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California State Pension Board Overrides San Diego’s Entitlement Reforms

February 10, 2016

San Diego, California lawmakers are appealing a ruling by the state’s labor relations board that rolls back pension entitlement reforms approved by voters four years ago.

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San Diego, California lawmakers are appealing a ruling by the state’s labor relations board that rolls back pension entitlement reforms approved by voters four years ago.

The California Public Employment Relations Board (PERB) ruled in December 2015 Proposition B, a San Diego ballot question approved by 66 percent of city voters in 2012, violated public employees’ legal rights by shifting the city’s defined-benefit pension entitlement system to a defined-contribution system, similar to the retirement programs enjoyed by private-sector employees.

PERB has ordered the city to pay all public employees “the value of any and all lost compensation, including but not limited to pension benefits.” PERB is also requiring the city to pay interest charges and attorney’s fees.

Will of the People Denied

Lawrence McQuillan, a senior fellow at the Independent Institute, says voters and taxpayers should have the final say on how city governments use their money.

“The private citizens of California should always have the right to adjust the pay and benefits of the people who work for them in government, the public servants,” McQuillan said. “If the PERB decision is allowed to stand, it will strip citizens of this fundamental right.”

McQuillan says the future of other California cities, not just San Diego, could be at stake.

“If [PERB’s] decision is allowed to stand, it will make it more difficult for the state and other California municipalities to implement the necessary pension reforms,” McQuillan said. “California will be essentially trapped on a path toward fiscal insolvency. I’m hopeful that when courts review PERB’s decision, they will see its absurdity and toss it out, affirming the rights of citizens over the edicts of bureaucracies.”

‘Clear Democratic Mandate’

Wayne Winegarden, a senior fellow at the Pacific Research Institute, a nonprofit organization advocating for personal responsibility and individual liberty in national and state issues, says the will of the people should be respected by reinstating the reforms.

“Nearly two-thirds of San Diego voters supported Proposition B,” Winegarden said. “Despite the clear democratic mandate and the economic necessity of the reforms, members of an unelected ‘quasi-judicial administrative agency’ are now trying to nullify the results. If upheld, the ruling by PERB undermines San Diego’s initial reforms to rein in out-of-control pension costs, risking the city’s long-term fiscal solvency.

“If this ill-considered decision is allowed to stand, all future employees would once again become eligible for the current unaffordable pension plans,” Winegarden said. “Thus, in spite of implementing fiscally responsible reforms, this decision forces San Diego back into fiscal peril. Instead of allowing unelected bureaucrats to undermine the will of the voters, San Diego’s political leadership should defend Proposition B in court.”

D. Brady Nelson (d.brady.nelson@me.com) writes from Washington, DC.

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Author
Darren Brady Nelson is an Austrian school economist who serves as the chief economist at LibertyWorks and as an associate scholar with the Center for Freedom and Prosperity. Nelson is also a policy advisor to The Heartland Institute.
darren.nelson@me.com