The measures, a reaction to the Bell scandal, were among flurry signed or killed.

By Patrick McGreevy and Jack Dolan, Los Angeles Times

October 1, 2010

Reporting from Sacramento —
Gov. Arnold Schwarzenegger late Thursday vetoed two bills introduced in response to the city of Bell pay scandal: a measure barring employment contracts with automatic pay raises and legislation that would cap pensions.

The governor also vetoed two bills aimed at ending pension spiking, but he signed bills requiring thousands of children to wait longer to enter kindergarten, setting up a new market for Californians to get health insurance coverage and banning pot shops near schools.

The governor had until midnight Thursday to act on the last of more than 750 pieces of legislation approved by lawmakers.

About 100,000 children would be affected by legislation signed by the governor requiring them to wait longer to enter kindergarten in California to address concerns that children are starting too young, before they are able to do the work.

SB 1381 increases the minimum age of those admitted to kindergarten, phased in over three years, starting in 2012.

Currently, youngsters can enter kindergarten if they turn 5 by Dec. 1 of the school year, one of the latest cut-off dates in the country. It means many children are not mature or developed enough to handle the school work, according to state Sen. Joe Simitian (D- Palo Alto), the bill’s author.

Under the bill, youngsters would have to turn 5 by Nov. 1 if they start school in 2012, then by Oct. 1 the next year and Sept. 1 in 2014.

The California Teachers Assn. dropped opposition to the measure after Simitian agreed that savings would go into putting children into preschool or a transitional kindergarten program where teachers will work to prepare them for entering kindergarten.

Schwarzenegger also signed a package of bills that allows the state to implement and participate in the new federal healthcare reforms, including measures setting up a new market for Californians to get health insurance coverage.

A California Health Benefit Exchange will be created that will help individuals and small businesses shop for and buy affordable health insurance starting in 2014 as provided for by the new federal reforms.

With the exchange, Schwarzenegger said: “We will be able to create a competitive marketplace where consumers can choose among qualified health plans — all without relying on the state’s general fund.”

The exchange is expected to help bring down the price of coverage because it can act as a purchasing pool in getting the best deal from insurers, and it allows participants to qualify for federal subsidies, said Anthony Wright, executive director of Health Access California, a consumer advocacy group.

“Right now individuals and small businesses are all alone at the mercy of big insurance companies,” Wright said. “This levels the playing field.”

The bills were opposed by some health insurance firms and the California Chamber of Commerce. The chamber said the legislation “prematurely creates overly broad and expansive governance and guidelines without oversight for the state health benefit exchange, which could lead to unnecessary cost increases and limited choice for employers.”

Schwarzenegger also signed AB 2470 by Assemblyman Hector De La Torre (D- South Gate), which prohibits health insurers from rescinding coverage from customers when they get sick by claiming they provided false or incomplete information on their application for coverage.

Other healthcare-related bills that the governor signed will prohibit insurance companies from denying coverage to children with preexisting conditions, and require all proposed insurance rate increases to be posted on both state and insurer websites.

Separately, the governor also signed a bill Thursday that will prohibit medical marijuana dispensaries from within 600 feet of schools in California.

AB 2650 by Assemblywoman Joan Buchanan (D-Alamo) was inspired by an ordinance that took effect in June in Los Angeles.

“We believe that this bill is reasonable and balances our responsibility to our youth and schools with the need for patients to purchase medical marijuana,” Buchanan said.

Amid concern that many schools don’t have drinking fountains available where children eat, the governor also signed a bill that requires free water to be provided in all school food service areas. SB 1413 was introduced by Sen. Mark Leno (D- San Francisco).

Local government officials in California would have been barred from giving their administrators contracts with automatic salary hikes and renewals, like one given to former Bell City Administrator Robert Rizzo, under a measure vetoed by Schwarzenegger.

The measure, AB 827, would have prohibited city councils, county supervisors and school boards from awarding “evergreen” employment contracts to managers that increase salaries above the cost-of-living increase without a performance evaluation that is made public.

The measure was opposed by the League of California Cities, which said it prefers public disclosure of salaries to what it calls the “arbitrary contract restrictions” in the bill.

In vetoing the Bell-inspired bill restricting pay raises in employment contracts, Schwarzenegger wrote: “I share the public outrage expressed over the abuses attributed to the city of Bell’s management of employee contracts. Assembly Bill 827 presents good public policy in that it provides transparency with regards to some municipal personnel contracts, but it should be applied to all public employees, including labor union members and state employees.”

The bill to cap the amount of pay that can be used for calculating pensions was not real pension reform, the governor wrote in his veto message. “I am still hopeful that the Legislature will pass an acceptable bill that addresses the real cost issues that have driven up the liability in public pension systems. For these reasons, I am unable to sign this bill,” he wrote.

Assemblyman Hector De La Torre (D-South Gate) said he wrote AB 827 to prevent the kinds of pay excesses seen in Bell, where Rizzo’s contract provided for automatic pay increases of 12% each year that helped drive his salary to nearly $800,000 before he resigned in controversy.

The governor also vetoed a measure aimed at stopping the kinds of pension excesses that were found in the city of Bell, where Rizzo’s salary of nearly $800,000 meant he could get a state pension of $600,000 a year if he retired.

AB 194 would have limited the amount of salary used as the basis for calculating public retirement benefits to 125% of the salary of the governor, going up annually with the cost of living. The governor’s salary is currently $173,987 — although Schwarzenegger does not accept it — so the cap on the salary used to calculate public pensions would start at $217,484.

Simitian’s SB 1425, which was vetoed, would have curbed “pension spiking” in the California Public Employees’ Retirement System and the California State Teachers’ Retirement System by barring the padding of end-of-career salaries, which are used to calculate pensions, with one-time bonuses, promotions and accrued vacation time. It also would have prohibited “double dipping,” in which government employees retire from a job on Friday and start another job with the same agency on Monday.

The bill would have barred state workers who retire from returning to state employment for six months.

“What people are really offended by was the ability of people to game the system,” Simitian said.

The governor also vetoed AB 1987 by Assemblywoman Fiona Ma (D-San Francisco), which would have applied the same restrictions against pension-spiking to local pension funds, including those operated for counties and cities.

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