Pension Crisis

California Pension Reformers Split Initiative into Two

One focuses on limiting taxpayer liability; the other gives voters more say.

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Carl DeMaio

A ballot initiative introduced to try to restrain runaway public employee pension costs in California has been split apart and reintroduced as two new initiatives. Proponents plan only to collect signatures for one of them to get it on the 2016 ballot, but they're going to see what Attorney General Kamala Harris does when she titles and summarizes each ballot initiative.

We've blogged before about the "Voter Empowerment Act of 2016," introduced by former San Diego City Council member Carl DeMaio (a Republican) and former San Jose Mayor Chuck Reed (a Democrat). The initiative would have required voter approval to put new government employees into pension plans (instead of 401(k)-style defined contribution plans) or to pay more than half of an employee's retirement and health benefits.

When Attorney General Harris was handed the initiative to summarize prior to signature gathering, as required by law, initiative proponents came away very unhappy. Her summary (as it has in previous efforts) declared that the ballot initiative would "eliminate constitutional protections" for existing government employee protections, even though the ballot initiative is very clear that it would not alter existing pension agreements. Proponents argue that Harris' wording is biased, and she's trying to damage its chances of passage.

So, what they've done is gone back and write up two ballot initiatives. The Voter Empowerment Act of 2016 still exists, but it's a bit streamlined. It would amend the state constitution to require a vote by citizens in any jurisdiction in order to add new employees to a defined benefit plan, and it would require a vote for governments to pay more than 50 percent of an employee's benefits. That's very similar to the previous act, but some other components have been stripped out.

The second initiative filed is titled the "Government Pension Cap of 2016." That initiative caps the government's contribution responsibility for employee retirement benefits to 11 percent of that employee's base compensation—13 percent for public safety employees. It states that employees would be responsible for any other costs, included unfunded liabilities.

This second initiative is obviously intended to make defined benefit plans look more palatable by taking away the guarantee that taxpayers will cover the differences whenever pension funds go bad or come up short. Again, this initiative states that it does not change current agreements, but will apply to successive labor agreements.

In a phone interview, DeMaio said this second initiative does not actually force a shift to defined contribution plans, but rather caps the risk to the public. He said he calculated the percentages based on what he's seen in private sector retirement plans.

"We are eminently reasonable," he says. "In some cases it's a little bit more reasonable than the private sector."

Because the two ballot initiatives are significantly different, he's hoping this would force Harris to have to describe them differently in her summary and avoid the characterization that government employees could lose their existing benefits. But he's going to see what they get from Harris before deciding which initiative they're going to circulation for signatures.

"In all the polling we've seen, the public understands there's a crisis and we need reform," DeMaio says. "The only people who don't understand this are the politicians and the union bosses who want this Ponzi scheme to continue."

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

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  1. I’m going to guess Kamala Harris is going to find some wording of these ballot initiatives that make it seem like they’re doing something terrible that they are not.

    1. That’s her job. Just imagine the damage she’ll do as a Senator.

      1. She’d only be one of 100 then, and considering she’d replace one of (Feinstein, Boxer), she can’t be any worse.

        1. CHALLENGE ACCEPTED!

          /Harris

  2. …he’s hoping this would force Harris to have to describe them differently in her summary and avoid the characterization that government employees could lose their existing benefits.

    “The Voter Empowerment Act of 2016 would require all government employees to panhandle on the freeway exit ramp and wash your windshield with spit and a dirty newspaper. The Government Pension Cap of 2016 will change everyone’s telephone area code.”

    1. *pulls lever….realizes it’s a touchscreen system….shits Depends?*

      /FloridaVoter

      1. I resemble that remark!

        1. I was hoping someone would notice a FL voter attempting to vote in a CA election, too.

  3. Is there no legal remedy for Harris’ thumb on the scale?

    1. Yes, but talking about it gets Reason subpoenaed.

      1. 7:01!!!!!

        *pours sip for my homies*

    2. There is, but it would end up being too late, and it is difficult to win.

      1. Figures.

    3. Think of her as a Kentucky clerk who refuses to do her job.

      1. I’m pretty sure Jerry Brown thinks she’s doing her job quite well.

        Is it an elected or appointed position in CA?

        1. Is it an elected or appointed position in CA?

          Technically both. The Democrats appoint the candidate and the great unwashed do as they’re told and vote for them.

          1. Charming. California is so beautiful to be inhabited by so many dickholes.

            1. (Not directed at you, of course. I realized that could be seen as personal.)

              1. Hey, if the shoe fits…

    4. One of Donald Trump’s TOP MEN will prosecute the California kangaroo court holders for civil rights violations. I might be projecting.

  4. Kamala Harris is just beautiful. I thought Kathleen Sebelius was hot too, for reference. Yikes.

    And when the clothes are strewn
    Don’t be afraid of the room
    Touch the fullness of her breast
    Feel the love of her caress
    She will be your living end

    /Bowie (and the Book of Genesis)

    There’s a darned good chance Kamela Harris will fill the senate seat vacated by Barbara Boxer.

    1. Kamela Harris WILL fill the senate seat vacated by Barbara Boxer.

      It has already been decided. The election is just a formality.

      Yes, Kamela Harris is very beautiful. Too bad she believes the way she does.

      1. It has already been decided. The election is just a formality.

        Antilles is correct to about 99.998%. That’s my 0.002%’s worth.

        1. What’s most galling is they don’t even pretend it’s a democracy. Boxer announced her resignation and virtually said that Harris would take her spot, as if it were hers to give away. You’d think the idiotic voters would punish them for their hubris, but they’ve been properly trained to never vote for anyone but a ‘D.’

          1. At least it’s not Illinois. Dan Lipinski effectively gave his seat to his son.

      2. She can’t possibly be as bad as Boxer, unless she’s DiFi.

        When does Trump get to fire her ass?

    2. Condie Rice would give Kammy a run for her money. Too bad Condie ain’t got no time for dat.

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  6. You state, “Her summary … declared that the … initiative would ‘eliminate constitutional protections’ for existing government employee[s] …, even though the ballot initiative is very clear that it would not alter existing pension agreements.”

    Perhaps you should read the petition.

    Start with: “Notwithstanding any other provision of this Constitution or any other law:” Stating that the current protections would be replaced by the provisions of this measure.

    The 1st provision: “Voters have the right to use the power of initiative or referendum provided in Article II, to determine the amount of and manner in which compensation and retirement benefits are provided to employees of a government employer.” It does not say new employees it says employees which means it would apply to everyone.

    The 5th provision: “Government agencies and retirement boards must fully and faithfully implement voter approved initiatives that affect government employee compensation and retirement benefits approved by voters, whether placed on the ballot by a government agency or by voters.” Again, it refers to compensation of all employees.

    The 10th provision: “Nothing in this section shall be interpreted to reduce the retirement benefits earned by government employees for work performed.” This means that future benefits can be changed – now prevented by Constitutional protections. You know, those protections that Harris said would disappear. Also, notice that the word new is missing yet again.

    1. Sec.3 ARTICLE XVI of the California State Constitution is amended to add the following section:

      Sec. 23 Notwithstanding any other provision of this Constitution or any other law:

      (h) Nothing in this section shall alter any provisions of a labor agreement in effect as of the effective date of this Act, but this Section shall apply to any successor labor agreement, renewal or extension entered into after the effective date of this Act.

      1. (h) Nothing in this section shall alter any provisions of a labor agreement in effect as of the effective date of this Act, but this Section shall apply to any successor labor agreement, renewal or extension entered into after the effective date of this Act.

        Labor agreements expire after 1 to 5 years.

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