Pension reform advocates emboldened by wins in San Jose, San Diego – Los Angeles Times

Landslide victories on ballot measures to cut pension costs in two major California cities emboldened reform advocates, who said they expect a flurry of copycat initiatives and increased support for Gov. Jerry Brown’s long-stalled push to curb the state’s obligations to its employees.

In San Jose, nearly 70% of voters Tuesday approved a plan that gives workers the choice between increasing their pension contribution to 13% of their pay, currently 5% to 11%, or switching to a lower-cost plan with reduced benefits. It also steeply cuts benefits for new hires and tightens rules for disability retirements.

In San Diego, where pension cuts already have been implemented, voters opted to eliminate pensions for new workers. By a 66% to 34% margin, voters Tuesday endorsed Proposition B, which provides newly hired city employees with a 401(k) program, but preserves traditional pensions for new police officers.

The San Diego measure also calls for a five-year freeze on “pensionable” pay levels and removes elected leaders’ ability to improve retirement packages without a popular vote. Leaders in both cities say voters were echoing a point that reform advocates have made for years.

“They understand the direct connection between skyrocketing pensions and the cuts in services we’ve suffered,” said San Jose Mayor Chuck Reed, the primary mover behind his city’s push for reform. “They recognize that the system is simply not sustainable.”

San Diego Mayor Jerry Sanders said Wednesday that he believed voters “understand that these pension systems are simply unsustainable. They were created during a different era when people did not live as long.”

Sanders, who leaves office at the end of the year, said he expects other cities to move to 401(k) plans. “They have to,” he said. “These pension programs are anachronisms.”

Compared to the tough measures approved by voters, Gov. Jerry Brown’s call to increase employee contributions to existing pensions and create a hybrid retirement system for new workers could seem like the better deal to union leaders who have resisted proposed changes, pension analysts say.

Local pension measures have enjoyed resounding success at the ballot. Before Tuesday’s vote, 18 measures to alter a pension system had passed, and only two had failed, both in San Francisco. On average, those measures passed with 62.7% of the vote, according to the California Foundation for Fiscal Responsibility, a pension-reform advocacy group.

City unions largely sat out Tuesday’s elections, saying they are concentrating their money and energy for the legal fight ahead. Labor groups in both cities have already filed lawsuits, and a police union in San Jose filed Wednesday, according to Reed.

“We could have spent $100,000, $1 million, or $10 million trying to educate people and it wouldn’t have helped,” said Michael Zucchet, a former San Diego City Council member and now general manager of the Municipal Employees Assn. “We could have shown people how this will not save the city any money but people would have said, ‘Yes, but it feels good to vote for it.’ ”

Labor groups in San Diego, backed by the state’s Public Employees’ Retirement System board, alleged in court that Sanders and the council were guilty of an unfair labor practice by declining to negotiate pensions during contract bargaining and putting the measure on the ballot.

California courts have consistently ruled that pension benefits, once given, cannot be taken away. Reform advocates say they are prepared to defend the measures in court.

“This is California and nothing important happens without litigation and we’re prepared for that,” San Jose’s Reed said. “We’re going to do whatever it takes to implement the will of the voters.”

Zucchet, in San Diego, said public employees have become scapegoats for broader financial problems. Tax revenues fell off a cliff during the recession and market returns on city funds have also fallen, he said.

Pension-cutting moves “play right into the extreme anti-public-employee politics of the day,” Zucchet said.

Marcia Fritz, president of the California Foundation for Fiscal Responsibility, which has pushed to rein in pension costs, said she hopes the Legislature will heed the public’s mood and support the governor’s 12-point reform plan.

If they fail to do so, voters could turn on the governor’s tax-increase proposal on the November ballot, or pass tough pension measures in cities across California.

“They can get on this train that’s picking up steam or they can stand on the tracks and get flattened,” Fritz said.

via Pension reform advocates emboldened by wins in San Jose, San Diego – Los Angeles Times.


The following editorial was published Friday in The Sacramento Bee. It is republished here with permission.

Looking for a trend in Tuesday’s election? Look no further than pension reform results in San Diego and San Jose. As the Legislature dithers, fed-up voters in the state’s second- and third-largest cities overwhelmingly approved ballot measures that roll back benefits for current and future city workers.

The measures go further than anything union-friendly Democrats who control the Legislature are considering. They go much further than the modest pension reform plan that Gov. Jerry Brown has advanced, a plan that’s languishing in a joint Assembly-Senate committee.

