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Sonoma County politicians wary of push to overhaul pensions

By DEREK MOORE
THE PRESS DEMOCRAT

Several Sonoma County politicians who rely on labor union support are coming out early against a proposed statewide ballot measure that could dramatically overhaul public employee pensions.

The Pension Reform Act of 2014 would change California’s constitution to allow for reductions in public employee benefits for current workers. Employees would keep benefits earned prior to changes in their contract but could be affected by reduced benefits going forward.

PensionThe measure would appear to contradict case law that appears to make such changes illegal without giving public employees another form of compensation to offset that loss. It also is sure to face stiff resistance from labor groups, which criticize the proposal as an end-around collective bargaining.

“The proposed measure is a huge threat to bargaining and the power of labor, a core Democratic constituency and one that will fight this tooth and nail,” said David McCuan, a political scientist at Sonoma State University.

San Jose Mayor Chuck Reed is spearheading the pension changes, which have sparked criticism in Sonoma County among elected officials whose own political fortunes rest to varying degrees on labor support.

Sonoma County Supervisor Mike McGuire, a candidate for state senate, Healdsburg Vice-Mayor Jim Wood, a candidate for state assembly, Santa Rosa councilwoman Erin Carlstrom, who is considering entering the race for a state assembly seat, and Santa Rosa Mayor Scott Bartley signed a Nov. 26 letter to Reed in which they urged him to withdraw the ballot measure. An additional 21 elected officials from across California signed the letter.

The letter stated that pension matters are “best decided locally and addressed at the bargaining table rather than at the ballot box,” and warned Reed that his measure “will likely increase costs to California’s cities by hundreds of millions of dollars.”

Wood, who was just appointed Healdsburg’s mayor and is running for state Assembly in the 2nd District, said the ballot measure would be “extremely confusing” for voters and lead to a costly battle between rival campaigns.

Wood this week announced that the California School Employees Association is supporting his Assembly campaign. But he said labor support did not play a role in his decision to oppose Reed’s efforts.

“At the end of the day, I think the better solution is to allow local jurisdictions to solve these issues,” Wood said. “When I see language in an initiative that is as long and detailed as this, I get concerned.”

Fiscal watchdogs, however, warn of another financial crisis if steps are not taken to rein in rising pension costs.

In Sonoma County, a 49 percent spike in unfunded pension promises could drive up taxpayer contributions to government agencies by $13.6 million over the next three years, according to a May report.

The report showed a sharp, one-year jump in long-term unfunded obligations to county retirees. Now at $527 million, that so-called unfunded liability — the difference between current assets and projected payments to retirees — is up from the $353 million reported last year.

The Sonoma County Employees’ Retirement Association covers six government agencies, of which the county by far is the largest. It pays benefits to 4,283 retirees and has about 4,150 current and deferred workers enrolled.

“Right now the rules are holding solutions hostage,” said Santa Rosa winemaker Ken Churchill, a pension system critic. He said Reed’s measure would “take off the handcuffs” while protecting pensions already earned.

Reed, in his response to the letter’s authors on Dec. 3, stated that nothing in his measure would limit local officials from addressing retirement problems nor dictate specific changes to benefit plans. He wrote that any such changes would have to comply with collective bargaining laws.

“Continuing to ignore these enormous problems is not fair to the people who rely on us for essential public services, and it is not fair to those who are counting on us for their retirement security,” Reed wrote.

The city of Santa Rosa’s pension costs are set to soar by about $12 million over the next six years as it is forced to pay higher rates set by a state pension system trying to come to grips with a massive gap between its assets and what it owes current and future retirees.

The increases of about $2 million per year would result in the city by 2020 paying about 45 percent more than it does now toward employee pension costs, already one of the largest costs in the city budget, according to an August report.

But Bartley, the city’s mayor, called Reed’s measure “potentially very Draconian” and counter-productive to what he views as progress being made locally with public employee unions.

“We have accomplished a lot working with our labor units in terms of changing pensions,” Bartley said. “My feeling is that it’s not the time to draw a line in the sand on this, which I think the initiative would do.”

Reed submitted his ballot measure to the California Attorney General’s Office. Supporters would have 150 days once the title and summary are prepared to circulate petitions and collect signatures. They would need at least 807,615 valid voter signatures, representing 8 percent of the votes cast in last election for governor, to put the measure before voters.

(You can reach Staff Writer Derek Moore at 521-5336 or derek.moore@pressdemocrat.com. On Twitter @deadlinederek.)





14 Responses to “Sonoma County politicians wary of push to overhaul pensions”

  1. your are catching on says:

    Nothing to see here, Folks. This way to the exit. Gee, I wonder what all those angry school teachers will do when they find out California will just do a Detroit get rid of their pensions? They already get 4 months off paid a year, what more shall we give them?

  2. James Bennett says:

    Draconian?

    Isn’t that kinda like the pot calling the kettle black?

    They are all complicit in Draconian moves at every Council meeting.

    Last week it was a 1 and a 1/2% ‘Impact Fee’ on all residential transactions to fund Smart Growth.

    Funny, never saw that in the PD.

    That should have quite an…
    impact.

