Capitol Alert Breaking

San Jose mayor files public pension initiative

In a move that portends a labor firestorm, San Jose Mayor Chuck Reed and four other city leaders filed papers on Tuesday aiming to put a public pension measure on the November 2014 statewide ballot.

If approved, the measure sent to Attorney General Kamala Harris would change the California Constitution to give state and local government employers authority to lower current employees’ pension and retiree health benefits prospectively. Until now, most legal experts have concluded that the state constitution protects pensions promised to workers on their first day at work as a “vested right” that can’t be reduced without comparable compensation in return.

“It’s an empowering initiative for governments,” Reed said during a Tuesday afternoon telephone interview.

Labor interests knew the proposal was coming. Shortly before Reed issued his press release, the unions issued a statement blasting the plan. Dave Low, chairman of labor coalition Californians for Retirement Security, called Reed’s plan an “extreme proposal, advanced by a career politician.”

If the measure reaches the ballot, Low predicted, “it will energize the same coalition that defeated Proposition 32,” the failed 2012 measure that aimed to make it more difficult for unions to collect dues from members.

To counter labor attacks, Reed has been busy building a bipartisan coalition to support his ballot measure. On Tuesday, four Democratic mayors – Reed, San Bernardino’s Pat Morris, Santa Ana’s Miguel Pulido, Pacific Grove’s Bill Kampe – and Anaheim’s Republican Mayor Tom Tait submitted language for the “Pension Reform Act of 2014” with a letter asking Harris to assign it a title and description.

But it is Reed, mayor of California’s third-largest city, who is the face of the latest campaign to alter current public employee pensions. Last year he sponsored a successful San Jose ballot measure that forced current city employees to choose a less-generous retirement plan for future service or contribute more money to continue their more generous pension. Like the statewide proposal Reed introduced Tuesday, the measure didn’t change benefits workers had accrued. Voters overwhelmingly approved the plan. Unions have sued to block it.

Still, pension reformers hailed Reed’s 69 percent-to-31 percent local pension victory as a watershed moment that proved voters care about pension politics. It also thrust the 65-year-old mayor into the forefront of California’s public pension debate. Since then he has crisscrossed the state and traveled to Washington, D.C., to talk up pensions and round up supporters for a statewide initiative.

Reed’s new political committee, Coalition for Fair and Sustainable Pensions, hasn’t raised any money yet.

“It’s too early in the process,” Reed said, because he doesn’t know what ballot title and summary the attorney general will hang on the measure. The language matters because it influences how voters perceive what the proposal accomplishes or whom it harms.

Last year, for example, another group complained that Harris, a union-friendly Democrat, skewed their measure’s title and summary so unfairly that it stood virtually no chance of passage. The campaign died because donors wouldn’t ante up the $2 million or so needed to collect qualifying signatures for a sure-fire loser.

Some of the players in that failed effort are on Reed’s team this time around, including consultant Dan Pellissier. The memory of that stinging defeat is still fresh.

“We’ve drafted accordingly,” Reed said, by designing an initiative that gives government agencies the “tools” to cut pension costs without prescribing how they do it.

That should “generate a favorable title and summary,” Reed said.

Once the language is in hand, campaign veterans say, Reed’s group will test voter reaction and – assuming the measure tests well – shop it to potential contributors in late December and early January.

The fundraising comes with another concern, said Bill Whalen, a research fellow at Stanford University’s Hoover Institution: “If you’re running this initiative, where do you find that money in California?”

Unions have already made hay with reports that Reed asked a Houston-based nonprofit to give $200,000 to his local chamber of commerce last summer for “policy analysis for statewide pension reform,” according to a report the mayor filed in August. The nonprofit, Action Now Initiative, has ties to former Enron executive John Arnold.

“The unions will make this a referendum on out-of-state money,” Whalen said. “The playbook is very predictable.”

Still, the former speechwriter for Republican Gov. Pete Wilson thinks the issue has resonance with voters who are watching cities such as Stockton, San Bernardino and elsewhere wrestle with cutting services to pay their pension obligations.

“I think there’s an audience for this outside the Sacramento beltway,” Whalen said.

That may be, said Jack Pitney, a government professor at Claremont McKenna College. But the early predictions are that Gov. Jerry Brown will lead another sweep of Democratic wins to statewide offices next year. Republicans won’t have much reason to turn out in force.

“It’s an election that Brown is going win by a substantial margin,” Pitney said. “It’s hard to see an election where the governor wins and voters pass something like this.”

Plus, labor interests are organized in every precinct statewide, and the issue matters more to them than to any other group – including the monied interests that might write checks for it.

“For the unions it’s Armageddon,” Pitney said. “For the other side it’s just a video game.”

But Jon Hamm, the longtime executive director of the California Association of Highway Patrolmen, predicted unions face an uphill battle. Pensions, once more common in the private business than in government, have virtually disappeared.

“This won’t be an easy fight,” Hamm said, “because the campaign will play to the emotions of private sector workers who have already had this done to them.”

Related stories from Sacramento Bee