Pension Reform Efforts Move Forward After Harris Issues Summaries

On Thursday, California Attorney General Kamala Harris (D) issued official summaries for two proposed ballot measures targeting future workers' pension benefits, the Sacramento Bee's "The State Worker" reports (Ortiz, "The State Worker," Sacramento Bee, 12/10).

Background

Former San Jose Mayor Chuck Reed (D) and former San Diego council member Carl DeMaio (R) -- who authored the new initiatives -- dropped similar pension reform efforts earlier this year after Harris issued summaries that supporters said favored labor unions.

The previous summaries stated that the pension reform measures would "eliminate[e] constitutional protections" for current workers and could lead to "significant effects -- savings and costs -- on state and local governments."

Supporters of the failed proposals mounted a legal challenge against its description, saying the wording did not accurately represent the intent of the measures. However, Sacramento's 3rd District Court of Appeal "dismissed as moot" the case's claim that the language was biased (California Healthline, 8/12).

Details of New Initiatives

Reed and DeMaio have said the new ballot initiatives take "a totally different approach" than previous pension reform efforts by reducing benefits only for future employees.

One measure would place workers who join a public pension on or after Jan. 1, 2019, into retirement savings plans similar to a 401(k). The plans would guarantee fixed contributions from employers rather than retirement payments from government agencies.

The second measure would cap the amount employers could pay for new hires' retirement benefits to certain percentages of their income. Employer payments would be capped at:

• 11% of base compensation for most new employees; and
• 13% for police, firefighters and other public safety workers (California Healthline, 10/6).

New Summaries

In the summaries issued this week, Harris wrote that the measures would change the state constitution "to impose restrictions on pension and retiree health care benefits for new public employees, including those working in K-12 schools, higher education, hospitals and police protection."

Reed said, "It's not the most positive way to describe the initiative ... but at least it meets the legal requirement to be accurate."

Next Steps

Supporters of the measures now must gather 585,407 signatures to qualify them for the 2016 state ballot.

Reed said he will poll voters on the measures and move forward with whichever one has at least 60% support -- which he says will be necessary to overcome attacks from a campaign against the reform efforts. He estimated that supporters would need $2 million to $3 million to launch a three-month effort to collect signatures. Overall, Reed estimated that supporters would need about $25 million to run a statewide campaign once a measure qualifies for the ballot.

Steve Maviglio, a labor union spokesperson, said his clients will "throw the kitchen sink at" the measures if they make it onto the state's 2016 ballot ("The State Worker," Sacramento Bee, 12/10).