Analyst says pension initiative would affect current employees’ compensation
LAO report warns of “significant uncertainty” in Reed/Demaio pension attack

According to a report released this week by the state’s Legislative Analyst’s Office (LAO), the pension-gutting ballot measure proposed by former San Jose Mayor Chuck Reed and former San Diego City Councilman Carl DeMaio is so drastic and recklessly conceived that it could lead to radical and unforeseen negative consequences.

The measure is called the “Voter Empowerment Act,” but its optimistic name actually disguises a dramatic attack on the retirement security of public employees that does anything but empower voters. In reality, the measure would add cumbersome and expensive voter actions to retirement and benefit decisions that are best and most efficiently negotiated at the bargaining table.

The LAO report also puts to lie the contention by the measure’s supporters that the “reform” would only affect future hires. Indeed, the LAO found that existing employees would be affected, death and disability benefits for public employees could be modified or eliminated, collective bargaining would be bypassed. And the state would likely have to increase other benefits or compensation to attract and retain employees. The LAO report concludes: “There is significant uncertainty as to the magnitude, timing, and direction of the fiscal effects of this measure and its effects on current and future governmental employees’ compensation.”

California Attorney General Kamala Harris will consider the report when she drafts a proposed title and summary which is due by August 11.