Measure B in San Jose was the most politically significant because the South Bay city is a union town and Democratic Party stronghold.

Mayor Chuck Reed, who championed Measure B, is a Democrat. Despite strong labor opposition, city voters approved it with a whopping 70 percent of the vote.

The San Jose measure allows current workers to keep the retirement benefits they have already earned, but to continue accruing benefits at the same level workers would have to contribute more of their own money, as much as 16 percent of salary. Alternatively, current workers could elect to enroll in a less generous retirement plan with a higher retirement age. Future hires would receive an even lower level of guaranteed benefits plus Social Security and a 401(k)-type retirement benefit.

In San Diego, 66 percent of voters approved Proposition B. It would freeze the amount of pay used to calculate retirement benefits for current workers. It would do away with guaranteed pensions entirely for most future workers. With the exception of police, San Diego city employees hired after the effective date of Proposition B would be enrolled in a defined-benefit or 401(k)-type plan.

Like many local and state governments, San Diego and San Jose are paying out more and more in pension benefits each year. Those benefits now eat up roughly 20 percent of general fund spending in both cities. Payouts for pensions in San Diego rose from $137 million in 2006 to $231 million this year. San Jose pension costs zoomed from $73 million in 2001 to $245 million this year. To help pay those higher costs, both cities have had to lay off police officers and other city employees, close firehouses, reduce library hours and cut maintenance of parks and streets.

Predictably, public employee unions have filed lawsuits in both cities, arguing the reform measures violate vested retirement rights of workers and interfere with their collective bargaining rights.

In the past, courts have been highly protective of pensions, particularly for current workers. Both cities claim their measures have been carefully crafted to avoid running afoul of state law or the Constitution. Struggling municipalities across the country are watching closely to see how the courts respond.

But even if unions win in court, they lose. Generous public employee pensions approved in good times are simply unsustainable, both politically and economically. Increasingly, taxpayers are unwilling to fund a retirement system that allows most public workers to retire at age 55 with generous pensions and cost-of-living increases on top of that. Voters have become even more incensed as they watch their government services shrink at the same time. Finally, as they face layoffs, furloughs and pay cuts, even younger public employee union members are beginning to balk.

The message from voters in San Jose and San Diego could not have been more clear. They want pension reform. Gov. Brown certainly heard them, saying, the day after the vote, that reform was “imperative.” If labor unions want to head off an eventual ballot initiative that goes far beyond what Brown has proposed, they should cut a deal with him.


Government Unions Lose – Deroy Murdock – National Review Online

Wisconsin governor Scott Walker’s 53–46 percent victory over Milwaukee’s Democratic mayor, Tom Barrett, in Tuesday’s recall election is the Proposition 13 of the 21st century. In 1978, California’s famous property-tax-cut referendum ignited the supply-side tax-relief movement. Similarly, Walker’s win will encourage elected officials to demand that taxpayer-funded government employees earn realistic wages and pay their fair share for benefits. Likewise, Walker’s triumph should stiffen politicians’ spines so that they insist that government-union bosses live by the same rules as the rest of us.

Tuesday’s humiliating loss for the government workers’ unions is just the latest setback in their hard-fought but futile campaign to foil the reforms that Walker promised to implement if elected. After screaming themselves hoarse in Madison for weeks, the unions got serious and tried to remove a reform-friendly Wisconsin-supreme-court justice in order to overturn Walker’s collective-bargaining restrictions and other measures. The voters did not cooperate.

Strike one.

The government-union bosses tried to unseat nine state senators who supported Walker’s agenda. Again voters didn’t agree.

Strike two.


And, for months, government-employee unions pumped some $7.6 million (largely from mandatory dues), countless volunteer hours, and immeasurable amounts of prestige into sending Walker to the locker room. Once more, Wisconsinites refused to cooperate.

A swing and a miss, strike three!

(And, yes, Walker’s supporters spent some $17 million in voluntarily collected funds.)

Far from retiring him, Scott Walker’s union foes have catapulted him to national prominence. Veteran activist and direct-mail pioneer Richard A. Viguerie calls Walker “the conservative movement’s new leader.” As Viguerie wrote Wednesday:

In a blue state, Governor Walker has shown establishment Republicans, including Mitt Romney and the Capitol Hill Republicans, that a bold conservative agenda is a political winner. Taking on the public sector unions and winning the battle to roll back the size and cost of government have made Scott Walker the leader conservatives have been looking for, whether he wants the role or not.

