Keep an Eye Out for a Referendum if Pension Reform Passes

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

With pension reform a hot topic in the capitol and less than two weeks to go in the legislative session, the thought occurs – how would the public employee unions respond if a pension reform is passed by the legislature?

Sacramento politicians know that reform, or perhaps even the appearance of reform, is necessary to convince voters to pass higher taxes like the sales and income tax increases included in Proposition 30.

In local jurisdictions, the unions have filed lawsuits against successful initiatives to curb pension excesses. The lawsuit route is also possible if a state measure is passed. But, there are other avenues that can be pursued.

Since it is too late to put pension reform on the November ballot, any reform would be in the form of a statute rather than a constitutional amendment. Post-election, a statute can be changed with a majority vote. The influence public unions have over the majority party cannot be understated. A “clarification” of any reform statute in bill form coming out of the legislature after the election has been decided is not out of the question.

However, it seems if the legislature goes through a gauntlet to make important and substantial reforms to the system – important and substantial are key terms that I’ll discuss in a moment – then it might be difficult for legislators to reverse course so soon.

One other avenue to pursue would be a referendum to overturn the new pension law. To secure a referendum on a bill, supporters must collect signatures within 90 days of a law’s enactment from an equivalent number of five percent of the voters who cast ballots in the last gubernatorial election. Such an action would freeze the law from taking effect and place it on the next statewide ballot.

With the resources at the unions’ disposal and the number of members they can reach in a short time — even accounting for the gobs of money they plan on spending to thwart some November ballot propositions while supporting others — they could probably qualify a referendum on pensions in less than 60 days.

Should a pension reform measure pass, and the governor does not sign the bill until the end of the signing period allotted to him, around October 1, the referendum filing could be held until after the election so as not to influence ballot outcomes and still have about sixty days to qualify. It could be done in that amount of time.

A referendum filed before the election to overturn a major reform would be ammunition to blast at the tax increase ballot measures, especially the governor’s Proposition 30, since the governor has called for pension reform.

The reforms must be important and substantial. Making adjustments around the edges of pension law, plucking the easy issues of eliminating the ability to buy more time on which a pension is calculated or pension spiking that all observers agree are outrageous attempts to pick the taxpayers’ pocket, are not enough.

If you see no negative response from the unions to a pension reform that passes, that probably means the reform doesn’t amount to much.

Or could it be that the unions are just waiting to file a referendum?

Far-fetched? Not so much. Remember, politics is more like a chess match than a straightforward game of checkers.

I’d keep an eye out for a referendum.

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