LAO Deals a Blow to Pension Measure’s Chances

Steven Maviglio
Principal of Forza Communications, a Sacramento-based public affairs/campaign firm

The Legislative Analysts Office may have dealt the death knell to an effort to slash the retirement security of California’s teachers, firefighters, peace officers, bus drivers and other public employees this week with a candid assessment of its impact.

In its analysis of the measure, being advanced by former San Jose Mayor Chuck Reed and former San Diego City Council member Carl DeMaio, the no-nonsense LAO concluded “There is significant uncertainty as to the magnitude, timing, and direction of the fiscal effects of this measure and its effects on current and future governmental employees’ compensation.”

It said the measure would likely be the subject of legal battles because of the massive uncertainty about its impact.

The LAO also noted:

  • Existing employees (not just new ones) could see their retirement security eliminated;
  • Death & disability benefits for firefighters, peace officers, and other public employees could modified or eliminated;
  • Collective bargaining would be threatened; and
  • Government employers would likely have to increase other benefits to attract and retain employees.

When they introduced their measure, Reed and DeMaio said it was “bulletproof.” But the LAO review exposed several vulnerabilities that have doomed previous attempts: most notably, opening the door to the elimination of death and disability benefits and undermining the promise made to existing employees about their promised retirement benefits.

“This measure is a Trojan horse that will undermine the retirement security of millions of California families with unknown costs to taxpayers under the guise of giving them more power,” said Dave Low, Chairman ofCalifornians for Retirement Security, which represents 1.6 million public servants. “Voters have consistently said they will reject proposals that threaten the death and disability benefits of public safety workers, undermine collective bargaining, and eliminate retirement security for teachers, bus drivers, and other public servants. This measure would be dead on arrival to voters, just like previously over-reaching measures.”

The LAO gave short-shrift to the notion that the measure automatically would reduce taxpayer costs, noting several reasons why it would cause government to be forced to pay more in other compensation to offsets any cuts in pensions. Taxpayers also would be on the hook to sustain both CalPERS and CalSTRS as new employees are effectively banned from joining the pension funds to help pay for promised benefits.

So it appears that Reed & DeMaio didn’t learn from their past mistakes. Their new measure has many of the same flaws as previous versions, ones that make it politically unpalatable to most California voters – particularly in a year when Democratic turnout is expected to be heavy.

Back to the drawing board? We shall see.

Share this article: Share on FacebookTweet about this on TwitterShare on LinkedInPin on PinterestEmail this to someone

Comment on this article


Please note, statements and opinions expressed on the Fox&Hounds Blog are solely those of their respective authors and may not represent the views of Fox&Hounds Daily or its employees thereof. Fox&Hounds Daily is not responsible for the accuracy of any of the information supplied by the site's bloggers.