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Marin County
2018 a decisive year for reining in pensions
This year will be either a game-changer for the state of California — or a continuation of the status quo.
The outcome now rests with the state Supreme Court’s decision in CalFire v. CalPERS, the first to be heard of the three or more similar cases, among them the Marin Association of Public Employees v. Marin County Employees Retirement Association.
The state Appeals Court decision in MAPE v. MCERA sided with the 2013 laws — and went a big step further by stating:
“As will be shown, while a public employee does have a ‘vested right’ to a pension, that right is only to a ‘reasonable’ pension — not an immutable entitlement to the most optimal formula of calculating the pension. And the Legislature may, prior to the employee’s retirement, alter the formula, thereby reducing the anticipated pension. So long as the Legislature’s modifications do not deprive the employee of a ‘reasonable’ pension, there is no constitutional violation.”
A state Supreme Court decision upholding the lower courts’ decisions will allow all government agencies to make changes that will benefit taxpayers, while being fair to public employees.
Without the tools to modify pensions, we are faced with fiscal chaos. Yet, to date, not one government agency in Marin County has supported MCERA — either legally or politically — in the suit brought by MAPE.
San Rafael taxpayers pay 61 percent of payroll (employees pay 12 percent) as the annual pension cost. Novato taxpayers pay 48 percent of payroll (employees pay 14 percent) for the Novato Fire District’s annual pension bill.
This is indisputably unsustainable.
The county required pension contribution is 26 percent of payroll (employees pay 11 percent). But, without taxpayer approval, the supervisors approved an additional contribution of $94 million of taxpayer money.
Special interest groups are proposing changes to Proposition 13 that would remove protections from commercial properties in order to raise more money. The gas tax was adopted by the Legislature because there’s not enough money for both infrastructure and pensions.
CalPERS, the state’s largest public employee union, lowered its rate of return assumption, requiring higher employer contributions and placing government agencies under extreme financial stress, precipitating higher rates and taxes.
Many noted reporters and columnists proclaim that every new tax is a pension tax. We of Citizens for Sustainable Pension Plans agree.
The city of San Rafael is struggling to continue services without new taxes, but it seems both unlikely and impossible that they can do so.
The Transportation Authority of Marin is revving up to once again raise the sales tax cap.
The Marin Municipal Water District initiated rate increases to occur over the next few years, shifting pension costs onto its customers.
These are but a few local agencies turning to taxpayers to pay more to maintain an unsustainable system.
Whether or not our local agencies, including city councils and the Board of Supervisors, have the courage to put an end to ever-increasing taxes, rates and fees, coupled with reduction or elimination of services, is yet to be seen.
When I asked this question of San Rafael Mayor Gary Phillips at a recent Marin Coalition luncheon, he stated that I couldn’t fathom what it’s like to sit across the table in negotiations and that he is mayor, not king.
This was less than reassuring.
I’m certain the mayor is not alone in those feelings, but there is too much at stake to be less than bold in moving forward if given the tools to do so.
If they don’t have the courage, they need to be replaced by those who do.
We will continue in our seventh year as we have done for the past six years — strongly encouraging all local officials to put the interests of their taxpaying constituents above their own ambitions or pressure from public unions and other special interests.
We urge you to join us.
Jody Morales of Lucas Valley is the founder of Citizens for Sustainable Pension Plans, a Marin-based group pressing for public pension reform.
http://www.marinij.com/opinion/20180104/marin-voice-2018-a-decisive-year-for-reining-in-pensions