Pension Crisis

Pension Reform on the Ballot Next Year in California

Initiative backers release details

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California's pension-reform movement is back, as reformers on Thursday announced the long-awaited details of a statewide ballot initiative targeted for the November 2016 ballot. The measure, one of its main backers said, will cut the "Gordian Knot" that has halted reform—in particular, the tangle of court cases that has made it nearly impossible to control benefit costs.

In the legend, the King of Phrygia tied a complicated knot and prophesied that the one person who could undo it would rule Asia. Alexander the Great glared at the entangled mess and, unexpectedly, whacked through it with his sword. The "Gordian Knot" refers now to complex situations that can only be fixed with an unconventional approach.

Pension reformers have tried many conventional approaches, but they've been stymied by an intractable legal problem called the "California Rule"—court interpretations that forbid any reduction in benefits for current employees, even on a going-forward basis. And they've been stymied by a Legislature that – after passing modest reform in 2012—declared the mission accomplished and moved on to other things.

Reformers have backed statewide initiatives before. But titles and summaries issued by the attorney general have been criticized as biased. Voters who sign petitions tend only to read those short descriptions, so biased ones can be the death knell. Reformers even attempted a county-by-county approach, but the first test case, in Ventura County, was kept off the ballot by a judge.

Instead of trying to directly address the legal and constitutional tangle, this group—led by former San Diego councilman Carl DeMaio, a Republican, and former San Jose Mayor Chuck Reed, a Democrat—has decided to try something different, simple and obvious. You can get the gist of it by the title its supporters have given the initiative: "The Voter Empowerment Act." Basically, the measure would subject many types of pension enhancements to a vote of the people. It applies mostly to new hires—and to every local, regional or state government entity.

Specifically, it would require voter approval if an agency creates a new defined-benefit retirement plan for new employees (hired in 2019 and beyond). It would also require a vote for any hike in pension benefits for existing employees. It also would require a vote if any government employer pays more than half of the cost of the pension benefits for new employees. The language refers to "total" cost. Currently, agencies divvy up costs with employees by looking only at the "normal" costs of those benefits. That leaves out the large unfunded portion of them.

The initiative takes aim at the "California Rule," but in a backdoor way. Section 23 (a) adds this wording to the Constitution: "Voters have the right to use the power of initiative or referendum … to determine the amount of and manner in which compensation and retirement benefits are provided to employees of a government employer." That might let voters pass initiatives allowing future benefits of current employees to be pared back.

One union coalition shot back with a preview of the type of campaign we can expect if reformers gather the necessary 585,000 signatures to qualify it for the ballot. "This is yet another destined-to-fail attempt to eliminate the retirement security of teachers, firefighters, school bus drivers and other public employees they have earned and agreed to in good faith at the bargaining table," said Dave Low, chairman of Californians for Retirement Security.

The reform side will focus on the voter empowerment angle. "How do you argue against people having the final say on deals made by politicians?" asked DeMaio. And how do you argue against the numbers? A new study by Chicago-based Truth In Accounting "found that California did not report 74 percent, or $111 billion, of the state's retirement debt on its balance sheets" because "the state government uses outdated accounting methods."

Has this group figured out how to make pensions more sustainable? We'll see. But they won't be the first reformers in California to try to untangle a legal and political knot by giving more powers to the state's voters.

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15 responses to “Pension Reform on the Ballot Next Year in California

  1. The whole state deserves to go bankrupt. And that’s where its headed.

    How in god’s name are libertarians the ones accused of having a child’s ideology when these people just put their finger’s in their ears and scream “I’m not listening” as their debt piles up?

    1. How in god’s name are libertarians the ones accused of having a child’s ideology…

      Because libertarians think adults shouldn’t have to ask permission and obey orders from government as long as they’re not bothering anybody. That makes them exactly like children who think they shouldn’t have to ask permission and obey orders from their parents.

      You see, we’re all children, and government is our parent.

      1. Joan Walsh has argued more or less exactly that more than once.

        http://linkis.com/QVTnM

      2. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, go? to tech tab for work detail,,,,,,,

        ????????????? http://www.pay-buzz.com

    2. “[…]these people just put their finger’s in their ears and scream “I’m not listening” as their debt piles up?”

      I hear it quite often and stated with a straight face:
      ‘Moonbeam balanced the budget!’
      In fact, commie-kid shows up here and repeats that as if the words meant something.

  2. My best friend’s step-mother makes $85 hourly on the computer . She has been fired from work for nine months but last month her pay check was $17089 just working on the computer for a few hours. see it here
    LINK HERE?????? http://www.BuzzReport20.com

  3. ” outdated accounting methods”

    Pretty sure that cooking the books is never going to be outdated.

    -jcr

  4. Unfortunately, this:

    “This is yet another destined-to-fail attempt to eliminate the retirement security of teachers, firefighters, school bus drivers and other public employees they have earned and agreed to in good faith at the bargaining table,”

    Will resonate with the mob more than this:

    “A new study by Chicago-based Truth In Accounting “found that California did not report 74 percent, or $111 billion, of the state’s retirement debt on its balance sheets” because “the state government uses outdated accounting methods.'”

    I wish them the best of luck, but they need a much more populist method if they want to get through to the brain dead masses that make up the population of California.

  5. This legislation is a no vote.

    Beware, A yes vote will lead to bankruptcy for every city and county. Some sooner than others but all will eventually need to file.

    Look closely at the ultimate impact and at the motives of the backers. California will become, a second class state.

    1. Keeping watch|6.12.15 @ 3:38PM|#
      “This legislation is a no vote.”

      Wrong.
      This initiative is a YES vote.

  6. BTW:
    http://liarliar.com/
    ” Liar Liar Pants on Fire”
    […]
    “Exposing California’s Debt Crisis”

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  8. Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it out.
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  9. Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it out.
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  10. Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it out.
    This is wha- I do…… ?????? http://www.netcash5.com

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