state government spends on pensions and other benefits for retired workers, a study released on Thursday concluded as a fight over the costs of public-sector pensions intensified.

The study released on Thursday says government workers, whose pensions are typically guaranteed, can expect far more in retirement than private-sector employees. That disparity is a key focus in a nationwide battle over public pensions in particular and public workers’ benefits and rights in general.

“A state employee earning $60,000 annually will accumulate pension and retiree health benefits valued at $19,000 a year. A comparably paid employee of a large California company will receive retirement benefits worth less than $6,000,” the study by the California Foundation for Fiscal Responsibility found.

In nod to concerns about that disparity, officials across California are pressing public workers to devote more of their pay toward their pensions and retiree health plans.

A report overseen by a former California lawmaker at the Stanford Institute for Economic Policy Research last year estimated California’s pension funds for government workers, teachers and university employees face unfunded liabilities of more than $425 billion, a figure contested by fund officials.

The private study comes a day after public-sector unions rolled out a website to challenge critics of their pensions and claims that public pension costs threaten government finances in the most populous U.S. state.

At the same time, some officials are drafting less generous retirement packages for future workers.

SAN FRANCISCO (Reuters) – California’s powerful public-sector unions back Governor Jerry Brown’s call to extend tax hikes to close the state’s $15 billion budget gap, but they are breaking with his plan to put the issue in front of voters.

The unions prefer lawmakers extend tax increases expiring this summer because that would eliminate the risk of a defeat at the ballot box which could also jeopardize the pension benefits of their members.

The difference between the governor and one of his key support groups compounds the mess in California’s budget politics.

The unions’ position could open a rift between Brown and fellow Democrats who control the legislature and who are close allies of public-sector unions. The Assembly speaker last month said tax increases should be left to lawmakers. Brown has steadfastly said taxes should be left to voters.

“We’ve been strong supporters of the governor’s approach to this point but we think the time has come for the legislature to do its job,” said Steve Smith of the California Labor Federation, which represents public and private sector unions.

Brown will present a revised budget plan mid-month to show how he would close the remaining $15 billion budget shortfall for the fiscal year that begins on July 1.

Labor’s campaign to leave taxes solely to lawmakers starts next week amid a difficult time for public employees unions in the most populous U.S. state.

SAN FRANCISCO (Reuters) – California Governor Jerry Brown is nearly halfway to closing a state budget gap of nearly $27 billion, but the state’s partisan divide has derailed his original plan for plugging the remainder of the shortfall and it’s not clear what will take its place.

An answer may, however, start with taking on public pensions as the 72-year-old Democrat, now looking to a May deadline for a revised budget plan, tries to tackle an issue that was a stumbling block in budget talks with Republican lawmakers and has become a serious concern among voters.

What is clear is that critical budget talks between Brown and Republicans are off until further notice and voters will not be going to the polls in June to take up a measure he had been urging that would have extended temporary income tax increases due to expire this year.

He called a halt to talks on Tuesday, blaming Republicans for driving them into a ditch with demands that would “materially undermine any semblance of a balanced budget.”

State Senate Republican Leader Bob Dutton shot back on Thursday, saying hard feelings had poisoned talks.

Dutton said that at one point he had been called into the governor’s office, where “I was yelled at more than I was talked to, and mostly by Mrs. Brown, not even Governor Brown.”

The result is that Brown’s plan to fill about half the $27 billion budget hole with tax extensions to be voted on by voters in a special June election will not get the needed support of a handful of Republicans.

SAN FRANCISCO, March 30 (Reuters) – On the heels of California’s governor halting state budget talks, Standard & Poor’s said on Wednesday its low credit rating on the state may be determined more by how the state manages its cash than by any improvement in its overall finances.

The rating agency’s warning came quickly after Governor Jerry Brown, a Democrat, said late on Tuesday he had called off budget talks with Republicans in the Legislature’s minority, underscoring the close attention Wall Street is paying to the state’s budget politics.

California faces a budget shortfall of nearly $27 billion, the biggest deficit of any U.S. state. Its leaders have so far approved measures tackling roughly $11 billion of the gap.

The wobbly finances of state and local governments have been weighing on the $2.9 trillion U.S. municipal debt market, although U.S. Census data showed on Tuesday that state and local finances are recovering after taking a severe beating during the worst economic downturn since the Great Depression. [ID:nN29259672]

“Governor Jerry Brown’s announcement yesterday that the fiscal 2012 budget negotiations have reached an impasse suggests that our focus will remain trained on the state’s fundamental cash and liquidity position,” S&P said in a statement.

S&P added that its A-minus rating and negative outlook on California’s general obligation debt will over the near term be “characterized” more by the state government’s cash management than prospects for “structural improvement” in its finances as long as Brown’s budget plan is stalled.

“Extraordinary cash management actions such as certain payment deferrals or IOUs might in our view again prove critical to the state’s credit level if fiscal 2012 were to begin without a budget in place,” S&P said.

SACRAMENTO, California (Reuters) – California lawmakers on Thursday approved most of the bills making up Governor Jerry Brown’s state budget but the most important part of the plan — an extension of temporary tax increases — may not be tackled until next week.

Potentially standing in the way of a vote on extending the tax increases is a major event for Republicans this weekend in the state capital of Sacramento — their party convention.

There is little point for Democrats who control the legislature to schedule a vote on a tax measure with activists on their way to the convention demanding that Republican lawmakers live up to their anti-tax rhetoric, analysts said.

“The more probable outcome is that they’ll wait until after the convention,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association, an influential group within California Republican circles dedicated to the 1970s-era proposition that capped property taxes.

