Calif. Public Pension Initiative Cleared for Signature-Gathering

Definitely a bear market for pensionsCalifornia Attorney General
Kamala Harris has produced her title and summary for a ballot
initiative that would change the state’s constitution to permit
municipalities to make changes to future pension and health
benefits for its workers. Of course, they should be able to do so
now, but it only works one way. They can only be increased. This
ballot initiative, introduced by San Jose Mayor Chuck Reed (a
Democrat), would allow fiscally struggling municipalities to reduce
future benefits or require employees to contribute more moving

The Sacramento Bee notes that neither side is
exactly happy with how Harris has
summarized the amendment

The initiative is now officially titled “Public Employees
Pension and Retiree Healthcare Benefits Initiative Constitutional
Amendment.” Harris’ summary says, among other things, that it
“eliminates constitutional protections for vested pension and
retiree healthcare benefits for current public employees, including
teachers, nurses, and peace officers, for future work

Chuck Reed, the Democratic mayor of San Jose behind the measure,
has said he wants to give state and local governments the authority
to cut pension costs even if it means changing future benefits for
current workers. He said he thought the newly released language
isn’t clear and that the word “eliminate” is “pejorative.”

“You read this and you don’t know what we’re trying to do,” Reed
said. He said the summary focuses on the measure’s pension
takeaways when it should state that the initiative it also locks in
accrued benefits.

Harris’ summary is
(pdf). The law requires the summary to be 100 words or
less. Given the complicated nature of pensions, it is a bit
challenging to write a satisfying summary of what pension reforms
would do. The latest draft of the full ballot initiative is

(pdf). Reed is correct that Harris’ summary doesn’t
outright say that current benefits are protected from cuts by this
amendment, though she does make it clear that changes refer to
“future work.”

The unions, of course, feel like Harris’ summary doesn’t shed a
bad enough light on pension reform:

Organized labor said the language doesn’t emphasize the risk
they believe the measure poses to the retirement security of both
current and future public workers. The unions also wanted Harris to
cast the proposal as sanctioning the abrogation of contracts, since
pension and benefits health are normally negotiated.

“While the title and summary describes the repeal of
Constitutionally vested rights to pensions and retiree health care,
teachers, nurses, and firefighters – by far the largest groups of
municipal public employees – deserve to have voters know exactly
how their retirement security will be put at risk with this
measure,” the union coalition’s press release said.

How does the risk compare to what could happen to their
retirement security if their employers go
, hmm?

The release of the summary now allows the initiative to be
circulated for signatures, so we may see where the public’s
loyalties lie. In California, voters passed
pension reforms
in San Diego and Reed’s own San Jose in 2012.

A judge ruled
in December, though, that pensions couldn’t be
cut in San Jose, hence the need for a constitutional amendment. A

Reason-Rupe poll
in September shows that citizens want their
cities to deal with financial problems by reducing city employee
benefits and pushing them into 401(k)-style defined contribution

from Hit & Run

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