California pension initiative could affect public employees in Merced County

Proponents of a California pension initiative said Tuesday that state Attorney General Kamala Harris is again favoring labor unions – including those that represent nearly 18,000 people in Merced County – by using the same words she used to describe the proponents’ previous failed bid to limit taxpayer spending on public pensions.

Labor leaders in Merced County will likely be watching, as it could affect about 17,600 workers. About 22 percent of laborers in the county are employed as maintenance workers, teachers, administrative assistants and other publicly funded positions.

“The first sentence is a repeat of the first sentence from the initiative two years ago,” said former San Jose Mayor Chuck Reed. “It’s been certainly poll-tested by the unions and fed to the attorney. It’s inaccurate and misleading.”

Reed and former San Diego Councilman Carl DeMaio said they will conduct a legal review of the attorney general’s title and summary language before they begin collecting the 585,407 voter signatures needed to qualify for the November 2016 ballot. They said voters will want to review retirement benefit decisions made by elected officials.

Generally, the government job sector is second only to agriculture in much of the Central Valley, according to Steven Gutierrez, a labor market analyst with the Employment Development Department.

The city of Merced has 422 employees who can pay into a pension, according to the personnel office. The county has 1,817 employees who can contribute to their retirement, the county Human Resources Department reported.

Facing a Tuesday deadline to release her description of the initiative, Harris wrote that the proposal would eliminate constitutional protections on pension and health care benefits for public employees, “including those working in K-12 schools, higher education, hospitals and police protection.”

David Low, chairman of the labor-backed Californians for Retirement Security, said while Harris’ description was accurate, he wanted her to list public employees as teachers, nurses and police as she did before.

“You put this on the ballot, it’s dead in the water,” Low said of the initiative.

Pension reform advocates had abandoned their attempt to enable governments in California to cut future pension benefits for current workers after losing a court fight over the attorney general’s legal description last year. In finding Harris’ summary accurate, Sacramento County Judge Allen Sumner wrote the use of the words “eliminates constitutional protections” was not false or misleading.

They returned this year with the “Voter Empowerment Act of 2016,” which would require voters to approve any new pension benefits or upgrades to current ones.

The new proposal would require voters to approve defined benefits for new employees starting Jan. 1, 2019, as well as pension enhancements for existing workers. Voters also would have to give authorization if the state or a local government wanted to contribute more than half of pension costs for their employees.

Unions have battled repeatedly with DeMaio, a Republican who lost bids for San Diego mayor in 2012 and Congress in 2014, and Reed, a Democrat who was forced from office last year by term limits. Reed and DeMaio successfully led voters in San Jose and San Diego to approve local pension-cutting plans in 2012.

Pension reform advocates said unchecked retirement benefits will keep libraries closed, leave potholes unfilled and deprive residents of key public services as resources are increasingly diverted to pay for pensions. Labor unions say the cost-cutting push deprives workers of collective bargaining and make crucial jobs less attractive to potential recruits.

The Legislature’s nonpartisan budget analyst, Mac Taylor, and Gov. Jerry Brown’s finance director, Michael Cohen, described the latest proposal as creating “significant uncertainty” on current and future government employee compensation.

They noted that the measure could face legal challenges. And while it could yield large savings on defined pension benefits and lower retiree health care costs for taxpayers, the two say it could drive costs elsewhere such as into defined contribution plans such as 401(k)s, higher wages and shift more public workers onto Social Security.

“The magnitude and timing of these effects would depend heavily on future decisions made by voters, governmental employers, and the courts,” Taylor and Cohen wrote.

This story was originally published August 12, 2015 at 6:04 PM with the headline "California pension initiative could affect public employees in Merced County."