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A Rigged Game

eye on the news

A Rigged Game

In California, pension reform is a noble—if often losing—cause. January 15, 2016
California

“Certainly the game is rigged,” science fiction author Robert Heinlein once wrote. “Don’t let that stop you; if you don’t bet you can’t win.” The quip should be the new rallying cry of California’s indefatigable band of pension reformers, who continue to fight to rein in the state’s pension debt. It’s always been a tough battle—but the latest setback shows that the system is rigged at practically every level. Last month, California’s Public Employment Relations Board (PERB), the quasi-judicial body that oversees the implementation of the state’s collective-bargaining statutes, invalidated the results of a three-year-old referendum—Proposition B—that passed in November 2012 with 66 percent of the vote and would have reduced pension benefits for most new hires in San Diego and moved them to a 401k-style, defined-contribution system. Other reforms have also fallen by the wayside. In June 2012, heavily Democratic San Jose approved with nearly 70 percent of the vote a measure that would have trimmed benefits for current employees. A Santa Clara County judge in 2014 eviscerated the measure, invoking the so-called “California Rule,” a 70-year-old court interpretation of the state constitution that has made it impossible for overburdened cities to trim employee costs.

San Diego’s reform initiative was qualitatively different from San Jose’s. Its authors were careful to craft language that avoided running afoul of the California Rule by focusing on new hires and placing caps on pensionable pay. Prop. B was touted as a model for the rest of the state to follow, and the state needs one. The union-controlled legislature remains hostile to reform, beyond the expedient passage in 2012 of a pension-reform bill that mainly served as a bait-and-switch to convince voters to hike taxes.

PERB is not an impartial agency. Before the 2012 city vote, PERB had tried to keep the proposition off the ballot altogether. Most of the board’s members have worked for one of two big unions—either the California Teachers Association or the Service Employees International Union. Its administrative law judges aren’t real judges but officials employed by the agency. Nearly two years ago, one of those biased adjudicators issued a lengthy ruling demanding that San Diego return to the 2012 status quo. The full board affirmed the ruling, maintaining that officials were required to bargain the terms of the initiative with the city’s unions before placing the measure on the ballot. But the city didn’t place the measure before voters—voters did it themselves, signing petitions to place it on the ballot. The board elided this vital distinction by pointing to the participation of San Diego’s former mayor, Jerry Sanders, and other officials in the initiative’s campaign. Never mind that Sanders said he was involved as a private citizen.

On Tuesday, the City Council voted unanimously to appeal the measure, even though a leading Democrat said he voted for the appeal simply to get legal clarity. “The people’s right to initiative is guaranteed by the California Constitution,” City Attorney Jan Goldsmith told the Union-Tribune. “This right cannot be bargained away in a back room, or stolen from the people by a government agency.” The appeal will send the matter to the courts.

Goldsmith, a strong backer of Prop. B, wrote in a July 2012 San Diego Union-Tribune column that the issue boiled down to constitutional rights. “[N]ever before has any initiative that qualified for the ballot through petition signatures been deemed a ‘sham’ citizen initiative,” he wrote. “Since 1911, the right to place citizen initiatives on the ballot through voter petitions has been a constitutional right in California reserved by the people to bypass politicians and special interests. This right is not conditioned upon the approval of those special interests and is not something to be bargained over.”

PERB isn’t the only agency to try to kill citizen initiatives. Recently, the union-friendly Agricultural Labor Relations Board invalidated an election by Fresno farm laborers who voted against representation by the United Farm Workers. For more than a year, the board refused even to count the ballots before deciding to destroy them. Former San Diego councilman Carl DeMaio, a leader in the city’s pension reform fight, and Chuck Reed, San Jose’s former mayor and a leader in that city’s pension reform efforts, have been working on a statewide initiative for either the November 2016 or 2018 ballots. They’ve faced lots of resistance from entrenched power, and they’re preparing to meet other legal obstacles from unions and their political backers. Yes, the game is rigged, but reformers soldier on. At least they understand that California’s fiscal future is at stake.

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