Peter Hannaford, a long-time adviser to Ronald Reagan, notes on the American Spectator’s website that Californians on Tuesday also cried “Uncle!” at the government-workers’ unions and their statist enablers:

San Jose voters passed Measure B by 71-to-29 percent. In San Diego, they endorsed Proposition B by 67-to-33 percent. In recent years both cities had been forced to cut back on libraries, recreation centers, and fire and police services in the face of galloping pension liabilities. San Diego saw its annual contribution to pensions go from $43 million in 1999 to $231 [million] this year, soaking up 20 percent of the city’s budget. In San Jose, it went from $73 million in 2001 to $245 million this year — equal to 27 percent of the budget. . . . It began to look as if the taxpayers were working for their own employees.

via Government Unions Lose – Deroy Murdock – National Review Online.

Parker weighs in on janitors’ union contract dispute | Houston Politics | a blog

Parker weighs in on janitors’ union contract dispute

Houston Mayor Annise Parker has weighed in on a contract dispute between janitors and their employers that has seen the union stage a one-day walkout this week and threaten more work stoppages if a new contract can’t be negotiated.

Eighty to 100 janitors went on strike Tuesday night at Greenway Plaza, according to the Service Employees International Union, which represents about 3,200 janitors who clean Houston’s high-rises. The workers’ contract expired May 31; they want to boost their pay to $10 an hour over the next three years, up from a cap of $8.35 for most janitors now. The workers also want additional employer contributions for health insurance.

“We want to give owners and contractors a chance to respond,” said union spokeswoman Paloma Martinez. “As the weeks go by, it could get bigger.”

Tim Reilly, lead negotiator for the Houston Area Contractors Association, said the “union’s proposal was simply unrealistically high” and cited “ongoing economic challenges.” Reilly’s group includes three of the seven companies that are part of the negotiations.

In a statement released today, Parker said she supports the right to a fair wage and to lawfully protest, and said she urges a negotiated resolution that is fair to both sides as the best outcome for the city. Parker added:

“Houston has rounded the corner on the recession. We have recovered from the national economic downturn faster than any other major city, and we did it the only way Houstonians know how – by working hard and working together. In order to keep our economy moving forward, we must continue to work hard and work together. In the spirit of solidarity, I urge the Houston janitors and cleaning companies to return to the table to negotiate a contract that is fair and just. Treating each other with dignity and respect makes our city stronger.”

via Parker weighs in on janitors’ union contract dispute | Houston Politics | a blog.

Unions concerned as contracts set to expire |

DETROIT — Some Detroit union leaders accuse Mayor Dave Bing and the city of backing them into a corner by refusing to negotiate new collective bargaining deals with less than a month before some of the contracts expire.

Union strategy sessions continue to focus on what could be a June 30 contract showdown.

“We looked at this back in December. We kind of expected things to go south,” said Joseph Duncan, Detroit Police Officers Association president. “It’s my impression they are going to try to impose a contract on us.”

Duncan said his and other unions haven’t bargained with the city since earlier this spring when the unions agreed to pension, benefits and work rule changes. The tentative agreements were intended to help the city stave off any attempt by the state to appoint an emergency manager.

Detroit faces a budget deficit of more than $200 million and in April entered into a consent agreement with Gov. Rick Snyder that allows the state to have a role in revamping the city’s bleak fiscal condition.


• Feb. 1: City reaches tentative deal on contract concessions with non-uniformed workers’ unions.

• Feb. 10: City reaches tentative deal on contract concessions with police unions.

• Feb. 18: City reaches tentative deal on contract concessions with firefighters union.

• March 26: Financial review team determines that Detroit is in “severe financial stress.”

• April 4: Detroit City Council approves consent agreement between Mayor Dave Bing and Gov. Rick Snyder; deal keeps Detroit out of state receivership.

• June 30: Detroit police union contract expires, as do bargaining agreements with some non-uniformed unions.

• July 16: Date set in consent agreement requiring Detroit to have negotiated or imposed contracts with unions whose deals expired June 30.

• June 30: Detroit police union contract expires, as do bargaining agreements with some non-uniformed unions.

• More Consent Agreement coverage

Part of that agreement calls for the city to have either negotiated or imposed new labor deals by July 16 for contracts expiring this summer.

