2016 Ballot Effort to Privatize California Public Employee Pensions Faces Rocky Start, New Poll Finds

The conservative obsession to cut public employee pensions is facing an uphill climb in California, according to a newly released poll that found ambivalent support for a pair of 2016 ballot measures pushed by former San Jose and San Diego officials.

According to a Capital & Main-David Binder statewide poll of 500 likely voters, there’s roughly a 40-40 split, with the rest undecided, for both measures. The first would move newly hired state and local government employees from traditional pensions to 401(k)-style plans. The second would impose a cap on how much government could pay for retirement benefits for new hires, where the most paid would be 13 percent of wages.

The measures are the latest efforts by former San Jose Mayor Chuck Reed, a Democrat, and former San Diego City Councilman Carl DeMaio, a Republican, to significantly cut taxpayer obligations for public employee retirement benefits, which have become a big burden for many local and state governments because they have not set aside sufficient funds. 

The lack of clear support for the measures means that Reed and DeMaio will have to decide if they will proceed with the next stage in their campaign, which would be hiring petition circulators to gather more than 500,000 signatures from registered voters to place the proposals on the fall 2016 ballot. That costs an estimated $2-3 million, California newspapers have said. The actual campaign could then cost $20 million or more, as California labor union have said that they would fervent oppose the proposal.

Earlier this week, Reed told the Sacramento Bee, the state’s capital’s hometown paper, that he wanted to see at least 60 percent support for the measures before embarking on the next phase of fundraising and petition circulating. That level of early support is essential, California political observors say, because it is likely to erode in any hard-fought campaign. Also, next fall’s ballot will be very crowded. In addition to the presidential election, there may be more than a dozen ballot measures, which only complicates efforts to get the public to pay attention.

“Generally, an even split at this early stage does not bode well for an initiative,” said Floyd Feeney, an election law expert at the University of California’s Davis campus, in an e-mail to reporters.    

Across the country, state-based fights over government pensions and retirement benefits have become a regular feature of the political landscape. States like New Jersey and cities like Chicago have found they have not set aside sufficient funds for many years, and now are fighting political and legal battles to curtail and lower promised benefits. As those controversies continue, measures like the California proposals are taking aim at future government employees.

In general, pensions—which are a proportion of one’s salary paid during retirement—are more reliable and outperform 401(k)s and other private saving plans for several reasons. That’s because they are less susceptible to the wide swings in the stock market that the average investor is exposed to, whereas pension fund managers are able to invest in an entirely different mix and scale of investments. And it’s because they pay a fixed sum, which, unlike private retirement savings, does not erode over time.

Conservatives don’t like public pensions for many reasons, starting with their dislike of labor unions and continuing with taxpayer costs. While the percentage of workers in labor unions has shrunk in recent decades, public employee unions are one of the movement’s last bastions of strength. 


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