A new push to ask California voters to let state and local governments roll back pensions for current employees is taking shape, with San Jose Mayor Chuck Reed leading the charge.
In a telephone interview Monday evening, Reed said that he recognizes the economic pressure on state and local budgets has eased and that he hasn’t raised any money yet, but that he is convinced the need remains to dial back public pension costs.
“I’m not seeing signs that the public thinks this isn’t a problem that has to be dealt with,” the Democratic mayor said, noting that pension costs have been in the spotlight for financially struggling cities such as San Bernardino, Stockton and Detroit.
Language for the proposed ballot measure is still in the formative stages, he said, but it would ask voters to change California’s constitution to explicitly allow state and local governments to alter pensions going forward for current employees.
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Reed said he has been meeting with mayors across the state, and his calendar shows that he has been in discussions with several pension reform crusaders, including Dan Pellissier, who led a group that unsuccessfully tried to put a pension measure on the 2010 ballot. That effort failed to raise enough money to gather qualifying signatures.
Unlike previous proposed measures that never reached voters, Reed’s measure wouldn’t mandate a one-size-fits-all change to pensions. Instead it aims to settle a state constitutional question about whether public pensions may be altered prospectively once promised to employees.
“I’m not trying to be prescriptive,” Reed said. “We need to empower local governments.”
The default assumption for years has been that the state and U.S. constitutions protect pensions as a contractual agreement and a vested property right. That has meant that rollbacks to pension formulas, including the less-generous package mandated in a pension law that Gov. Jerry Brown signed last year, affect only new employees. Reed’s measure would not address federal law.
Governments could enhance pension formulas retroactively, and did, until the new pension law forbade it this year.
Reed and others say that those changes, while necessary, don’t go far enough. They contend that the more generous pension formulas that have kicked in over the last 14 years and the Great Recession delivered a double-whammy to pension funds. Altering pensions for current workers, Reed says, is the only way to address projected shortfalls that run into the hundreds of billions of dollars.
Steve Maviglio, a spokesman for the union-backed Californians for Retirement Security, called Reed’s idea a “radical attack on the retirement security of teachers, firefighters, police officers and other public servants.”
“Because he is incapable of providing the leadership to solving pension issues at the bargaining table and in the Legislature,” Maviglio said in an email Monday, “Mayor Reed has decided to try to advance his political career by going to the ballot box in a costly campaign.”