The State Worker

Measure to curb California public pensions is pulled – for now

Former San Jose Mayor Chuck Reed announces two proposals to limit California public pensions won’t make the ballot this year, but might be back in 2018.
Former San Jose Mayor Chuck Reed announces two proposals to limit California public pensions won’t make the ballot this year, but might be back in 2018. Associated Press file photo

Beleaguered by fundraising doubts and attacks from organized labor, two former California officials said Monday they are backing off plans to place a measure on the November ballot intended to curb public pension benefits.

Instead, former San Jose Mayor Chuck Reed and former San Diego Councilman Carl DeMaio said in a joint announcement, “We have decided to re-file at least one of our pension reform measures later this year for the November 2018 ballot.”

Reed said in a telephone interview that he is disappointed but undeterred. Professional fundraisers and potential donors, he said, believed that economics, politics and a pending U.S. Supreme Court decision would strengthen the likelihood of passing a pension measure in two years.

“Enough people in my coalition think so,” Reed said, “and you have to listen to them.”

Labor unions, which opposed Reed and DeMaio’s proposal and others like it, rejoiced at Monday’s news that another “extremist” stab at changing public pensions had failed.

Dave Low, chairman of the union-backed Californians for Retirement Security, questioned in a statement whether “donors will have any confidence in these two failed politicians who have repeatedly bungled efforts” to put a proposal on the ballot.

Reed and DeMaio’s announcement marked the latest in a decade-long string of unsuccessful attempts to put a pension measure before California voters, although both men were behind successful local ballot measures in 2012 intended to cut into pension costs that they said had eroded their respective cities’ core services.

$28 millionThe amount of money needed to collect signatures and run a pension-change ballot measure campaign, according to former San Jose Mayor Chuck Reed

Reed, a Democrat, tried to repeat his success in San Jose with a 2014 statewide proposal, but he failed to find backing and then lost a court fight over its official description. Last year, he teamed up with DeMaio, a Republican, and filed two proposals for the November 2016 ballot, intending to select one after they polled the language applied to each by the state attorney general.

One measure, which Reed said didn’t poll well this month, would have put employees who first join a public pension system on or after Jan. 1, 2019, into 401(k)-style retirement savings plans that guarantee fixed contributions from employers instead of guaranteeing retirement payouts by government agencies.

The second measure, which stalled Monday, would have capped how much employers could pay for new hires’ retirement benefits to a certain percentage of their salary.

Voters at the state and local levels would have had the power to override the downgraded benefits or the cost caps at the ballot box.

After the state issued the official language for both measures, Reed said, the cost-cap proposal polled better because it was easier to understand. But he still couldn’t persuade donors to come up with up to $3 million needed to gather qualifying signatures by mid-April. Beyond that, Reed estimates he would need another $25 million to wage a campaign against fierce union opposition.

Internal discussions, Reed said, turned to 2018. By then, some of his advisers speculated, the state economy might cool down, putting state and local budgets under more stress and giving voters more reason to pay attention.

There would also be no election for president that year, he noted, which tends to suppress turnout in Democratic, union-friendly California.

Pensions will always be the top issue for labor.

Steve Maviglio, union coalition spokesman

Also, by the 2018 campaign season, the U.S. Supreme Court’s decision in Friedrichs v. California Teachers Association, due by June with potential to shrink union revenues, may have sapped funds from labor’s political war chests for two years. Still pending, the case takes on whether the union can require payments from nonmember teachers it represents in contract talks. Labor organizations fear a decision against the CTA will be applied more broadly. If that happens, public employee unions nationwide would lose members and money.

Potential funders “want the best return on their investments,” Reed said, “so they wanted to wait for 2018 for higher prospects for a better return.”

Union coalition spokesman Steve Maviglio brushed aside that rationale.

Pension-change advocates failed to find funding for a measure during the depths of the 2008 recession and the havoc it wreaked on government budgets, he noted, “so they won’t pass (a measure) when the economy is doing well.”

The Republican establishment won’t back a pension measure even in a midterm election year, Maviglio said, because they won’t want to galvanize labor and spur Democratic turnout that would hurt their own campaigns.

Whether the CTA decision will weaken unions’ financial wherewithal, as many experts believe, Maviglio said, “Pensions will always be the top issue for labor. We will always have deep pockets for this.”

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