Union Watch Highlights

California Pension Reform: Bargaining Table or Ballot Box?

By Ed Mendel, May 31, 2011, Calpensions

California’s four largest cities all have public pension problems, but their mayors are split on the solution — two negotiating changes in the existing system, and two planning to ask voters to overhaul the system. San Francisco Mayor Ed Lee last week announced that months of negotiations had produced a “consensus pension reform” supported by business and much of labor that could save $800 million to $1 billion over the next decade. Los Angeles Mayor Antonio Villaraigosa announced a pension and retiree health care agreement in March negotiated with 14 of 18 bargaining units in a labor coalition expected to save $400 million during the next five years. The agreements get most of their savings from requiring employees to pay more toward their pensions and retiree health care. Both are being criticized for not cutting enough from rising retirement costs that divert money from basic government services. In San Diego and San Jose, already hit by painful budget cuts and layoffs, the mayors apparently have given up on negotiations and are talking about going directly to voters with major changes in their retirement systems. (read article)

SEIU reaches into GOP districts in California

By Steven Harmon, May 29, 2011, Contra Costa Times

The last group you’d think would sway Republican voters is a public employee labor union. But David Kieffer, the political director of the Service Employees International Union, thinks he has the tools and the approach to persuade GOP voters to support its highest political priority: extending the current level of sales, income and auto taxes to help close the state’s $10 billion deficit. It is a multimillion-dollar experiment for the SEIU, the largest public employee union in California, with 700,000 members. Kieffer has targeted 10 Republican legislators’ districts with TV, radio and newspaper ads, fliers and billboards over the past two weeks. The TV and radio campaign has reached 2.6 million viewers and listeners in five markets: Sacramento, Fresno, Monterey, Santa Barbara and Palm Springs. The campaign has two purposes: to provide cover for some Republicans who are considering voting for taxes, or at least voting to put tax extensions on the ballot as legislators work toward the June 15 budget deadline; and to harangue other Republicans who may be vulnerable to accusations that they are blocking reasonable compromise solutions.  (read article)

Public Employee Unions Will Regret Not Fixing Pensions

By Marc Levine, May 27, 2011, Chicago Sun-Times

Illinois’ runaway pension system is placing the state’s fiscal health in jeopardy. State contributions to the pension system have already crowded out payments to social service providers. But less focus has been placed on current state workers and teachers, particularly those with retirements more than a decade away. Their outlook is very much at risk, which is why their unions’ opposition to pension reform is contrary to their interests. Illinois’ pension system is hopelessly insolvent with about $60 billion of assets and $200 billion in “legacy” liabilities (using an appropriate discount rate). Illinois state workers and teachers currently have roughly 9 percent of each paycheck withheld and sent to the pension black hole. The premise is that the funds will be held by the pension system, invested responsibly, and used to make payments to the workers upon retirement. Unfortunately, pension officials are using those contributions from current workers to pay current retirees. (read article)

Why AFSCME’s Proposal to ‘Tax the Rich’ Isn’t the Answer on Illinois Pensions

By Mark Cavers, May 27, 2011, Illinois Policy Institute

Rather than coming to the table to try and help save their members’ pensions, union officials seem content to vilify the wealthy in Illinois. Yesterday, while discussing the pension reform bill in committee, the head of AFSCME argued that all we need to do is raise taxes on the rich and our pension problem will disappear: “Although Illinois may be broke, members of the Civic Committee are not” So will taxing the rich save us? Illinoisans face at least $85 billion in debt to the state’s pension system, some academic studies put that number over $200 billion, and that doesn’t include local pension debt. If we take the head of AFSCME’s advice to the extreme and confiscated the wealth (not income, but everything they own: every car, home, and stock and all the way down to every last granola bar and bath towel) of all the billionaires in Illinois, we would still owe our pension system $42.9 billion. And under the current system the problem keeps getting worse. (read article)

‘Card check’ bill is bad for both farmworkers and agriculture

By Bill Berryhill, May 27, 2011, Sacramento Bee

Gov. Jerry Brown is now deciding whether to sign legislation that supporters claim will improve the lives of California’s farmworkers. Senate Bill 104 would effectively abolish secret ballot elections for workers deciding whether or not to unionize. It would be ironic that the Jerry Brown who might sign this law is the same Jerry Brown who once marched with Cesar Chavez decades ago to demand secret ballots for unionization. In 1975, during his first stint as governor, Brown signed the Agricultural Labor Relations Act guaranteeing farmworkers the right to unionize through a secret ballot. Chavez fought hard for the secret ballot because he was rightly concerned about workers being intimidated by employers who wanted them to vote against unionization.  (read article)

Niello’s isn’t the only initiative of concern for California’s unions, Democrats

By Malcolm Maclachlan, May 26, 2011, Capitol Weekly

Many Democrats and union supporters breathed a sigh of relief when former Assemblyman Roger Niello announced late Tuesday that he wouldn’t follow through with a signature campaign for his initiative to restrict public employee pensions. That effort would have banned public employee unions from collective bargaining on pensions — a key dispute in Wisconsin’s labor battles, and a tactic many say is designed to destroy these unions. But there remain several initiatives filed with the Secretary of State’s office that could keep these same people up at night. These include measures that would severely limit union elections, ban unions from making political donations, restrict state spending to near current levels, and make it harder for the Legislature to pass bills.  (read article)

