California voters still have a voice in local pension reform, thanks to an appeals court decision blocking a rogue state agency’s efforts to undermine the initiative process.
The recent ruling in a case involving the city of San Diego preserves, at least for now, the ability to go directly to the ballot to stem rapidly escalating retirement costs.
The sanctity of the initiative process would seem to be a no-brainer. But the labor-dominated state Public Employment Relations Board had claimed it could override the will of the voters.
Fortunately, the 4th District Court of Appeal rejected the board’s claim. The state board and labor unions are contemplating whether to appeal the decision. Unless the state Supreme Court overturns it, the ruling will restore a modicum of sanity to the pension reform process.
At issue was a measure 65 percent of San Diego voters approved in 2012 that replaced traditional pensions for all future employees, except police officers, with 401(k)-style retirement savings accounts.
At the urging of public employee unions, the state board tried to undermine the initiative. It told the city that it would have to give the employees the savings from the change.
Past court rulings established that when a city council places its own measure on the ballot, it must comply with state rules requiring that it first meet and confer with unions. That’s the route San Jose took in 2012.
The state board and labor unions argued that the same meet-and-confer requirement applies when citizens gather signatures for an initiative and then a council places it on the ballot.
The court said no, noting that the council’s role in that case is merely ministerial, that it has no legal option to refuse if sufficient signatures have been gathered.
The state board and labor unions also argued that the mayor was acting on behalf of the city when he worked with the initiative sponsors and campaigned for the measure. Thus, they argued, this was effectively a City Council-sponsored measure anyhow.
The court also rejected that argument, saying that the mayor was acting as a private citizen and noting that he did not have the legal authority to act on behalf of the entire City Council.
To be sure, the San Diego model is not one all cities can follow. That city has its own retirement system so it can withdraw future employees from a traditional pension system.
In contrast, most cities turn to CalPERS to administer their pensions. CalPERS requires participating cities to provide pensions to all their employees or withdraw entirely and pay huge upfront costs.
Thus, the San Diego case does not provide a clear path to reform; it only protects the path from total destruction.
