California Pension Initiative Ballot Summary Draws Crossfire

The authors of an initiative giving voters the power to decide whether new government employees get pensions said they will “commission a legal review” of the ballot summary issued yesterday by Attorney General Kamala Harris.

Two previous pension reform initiatives were dropped after sponsors said Harris gave them ballot titles and summaries that were inaccurate and misleading, making voter approval unlikely.

The authors of the new initiative, former San Jose Mayor Chuck Reed and former San Diego City Councilman Carl DeMaio, said “politicians and union bosses” opposing the initiative “continue to try to mislead the public on what the initiative does.”

But a news release from the two leaders of a bipartisan group backing the new initiative, which is aimed at the November ballot next year, did not cite a specific problem with the Harris summary of the initiative.

The initiative leaders previously have said they intended to file the initiative early to allow time for a legal challenge of the title and summary, if needed. Polling to see how the title and summary is received by voters also has been mentioned.

“Reed and DeMaio noted that the next step in their campaign will be to commission a legal review (of) the ballot measure ‘Title and Summary’ concocted by state politicians,” said their news release. “Once that review is completed, DeMaio and Reed will kick off their signature drive to qualify the measure.”

A coalition of public employee unions opposed to the initiative gave Harris, who is running for the U.S. Senate next year, some claim to the middle ground on her ballot summary by drawing fire from both sides.

“We strongly disagree with the attorney general’s elimination of the specific mention of teachers, nurses, police and firefighters in the title and summary,” Dave Low, chairman of Californians for Retirement Security, said in a news release. “They are the bulk of the public servants whose retirement security and death and disability benefits would be abolished by this heavy-handed measure.”

The elimination of death and disability benefits was used in television ads a decade ago that helped persuade former Gov. Arnold Schwarzenegger to drop his support for a measure to switch new state and local government employees to 401(k)-style plans.

In an apparent response, the new initiative says it shall not be “interpreted to modify or limit any disability benefits provided for government employees or death benefits for families.”

Reed dropped a different pension reform initiative last year after losing a court battle to change a Harris ballot summary. One of his complaints was that the summary “singles out a few specific public occupations” held in high regard by voters.

The first sentence of the initiative summary last year: “Eliminates constitutional protections for vested pension and retiree healthcare benefits for current public employees, including teachers, nurses, and peace officers, for future work performed.”

Low’s complaint is that the occupations are not specific in the first sentence of the initiative summary this year: “Eliminates constitutional protections for vested pension and retiree healthcare benefits for current public employees, including those working in K-12 schools, higher education, hospitals, and police protection, for future work performed.”

But the new Harris summary repeats what once again may be the main issue. Another of Reed’s complaints last year was that the summary incorrectly said the initiative eliminates the vested pension rights of current workers.

A superior court judge found that the initiative summary was not “false and misleading,” ruling that the previous Reed initiative was an attempt to overturn the “California rule.”

The rule results from a series of state court decisions widely believed to mean that the pension offered on the date of hire becomes a vested right, protected by contract law, that can only be cut if offset by a comparable new benefit.

And it may be important to voters. A labor polling firm found that “California voters reject the idea of reducing or eliminating retirement benefits for current public employees,” calling it a “visceral negative response,“ the Sacramento Bee reported.

Most pension reforms are limited to new hires, which takes years to yield savings. Cutting pensions earned by current workers in the future gets immediate savings, urgently sought by reformers who say pensions are taking money needed for other programs.

Reed and the union coalition have already clashed over whether the new initiative would allow voters to reduce or eliminate pensions earned by current workers in the future, while protecting pensions already earned.

Reed has argued that the new initiative is not intended to overturn the California rule. The union coalition disagrees, pointing to a provision that gives voters the right to determine the “compensation and retirement benefits” of government employees.

The official analysis of the new initiative sent to Harris by nonpartisan Legislative Analyst Mac Taylor and Brown’s finance director, Michael Cohen, said the issue is unclear and could end up in the courts.

“Many of the measure’s provisions could be subject to a variety of legal challenges,” said their initiative analysis. “For instance, it is not clear to what extent allowing voters to use the power of initiative or referendum to determine elements of compensation for existing employees would change governmental employers’ contractual obligations under the California rule.”

The new initiative, the “Voter Empowerment Act of 2016,” would require voter approval of pensions for new state and local government employees hired on or after Jan. 1, 2019.

Some of the other provisions in the initiative require voter approval of a government employer paying more than half the cost of retirement benefits for new employees and voter approval of any pension increase for current employees.

“Costly government pension deals are devastating our public services — and this simple initiative gives voters the ability to stop sweetheart and unsustainable pension deals that politicians concoct behind closed doors with union bosses,” said the Reed-DeMaio news release.

“That’s why the politicians and union bosses oppose this initiative — and why they continue to try to mislead the public on what the initiative does. Despite their attempts to mislead, we are very confident the voters will understand the plain English requirements of this measure and overwhelmingly pass it in November 2016.”

Low’s news release said: “While the (Harris) statement accurately reflects that this Tea Party-backed measure is a back-door way of repealing constitutionally-vested and promised rights to retirement security and health care and breaks contracts negotiated through collective bargaining, it falls far short of describing the chaos and uncertainty that would occur if it were to pass, including the undermining of the financial stability of the state’s major retirement systems.

“The measure also purports to protect death and disability, but contradicts itself by repealing the very structure on which these benefits are provided for police, firefighters and other public workers. This type of extreme measure will be unacceptable to California voters and is doomed to fail.”

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at Calpensions.com.

Photo by Elektra Grey Photography