Money

California is set to host a big-money contest over union pensions.(KAZUHIRO NOGI/AFP/Getty Images)

National Journal

State labor unions say they’ll spend whatever it takes to defeat a ballot measure on government pensions.

By Jack Fitzpatrick
March 19, 2015

Last week, pension-reform advocates in California announced plans to again push a 2016 ballot measure that would pave the way for cuts to public employees’ pension plans. The move sets the stage for a clash between organized labor and fiscal conservatives whose price tag could rival even the most expensive of Senate races.

The plan’s backers, former San Jose Democratic Mayor Chuck Reed and former San Diego Republican city councilman and congressional candidate Carl DeMaio aim to cut the state’s exploding pension debt: As of 2013, the 130 pension systems had $198 billion in unfunded liabilities, compared to $6.3 billion in unfunded liabilities in 2003, according to the state controller. In 2014, Reed proposed eliminating protections for employees’ benefits, a move that would allow lawmakers to close the gap by cutting pension payouts—including payouts to employees who’d already paid into their plans.

It’s a direct challenge to the state’s unions, and one that Dave Low, executive director of the California School Employees Association, promised that labor would answer forcefully. “If that’s the direction they go,” he said, “it’s going to be World War III.”

And what an expensive war it will be: In 2005, unions spent about $100 million against a series of ballot measures on teacher tenure, union campaign spending, and other topics pushed by then-Gov. Arnold Schwarzenegger, including $60 million from the California Teachers Association alone.

“We will spend whatever it takes to defeat it,” Low said of the pension-reform initiative. “No other issue gives rise to the same level of strong opposition from rank and file members than this issue.”

The plan’s supporters won’t be so well funded, Reed admits, but the question is how big the spending gap will be. Reed has been “using the ballpark number of $20 million” when planning how much they’ll be able to spend. (Steve Maviglio, a Democratic strategist and the spokesman for Californians for Retirement Security, said he thinks Reed and his allies will have to spend $30-50 million to have a shot at getting the ballot initiative passed.)

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