“People are saying if (the city) goes to bring somebody in here to take their jobs that there is going to be hell to pay,” said Ed McNeil, a spokesman for American Federation of State, County & Municipal Employees Council 25. “When you start to roll over people you are going to get a lot of push-back in this town, which I don’t want to see.”

But Richard Block, professor and director emeritus of Michigan State University’s School of Human Resources and Labor Relations, said if no new deals are reached, it’s likely city unions will continue working under the expired contracts.

“Under Michigan law, contracts continue in effect until they agree on a new one,” he said.

The city can’t “get rid of a worker” unless it’s allowed under their collective bargaining agreement or if workers go on strike, Block added.

Municipal “workers in Michigan can’t strike, so they can’t be replaced,” he said. “If they strike, you have a different scenario. The city might take the position that they abandoned their jobs.”

The state expects city employees to remain on the job and that new contracts will have been negotiated or in place by July 16, said Terry Stanton, state Treasury spokesman.

Mayor Bing’s office did not respond to a request for comment.

City unions have not voted on whether they will strike, but a coalition of about 20 bargaining units has filed an unfair labor practices complaint with the Michigan Employment Relations Commission alleging the city failed to execute the tentative agreements.

Bing last month signed a council-approved budget for the coming fiscal year that calls for cutting more than 2,500 jobs, while shaving $250 million in annual expenses.

The city’s accumulated budget deficit is about $265 million. Long-term structural debt stands at $13.2 billion.

The tentative agreement with police would have saved the city more than $20 million and included a 3-year pay freeze, according to the police union.

The tentative deal between the city and about 20 civilian unions was to have created about $60 million in health care savings. But those and other savings didn’t “appropriately address” Detroit’s fiscal cash crisis, according to a review done in February by the council’s fiscal analysis division.

None of the deals went into effect.

“The city is saying we didn’t have an agreement because it was never approved by council,” Duncan said. “The bottom line is the city needed our help to try not to get an emergency manager. We sat around the table and looked at each other, realizing the city was in trouble. We negotiated with the mayor. As soon as we got it done, they turned their backs on us.”

McNeil said the unions contend there is an agreement.

“We have a deal, a 3-year agreement. We signed it. We shook hands,” McNeil said. “We know we can’t trust them at this point.”

via Unions concerned as contracts set to expire |

Vote could push Chicago closer to teachers strike –

CHICAGO — Angry that one promised raise disappeared and that they’re being asked to work longer days without what they consider to be an adequate pay increase, Chicago teachers are considering authorizing their first strike in a quarter-century.

In a signal of their mounting anger, teachers are voting this week – before a summer of negotiations and a recommendation from an independent fact-finder – on a strike that wouldn’t happen until the next school year starts. If they do authorize a strike, teachers in the nation’s third-largest school district would be leaving the final decision in the hands of union leaders.

“This is a reflection of the treatment we as teachers have been subjected to this year … that the posturing of the board of education has created such misery and suffering and discontent that we needed to send a message,” said David Rose, a teacher at Roberto Clemente Community Academy.

The frustration largely centers around Mayor Rahm Emanuel, who rescinded a 4 percent raise last year and then began pushing for a longer school day. Teachers say the mayor – and now the district – have not offered them enough money to make up for the added time.

Chicago Public Schools has proposed a five-year deal that guarantees teachers a 2 percent pay raise in the first year and lengthens the school day by 10 percent. The union wants a two-year deal that reduces class size and calls for teachers to receive a 24 percent pay raise in the first year and a 5 percent pay raise in the second year.

Under a new Illinois law, at least 75 percent of the district’s 25,500 teachers would have to vote in favor of a strike authorization. But Rose and several other teachers said that amid the acrimony, they’re not worried about the union reaching that threshold. The union is expected to release results next week.

“I think it’s going to be in the 90s because we are very angry,” said Zulma Ortiz, a teacher at John F. Kennedy High School on the city’s southwest side. “We’re fed up.”

For his part, Emanuel has said he thinks teachers do deserve a raise. He also said he believes the two sides can find “common ground” and urged teachers to wait for the fact-finder’s report, which is due in mind-July and would offer recommendations for a contract.

But Emanuel has had a contentious relationship with the Chicago Teachers Union since taking office last year and tried to go around the union in his push for longer school days.

The union had turned down an offer for 2 percent pay raises in exchange for lengthening the school day, so Emanuel began asking teachers at individual schools to vote to waive the union contract and add the extra 90 minutes. The Illinois Educational Labor Relations Board subsequently voted to block Emanuel’s administration from negotiating with more schools, but not before the mayor angered teachers.

