Unions vs. Reform Democrats over California Pension Reform

Unions vs. Reform Democrats over California Pension Reform

Last week, Chuck Reed, the Democratic mayor of San Jose, abandoned an effort to place a referendum on the state ballot in November that would do for California what he did for San Jose in 2012–namely, bring massive unfunded pension liabilities under control. However, intervention by California Attorney General Kamela Harris, on behalf of the powerful yet self-destructive California unions, have made the referendum impossible.

In June 2012, Breitbart News noted that “fiscal sanity” had returned to San Jose and other California cities that had passed pension reforms–coincidentally, at the same time that Wisconsin voters chose to retain Gov. Scott Walker in office in his recall election. The growing constituency for fiscal reform–even among Democrats–has offered reform-minded chief executives from both parties to succeed when their ideas are put to the voters.

Mike Rosenberg of the San Jose Mercury News notes that Reed’s reforms in San Jose proposed “reducing pensions for new city hires and making current employees either pay more for their retirement or choose a less-generous plan.” After voters passed those reforms in San Jose, he wanted to take his case statewide–though his reforms have been stalled by union lawsuits and rulings by judges to preserve existing, unaffordable pensions.

Harris–described a year ago by President Barack Obama as “by far the best-looking attorney general” (a remark for which he later apologized)–piled on, adding a ballot summary that was profoundly negative and would have made it far more difficult for the measure to gain public support. The Wall Street Journal describes her summary as saying that: “Mr. Reed’s initiative ‘eliminates constitutional protections’ for retirement benefits of ‘current public employees, including teachers, nurses, and peace officers, for future work performed.’

That agrees with recent rulings of union-friendly California courts–but not, the Journal editorial writers claim, with older precedent or with the law of the state itself. Public workers are entitled to a “substantial” pension, but not to a fixed pension plan, and legislative changes by the state are implied in public employees’ contracts.

Whether Reed’s pension reform plan will make the 2016 ballot is unclear. What is absolutely clear is that the pensions, as bargained for by unions and the Democrats they elect, are a racket and a fraud, cheating taxpayers and public employees. So a solution must be found, eventually–which wiser Democrats understand. In blue states across the country, the same internal drama of reformists versus union-backed shills has begun to unfold.