Bipartisan Coalition Unveils 2016 Pension Reform Referendum

CalPERS (Reuters / Max Whittaker)
Reuters / Max Whittaker
San Diego, CA

A bipartisan coalition of former and current elected officials, together with fiscal accountability groups, revealed much-anticipated plans Thursday for the newest installment in statewide ballot initiative efforts to combat the crushing burden of public employee pensions in California. The measure is slated to face California voters in November 2016.

“With California government pension systems facing hundreds of billions in debt, a bipartisan group of current and former local elected officials, led by former San Jose Mayor Chuck Reed (D) and former San Diego City Councilmember Carl DeMaio (R), have filed a statewide ballot initiative to reform compensation and pension benefits of state and local government employees,” read an announcement of the effort.

Reed launched the initiative effort in March. America’s largest public pension fund, CalPERS, is said to be one of the chief sources of the state’s burdensome pension liabilities–and, given previous statements from Reed, it is one of the targets of the pension reform measure.

The ballot initiative is an effort to overcome a largely union-dominated state legislature. Proponents of the effort say they are giving voters the opportunity to “reform government employee compensation and retirement benefits.”

Specifics of the plan reveal a heavy emphasis on voter control over pensions. The plan would:

  • require voter approval of any defined benefit pensions for new government employees
  • require voter approval of any increase in pensions for existing government employees
  • prohibit any taxpayer subsidy of government retirement benefits in excess of 50% of the cost–unless voters expressly approved a higher contribution
  • prohibit politicians and government agencies from delaying, impeding, or challenging any voter-approved state and local ballot measures regarding compensation and retirement benefits.

Union leaders were quick to react. Bruce Blanning, Executive Director of the state Engineer’s Union, called Reed a hypocrite, the Sacramento Bee reported. Blanning continued, “He’s not interested in protecting taxpayers. His real target is working men and women who dedicated themselves to public service and then retire.”

“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 contends.

Signature collection will begin soon, the release states.

A source close to the effort expressed sincere belief in the initiative’s potential for success on the ballot.

The initiative will likely face an uphill battle as 2016 brings with it the Presidential election, which could push election results leftward; however, bipartisan support for the measure could help it on the November ballot.

Joining Reed and DeMaio in support of the pension reform initiative are former San Bernardino Mayor Pat Morris (D), Anaheim Mayor Tom Tait (R), former Vallejo Vice Mayor Stephanie Gomes (D), and Pacific Grove Mayor Bill Kampe (D), as well as the Ventura County Taxpayers Association.

Initiative leaders said: “Despite the state’s improving economy, public employee pension debt in California continues to explode–growing from $6.3 billion in 2003 to $198 billion in 2013. In addition, the state and local governments have approximately $150 billion in unfunded liabilities for retiree health care benefits.”

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