CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, JUNE 12, 2015, OR THEREAFTER
BY THOMAS D. ELIAS
FOR RELEASE: FRIDAY, JUNE 12, 2015, OR THEREAFTER
BY THOMAS D. ELIAS
“PENSION-CHANGE MEASURE
INEVITABLE NEXT YEAR”
It was inevitable once the number of
signatures needed to put a constitutional amendment initiative on the statewide
ballot dropped by 300,000 following last fall’s election:
A measure to change the pension system
governing many California public employees will be voted on in November of next
year.
Equally unsurprising are the
identities of its two major sponsors: former San Jose Mayor Chuck Reed and
ex-City Councilman Carl DeMaio of San Diego, who has failed in runs for mayor
and for the congressional seat now held by Democrat Scott Peters.
The exact content of the initiative is
not yet certain, although both politicos say they may have their measure ready
as early as next month for review and titling by state Attorney General Kamala
Harris, who likely will share the ballot with the initiative as she runs for
the U.S. Senate.
Given what Reed and DeMaio have done
via local ballot propositions in their own cities, it’s a virtual certainly
their measure will contain something forcing public employees at the state and
local levels to increase their contributions to pension funding. It will also
most likely give local governments the power to renegotiate with unions the
pension benefits paid for future work, while leaving all vested benefits in
place. And it might set up 401(k)-style accounts for some future public employees,
rather than fixed benefits paid through CalPERS, the California Public Employee
Retirement System.
When Reed tried to put a measure much
like that on last fall’s ballot, he ran afoul of the attorney general, who must
write an objective summary and title for every initiative before petition
circulators begin seeking signatures.
Harris’ summary said the 2014 Reed
measure would “eliminate constitutional protections” for some workers,
including teachers, nurses and law officers. Reed strongly objected to this
description, but it was upheld in court and the effort went nowhere.
Now, with the petition signature
threshold for proposed state constitutional amendments down from 807,000 to
504,000 because of last fall’s low voter turnout, Reed and DeMaio are working
to craft something Harris-proof.
“Some of the San Diego and San Jose
policies will be included,” Dan Pellessier, president of a group calling itself
California Pension Reform, working with Reed and DeMaio, told a reporter. “But
we have to make it hard for Harris to make this look like a dirt sandwich, as
she did before.”
That’s a challenge, because no matter
how they try to sugar-coat it, Reed and DeMaio will be trying to take money
from public employees either at the front end, via increased contributions, or
at the back end, via reduced payouts or a change away from fixed benefits for
new employees.
Something, however, has to be done.
For even after the reforms pushed through by Gov. Jerry Brown early in this
decade, many of the state’s 130 public pension systems are unhealthy,
underfunded. In 2013, then state Controller, now Treasurer, John Chiang
reported 17 plans were underfunded by at least 40 percent, 45 per underfunded
by 20 to 40 percent and 22 more had shortages of 20 percent or less.
Altogether, the state’s unfunded
pension liability had risen to $198 billion from $6.3 billion in 2003.
“Rising salary and pension costs for
state and local government workers have outpaced the…new tax revenues generated
by (the 2012) Proposition 30,” DeMaio claimed in an essay.
One result is that CalPERS will soon
begin raising assessments of cities and counties to help meet their pension
obligations, administered by that agency in most cases.
“It is clear that politicians in
Sacramento are not serious about reforming unsustainable pension benefits,”
DeMaio said. He complains that public employee pensions far outpace those in
the private sector, where fixed-benefit plans are mostly a thing of the past,
enjoyed by many of the currently retired, but a mere fantasy for most of
today’s workers.
The challenge for DeMaio and Reed lies
in crafting a plan that doesn’t renege on promises and contracts previously
agreed to, while still saving money. That’s a very tall order.
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Elias is author of the current book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It,” now available in an updated third edition. His email address is tdelias@aol.com
Elias is author of the current book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It,” now available in an updated third edition. His email address is tdelias@aol.com