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California Policy Center
California Public Pension Reformers Win A Battle, Not The War
Some of you have asked why my Marin Voice column stated that CSPP was pleased with the CalFire v CalPERS ruling - as opposed to the Marin IJ article that took the position that both reformers and public unions were displeased. They opted not to use the quotes they solicited from CSPP.
This article by Elizabeth Bauer, appeared in Forbes on March 7. Elizabeth Bauer's reasoning parallels the views of CSPP, that this case was not based on actual work being done and was therefore not subject to the so-called California Rule. Thus the narrow ruling - which we expected.
CLICK HERE TO READ THE ARTICLE
The difference in this case and the MAPE v MCERA case is the matter of deferred compensation. The Court ruled that air time is not deferred compensation. In the MAPE case, they will be dealing with accrued vacation and sick time earned over years of employment and added prior to retirement to increase pensions.
It will be interesting to see how the State Court differentiates between the two. Ms Bauer agrees that it will be hard for the court to apply the same principle in the two cases.
A pension reform initiative is again being discussed as the only way to fully address the California Rule. From past experience, however, we know this is an uphill battle, starting with the wording of proposed ballot initiatives - as in the case of Kamala Harris's successful attempt to kill Chuck Reed's effort. Initiatives are also extremely costly and the resistance by public sector unions, with unlimited resources, is daunting.
With a deluge of new and increased taxes, the plight of school financing statewide, failing infrastructure, the departure of many wealthy California taxpayers and corporations - and all the other fallout of unfunded pension debt - it is time for either the CA Supreme Court to address the California Rule or for another try at a pension reform initiative.
The decisions in the court cases yet to be heard will determine the next step.
CSPP