Bloomberg News

California Group Drops Bid for Public Pension Cuts on Ballot

February 13, 2012

Feb. 8 (Bloomberg) -- A group that had been trying to place a voter initiative on California’s ballot to cut public pensions suspended its campaign, saying a summary and title assigned to the measure by the attorney general made it impossible to pass.

California Pension Reform will instead focus on getting lawmakers and Governor Jerry Brown to overhaul public pensions, the group’s president, Dan Pellissier, said in a statement today. He said they would seek another ballot measure in 2014 if Brown and lawmakers fail to act.

Brown, a Democrat, has proposed his own plan, which would push new state workers into a hybrid-type pension that combines elements of a 401(k) savings plan common in the private sector with traditional government benefits. It would also raise the retirement age to 67 from 55 for most state employees. Pellissier said at the time Brown unveiled his plan that it didn’t go far enough.

“We will continue to push our elected representatives to reform our broken pension system and if they fail we will focus on qualifying an initiative for 2014,” Pellissier said in the statement. “California taxpayers face more than $240 billion in pension debts that grow every year, a brutal math problem that requires courageous leadership instead of the special interest politics that is blocking meaningful reform today.”

Pellissier’s group had submitted two separate measures, one that would have forced government workers into a 401(k)- type plan and another that would have sought a hybrid. The group was polling voters to see which might pass before deciding which one to pursue.

Strained Budgets

California Attorney General Kamala Harris, also a Democrat, must review all proposed voter initiatives and write an impartial title and summary before supporters can begin gathering signatures. Pellissier criticized the way Harris explained his group’s proposals, saying she used false and misleading language.

“Our title and summary describes the initiative’s chief points and purposes, and is accurate and not misleading,” said Lynda Gledhill, spokeswoman for the attorney general’s office.

Rising retiree obligations are straining the budgets of states such as California and cities across the U.S. still grappling with income- and sales-tax revenue reduced by the longest recession since the Great Depression.

--Editors: Rick Levinson, Mark Tannenbaum.

To contact the reporters on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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