California, which has the world’s eighth largest economy, has established a dubious tradition in the past two decades of rarely approving its state budget before the July 1 start of its fiscal year.

The state Senate and Assembly late Thursday afternoon took steps toward improving that record with party-line, simple-majority votes approving a bill that will enact spending cuts and planned revenue in Brown’s budget plan.

But wrapping up a budget before July requires lawmakers approve all bills that make up Brown’s plan and that a tax measure goes to voters and is approved in a June election.

SACRAMENTO, California (Reuters) – More California voters believe public employees’ pension benefits are too generous than they did two years ago and a majority support steps to rein in their costs, according to survey results released on Thursday.

At the same time, California voters oppose — by a margin of 50 percent to 42 percent — linking efforts to tackle the state’s budget gap with legislation that would take away some collective bargaining rights of most public employees.

A similar effort in Wisconsin sparked massive protests by government employees that for several weeks dominated headlines regarding the wobbly finances of state governments, an issue lawmakers in Washington are closely watching.

A bill aimed at public employees’ collective bargaining rights has been introduced by a Republican lawmaker in California, but even his staff concedes it will be shelved by Democrats who control the state’s Legislature and who are allies of the state’s labor movement.

Some changes to the pension packages of state employees may, however, spring from talks between Democratic Governor Jerry Brown and Republican lawmakers who are pressing for an overhaul of pensions.

Separately, Brown has been in contract talks with some state employee bargaining units to have their members pay more toward retirement accounts to ease the state’s pensions costs.

Local governments across California, the most populous U.S. state, have also been seeking higher personal contributions to pension accounts from their work forces.

SACRAMENTO, California (Reuters) – California’s Democratic Governor Jerry Brown and five Republicans he needs to reach a balanced budget deal couldn’t even agree on Monday about whether or not they were still negotiating.

Republican state Senator Tom Harman said talks had stalled.

“Basically the ball is in his court,” Harman told Reuters. “He knows where we are.”

State Senate President Pro Tem Darrell Steinberg, a top Democratic lawmaker, said work on California’s budget would continue and Brown spokesman Gil Duran disputed that talks had broken down.

“They’re going to keep talking,” Duran said.

Harman said his group had been pressing hard in negotiations for a spending cap, easing regulations and an overhaul of the state’s pension system.

“He had problems with each of those major areas,” Harman said.

SAN FRANCISCO (Reuters) – California lawmakers may delay a vote on a state budget plan until Monday, aides said, in a sign that talks between Democratic Governor Jerry Brown and Republicans are progressing.

Brown had hoped the Democratic-led legislature would vote on a budget on Thursday but Republicans remain opposed to the tax hikes included in the plan. The delay suggests there is still room for compromise, although no guarantee.

California’s budget talks are among the most closely watched of any U.S. state because it has been burdened with dramatic shortfalls in recent years due to slumping revenue.

This year’s budget fight is getting added attention as shaky state finances have weighed on the U.S. municipal debt market and become a top issue in Washington.

Brown needs a few Republicans to sign on to tax increases to open the door to a budget vote, but that is no easy task.

“Republicans believe reforms that force government to live within its means need to be at the center of discussions and that there is still time to debate a sensible spending plan that does not include taxes,” state Assembly Republican Leader Connie Conway’s spokeswoman said.

She said Assembly members were leaving the state capital of Sacramento to return to their districts for the weekend.

SAN FRANCISCO (Reuters) – California state employee unions will fight bills aimed at cutting their pensions, but will wage battle behind closed doors, unlike the public struggle over collective bargaining rights in Wisconsin.

California’s unions will not need to stage mass protests because they have friends in high places in the Statehouse. Public employee unions’ political allies in Wisconsin are, by contrast, literally on the run. Some Democrats fled the state to block a vote in the Republican-led Legislature to curtail union bargaining rights.

Democrats who control California’s Legislature present a united front against efforts to water down bargaining rights, proposed this week in one pension bill.

“There won’t be sit-ins and things like that,” University of California, Los Angeles labor economist Daniel Mitchell said.

Union protests have gripped Wisconsin since its governor proposed scrapping most collective bargaining rights for many state workers, on top of plans to raise their contributions to their pensions.

That dispute is taking place as states, counties and cities face budget difficulties at the same time their pension costs and future obligations are rising. In California, some analysts project state pension obligations run into the hundreds of billions of dollars.

Officials worry that will crowd out other spending, said Chuck Reed, mayor of San Jose, California’s third largest city. Unless San Jose changes how it funds its pensions, “over the next four-to-five-year time period, we will be spending more on retirement payments than on salary,” Reed said.

SAN FRANCISCO (Reuters) – California Republicans, who could hold hostage a state budget proposed by its new Democratic governor, are drafting demands for supporting it, including the controversial issue of public pension reform.

Governor Jerry Brown needs at least a handful of Republicans to vote for the cornerstone of his budget plan, a ballot measure to extend tax increases that expire this year.

Mass protests by Wisconsin government workers were sparked in part by plans to raise employee contributions to pensions, and state, city and county governments nationwide are struggling with financing retirement systems.

California, the most populous U.S. state, faces tens or even hundreds of billions of dollars of unfunded pension liabilities in future decades.

Republicans, who are the minority in California’s legislature, intend in coming days in private meetings to firm up their conditions for cooperation on the tax measure. One demand will be an overhaul of funding arrangements for the state’s public pensions to reduce the burden on its finances.

“Almost everybody’s wish list has some form of pension reform,” Republican state Senator Tony Strickland told Reuters on Tuesday.

Strickland said it is unclear when Republicans will reach consensus on pension reforms to put before Brown, who wants lawmakers to reach a budget deal by March 10 and prepare a tax measure for the June ballot.