Opinion: Lawmakers could undermine California’s landmark public pension reform
A view of California Residents Employees Retirement System CalPERS headquarters in Sacramento File photo by Max Whittaker Reuters This column was originally published by CalMatters Sign up for their newsletters Thirteen years ago a minor political miracle occurred in California s Capitol A Democrat-dominated Legislature passed and a Democratic governor Jerry Brown signed a critical overhaul of state and local general employee pension systems It was a miracle because the transformation was universally opposed by populace employee unions which were and still are the Capitol s the greater part potent political interests with long-standing ties to Democrats The overhaul championed by Brown made it into law because the state was then recovering from a very severe recession that had devastated regime finances and pension obligations which had expanded sharply during the prior Gray Davis governorship had become unsustainable burdens Mandatory pension payments into the California Society Employee Retirement System had been factors in the bankruptcies of two cities and unfunded obligations for future benefits totaled plenty of tens of billions of dollars The decree capped benefits increased retirement ages blocked maneuvers that artificially increased certain pensions created a two-tier system that maintained benefits for current workers but limited them for future hires and required workers to pay for at least half of pension costs This is the biggest rollback to population pension benefits in the history of California pensions Brown explained as he signed the bill We re lowering benefits to what they were before I was governor the first time and reducing costs by up to billion in PERS and billions more in other local pension systems Under the new rules employers and employees alike are going to contribute their fair share of the costs resulting in a more sustainable system Not surprisingly certain unions challenged aspects of the restructuring particularly those outlawing pension-spiking maneuvers but Brown fought back and won in the state Supreme Court However the court refused to take a further step Brown sought eliminating the California rule that prohibits reducing benefits for workers once they are enrolled in the system This bit of political history forms the background of new statute that would if passed by the Legislature and signed by Gov Gavin Newsom begin to undo what the amendment wrought Assemblymember Catherine Stefani a San Francisco Democrat is carrying the ordinance Assembly Bill which would repeal one of the major provisions of the amendment banning local governments from enacting supplemental retirement benefits for their workers Stefani and the Teamsters Union the measure s sponsor contend that Brown s overhaul leaves workers without sufficient pension benefits to offset California s notoriously high costs of living and makes it complex for local governments to fill vacancies It exclusively gives local governments and their employees another option at the bargaining table one that might make the difference between losing or keeping a talented worker Stefani communicated the Assembly Population Employment and Retirement Committee last week The bill whipped through the committee on a - vote including the committee s two Republicans Tom Lackey and Juan Alanis both of whom are former police officers While the bill s advocates say that it would merely be permissive giving local governments the option to increase benefits its practical effect would be to gut one of the improvement s preponderance pivotal safeguards It would restore the ability of local authorities unions to put political pressure on city councils county boards of supervisors and other local bureaucrats to expand benefits for the workers who have been hired since the reorganization was enacted long a sore point for unions It s amazing that such a major change in pension law would begin moving through the process without so far any opposition or even comment from the local governments that it would affect CalMatters is a inhabitants interest journalism venture committed to explaining how California s state Capitol works and why it matters
