Bonta: Proposed ‘Voter Empowerment Act will adversely affect CalSTRS, women

Assemblymember Rob Bonta

ASSEMBLY | 18TH DISTRICT | A proposed statewide ballot measure that could severely undercut the stability of public employee pensions might also disproportionately affect women, says East Bay Assemblymember Rob Bonta.

The initiative, currently called the Voter Empowerment Act of 2016, would allow voters in local jurisdictions to vote on various government employee benefits packages, including pensions.

A legislative analysis by Attorney General Kamala Harris’ office this week stated the ramifications of the initiative’s potential approval by voters next year are unknown. “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,” said the analysis.

Its passage may trigger lawsuits, in addition, to uncertainty over how often local jurisdictions will want to use the power to approve compensation packages for public employees, it continued. The analysis also asserts that voters in local districts might also approve packages that are more generous than those negotiated by cities through the collective bargaining process. Furthermore, it is not clear how negotiations between employees and management will play out if collective bargaining becomes more public.

Bonta, who also chairs the Assembly Committee on Public Employees, Retirement, and Social Security, said the proposed initiative will exacerbate the inability of school district to attract and retain qualified teachers. “What is certain is that it would undermine the retirement security of our state’s current and future teachers, particularly women,” he said.

Since pensions for teachers in the state is overseen by one entity–the California State Teachers’ Retirement System (CalSTRS)—the initiative, authored by former San Jose Mayor Chuck Reed and former San Diego Councilmember Carl DeMaio, would, in effect, create more than 1,700 retirement plans, said CalSTRS. Retirement benefits earned in one school district could potential be diminished if a teacher were to switch jobs to another school district.

Conversely, the legislative analysis also predicted “significant savings” to the state if the Voter Empowerment Act is passed by voters in November 2016. Pension costs would likely be equally split between employee and local jurisdictions, said the analysis.

However, the analysis added. “To offset lower compensation in defined benefit pensions and retiree health benefits, governmental employers likely would increase compensation in some or all of the following areas.” They include possibly replacing a defined compensation package with a 401(k), boosting wages and maintaining disability benefits even for new employees.