“He created an incentive for them, the causes and conditions for teachers to mobilize in a way they haven’t mobilized before,” said Robert Bruno, a professor of labor and employment relations at the University of Illinois at Chicago.

Strike authorization votes by teachers are not all that unusual, according to experts, and most end with deals being hammered out before a strike happens. Teachers’ strikes have become increasingly rare across the U.S., and the last in Chicago was in 1987.

In this case, Emanuel and the district say the union is jumping the gun with its vote. The district has also noted that it means 1,500 retiring teachers who will not be affected can cast ballots, and a couple of thousand new teachers will be tied to something they couldn’t vote on.

Chicago Public Schools spokeswoman Becky Carroll said that once the fact-finder’s report comes out, both sides will have 15 days to accept it or reject it. The union, meanwhile, will have 30 days to decide whether or not to strike, she said. Teachers should know what that report says before giving their leaders the authority to send them on strike, Carroll said.

“Once they vote to authorize a strike there is not a second bite at the apple,” she said. “The only other vote the teachers will have is to ratify the final agreed upon contract.”

Chicago Teachers Union Vice President Jesse Sharkey has said the strike authorization is necessary to give the union leverage during negotiations.

Parents, meanwhile, are worried, not just about the education of the city’s children, but about their safety and well-being should teachers go on strike. The district has about 405,000 students in more than 675 schools.

“The gang violence in my neighborhood is way too high to risk having children home on a daily basis when they should be in school,” said Letitia Daniel, whose 11-year-old boy goes to school on the city’s South Side.

Her sister, Felisha Slater, noted the school her two young sons attend elsewhere in the city also provides meals.

“Some of the kids, their parents can’t afford to buy food for their families, and they get fed at school,” she said.

via Vote could push Chicago closer to teachers strike –

Tentative Fairfield-Suisun teacher union contract would save sports | Daily Republic

FAIRFIELD — Union leaders representing Fairfield-Suisun teachers have tentatively agreed to a reduction in their contract totaling $1.9 million, savings that will be used to save high school sports and clubs.

Fairfield-Suisun Unified Teachers Association President Melanie Driver said the tentative agreement with the district was struck June 1. It amounts to a 2.6 percent reduction to each member of the union. The union membership needs to ratify the contract and at that point it will go before the school board for approval.

Union members have until Monday to vote. The votes will be tallied by 3 p.m., said Driver. If approved, this would be the second year in a row the district’s unions gave back to fund extracurricular activities.

“If you love high school sports, if you like yearbooks and drama and band, thank a teacher or a support person who works for our district,” said board member Perry Polk. “They have given. Now it is up to others. We cannot and should not expect them to continue to sacrifice.”

To close a $6.5 million budget deficit, the board voted in February on a number of cuts, including closing schools and eliminating stipends given to athletic coaches and advisers to clubs and other activities. The agreement did not come in time to save Sullivan Middle School from closing.

The savings from the teacher union contract will be used to pay for the stipends for one year, Driver said. The stipends cost the district $450,000 annually. The rest of the savings will be used to restore funding for classroom supplies and clerical, custodial and library positions.

Driver said she is confident the union will pass the contract but said some teachers have told her they cannot afford the cut.

“We have members in that position right now, they can’t afford to do it any more,” Driver said. “We are all sacrificing and trying to do what is best for everyone involved, the students and the teachers.”

Coaches reached for comment were pleased that a deal was in the works, though it may not have come soon enough for some.

“I’m ecstatic if that truly happens,” said Fairfield boys basketball coach Tony Bryant. “I was deeply saddened that they keep even talking about dropping sports. The effect it would have on local high schools would be terrible. This time, the way that (the talk of dropping sports) happened, it really hurt us, it hurt us bad at Fairfield High. We had to eliminate the Holiday Classic (tournament held each December). We had four local teams in it. I’m not sure if we can get that back. At least we’ll have a season.”

Mike Clarkston, wrestling coach and athletic director at Rodriguez, said he tried to keep a positive attitude and encouraged his wrestlers to work out and participate in tournaments in the hope that sports wouldn’t be cut.

“I think that helped the kids a little bit,” Clarkston said. “It’ll be a relief if it definitely comes back, once we hear the official word. . . . (The threat of cuts) is an every-year thing. It wears on you, it wears on the kids. Their morale was really low. They wanted to talk about it but there weren’t any answers. We definitely need a longer term solution than what we have right now. We need a bigger picture look at it right now.”

