San Jose Mayor Promises "Bumpy Ride" for Public Pensions
Just when you thought a rebounding economy was making our CalSTRS and CalPERS pension systems even stronger, up pops another initiative booster who is threatening the stable retirement that current educators and other public workers are earning.
San Jose Mayor Charles Reed gave participants at a forum held by the conservative Hoover Institution on Wednesday a peek at his pending “pension reform” proposal, which he hopes to qualify for either the November 2014 or 2016 ballot. Reed said he plans to have the measure ready to unveil fully in a couple of days.
The new pension threat comes about a decade after voter sentiment rose overwhelmingly against then-Gov. Arnold Schwarzenegger’s attempt to use a ballot measure to undermine public retirement systems. “Arnold” withdrew the measure when it became clear voters would not support it. In 2012, another anti-public pension organization – California Pension Reform – dropped its effort to quality two measures after the Attorney General’s title and summary revealed the measures’ true nature.
This new initiative pushed by Reed – which would reduce pensions for current and future teachers, education support professionals, firefighters, police officers, and other dedicated public employees – would likely reduce pension payments by giving governments the power to set aside court rulings that have made it clear public workers earn “vested rights” to their promised retirements.
Reed was upfront about the alternatives within his initiative. It would allow government to ignore the court decisions and ultimately do things like reduce “overly generous” benefits, raise the retirement age, or increase workers’ contributions to their pension systems.
This proposed measure breaks the promises made to current public employees and will result in less retirement security for millions of Californians while costing taxpayers more in lawsuits and losses to the state's retirement systems.
Reed’s comments neglect the fact that Gov. Jerry Brown and the California legislature made wide-ranging reforms to the state’s pension systems by enacting AB 340 last year. That legislation aimed to ensure the systems would remain viable and healthy without requiring taxpayer bailouts.
Reed claims his “polling” suggests the public is overwhelmingly in support of these reductions, and he claims neither a rising stock market nor a recovering economy will be enough to offset what he calls “skyrocketing costs.”
Those claims sound remarkably like the ones Arnold Schwarzenegger made in 2005 and Marcia Fritz – a leading proponent of the more recent initiatives – made in 2012…..just before the measures were dropped.
CTA and other organizations in the Californians for Retirement Security coalition will continue following developments closely and taking appropriate action.