State’s pension crisis

Reformers claim Dem attorneys general use labor’s rhetoric to describe measures to voters

More than 20 times in the last 15 years, political leaders looking to control California’s fast-growing public pension costs have tried to put statewide reform initiatives before the voters. None made it onto the ballot.

Often, advocates could not raise enough money for an initiative campaign. But some of the most promising efforts, ran into a different kind of obstacle: an official summary, written by the state attorney general, that described the initiative in terms likely to alienate voters, prompting sponsors to abandon the campaigns.

By law, the attorney general’s title and summary “shall be true and impartial” and not likely to “create prejudice for or against the proposed measure.” The title and summary, which appear on petitions and in the official voter guide, can powerfully shape attitudes toward a ballot measure. The language has emerged as a battleground between those seeking to overhaul California’s public retirement system and those determined to defend it.

“It’s the one thing every voter will see, and it’s the last thing every voter will see,” said Thomas W. Hiltachk, a lawyer who specializes in California initiatives and has run campaigns in support of Republican ballot measures. “Those words are critically important.”

Taxpayer advocates contend that attorneys general — Democrats elected with robust support from government employee unions — put a finger on the scale, distilling the initiatives in language that echoed labor’s rhetoric that the initiatives would dilute benefits already promised to public employees.

Retirement benefits are

the fastest-growing expense in many municipal budgets. In Los Angeles and other cities, they account for 20 percent or more of generalfund spending. The burden has pushed some cities to the edge of bankruptcy.

Yet a string of court rulings, known collectively as the “California Rule,” has posed a formidable barrier to change. Under the rule, pensions are considered binding contracts protected by the state Constitution. It effectively bars cuts not only in pension benefits already earned, but for the rest of the employee’s career.

For that reason, many of the cost-saving measures passed by the Legislature in recent years, including later retirement ages, did not affect employees already on the payroll. They applied only to newly hires .Asaresult, the savings will not kick in for many years.

Pension reform advocates say that achieving real relief in the near term will require reductions in benefits to current employees. Because of the California Rule, that can be done only by amending the Constitution. And that requires a ballot initiative.

A wide majority of California voters surveyed have favored changing the pension system to save money, but support drops sharply when the change is framed as eliminating benefits for teachers, police and firefighters.

Disputes over the attorney general’s choice of words have figured prominently in several major reform attempts. The most recent, in 2013-14, was led by then-San Jose Mayor Chuck Reed and former San Diego City Councilman Carl DeMaio.

Reed, a Democrat, and DeMaio, a Republican, proposed a constitutional amendment to alter the California Rule by targeting future benefits of current employees. Workers would keep retirement benefits they had earned, but future benefits would be determined through collective bargaining or public referendum.

A survey conducted for labor groups opposed to the initiative found that majority support for pension reform collapsed if it was described as “eliminating police, firefighters, and other public employees’ vested pension benefits” or “constitutional protections.”

Then-Attorney General Kamala Harris issued a summary saying the Reed-DeMaio measure “eliminates constitutional protections for vested pension and retiree healthcare benefits for current public employees, including teachers, nurses, and peace officers, for future work performed.”

Reed and DeMaio sued, accusing Harris, elected attorney general in 2010 with strong financial support from labor and now a U.S. senator, of modeling her ballot language on the labor survey. The court ruled Reed and DeMaio had not proved Harris’ summary was false or misleading and that the attorney general is afforded “considerable latitude” in crafting the language.

Reed and DeMaio dropped the initiative in March 2014 after concluding that it was unlikely to win with Harris’ ballot language.

Steve Maviglio, a spokesman for Californians for Retirement Security, the labor coalition that opposed the initiative, said the labor survey indicated that the initiative would lose “regardless of how the ballot language is written.”

Harris did not respond to requests for comment. But a former senior advisor to Harris said the similarity between the attorney general’s summary and the labor memo reflected shared values, not a quid pro quo.

It was the second time Harris approved summary language that proponents of pension reform regarded as unfair.

California Pension Reform, a Republican-led advocacy group, proposed an initiative for the 2012 ballot that would have reduced benefits for both current and newly hired public workers. It called for imposing caps on how much government employers could contribute toward workers’ retirements.

Harris’ summary stated that the initiative “eliminates constitutional protections for current and future public employees’ vested pension benefits.”

California Pension Reform dropped the initiative, asserting that the “false and misleading title and summary make it nearly impossible to pass.” Dan Pellissier, president of the advocacy group and a former aide to Assembly Republicans, said the summary was unfair because it stated as fact that pension benefits are constitutionally protected when the issue is in dispute. At the time, Harris’ office rejected the criticism, saying the title and summary accurately described “the initiative’s chief points and purposes.”

One of Harris’ predecessors, Democratic Attorney General Bill Lockyer, was accused of writing politically charged language for a pension measure in 2005. The initiative, proposed by thenGov. Arnold Schwarzenegger, would have given future state workers 401(k)-style retirement accounts instead of traditional pensions.

Schwarzenegger said in his State of the State address that year that California’s pension obligations had risen from $160 million in 2000 to $2.6 billion, “threatening our state.”

But the Republican governor abandoned the initiative in April 2005, after Lockyer’s office issued a title and summary that said the measure would eliminate death and disability benefits for future public employees.

Schwarzenegger’s initiative did not mention death benefits. But because they were tied to pensions, newly hired civil servants who wouldn’t have pensions wouldn’t have the associated benefits either, unless they were provided separately.

The governor’s communications director, Rob Stutzman, had suggested that the attorney general was trying to curry favor with labor unions: Lockyer received more than $1.5 million in campaign contributions from public employee unions during his two terms as attorney general. Lockyer, now a lawyer with the firm Brown Rudnick in Orange County, said his staff’s analysis of the Schwarzenegger initiative was correct.

Reed and other proponents of pension reform plan to put a new measure on the ballot next year. If they do, the title and summary will be written by California’s new attorney general, former U.S. Rep. Xavier Becerra, a Democrat from Los Angeles who after his confirmation noted his father was a retired union construction worker with a pension.

“You drive on the roads that my dad built,” Becerra said. “I think anyone who works hard deserves to get what they bargained for.”