Superintendent Jacki Cottingim-Dias announced the agreement in an email to school board members to spread the word to high school athletic boosters who have promised to raise money to cover the cost of stipends.

“They must keep going on the fundraising however as we will be in the same position next year,” she wrote. “This gives everyone a year to get the funding before we come to another crisis. Don’t let up.”

via Tentative Fairfield-Suisun teacher union contract would save sports | Daily Republic.

News Item

News Item:

FOP Contract Approved


BARTLESVILLE, OK — The Bartlesville City Council approved a labor agreement between the City of Bartlesville and the Fraternal Order of Police Lodge 117 for 2013.

City attorney Jerry Maddux says the new contract has few changes. Before the city council accepted the contract, the FOP met with City officials for the past two months and the organization approved the new contract.

“FOP Contract Approved”.

via News Item.

Pension Reform in California

League of California Cities: Pension Reform

June 8, 2012 – On June 5, the cities of San Diego and San Jose both passed measures implementing pension reforms. The day after San Jose voters overwhelmingly supported Measure B, police and fire unions filed suit challenging the legality of the measure.

San Diego Mayor Jerry Sanders said that the vote proves residents are frustrated with rising pensions and reduced city services. San Jose Mayor Chuck Reed has said that the pension reductions are needed to restore public safety positions, reopen firehouses and libraries, and ensure the future viability of the city.

It is unclear whether these ballot measures will boost support for pension reform in the Legislature though  just last week during the California State Association of Counties Legislative Conference, Senate President Pro Tem Darrell Steinberg (D-Sacramento) said he believed it was the Legislature’s obligation to deliver pension reform by the end of this legislative session.

Gov. Jerry Brown also weighed in saying, “the pension vote in San Jose, which is a more liberal city than the state as a whole, is a very powerful signal that pension reform is an imperative. It’s really important. Right now, I want to lock this budget down. But people should have confidence that pensions and their reform are on the agenda, right at the top.”

The Governor’s sentiments on pension reform are contained in his 12-Point Pension Reform Plan initially released in April 2011, and revised later in October. Earlier this year he released two documents containing language for his reform plan: Part 1 and Part 2.

The following are the twelve points listed in the Governor’s summary:

Requires equal sharing of the normal cost of pensions among employers and employees;

Hybrid risk-sharing pension plan for new employees;

Increases retirement ages for new employees;

Requires a three year average calculation for final compensation for new employees;

Calculates benefits based on regular, recurring pay;

Limits public employee post-retirement employment to 960 hours;

Requires forfeiture of benefits if convicted of certain felonies;

Prohibits retroactive pension increases;

Prohibits pension “holidays;”

Prohibits purchase of “air time” or additional service credits;

Increases pension board independence and expertise; and

Reduces retiree health care costs for the state and encourages local governments to do the same.

The Conference Committee on Public Employee Pensions has met five times since the end of last year, with its last meeting in April 2012. Although a conference committee report has not been released, the Legislature may take action on pension reform following the passage of the state budget. The issue could also be delayed until August when legislators return after summer recess. As speculation abounds in the Legislature on this issue, nothing is certain on when or whether the Legislature will act on pension reform.

Potential Ballot Measures

June 28 is the deadline for the Legislature to place items on the November 2012 ballot, but that deadline has been pushed back in the past. Ballot measures require a two-thirds vote, therefore requiring Republican votes for passage. Some of the items that may surface for discussion late this month include:

A constitutional amendment to enact elements of a legislative pension reform package;

A revision to the California Forward ballot measure expected to qualify for the ballot; and

A revision to the water bond scheduled for the November ballot, or to move it to another ballot.

Pension Reform

Addressing pension reform may mean a two-bill approach, one that enacts necessary statutory reform language and a second measure to address constitutional issues.

The Governor and the Legislature have discussed applying pension reforms across the board to all state and local government employees regardless of differing retirement systems though, this gets a little tricky. While most reforms can be done in the Legislature with a majority vote bill, any changes to charter cities would arguably have to be done via a state constitutional amendment. The Legislature however may think differently.

California Forward Initiative

California Forward recently submitted signatures to qualify its proposed government reform measure for the November ballot. Prior to submitting signatures, representatives for California Forward attempted to negotiate a substitute measure in the Legislature that would mitigate concerns raised by labor and environmental groups. The organization submitted signatures for qualification when no agreement was reached.

