On April 10, the libertarian Reason Foundation held its strategic “pension summit” in Sacramento’s Sterling Hotel to reduce government workers’ retirements. A proposed 2016 state ballot measure to cut public employee pensions by shifting them from traditional, defined-benefit pensions to more volatile 401(k)-type retirements took center stage. At that point, the measure was months away from being submitted to the state Attorney General’s office for a title and approval of its wording.
The measure is co-authored by Chuck Reed, the former Democratic mayor of San Jose who successfully pushed a 2012 city pension-cutting ballot initiative, Measure B. Reed headlined the summit, which was open to the media only on an off-the-record basis.
“The political support is the relatively easy part,” Reed told Capital & Main after the summit concluded. “As long as you are solving a problem the public is willing to support it in the form of pension reform.”
But not everyone shares Reed’s optimism.
Last month former San Jose mayor Chuck Reed took the first step toward offering a promised draft of a 2016 public pension cutting initiative that, he has hinted, will target the California Public Employees’ Retirement System. CalPERS manages the retirement and health benefits for more than 1.6 million California public employees, retirees and their families. Reed tried to get a pension initiative on the ballot in 2014, only to withdraw the measure when state attorney general Kamala Harris assigned it a ballot description that Reed and his allies believed would hurt their chances with the electorate.
This time, however, Reed could find his campaign in danger from an unexpected source – conservative allies who might be worried that his initiative’s very presence on the ballot will draw huge numbers of liberal and union voters – who would then also vote against conservative candidates running for local and state office.
California pension cutters suffered another setback last week when a state appellate court rejected their claims that ballot language written by Attorney General Kamala Harris showed political bias.
The decision by Sacramento’s 3rd District Court of Appeal “dismissed as moot” San Jose Mayor Chuck Reed’s appeal of a lower court ruling. This effectively leaves in place Sacramento Superior Court Judge Allen Sumner’s March decision that Reed had failed to prove Harris’ ballot summary was misleading.
“We’re not going to get a hearing on the merits,” Reed told Capital & Main. “It shows how difficult it is to try to get through the court system in an election cycle; it means you have to start earlier.”
Legally, the two rulings sound a final death knell for Reed’s contentious statewide campaign to put his self-described Pension Reform Act of 2014 before California voters. In practical terms,
Jon Coupal is nothing if not blunt when he describes one motive behind a Ventura County ballot measure that would replace the “defined benefit” pensions currently enjoyed by county employees and replace them with 401(k)-type plans for all future hires.
“This is meant to be a template for other counties,” Coupal tells Capital & Main. By that, the Howard Jarvis Taxpayers Association’s president means the measure’s conservative and libertarian backers see the “Sustainable Retirement System Initiative” as the newest and most promising weapon in their assault on California’s public employee retirement plans. Having failed to place similar measures on state ballots in 2012 and 2014, a coalition of wealthy individuals, anti-tax activists and government privatizers has seized on an aspect of California law that allows 20 counties to fashion their own public employee retirement policies apart from the CalPERS system that administers such policies for nearly all of the state’s remaining 38 counties.
Last week’s announcements about 2013 earnings by California’s largest public pension funds suggest the agencies may be making significant progress in shaking off the lingering after-effects of the 2008 stock market crash.
The California Public Employees’ Retirement System (CalPERS) said it rode a 25 percent run-up in stock prices to post a 16.2 percent gain for its 2013 portfolio — its best showing in a decade. For its part, the California State Teachers’ Retirement System (CalSTRS) reported an impressive 19.1 percent return on its 2013 investments, led by a 28 percent return on its stock holdings.
The announcements undoubtedly came as welcome news to the roughly 1.6 million California government workers and 860,000 public school teachers represented by the systems. Ever since the 2008 global financial meltdown, their pensions have been in the crosshairs of fiscal conservatives and anti-public pension activists who wish to see the employees’