By Dan Walters
July 13, 2015
- Ballot measure seeks to curb pension spending
- Both sides gearing up for a big fight next year
- Paltry earnings by CalPERS provide fuel
It’s likely that California voters will be treated – or subjected – next year to a vitriolic campaign over public employee pensions.
Backers of a proposed ballot measure, which would require voter approval of future pension increases, contend that too-generous benefits are diverting money from other vital public services such as police and fire protection.
Its opponents – unions, mainly – portray it as a right-wing hit on the retirement security of middle-class public employees.
The measure is still awaiting an official title and summary from Attorney General Kamala Harris, whose handling of a previous reform proposal led to its abandonment, before signature-gathering can begin.
Meanwhile, however, the debate has already been joined. And Monday’s revelation that the California Public Employees’ Retirement System earned an anemic 2.4 percent on its investments in the past year, less than a third of its 7.5 percent target, will provide more fodder.
The battle has been brewing for years, ever since then-Gov. Gray Davis and the Legislature boosted state benefits in 1999.
They acted on assurances – later shown to be fallacious – from CalPERS that its high-flying investment earnings would cover the cost of the added benefits without burdening taxpayers.
Most local governments, especially big cities and urban counties, emulated the state’s action on the same assurances, but as a severe recession hammered the state less than a decade later, pension funds saw their investments, particularly the riskiest ones, plummet.
To read expanded column, click here.