Campaign 2016: Bipartisan group files pension reform initiative

calpers, cagle, July 14, 2014, wolvertonThe battle over California’s out-of-control public employee pensions could soon move from the courtroom to the ballot box.

A bipartisan group of pension reform advocates, led by former San Jose Mayor Chuck Reed and former San Diego Councilman Carl DeMaio, recently filed a statewide initiative for the 2016 ballot that would give voters a direct say on pension benefits. Dubbed the “Voter Empowerment Act of 2016,” the initiative would amend the state constitution to require voter approval of any new defined benefit retirement plans and place a 50 percent cap on government subsidies of retirement benefits provided to government employees.

“California’s politicians have chosen tax hikes and draconian service cuts to divert taxpayer money for unsustainable and indefensible government pension payouts, which is exactly why we must empower voters with this initiative to get reform done,” DeMaio said in a press release announcing the measure.

Voter Empowerment Act of 2016

In recent years, pension reform measures at the local level have been repeatedly stymied by the courts. After San Jose voters overwhelmingly approved a pension reform plan authored by Reed, a judge overturned the measure for violating the “vested rights” of public employees.

Under what’s been called the “California rule,” public employees have a constitutional right “not only to the amount of public employees’ pensions that has been earned by past service, but also to employees’ right to keep earning a pension based on rules that are at least as generous for as long as they stay employed.”

Last year, Ventura County taxpayers gathered thousands of signatures for a pension reform measure to have the county opt-out of the current defined-benefit system and replace it with a new 401k style plan. However, Ventura County District Court Judge Kent Kellegrew ruled that voters couldn’t vote to leave a pension system created by the state.

CA_-_San_Jose_Police“This court concludes that the initiative process cannot be used for such a process,” the Ventura County decision stated.

That decision spurred Reed and DeMaio’s measure, which explicitly grants voters the power to decide pensions.

“State and local politicians, government agencies, and courts have blocked common-sense efforts to address this financial crisis,” the measure states. “Consequently, the need to empower voters and clarify their rights with respect to compensation and retirement benefits for government employees is a matter of statewide concern.”

The four major provisions of the proposed state constitutional amendment, which would take effect in 2019, include:

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

With those provisions, governments would default to 401k style plans that would not require voter approval.

Rising Pension Obligations

capitol sacramentoBy engaging voters in the pension decision-making process, the group hopes to contain the state’s growing pension liability. Proponents of the “Voter Empowerment Act of 2016” point to independent numbers which show the state’s pension liabilities have increased 3,000 percent in a decade. Last November, then-State Controller John Chiang (now state treasurer) pegged the state’s total unfunded pension liability from 130 public pension systems at $198 billion, a dramatic increase from just $6.3 billion in 2003.

“The cost of public employee pension benefits continues to skyrocket across California, crowding out funding for important services such as police, fire, schools and road repairs,” Reed said.

Other local leaders that will help Reed and DeMaio collect 585,407 valid signatures include, former San Bernardino Mayor Pat Morris, Anaheim Mayor Tom Tait, former Vallejo Vice Mayor Stephanie Gomes, and Pacific Grove Mayor Bill Kampe.

Ballot title and summary obstacles

Before the measure can make the ballot, it must clear the ballot title and summary phase. Last year, while DeMaio was preoccupied with his campaign for Congress against Rep. Scott Peters, Reed unsuccessfully tried to qualify a similar statewide pension reform measure. However, that effort stalled during the qualification stage over a dispute with Attorney General Kamala Harris over wording for the title and summary.

In addition to clearing the title summary hurdle, the proposed constitutional amendment will face intense opposition from hundreds of thousands of public employees affected by the measure. The law would apply to all state and local government agencies, including special districts, counties, cities, school districts and both state university systems. Employees are prepared for a fight.

“It’s exactly what we expected,” Steve Maviglio, a prominent Democratic consultant said, according to CalPensions.com. “It’s fraught with flaws, potential major implications for both existing and future employees and will likely result in years of litigation.”

The full initiative is available here.

39 comments

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  1. SeeSaw
    SeeSaw 8 June, 2015, 16:26

    You call six people a bi-partisan group? Maybe when you’re going on a picnic–but not when you are pushing an evil initiative. Last year a “bi-partisan” group of 25 public officials throughout the state wrote Reed a letter, telling him not to put forth his pension-reform plan. That one did not go so well–this one is even worse!

    Reply this comment
  2. Teddy
    Teddy 8 June, 2015, 17:16

    LOL
    Another loser retread measure—– there is no data or actuarial science involved in the obvious issue of the lack of new worker contributions

    of course taxpayers will be on the hook for shortfalls—- this of course won’t pass or even get enuf sig’s but if it did it will cost taxpayers more than the current reform plan which passed and is law—- hard to imagine ANYone contributing real money to yet another legally and structurally flawed joke….

