One little-noticed result of the General Elections earlier this month – the first since the Great Recession of 2007-09 – was greater voter pressure for capping a giant gusher of government red ink: the $4 trillion in pension liabilities for state and municipal workers.
Few politicians, even Democrats backed by the public-worker unions, could afford not to propose reforms for these retirement benefits that are often abused, underfunded, and usually far more generous than those in private business.
In two key states, California and Illinois, voters approved many local ballot initiatives calling for pension reform. And in six states, newly elected governors have proposed one of the most radical steps: 401(k)-style plans for government employees as an alternative for traditional guaranteed pensions. Read the full Christian Science Monitor story here.
In California, a number of cities and counties had local pension-limiting measures on the Nov. 2 ballot – and all were successful except one. The most widely watched battle — San Francisco's Proposition B — failed. The measure was especially noteworthy because it would have required current employees — not just future hires — to pay more into pension and other benefits.
The local measures that succeeded:
* In Carlsbad, voters passed Proposition G, which requires a public vote to increase pensions for public safety employees, according to the North County Times.
* In Menlo Park, voters overwhelmingly approved Measure L, which would cut pension benefits for new city workers, except police, and raise the retirement age, according to the San Jose Mercury News.
* In Pacific Grove, voters passed Measure R, which amends the city charter to limit how much the city council can pay into employee retirement, according to the Monterey County Herald.
* In Redding, voters easily approved Measures A and B, which are both advisory only. The first would allow the city council to require workers to pay part of their pensions and the second would link health benefits to length of service, according to the Redding Record Searchlight.
* In Riverside County, competing measures — one backed by supervisors, the other by the sheriff's union — both passed. But the measure with the most votes will prevail, and results so far show the victory going to the supervisors' measure, according to the Riverside Press-Enterprise. Measure M would allow supervisors to lower retirement benefits for safety employees and would require a vote of the people to increase pensions. The other, Measure L, would require a vote of the public before safety workers' pension benefits could be changed
* In San Diego, voters shot down Proposition D, a proposed sales-tax increase linked in part on pension reforms, according to the San Diego Union-Tribune.
* In San Jose, voters widely approved Measures V and W. The first would limit how much outside arbitrators can increase pay and benefits for police and firefighters while the second allows the city to offer lower pensions to future workers, according to the Mercury News.
Looking forward, the Los Angeles City Council – faced with soaring pension costs – unanimously agreed to ask voters on the March 2011 ballot to scale back the retirement pay of future Los Angeles police officers and firefighters. According to the city's budget analysts, pensions make up 18 percent of the city's expenses this fiscal year, and the number is expected to double by 2014.
State law hinders officials from reducing the pensions of existing employees, but a ballot measure can be used to scale back the retirement pay of future police officers and firefighters. Read more on the issue here.
