CA Declaration of Independence 2011

JULY 4, 2011



Introduced by Senators Cannella, Berryhill, Emmerson, and Harman … Senate Constitutional Amendment No. 13

…relating to public employees’ benefits.

In California, July 4, 2011,

A DECLARATION … in the State Legislature assembled,

WHEREAS, The bipartisan Milton Marks “Little Hoover” Commission on California State Government reports that the 10 largest public pension systems in California have a combined unfunded accrued actuarial liability of $240,000,000,000; and

WHEREAS, The Little Hoover Commission has determined that public pensions in California are unsustainably expensive; and

WHEREAS, Projections show that the combined costs to the state’s General Fund of the Public Employees’ Retirement System, the State Teachers’ Retirement System, and retiree health care will grow from 5 percent of the state’s annual budget to 10 percent over the next 30 years; and the Little Hoover Commission reports that the situation with many local governments is even worse; and

WHEREAS, As dire as these figures are, they are based on the optimistic assumptions of most public pension governing boards regarding the rates of return that they expect to earn on their investments and, therefore, may actually understate the magnitude of the problem severalfold; and

WHEREAS, The rising cost of public employee retirement benefits threatens the ability of government agencies to deliver the vital services upon which the public depends and, therefore, the Legislature intends to exercise the police powers of the state to make reasonable modifications to public pension systems while protecting employees’ earned, vested rights;

NOW, therefore, be it Resolved by the Senate, the Assembly concurring,

That the Legislature of the State of California at its 2011–12 Regular Session commencing on the sixth day of December 2010, two-thirds of the membership of each house concurring, hereby proposes to the people of the State of California that the Constitution of the State be amended as follows:

…. The public employer shall be prohibited from paying on behalf of a member any of the member’s required employee contributions to a defined benefit plan.  The rate of required employee contributions shall represent a reasonable percentage of the normal costs of the plan and shall not be less than the employee contribution rate applicable to his or her membership classification on January 1, 2012….

(Full text here.)

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