    Reply this comment
    • NTHEOC
      NTHEOC 8 June, 2015, 22:39

      Financial backing for the statewide campaign is expected to come from anti-union sugar daddies such as Texas Enron billionaire John Arnold and the Koch Brothers!!!! The people of California hate these pigs and once we expose them things will just go from bad to worse with this waste of an initiative.

      Reply this comment
      • Donkey
        Donkey 9 June, 2015, 05:39

        Hey hose-puller, go have that chip replaced in your head, it is no longer working you leftist goon. 🙂

        Reply this comment
        • Ted
          Ted 9 June, 2015, 14:10

          Leave it to Duncey to make the first negative personal attack on this thread
          He does that
          Always
          Because he has no cogent comment
          Zzzzzzzzzzz

          Reply this comment
    • Jeannie
      Jeannie 12 October, 2015, 20:37

      My husband and I are retired Welfare and Probation workers, and all of this talk is worrisome. Most of our fellow retirees don’t make the bloated retirement pensions the public thinks we do. We put up with abusive clients(I’m trying to be polite), and we have earned every penny. In this household, the generous tips we usually give to wait staff 25-to 30%(some of these kids are students) would go down to the bare min. The local co. we have wash our windows 2 x yr. we would have to do ourselves. The local appliance store? Hmm, no can’t afford them, going to a big box store. our contributions to Toys for Tots, maybe one or two gifts. Might have to give up my volunteer jobs because I can’t afford the extra gas. Some of the very taxpayers who would love to see our benefits reduced,are the ones who would be hurt the most. Have to make up the difference some where. Not to mention, the cost to taxpayers in legal costs to fight this mess. Thanks. Just think, if these taxpayers would have taught their girls to keep their legs closed just at least until they were 16,or teach their young boys and girls, that its not nice to beat up a senior citizen, or steal things that don’t belong to them, my husband and I would be out of a job,but taxpayers wouldn’t be on the hook.

      Reply this comment
  3. Ulysses Uhaul
    Ulysses Uhaul 8 June, 2015, 18:00

    Anything out of the San Diego political morass is suspect. San Diego is a toilet ruined by corruption and fiscal mismanagement….

    Move on…..

    Reply this comment
  4. desmond
    desmond 9 June, 2015, 04:51

    This will be good if it is on ballot.
    More important, we need a 16 year old voting age.
    They will be paying for the liabilities of the previous generations. It is common sense to give them the vote. They are also creative and will have “out of the box fixes” to fix
    this problem and others. They are unencumbered by bias and will be open minded. Hey, we put dogs and cats to sleep because there are too many of them.

    Reply this comment
    • Donkey
      Donkey 9 June, 2015, 05:37

      Desmond, up early earning money to pay for the RAGWUS feeders pensions. Too bad you are one of the few of your generation that understands what harm the feeders are doing to your future. 🙂

      Reply this comment
  5. Donkey
    Donkey 9 June, 2015, 05:31

    As expected the usual RAGWUS feeders are the first to bark at the truth when a positive action is taken to curtail their disgusting greed.
    I find it very interesting that humans lose all ability to do simple math when stealing from others is making them rich. RAGWUS feeders have no shame, mostly because they have no honor and for the most part are cowardly thieves. 🙂

    Reply this comment
    • Ulysses Uhaul
      Ulysses Uhaul 9 June, 2015, 09:47

      Numbers are immaterial. Contracts are material. A small tax adjustment annually and a bit more worker contribution….end of discussion.

      Reply this comment
  6. Ronald Stein
    Ronald Stein 9 June, 2015, 11:05

    The international business world is intelligent enough to know that defined benefits are financial disasters to any business, thus all businesses focus on the known, i.e., defined CONTRIBUTIONS alone. When public sector contracts are negotiated by public sector employees that hammer out a contract with defined benefits that forces under duress a third party, the taxpayers, to cough up the necessary dough, then it’s truly a case of the inmates running the Asylum. Any challenges to that “racket” would be heard before judges who have pension and benefit package they want to protect. Again, seems like a racketeering cover-up right before our public eyes.

    Legally, we may be obligated to pay those DEFINED benefit pension plans, but their unsustainability is killing the budget and discouraging new job creation as the entrepreneurs’’ taxes and fees are contributing to paying for those defined entitlements that are not available in the private sector.