Outsourcing is good business

By Roy Reynolds, May 26, 2011, Orange County Register

Recent polling by my firm for the Costa Mesa Taxpayers Association found that 472 registered-voter households, 59 percent of those surveyed, believed the city “should look at all its options to solve the budget crisis, including outsourcing some of its services.” The City Council’s strategy to take bids from private companies for work like vehicle upkeep, street repair and park maintenance is favorable to better than double the households we polled. The city will determine by a fair and competitive process whether it will be less expensive to use profit-motivated companies or unionized city employees to perform maintenance and support activities. We’d expect that contracts will be let to private firms only when it’s clear that the city will save money. If outsourcing succeeds, and it will, union domination of municipal personnel will disappear as the city tries to shrink a multimillion-dollar budget deficit and mitigate $131 million of unfunded pension obligations.  (read article)

Union should withdraw complaint on volunteers

Editorial, May 26, 2011, Sacramento Bee

Each year, 80,000 young AmeriCorps volunteers tutor and mentor in public schools, help communities rebuild after disasters and meet other local needs. For their service, they receive a modest living allowance and a stipend they can use to attend college or graduate school. Most places deeply appreciate the service of these young people. In fact, the nation celebrated AmeriCorps Week last week. But in one school district in our region, AmeriCorps has come under unexpected, unreasonable attack. The regional staff of the California School Employees Association, representing classroom aides and custodians, wants the Twin Rivers Unified district to “cease and desist” using AmeriCorps volunteers. (read article)

California Governor Jerry Brown’s Deal With the Prison Guards Is the Opposite of Budget Reform

By Steven Greenhut, May 25, 2011, City Journal

When California governor Jerry Brown announced details last month of a two-year contract that he’d negotiated with California’s prison guards’ union, you could practically hear the sighs of disappointment from stalwarts who had hoped that the 73-year-old maverick might take on a few vested interests as he tried to close the state’s $15 billion budget gap. That hope was always at odds with reality: last year, public-sector unions poured $30 million into independent campaign expenditures on Brown’s behalf, including $2 million from the California Correctional Peace Officers Association (CCPOA). So the favorable new union contract shouldn’t come as a surprise, but it should deflate the wishful thinking that Brown is likely to be a radical reformer—unless you consider extending tax increases and restricting the use of state cars and cell phones real reform. (read article)

Costa Mesans, back your council

By John M.W. Moorlach, May 25, 2011, Orange County Register

With every passing day, it becomes more evident that California, its counties and cities are rapidly approaching the edge of a fiscal cliff. Costa Mesa, for example, has made national headlines with its fiscal crisis. Also, the mayor of San Jose on May 13 unofficially declared a fiscal state of emergency. Costa Mesa, while burning through its reserves, also improved the retirement benefits for its public safety unions. This deadly combination caused the watchdog Little Hoover Commission to criticize the municipality in its February report, titled “Public Pensions for Retirement Security.” The ballooning pension obligations that I’ve been warning about for years are here. Costa Mesa has to make severe budget and staffing cuts, and it must be done now. Costa Mesa can no longer allow public employee unions to determine how the city is managed. That strategy was one of the reasons the city got into such trouble.  (read article)

California union coalition tap dances on demise of former legislator’s pension plan

By Jon Ortiz, May 25, 2011, Sacramento Bee

Former Assemblyman Roger Niello’s initiative to rollback public pension benefits “will end up in the scrapheap of politically-motivated failures,” said Dave Low, chairman of Californians for Retirement Security, in a statement released by the union coalition Tuesday evening. As reported by Bee colleague Paresh Dave on Tuesday, Niello has decided he won’t pursue collecting signatures to put his public pension rollback initiative on the ballot, although the secretary of state has said that he can begin working to place it before voters.  (read article)

San Francisco’s Biggest Union Snubs Mayor’s Pension Reform Plan

By Chris Roberts, May 25, 2011, NBC

The “consensus” pension reform measure unveiled Tuesday by San Francisco Mayor Ed Lee. At a press conference flanked by union members, business leaders and other politicians — Lee claimed it would save some $800 million to $1 billion in city spending on public employee benefits. The plan has a big problem. Service Employees International Union 1021, the purple-shirted union members who represent nurses, teachers and other lower-income public employees, is not supporting the measure, which would increase employee contribution to health and retirement benefits, raise the retirement age, and put a cap on pensions for new employees, the SF Bay Guardian reported.  (read article)

Public Employee Unions, Wisconsin Legislator Lash Out at San Jose’s Mayor Over Pension Reform

By John Woolfolk, May 24, 2011, San Jose Mercury News

In the national spotlight since Mayor Chuck Reed this month called for a ballot measure to curb runaway pension costs, the San Jose City Council put off calling a fiscal state of emergency Tuesday while voting to study various proposals for reducing retirement benefits. The council’s 8-3 vote after a three-hour afternoon meeting set up a June 21 showdown in which the council would vote on formally declaring a fiscal state of emergency and deciding which pension reforms might be taken to voters in November. (read article)

Jack Dean is editor of PensionTsunami.com, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.