The State Worker

Chronicling civil-service life for California state workers

January 23, 2009
Pension reform crusader e-mails The State Worker

Yesterday we blogged that Santa Monica CPA Paul McCauley has gained permission to collect petition signatures to qualify The McCauley Public Pension Reform Act, an initiative to constitutionally change public employee pension contracts.

If you're not familiar with that post, we highly recommend to read it for context before continuing here. Click here to check it out.

We've heard back from McCauley. First, our e-mail to him:

Hello Mr. McCauley:

I write a blog and a column for the Sacramento Bee that focuses on
state worker issues. I noticed that you have received permission to
circulate a petition for a ballot measure to change public employee
pension contracts.

I'd like to talk to you about this to get some background on the
proposal and what is motivating your drive. Do you have anyone backing
the petition drive? What strategies are you going to use to get this
before voters and get it passed?

... Look forward to hearing from you.

Jon

Now McCauley's unedited reply, posted here with his permission:

Hi Jon,

Thanx for the e-mail message. As I am hearing impaired, you and I
will have to correspond by e-mail. Sorry.

Let's see. In the first instance, I have not heard from the AG's
Office that I have the green light to circulate the petition. I will
soon, though.

To answer your questions:

1) I do not have financial or organizational support lined up just
yet. However, I might point out that approximately 32 million
Californians do not benefit from these public employee pension
programs. I also point out that state and local governments have hit
the wall, fiscally speaking. That is, while the public employees are
holding out for tax increases to pay these pensions, the tax increases
are unlikely to materialize. That leaves state and local governments
with a choice - cut pensions or cut service.

2) I am going to use the same strategy I used in 1981 when I and two
other persons organized the campaign to oust Rose Bird, Joseph Grodin
and Cruz Reynoso from the state supreme court. California is a very big
state but it can be politically organized. I have done so as have
others.

I mention the crossroads. The public employee pension issue is not
new. That public employee pensions exceed private sector pensions
twenty-fold to thirty-fold speaks for itself. As the economy tanks and
an increasing number of people lose their jobs, their homes, their 0D
401(k)'s etc., their sympathy for a public employee who believes that
he/she has an entitlement to retire on a $100,000 pension will wane. I
intend to catch the crest of a wave of public resentment and outrage-
justifiable resentment and outrage.

The LAO's Office says that $13 billion is set aside annually now for
public employee pensions in CA, and that that figure will grow. That
is, that figure will grow while the taxpayers' ability to pay shrinks.
The LAO report, I might add, makes no mention that most if not all
public employees also receive lifetime health insurance benefits, which
the Schwarzenegger administration has recently calculated to be a $118
billion unfunded liability.

Something must give. I point out that my measure simply lays a
foundation for what must follow. That is, my measure ALLOWS cuts but
doesn't mandate them. The hard work of renegotiating pensions will
begin after my measure becomes law.

Expect a lot of whining from the public employees.

Paul McCauley, CPA

PS: I've already received five complaints from "hard working" public
employees today. The one thing they all had in common was a total lack
of regard for hard working folks in the private sector.

10:25 a.m. addition to this post: You can read the LAO analysis of McCauley's initiative by clicking this link. Thanks to Jason Dickerson at the LAO for calling this to our attention.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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