Pension Crisis

New Initiative Filed in California Puts Pensions in Voters' Hands

Citizens would have to agree to new or expanded plans

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Thanks to a "bonus" for appearing on flags, the bear's pension is well into six figures these days.
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Former San Diego city council member and Republican congressional candidate Carl DeMaio and former Democratic San Jose Mayor Chuck Reed announced today they're filing a new ballot initiative to reform public employee pension benefits for the state (which is hundreds of billions in the hole in pension obligations both on the state and municipal levels).

The way the initiative works is that voters will be giving themselves the power to vote on whether to take on future additional pension obligations. Note that it does not alter existing pension agreements. Here's how DeMaio summarizes what the "Voter Empowerment Act of 2016" would demand:

  • Require voter approval of any defined benefit pensions for new government employees;
  • Require voter approval of any increase in pensions for existing government employees;
  • Prohibit any taxpayer subsidy of government retirement benefits in excess of 50% of the cost – unless voters expressly approve a higher contribution, and
  • Prohibit politicians and government agencies from delaying, impeding, or challenging any voter-approved state and local ballot measures regarding compensation and retirement benefits.

The full ballot initiative may be read here (pdf). Unfortunately, last time Reed attempted to push through pension reform, Attorney General Kamala Harris gave the initiative what would could easily be seen as a very negative summary, leaving casual readers with the suggestion that it meant pensions could be eliminated. Reed challenged the description but was rejected, and thus he abandoned the effort. We'll have to see what happens this time.

(Disclosure: DeMaio has previously worked with the Reason Foundation as an independent contractor on pension reform.)

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  1. Be interesting to see where the funding comes from on the ‘no’ side.

    (Who am I kidding? We know the PS Unions will throw tens of megabucks down on ‘no’.)

    1. This is all moot anyway. CA’s pensions are so far underwater that even the legislature’s usual creative accounting cannot hide the problem. This initiative is about 40 years too late.

  2. Awwwww. This is disappointing in that it seems like an incredibly modest and sensible proposal, and neither of those adjectives typically come to mind when one thinks “Cali politician”.

    1. It’s a modest, sensible reform which public sector sympaticos will derail as an extreme tea party initiative.

  3. Note that it does not alter existing pension agreements.

    I’m curious, outside of bankruptcy, how you do this.

    1. Leave California works on an individual basis.

      How long before there is an ‘exit tax.’?

      1. There already is: California’s tax authority basically doesn’t believe you when you tell them that you have left the state, and they’ll try to take whatever they can get their hands on after you leave. Don’t ask me how I know.

    2. Military force.

    3. According to CalPERs, NEVER.

  4. The way the initiative works is that voters will be giving themselves the power to vote on whether to take on future additional pension obligations.

    This is what I’ve been talking about for years. Put the union contracts in the hands of the voters. Because a pubsec union doesn’t strike against the government, it strikes against the people. That makes me management.

    1. Yeppers, because everyone knows that voters are a reliably sober bulwark against government boondoggles, immune to the prevarications and emotional manipulations of concentrated interests.

      1. They’re a better bulwark than city councils or state legislators. Politicians vote with the taxpayers’ pocketbooks, so you may as well take out the intermediary.

        1. Yes.

    2. People will vote against their own financial interests if it makes them feel good to do so. Many people in California have made the mess by voting for what they believe is the right thing to do, but never take into consideration the cost, both monetary and unintended consequences. Case in point, the cities passing a $15 per hour minimum wage.

  5. How, then, will California recruit the cream of the intellectual crop; the hard working, selfless, noble yeomen who keep the great choo choo of government on the tracks?

    1. The old fashioned way, fear and intimidation.

    2. You need to look up “yeoman”.

  6. We know the PS Unions will throw tens of megabucks down on ‘no’.

    Something tells me the final wording of the initiative, as it appears on the ballot will offer a choice between killing all public employees and Puppysky Rainbowland.

    1. The previous initiative, says Reason, Harris summarized as “eliminates constitutional protections for vested pension and retiree healthcare benefits for current public employees, including teachers, nurses, and peace officers, for future work performed.”

  7. Its too late – the existing pensions are already going to bankrupt the state

    1. Not if we print more dollars!

    2. JRS1001|6.4.15 @ 6:29PM|#
      “Its too late – the existing pensions are already going to bankrupt the state”

      Last time this came up, commie-kid piped up about how moonbeam had ‘balanced the budget’. I think he believes that.

      1. “commie-kid piped up ”

        Could you be more specific ?

        I’ve got about a 25% chance of guessing which one you’re referring to around here.

        1. american socialist is the screen name

      2. What exactly did expect from someone who goes by the handle ” American Socialist”?

        Socialists (communists, fascists progressives liberals etc…) all believe in ideological truth not literal truth – that is that the facts don’t actually matter if they do not support the narratives that like. Truth is whatever supports their ideology.

  8. Yeah, these same CA voters approved the Train to Nowhere, countless school, water and road bonds, as well as multiple “temporary” sales tax increases. They also gave the legislature the authority to raise taxes with only a bare majority.

  9. As big city Democrat mayors from California go, Chuck Reed was probably one of the best. Relative scale of course.

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