Pension Crisis

New Initiative Filed in California Puts Pensions in Voters' Hands

Citizens would have to agree to new or expanded plans


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.)