July 29, 2015
The ballot measure proposed by former San Jose Mayor Chuck Reed and former San Diego City Councilman Carl DeMaio is a dramatic attack on the retirement security of teachers, nurses, firefighters, police and other public employees. Disguised as the “Voter Empowerment Act,” the measure undermines benefits to existing and new employees.
- It eliminates vested constitutional rights by gutting the “California Rule” that forbids reductions in benefits promised to current employees.
- It eliminates pensions for all new public employees and restricts them to 401K style plans, or nothing at all, unless voters approve a benefits package.
- It closes defined benefit retirement plans and prohibits paying debt, eliminating the sustainability of CalPERS, CalSTRS and other plans.
- It eliminates current death and disability benefits for new firefighters, police and other public employees, and provides no guaranteed replacement of these important benefits.
This ballot measure will harm California’s economy and cost taxpayers millions, perhaps billions. The LAO says there is “significant uncertainty” about its impact.
- Every contract in the state – no matter what level of government – could be on the ballot, costing school districts, cities, counties and the state millions to hold these elections.
- It will unleash lawsuits that will cost taxpayers millions as the provisions of the measure are litigated and could cost pension plans their tax exempt status as voters modify pension rules.
- It will reduce retirement income for millions of Californians that fuels our economy. For example, the $12.7 billion CalPERS paid benefits results in $30 billion in economic activity. Some $4.5 billion is injected into our state’s economy from CalSTRS.
- Many public employees (for example, teachers, firefighters and police) do not receive Social Security; this measure will undermine the ability of retirees to live with dignity. The average pension for CalPERS retirees is just $2,784 per month; for CalSTRS retirees it is $3,639.
- It will be difficult to recruit and retain teachers, firefighters, police officers and other public employees if promised benefits can be taken away.
This ballot measure is unnecessary and will undermine reforms made by Governor Brown
- Governor Brown and the Legislature have already passed major changes in the state pension systems. $100,000 benefits have been all but eliminated. Retirement age has been increased. These changes will save over $55 billion in retirement costs.
- Public employees must now pay at least half of their pension costs.
- This measure permits voters, without collective bargaining, to increase or decrease compensation and retirement benefits of government employees, undermining the ability of elected officials to bargain and agree on final contracts. It forces ballot box decisions on complex issues that should be settled at the bargaining table.
- This measure is being funded by the same failed politicians and Wall Street bankers who drove the economy into ruin and who will profit from risky 401K style plans.