A group of California mayors, including Anaheim Mayor Tom Tait, have submitted a request for title and summary for their Pension Reform Act of 2014 initiative. All are Democrats, except for Tait.
The mayor is proposing a state constitutional amendment intended to allow cuts in pensions earned by current state and local government workers in the future, while pensions already earned through time on the job would be protected.
Reed said private-sector pensions and public pensions in 12 other states have the flexibility to control costs by reducing pension amounts that current workers earn in the future.
Under the constitutional amendment, cuts in the pensions earned by current workers in the future could be bargained with unions or placed on ballots through initiatives. There also could be no change.
“It’s all about empowering cities to solve their own problems,” Reed said after addressing a pension conference last week at Stanford’s Hoover Institution. “How they do it will be up to them.”
Reed said the proposal is similar to the top recommendation of the bipartisan Little Hoover Commission in a 2011 report that warned rising pension costs could “crush” government.
“The Legislature should give state and local governments the authority to alter the future, unaccrued retirement benefits for current public employees,” said the report.
As Steve Greenhut puts it in his column:
The key portion of the initiative: It would amend the state Constitution “to give government agencies clear authority to negotiate changes to existing employees’ pension or retiree health-care benefits on a strictly going-forward basis,” according to a statement filed by initiative supporters. They note that federal law and laws in 18 states allow such changes – but that a series of California court cases have tied the hands of municipalities.
Given the magnitude of the state’s unfunded pension liability crisis, this initiative is both badly needed and entirely reasonable. It would solve the judicial impediment to serious reform by allowing state and local governments to modify their employees pensions on a going-forward basis, instead of past increases being locked in for the rest of a government workers active service
Kudos to Mayor Tait for joining stepping up with his fellow mayors. This initiative wouldn’t mandate that government unions have their members’ pensions modified on a going-forward basis, but it would provide a local governments with far greater flexibility to budget sensibly as pensions costs consume increasing shares of their budgets.
Expect over-wrought, apocalyptic rhetoric from the government unions.