The cost of California’s public pensions is breaking the bank. Here’s one reason this problem is so hard to fix

Judy Lin
CALmatters reporter

More than 20 times in the last 15 years, political leaders looking to control California’s fast-growing public pension costs have tried to put reform initiatives before the voters.

None of the proposals has made it onto the ballot.

Often, advocates could not raise enough money for signature gathering, advertising and other costs of an initiative campaign. Some of the most promising efforts, however, ran into a different kind of obstacle: an official summary, written by the state attorney general, that described the initiative in terms likely to alienate voters. Facing bleak prospects at the polls, the sponsors abandoned the campaigns.

Taxpayer advocates contend that the attorneys general — Democrats elected with robust support from organized labor — put a finger on the scale, distilling the initiatives in language that echoed labor’s rhetoric.

Labor leaders say the summaries were neutral and accurate, and that the problem lay with the initiatives — which, they contend, would have diluted benefits already promised to public employees.

The attorney general’s title and summary, which appear on petitions and in the official voter guide, can powerfully shape attitudes toward a ballot measure. The language has emerged as a battleground between those seeking to overhaul California’s public retirement system and those determined to defend it.

“It’s the one thing every voter will see, and it’s the last thing every voter will see,” said Thomas W. Hiltachk, a lawyer who specializes in California initiatives and has run campaigns in support of Republican ballot measures. “Whether you have a well-funded campaign or an underfunded campaign, those words are critically important.”

Retirement benefits are the fastest-growing expense in many municipal budgets. In Los Angeles and other cities, they account for 20% or more of general fund spending. The burden has pushed some cities to the edge of bankruptcy.

Yet a string of court rulings, known collectively as “the California Rule,” has posed a formidable barrier to change. It prohibits cuts in pension benefits already granted or promised. Under the rule, pensions are considered binding contracts protected by the state Constitution.

For that reason, many of the cost-saving measures passed by the Legislature in recent years, including later retirement ages and smaller monthly pension checks, did not affect employees already on the payroll. They applied only to newly hired workers. As a result, the savings will not kick in for many years.

Pension reform advocates say that achieving real relief in the near term will require reductions in benefits already granted to current employees. Because of the California Rule, that can be done only by amending the Constitution. And that requires a ballot initiative.

A wide majority of California voters surveyed have favored changing the pension system to save money. Support drops sharply when the change is framed as reducing benefits for teachers, police and firefighters.

That’s why the attorney general’s choice of words is so important. By law, the title and summary “shall be true and impartial” and not likely to “create prejudice for or against the proposed measure.”

In 2013, San Jose Mayor Chuck Reed, left, and San Diego City Councilman Carl DeMaio, right, proposed a constitutional amendment to allow government agencies to reduce current employees’ pension benefits — but only for future years of service. Benefits already earned would not have been affected. (Paul Sakuma / Associated Press; Lenny Ignelzi / Associated Press)

Disputes over the language have figured prominently in several major reform attempts. The most recent, in 2013-14, was led by then-San Jose Mayor Chuck Reed and former San Diego City Councilman Carl DeMaio.

Reed, a Democrat, and DeMaio, a Republican, proposed a constitutional amendment to alter the California Rule by targeting future benefits of current employees. Workers would keep retirement benefits they had earned, but future benefits would no longer be guaranteed; they would be determined through collective bargaining or public referendum.

survey conducted for labor groups opposed to the initiative found that majority support for pension reform collapsed if it was described as “eliminating police, firefighters, and other public employees’ vested pension benefits” or “eliminating state constitutional protections.”

The word “eliminate” “fosters a visceral negative response from voters,” according to a memo by the labor coalition’s Washington pollsters.

The Sacramento Bee published an article about the memo in December 2013. Three weeks later, then-Atty. Gen. Kamala Harris issued her summary of the initiative.

It said the Reed-DeMaio measure “eliminates constitutional protections for vested pension and retiree healthcare benefits for current public employees, including teachers, nurses, and peace officers, for future work performed.”

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