    “Defined benefit” programs are lucrative to the recipients, but unsustainable as they are funded by investments that do not get defined rates of returns. Currently there are more than 12,000 people receiving pensions over $100,000 from CALPERS. When the CALPERS investments perform poorly, the consumer picks up the tab for those defined guaranteed pensions.

    Reply this comment
    • Dork
      Dork 9 June, 2015, 11:12

      Legally, we may be obligated to pay those DEFINED benefit pension plans,

      No legislative body is bound by the acts of a previous legislative body, this is over 200 years old and still stands today, they can be ABOLISHED OVERNIGHT BY LAW!!!

      Reply this comment
      • SeeSaw
        SeeSaw 9 June, 2015, 15:31

        Well, let’s not exaggerate! Its been 104 years and yes anything can be changed by law , ie SB1253.. You are not going to abolish DB plans unless you want to start spending more taxes earmarked for social services. The color of “jealousy” never changes either. It is still a sickening shade of green–its all over you.

        Reply this comment
  7. Dork
    Dork 9 June, 2015, 11:10

    Contracts are material. A small tax adjustment annually and a bit more worker contribution….end of discussion.

    A contract based on Fraud is not a contract, a Contract requiring someone to Violate Federal Law regarding Ponzi Schemes are also not contracts that can be enforced.
    These retirement benefits guaranteeing the fruits of labor of future generations aree nothing more than SLAVE CONTRACTS. So you fully approve of Slavery?

    Sig Heil

    Reply this comment
    • Donkey
      Donkey 9 June, 2015, 13:58

      Dork, the Donk fully agrees with your assessment of the RAGWUS feeding goons!! 🙂

      Reply this comment
    • Teddy Duncey exterminator
      Teddy Duncey exterminator 9 June, 2015, 14:17

      “Contract based on fraud”

      I’ve beaten this dead horse dead so many times out here it’s silly!

      Do u think there is a reason no one has brought the contracts action for recission based on fraud?

      Lmao zzzzzzzz

      Reply this comment
  8. Charles
    Charles 9 June, 2015, 13:54

    Do you really expect any new employees to come to work and pay a backlog of bills that were money used to pay for the taxpayers benefit.

    Reply this comment
  9. Ted t teddly
    Ted t teddly 9 June, 2015, 14:24

    Hey dorky

    A ponzi scheme requires what specific intent?

    Do you know?

    Well? It’s four words
    Thinking hard?

    Maybe your tea baggy buddies know ?

    I’m sure the Koch bros lawyers know
    Any guess????

    Lmao
    This is too easy!!!! (Tm)

    Reply this comment
  10. Bill Gore
    Bill Gore 9 June, 2015, 15:14

    WHEW!! It’s getting hot in here! The world may be on fire and the oceans are a radioactive poison soup, but DO NOT mess with public employee pensions! ProTard Trolls really come out of the woodwork on this one, stammering “contracts, contracts!”
    Well, as Madame Ted over in the House of the Rising Sun well knows, the three elements of a valid binding contract are offer, acceptance and consideration. ANY one of these elements being fraudulent or erroneous can invalidate a contract. For example, taxpayers’ representatives signing a contract when they also receive campaign funds from the party they are contracting with. Fraud. Easy. QED.

    Reply this comment
    • Ted S
      Ted S 9 June, 2015, 19:37

      Good Job Bill!! Seriously!!

      Finally a troll-bagger who has the good sense to google the law up or consult a quality ref work— BRAVO !

      And you are 100% correct on the elements!!! (although as your google work will show later…..the consideration can be slight…..ahhhh…..the peppercorn! )

      But I digress—and probably waaaay over your head, but try to focus here little buddy—- if there was a good “fraud” issue, don’t ya think the whole matter could’ve been settled in a lawsuit? I mean the Koch’s have a bundle for lawyers– it aint close. IF there was a frauds issue—- why no lawsuit– ALL of these years later??

      LMAO no offense but you baggers are sooooo out of your league on the legal scholarship—– I rememebr the 5 million dollar lesson the OC board of sup’s had to learn on this……and others…….and on and on……

      ….and so it goes…..

      LOL—- THE only legal scholars who see a “fraud” defense to the contract——lol——let me catch my breathe—–hahahahaha—– are the CWD tea bag trolls!

      Have a super duper day little buddy! And keep up the good work!

      Reply this comment
      • Bill Gore
        Bill Gore 10 June, 2015, 06:49

        You’re wicked smart ma’am for a painted lady. And I must say you sure knows that Californee law like the back of your..oh never mind. And yup, that rascally old 9th circuit, themselves future recipients of the public’s utmost generosity, rule over and over in cases where they have deep-seated personal interest. And so, wha-la, you win! May you live to be 110, screeching to impoverished young people that they must support you in luxury.

