When Democratic former San Jose mayor Chuck Reed and Republican ex-San Diego councilmember Carl DeMaio finally unveiled the language for a promised attempt at getting a statewide public pension cutting measure to 2016 voters, the expectation was that Reed II would be a reined-in and more realistically-framed version of Reed I – last year’s failed attempt at undermining the public pension system.
That try for the 2014 ballot was aborted after Attorney General Kamala Harris slapped it with a candid, albeit politically untenable summary that frankly described the proposed constitutional amendment as targeting longstanding legal rights—rights that protect the pensions and retirement health care of the 1.64 million Californians enrolled in the state’s public pension systems.
But even veterans of the state’s public-sector retirement wars were unprepared for the sheer scale of what awaited them this time around.
The newest front in the battle over the retirement security of California’s public employees opened June 4 with the release of the language for a proposed ballot initiative that would rewrite the state’s constitution to virtually outlaw traditional defined-benefit pension plans for future state and municipal workers.
The measure, dubbed “The Voter Empowerment Act of 2016,” would effectively shift all new public employees from the various defined-benefit plans currently in place to 401(k) plans, beginning in 2019. It would then lock those plans in place by adding the burden of direct voter approval on government employers who want to continue offering traditional pensions after 2019.
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The security offered by defined-benefit retirement plans has been typically used by government employers to compete with the private sector in recruiting quality candidates for public workforces.
No city offers Californians a better example of voter-approved pension-cutting than San Jose. In 2012, then-mayor Chuck Reed, who is the co-author of the new “Voter Empowerment Act of 2016,” persuaded citizens to pass Measure B. Some provisions of the San Jose law were later thrown out by a Santa Clara County Superior Court, but an uneasy atmosphere lingers over this city whose public employees were vilified by Measure B’s supporters. Capital & Main recently discussed the fallout from Measure B and previous budget cuts, with a city firefighter who requested that only his first name be used.
Capital & Main: What do you see as the biggest problem facing the San Jose Fire Department today?
Matt: Don’t get me wrong, I love the department I work for . . . Unfortunately with the budget cuts that our department [has] faced [for] over a decade,
“California pension funds are running dry,” warned a recent Los Angeles Times headline.
“The unfunded liability— that’s the difference between promised benefits and projected funds to fulfill those obligations — grew from about $6.3 billion in 2003 to a little more than $198 billion in 2013,” Santa Rosa’s Press Democrat chimed in, helpfully doing the math to point out that’s a 30-fold increase in 11 years.
“The system, in short, is completely, utterly broken,” concluded the Orange County Register.
Despite nothing significant changing in the retirement plans themselves, public employee pensions are back in the news, and apparently panic is in the air.
A Ventura County judge Monday issued a setback to anti-pension zealots who have been working to roll back public employee benefits. The judge’s tentative ruling found fundamental flaws in a ballot measure to cut county employee pensions and concluded that putting it before voters would amount to nothing more than a waste of public tax dollars – a rebuke that must smart among groups who identify themselves as taxpayer advocates.
One of their central tactics has been to stir up resentment among the public, most of whom have seen their own benefits shrivel up over the years, then place measures on the ballot to slash public employee pensions. As Capital & Main’s Gary Cohn reported, anti-tax activists saw this particular Ventura measure as a template for what would be a wave of pension rollback measures.
“I guarantee you that when this passes, in 2016 every ’37 Act county will have this on their ballot,” Ventura County Supervisor Peter Foy said at the time.