In May, the League board of directors, when advised that California Forward was attempting to negotiate an alternative to the initiative to be placed on the ballot by the Legislature, directed League staff to pursue amendments to any legislative initiative to address numerous city concerns raised in policy committees.

via Pension Reform in California.

Pension-reform package collapses in Illinois House – Chicago Sun-Times

SPRINGFIELD — A hulking pension reform package pushed by Gov. Pat Quinn and House Minority Leader Tom Cross collapsed late Thursday, leaving the last big issue of a productive spring legislative session a casualty of partisan bickering and a heavy union pushback.

Cross (R-Oswego), who took over sponsorship of the pension package Thursday after House Speaker Michael Madigan (D-Chicago) abruptly dropped it a night earlier, announced the measure wouldn’t be called for a vote before lawmakers concluded their spring session.

“The governor’s office asked me this afternoon not to call the bill, and I’ve agreed to do that. It doesn’t do us any good to fight. We have a problem. We need to take a break,” Cross told colleagues in the House.

“We need to let emotions settle down. We need to be able to find some common ground on some issues, and I’m certainly willing to do that,” Cross said.

The surprise development now means Quinn and the General Assembly face a potentially protracted, election-year battle over how to reel in the state’s massive pension problems and the possibility that state borrowing costs could rise if bond-rating agencies frown upon Springfield’s inertia.

“As I have repeatedly made clear, inaction on pension reform is not a choice,” Quinn said in a prepared statement. “We must fundamentally reform our pension system, and we must enact bold reform that eliminates the unfunded liability.”

The governor said he intends to call the four legislative leaders together for a meeting “in the coming week so we can forge a pension reform agreement as soon as possible and return to Springfield to enact it into law.”

The pension plan began listing badly around mid-day Thursday after Madigan indicated he wouldn’t support it. He and Cross were dug in on an ideological dispute over whether suburban and Downstate school districts should partly relieve the state of the funding load for teacher and administrator pensions.

“He said he wouldn’t support that form of the bill and believes we should have the shift to have the local school districts who make decisions about salaries and others who make decisions about investments be responsible for those choices,” Madigan spokesman Steve Brown said of his boss.

During a brief floor speech late Thursday, Madigan sidestepped the acrimony with Cross — even thanking him at one point for a productive legislative session — while warning members to be prepared to return to Springfield for a special legislative session to deal with pensions.

But in doing so, despite the dour outcome on pensions, Madigan served up a joke about the conditions under which lawmakers could qualify for taxpayer-paid housing and food allowances, known as “per diems,” if they’re forced back to Springfield to deal with the issue.

“Just by way of information, if the governor calls the special session, why the members will get their per diem allowance. If the special session is called by the presiding officers, then the members will not get the allowance so you can express your hopes to yourself,” Madigan told the chamber, prompting laughter.

“We’re all very disappointed that we did not resolve the pension question before the Legislature,” he said.

Aimed at fixing the nation’s most underfunded pension system, the package sought to erase more than $80 billion in unfunded liabilities by having current and retired state workers, Downstate and suburban teachers, university and community college employees and state legislators accept less generous annual pension increases.

If workers and retirees agreed to relinquish an automatic 3-percent cost-of-living increase each year, they could keep state-subsidized health insurance as retirees, and current workers could continue to have future pay increases factored into their pensions.

With the need to reach at least 60 votes in the House, Cross said he had 30 Republicans lined up, putting the onus on Democrats to come up with the balance before a midnight deadline when lawmakers are scheduled to adjourn their spring session. After Cross pulled the plug on his plan, the Senate passed by a 30-24 vote a smaller pension reform that only targeted workers in state agencies and in the General Assembly but not university or community college employees or Downstate and suburban teachers.

Though the House adjourned before taking it up, Senate President John Cullerton (D-Chicago) Cullerton’s bill involved the same framework as what the House was considering on a broader scale — encouraging workers and retirees to accept lower post-retirement cost-of-living increases each year in exchange for having state health care.

“This bill is constitutional,” said Cullerton, the bill’s chief Senate sponsor.

While his approach had backing from Senate Minority Leader Christine Radogno (R-Lemont) and 2010 GOP gubernatorial candidate Bill Brady, others in the conservative bloc of the GOP caucus ridiculed the more modest pension offering Cullerton put on the table.

via Pension-reform package collapses in Illinois House – Chicago Sun-Times.