We said it would happen, and now it’s here.
Former San Jose Mayor Chuck Reed has joined with ex-San Diego City Councilman Carl DeMaio to slash public employee compensation, retirements and retiree benefits by introducing the “Voter Empowerment Act” initiative.
While we have been the scapegoat for California’s budget shortfalls for years, this is by far the most egregious attack we have ever seen.
Reed and DeMaio have already shown their determination to place the burden of the recession on the backs of public employees with local initiatives that unilaterally slash pensions and retiree health care. Voters bought their rhetoric in both San Jose and San Diego. Employees were fortunate that lengthy court battles were successful in overturning these initiatives.
Further, this is not Chuck Reed’s first attempt to overhaul pensions at the ballot box. In 2013, he submitted a measure that would have cut pensions for current and future employees and required agencies to outline a plan to pay off unfunded liabilities within 15 years. Attorney General Kamala Harris’ official description indicated that the measure would have eliminated benefits for peace officers, firefighters, teachers and nurses. Thankfully, the truth in her statement was enough to stop Reed in his tracks.
But now he’s back and better prepared after learning from his previous failure. This new measure is written to circumvent court decisions and collective bargaining by amending our California Constitution.
In anticipation of what we knew was shaping up to be one of the biggest battles that public employees have ever faced, many of you at November’s Annual Conference of Members discussed approving a voluntary, temporary $2-per-member-per-month dues increase to fund an account dedicated to whatever pension initiative might materialize. After much debate, the increase was approved and implemented in January of this year.
As stated above, this initiative is a full-scale assault on the salary, benefits and pensions of all current and future employees. Here are a few of the more appalling aspects of the “Voter Empowerment Act”:
- The proposal would override the protections afforded by collective bargaining statutes, including the Meyers-Milias-Brown Act (MMBA), by requiring voter approval of any changes to pensions or benefits.
- The proposal is not restricted to only future employees, but allows for a local initiative or referendum to determine the compensation and retirement benefits of all government employees.
- Under the measure, all new employees hired on or after January 1, 2019, will have a 401(k)-style plan. Defined-benefit plans would be eliminated.
- Once new hires move to a 401(k) plan, they are no longer part of the defined-benefit plan. This creates an unfunded liability that cannot be fixed. The employer rate for pensions will skyrocket, therefore making increases in salary or other benefits highly unlikely.
- New employees may not enroll in a defined-benefit plan unless approved by voters in that jurisdiction.
- The proposal prevents employers from paying more than 50% of total retirement benefit costs without voter approval.
- Employees would have to pick up half of the cost of unfunded liabilities (currently, PEPRA requires employers and employees to share “normal cost” down the middle, while employers are responsible for unfunded liabilities).
We have seen firsthand the media hysteria over pensions in the last decade. PORAC has been a leader in the efforts to debunk the myths, and we will continue to represent the voice of the front-line cop during what will likely be a long and very expensive campaign.
A united front at a grassroots level, along with a credible presence in television, radio and print media, will be the key to overcoming a coalition of proponents funded by hedge-fund billionaires with the singular agenda of taking a wrecking ball to public employee salary, pensions and benefits.
As you undoubtedly remember, public employees had a similar battle at the ballot box in 2012 with Proposition 32, which aimed to eliminate union political action in California. We were successful in defeating this billionaire-backed initiative, but not before PORAC and our coalition of public employees spent over $75 million.
We are cognizant of the fact that every dollar matters to every member of our association. We would never ask more of our members than is absolutely necessary. Again, the decision to add this temporary dues increase was discussed at length during our Annual Conference. The consensus subsequent to that discussion was that the issue is serious enough to justify the decision.
The future of public safety salary and benefits depends on the decision we make today to defeat these attacks. Thank you for your dedication to protecting our communities and defending our members. If you have any questions regarding the importance of this issue, please don’t hesitate to contact your PORAC leadership.