Two California votes echo Wisconsin recall message
Most of last week’s election coverage was focused on the recall election in Wisconsin, where first-term Republican Gov. Scott Walker survived a superheated effort by organized labor to oust him from office. But about 2,000 miles to the west of the state capital in Madison, two elections in California might have more impact on the direction of the country when it comes to restraining the costs of public-sector unions.
On Tuesday, voters in two major California cities, San Jose and San Diego, approved by wide margins referendums cutting the pension benefits of public workers that are increasingly seen as causing major strains to municipal and state budgets across the country. And the pension reductions approved by voters last week in San Jose and San Diego were not only for future employees, as has been approved elsewhere, but the cuts also will hit current employees.
The referendums will likely be challenged in court by unions.
Often characterized as a Republican-led effort, the California referendums were seen as financial and pragmatic moves, less than political or ideological.
Across the country, governors and mayors are challenging public-sector unions and the generous benefits they have built into employment contracts over decades. In Illinois, Democratic Gov. Pat Quinn says the state budget deficit requires cuts to the benefits of current state workers. In Chicago, Mayor Rahm Emanuel, a Democrat and former top aide to President Barack Obama, wants to freeze cost-of-living adjustments for city retirees.
Politicians in other cities and other states are facing the fact that many public-employee benefits programs are unfair to private-sector taxpayers with less-generous benefits — and simply unaffordable.
In San Jose, the voter-approved measure gives city workers a choice — they can maintain their pension benefits, but only if they contribute more of their salaries, up to 16 percent. If they reject that option, they will receive smaller pension benefits and will have to work more years before they retire.
That’s an approach that should be a guide for Pennsylvania in dealing with the impact of the unwarranted pension grab passed by state lawmakers in 2001. After lawmakers quietly voted themselves a 50 percent pension benefit, the unions representing other state workers objected and pressed for their own sweet deal. In response to that pressure, state lawmakers approved a 25 percent pension increase for most other state employees, including public school teachers.
Those controversial moves were not part of any public debate and the results now pose a looming financial time bomb that was kicked down the road by Gov. Ed Rendell and state lawmakers in moves that were falsely advertised as pension reform.
But Harrisburg did not pass pension reform; it passed accounting tricks. The voters in San Jose and San Diego passed pension reform, and voters in Pennsylvania should pressure state lawmakers to take up similar efforts in Harrisburg.
Short of repealing the greedy 2001 pension grab, state taxpayers should expect pension beneficiaries to pay significantly more for those unwarranted additional benefits.
It’s a reasonable reaction to threats posed by outsized public-employee pensions.
The Wisconsin vote was also about public-employee pensions and expecting workers to contribute more for those benefits, which usually are far more generous than benefits enjoyed by private-sector workers — the very people whose taxes fund those benefits.
But the pension reform measures approved by voters in San Jose and San Diego last week will be seen as a model for states and cities — and they will embolden politicians to press for real pension reform, knowing that taxpayers have had enough.
