California’s public employees breathed a huge sigh of relief when San Jose Mayor Charles Rufus “Chuck” Reed finally made the official announcement that his ballot measure would fail to appear on the November 2014 statewide ballot.
Reed’s ballot measure was designed to strip public employees of their defined benefit pensions, a policy made popular by shortsighted public officials and AM radio talk shows.
The facts have never gotten in the way of these people. Starting more than 10 years ago, then state Assemblyman Keith Richman took the position that pensions were ‘just too generous’ for all public employees. His efforts were consistently highlighted in the Los Angeles Times by reporters who apparently agreed with Dr. Richman. Over and over, they got the facts wrong. Over and over, we tried our best to correct the mistaken ideas reported in the newspapers.
It was just an insider’s game until the economic collapse in 2008 and daily reporting of pension system abuses in places like the City of Bell.
All those headlines were too much for our Legislature and for Governor Brown. They had to act. They did, and the result of their action was the Public Employees Pension Reform Act of 2013, a sweeping measure that reduced pensions for new public employees, increased costs for most public employees and prohibited pension ‘spiking’.
After PEPRA, however, we knew the attacks on our pensions wouldn’t go away. We knew there would be more attempts at unnecessary pension reform because news reporters are always looking for a local government official to stand in front of a city hall and disparage his/her workforce. That happened in San Diego, then San Jose, and now it’s happening in Ventura County.
A debate on pension reform in Ventura County is problematic. It’s a 1937 Act pension system, the same as LACERA, and it’s right next door to us. One Ventura County Supervisor has based his re-election campaign on a ballot measure that would essentially adopt all of the bad provisions of Chuck Reed’s recently defunct statewide initiative. New employees would be placed in defined contribution 401k’s, and existing employees could have their pension benefits changed by management without collective bargaining. Voters in Ventura County have been fed a steady diet of antipublic employee rhetoric, and polls will soon indicate if they would support such a measure, even if they know it will cost taxpayers more for the indefinite future.
The Ventura pension reform initiative is completely unnecessary. It has no financial or policy justification. Audits will show that it actually costs more to shift to a defined contribution, or 401k-type program, for the obvious reason that new employees won’t be contributing to the existing defined benefit program. The difference is paid by general fund dollars.
Further reform is unnecessary, so what’s driving it? That answer is not as simple. The primary reason people are promoting reform is because it gets them popularity among the large population — but not a majority of Californians — who get their news from AM talk radio. It’s unfortunately true that advocates on both sides of this debate are making names and money on the issue.
A deeper cause of the never ending pension reform debate goes all the way to Wall Street. CalPERS and more than a dozen 1937 Act pension systems in California are responsible for investing more than $10 billion. If California public employees switch to a defined contribution program, all of that money would be taken out of employee-managed pension systems and put in the hands of New York investment bankers...Wall Street.
When Wall Street’s resources descend in support of pension reform in California, we’ll know why. If we learned anything from the mortgage banking crisis, Wall Street’s financial motives are best kept at a distance.
The drumbeat for public employee pension reform will end when enough taxpayers remember that public employees are not getting rich, that we pay our own money into pensions for a secure retirement, and that we’re doing a job they don’t want to do, or can’t do, for any amount of money. We’re all working hard to make that day come sooner rather than later.