CA Declaration of Independence 2011

JULY 4, 2011

By WAYNE LUSVARDI

CALIFORNIA CONSTITUTIONAL AMENDMENT 13

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.)

6 comments

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  1. LetThemEatCake
    LetThemEatCake 4 July, 2011, 15:23

    Sounds interesting.

    Electeds are setting their own retirement programs & those of their biggest financial supporters – any wonder there’s been gross abuse & obscene pension spiking?

    Fix it – cap taxpayer subsidized retirement benefits – at a a Social Security maximum payout per year.

    Require anything beyond that SS payout equilavent – a SS Enhancement Program – to be voted on by the electorate & passed with a 2/3 majority to become effective.

    Require that the electorate vote to re-ratify any passed SS Enhancement Program – with another 2/3 majority, every 10 years.

    Reply this comment
  2. Ron Kilmartin
    Ron Kilmartin 5 July, 2011, 22:12

    I became bleary eyed attempting to digest the proposed amendment and gave up. It was disconcerting how often the term “defined benefit” is encountered, which would be unexpected from the wording of the preamble. I think this is still a taxpayer ripoff and something far simpler is needed. We should start from square one; public employees should not be entitled to a pension program any greater that the average of non-government pension plans within the jurisdiction in question whether a county, school district, or whatever. Thosewho are currently retired should have excessive benefits denied especially when gotten from various tricks, such as spiking. In addition, people who retired at less than 65 should get a prorated cutback until they are 65. Current retirees cannot continue on this gravy train . They need to understand the Bank of California has failed.

    Reply this comment
  3. Willis
    Willis 6 July, 2011, 07:04

    Wishful thinking.
    The unfunded liability will “Never” be
    funded and anyone under age 50 working
    for a state pension will be lucky to receive
    50 percent of the “promised amount”
    Smart labor leaders in some states
    (New Jersey) are beginning to see the light
    and have taken steps to correct the problem.
    But not California. Here some cling to the
    notion that all will be better later.
    Dreamers, fools.

    Reply this comment
  4. James McRitchie
    James McRitchie 6 July, 2011, 09:05

    PERSWatch.net will sponsor a “CalPERS Candidates’ Forum,” moderated by the League of Women Voters of Sacramento County, on Wednesday, July 6, 2011 from 6:00 p.m. to 8:00 p.m. The forum will take place in the CalPERS Auditorium, Lincoln Plaza North, 400 P St., Sacramento, California. Free parking will be available under the building. Enter on the Q Street side between 3rd and 5th Streets. All members of CalPERS and the general public are invited. We all pay into the system; we should all have some input. Come and make your voice heard.

    Reply this comment
  5. SkippingDog
    SkippingDog 6 July, 2011, 11:02

    Sorry, Ron Kilmartin. The benefits being provided to existing retirees are among the most securely protected under our laws – whether you agree with them or not. If you’re one of the people who truly believes the 8th largest economy in the entire world has failed, you’re simply not paying attention.

    This is nothing more than the opening gambit in a contest for political power. There will undoubtedly be numerous counter proposals and, eventually, litigation at every level up to the US Supreme Court to verify the scope of the proposed changes.

    If you read Article 1 Section 9 of the US Constitution, you’ll quickly find that it completely prohibits ex post factor laws, bills of attainder (which would target the property rights of current retirees), and interference with contracts.

    If you value the US Constitution, why would you propose doing any of the basic things it prohibits?

    Reply this comment

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