        Reply this comment
        • Teddy
          Teddy 10 June, 2015, 08:49

          Oh Billy!
          You’re a caution!
          Your doooooooomy instincts are intact little buddy!

          So…..

          I guess you can’t answer the question?

          How come no big money plaintiffs have EVER brought a fraud case on the pensions????

          LMAO

          Nite nite!

          Reply this comment
      • Donkey
        Donkey 10 June, 2015, 16:39

        Teddy Parrot, you were B-slapped by Billy Goat, you are just to dumb to know it my RAGUWS feeding sow. 🙂

        Reply this comment
  11. Ulysses Uhaul
    Ulysses Uhaul 9 June, 2015, 15:41

    Teddy

    Nothing like a juicy pension article to line the trolls up for goose stepping!

    There is no fraud, no law suits to abolish pensions.

    Government is expensive for a diverse populace wants 100% security, a welfare basic net, no child labor, free education, free basic health care, cheap roads and recreation…..

    Cutting everything will bring insurrection; cutting some will be judged unfair and uneven at best.

    Doomers have no answers….ignore them….

    Reply this comment
    • Teddy
      Teddy 9 June, 2015, 19:46

      THE cwd trolls ALWAYS spin up best and fastest on a pension article— and they have lost EVERY significant case—–so it’s always a 2 for 1 spin up proposition for the Ted System ™

      It’s all good!
      It’s just this easy! ™

      Reply this comment
  12. S Moderation Douglas
    S Moderation Douglas 9 June, 2015, 17:40

    “Public Sector Unions are a CANSER inflicted upon Society.”

    I had to say that because Tough Love is tied up (not literally, probably) with New Jersey pensions lately, and we’re brothers now.

    Also borrowed his spell checker and random CAPITALIZER.

    Brother Moderation

    Reply this comment
    • Donkey
      Donkey 10 June, 2015, 16:33

      Another worthless observation by a RAGWUS feeding sow!!! 🙂

      Reply this comment
      • Ulysses Uhaul
        Ulysses Uhaul 10 June, 2015, 20:00

        Be pragmatic doomers not fatalistic. You got a bit of pension reform….enjoy.

        Let’s see what the San Diego kabal does with their pension reform plans…

        In meantime, enjoy your Cherrios and Costco frozen blueberries!

        Reply this comment
  13. Hey Jude
    Hey Jude 20 June, 2015, 08:25

    That’s right, completely do away with defined benefit retirements in one act. No compromise Mr. Reed, such as reform PERS further by putting say a 60% cap on retirements, more employee contributions, raising retirement age some more, etc. San Jose can’t even hire cops anymore thanks to your actions in that city. No one talks about how the state has borrowed billions from PERS in the past and took years to repay. You pay for what you get, and being a cop in Calif sucks to start with. Roll back pay and benefits, see what you get then. And when PERS and all the other retirement systems fold because no new members are paying in, let’s see how many billions the state will have to come up with for decades to shore that up. But you don’t care as long as you get your legacy, right Mr. Reed.

    Reply this comment
  14. fletch92131
    fletch92131 13 August, 2015, 09:20

    I’m in favor of making all new state employees subject to a Defined-Contribution retirement plan, so that these employees can defer some current wages to help towards their retirement later. Not unlike what the federal government did when it created the Federal Employees Retirement System (FERS) to deflect the coming tsunami from its earlier CSRS retirement system. That is not the extent of things that must be done, more outsourcing/contracting out needs to occu, also;the state has far too many employees.

    Reply this comment
  15. fletch92131
    fletch92131 13 August, 2015, 09:24

    I’m in favor of making all new state employees subject to a Defined-Contribution retirement plan, so that these employees can defer some current wages to help towards their retirement later. Not unlike what the federal government did when it created the Federal Employees Retirement System (FERS) to deflect the coming tsunami from its earlier CSRS retirement system. That is not the extent of things that must be done, more outsourcing/contracting out needs to occur, also;the state has far too many employees, for the current workload.

    Reply this comment
  16. Nancy
    Nancy 20 October, 2015, 14:03

    Everyone is expressing their “opinions” when opinions DO NOT MATTER in this situation. California is going or will be going broke if we don’t address the pension issue. I’m a state worker. I started at 19 and now I’m 53. The numbers prove the current pension plan is unsustainable. I fear there won’t be enough tax payers in Cali to pay my pension!

    Reply this comment

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John Hrabe

John Hrabe

John Hrabe spends his time traveling the world as a freelance journalist. When he isn’t on an international flight, John writes about California politics for CalWatchdog.com and CalNewsroom.com.

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