  3. steve humphrey says:

    Bartley, the city’s mayor, called Reed’s measure “potentially very Draconian”

    as in D-E-T-R-O-I-T ?

    And FOLLOWER, couldn’t agree more.

  4. MOCKINGBIRD says:

    I think you all don’t know that this county’s employees put more out of their paycheck into their pension plan than any other county employee in the state (about 12%). They also pay into FICA (another 6%), into their health care, as well as taxes and a miriad of other deductions that equal about 35% of their paychecks. The county has changed this for new hires.

    Just a few facts for those who think the county employees don’t deserve a pension. Just wondering, all those years that the market was doing exceptionally well if the county put their share in. Many state and local government didn’t justifying it because of the high returns on the investments. Maybe someone can answer this for us?

  5. bear says:

    Every dollar you take away will have to be made up in salaries. Otherwise, no one will work for city or county government here. Remember the free market? Or maybe you just want the cheapest and less trained people? It will become your choice. Soon.

    Let us not forget that this crisis – which affects pensions – occurred between 2001 and 2008.

    As for those who object to the 30 year, 90% pension – who gets it and how much does it actually cost? Is it a County or City/CALPERS pension? Is it public safety or general retirement?

    What is 90% of a $3K salary after 30 years minus taxes and health insurance?

    Hey, American Airlines and the State of Michigan (regarding Detroit) can solve all your problems. Just declare bankruptcy and steal the pension funds.

    You could hire Mitt Romney to do it!

    Or you can aggressively collect taxes from those who are scamming you.

    Surely not anyone on this board?

  6. Steveguy says:

    They are all unsustainable. The Feds, State, Counties, Cities and Agencies.

    Add them up and there is not enough money to pay. It is already effecting our roads and real government expenses.

    The crash will come and I hope they get NOTHING. We have lazy bureaucrats retiring on well over 100K a year with FULL medical paid for for life.

    Meanwhile the rank and file take the abuse.

    Let the crash come and hit them HARD. We won’t forget the looting of our future.

  7. Reality Check says:

    “Better for the Unions to accept changes now that will leave current retirees safe.”

    Yes, history suggests Americans to be tolerant a tolerant people up to a point. Then, they get angry and reach for the a radical “fix.” Public employees will likely regret not recognizing the choices they face: Accept lower a pension (or be willing to pay substantial more for it) or face a public backlash that will really give them something to complain about.

  8. Robert says:

    Playing with fire. Go for it Reed. You are a moron among men. Your proposal doesn’t even address the safeguard built into the constitution. Your reform will trigger the safeguard, require tax increases without a vote, because they are built in, and it still doesn’t address the prohibition of lowering payments. It is a poorly structured, sadly lacking piece of sabotage to the state budget.
    Good luck. A little knowledge goes a long way. That’s a lot to expect from a politician with eyes on the Governors’ house, no matter what. This one leads to the dog house.

  9. Let Public Decide Not Politicians says:

    Let’s be honest. Voters don’t need any advice from the likes of the junior set politicians on the make like Mike McGuire and Erin Carlstrom who are desperately out there begging for dollars from every union that exists right now. They are after all candidates for the state legislature. No.

    Voters ignore these people. They do not speak for you. They are not even pretending to be fiscally responsible. It’s NEVER the “right” time for them. So cut them off. With candidates like these is it any wonder that city after city is headed towards bankruptcy? Vote in people who can count or vote for limits.

  10. Reality Check says:

    There is no easier way to gain election to a city or county office than to enjoy the support of public employee unions. It’s a no-brainer. Public employees vote and they vote for whomever promises the pay and benefits they seek. Mayor Reed is one rare dude.

    As some wag put it, democracy is not a spectator sport. Yet, that is what it has become. The result is special interest groups feed at the public trough. Expect little change in Santa Rosa’s unfunded obligations until voters demand far better reps than they did in the last election.

  11. Follower says:

    I’ve been mocked for my position in favor of banning Public Employee Unions but the facts behind that position have never been disputed.

    The fact is… Public Employee Unions, unlike Private Sector Unions are negotiating with an employer who can never go out of business, has an endless pool of “revenue” to draw from and is dependent on Union support to keep their jobs.

    Corruption is built into that system and the victims of that corruption are the tax payers.

    Public Employees are supposed to be servants of the people not the other way around.

    But they’re not “Civil Servants” anymore, they’re Union members.

    I’m not suggesting that County Workers should be slaves working for peanuts in awful conditions but if you’re going to have a job where you just about have to murder your boss in the Lobby of the Police station to get fired… maybe you need to sacrifice a little more and maybe you don’t really need Union protection.

    I’m just saying.

  12. GAJ says:

    If I’m not mistaken it has just been ruled that retirees’ pensions can be changed in Detroit, a sign of what can happen when things get completely out of hand.

    Better for the Unions to accept changes now that will leave current retirees safe.

    But I doubt that the Unions would do such a sensible thing.

    Anybody that thinks a 90% retirement is sensible or sustainable is nothing but a Union puppet.

    60% should be the absolute max.

  13. James Bennett says:

    Good, retired government employees will have the best trash cans to eat out of…
    for a while.