EDITORIAL PENSION TIME-BOMB SOARING PUBLIC EMPLOYEE COSTS COULD BECOME CALIFORNIA'S NEXT CRISIS.

WHILE much discussion and effort have gone into solving the crisis of the state's broken-down workers' compensation system and its drain on the California economy, little attention has been paid to the next financial juggernaut just over the horizon.

A ripple of worry is just starting to move through the state, still reeling from the triple whammy of the energy crisis, sour economy and state budget deficit, over the potential obligations to public pension plans.

Some cities could be threatened with bankruptcy in the next few years and local and state governments are facing massive price tags for runaway increases in pension benefits.

Just a few years ago, in 1999, when California seemed like the center of the cyber-universe and budgets had actual surpluses, Gov. Gray Davis and state legislators pushed through a labor-supported bill that generously hiked pension packages for highway patrol and corrections officers.

Cities and counties soon got in line to reward police, fire and other emergency workers with pensions up to 90 percent of their salaries, even if they retire in the early to mid-50s.

Since public employees are so instrumental in electing officials, it was a reward from politicians to their benefactors. They were buoyed in this excess by assurances from the California Public Employees Retirement Fund that returns on investments would completely fund the costs.

Maybe that would have worked had the economy not stalled in the last couple of years and Wall Street profits not dried up. Soaring bills are the cost of this earlier generosity.

The bills for this pension-boosting extravagance, unheard of in the private sector, are now coming due and at the same time government officials at all levels are looking to cut services to the public while squeezing more tax dollars from that same public.

The numbers are daunting.

The city of Glendale, for example, expects to spend an amount equal to about 37.3 percent of its payroll budget on pension payouts by 2009. Burbank expects to spend $9.2 million in 2007-08 for its retired employees.

Yet despite some of the warning signs, many refuse to acknowledge the coming financial disaster.

Los Angeles' pension officials haven't even calculated the long-term costs of the city's boosting of pensions. They don't know how much their commitments to retirement packages, such as the one for Los Angeles police officers - who can retire after 33 years with 90 percent of the pay from their best year - will cost the city's general fund.

Worse still, Los Angeles and many cities have continued to approve employee pay raises above the cost-of-living increases.

Local and state officials need to figure out how they are going to deal with this looming crisis. Pensions need to be overhauled before they deluge the entire state.