Attention to pensions

It’s so easy to like Measure J, the proposal on the Orange County ballot that would prevent any sweetening of pensions for county employees, including sheriff’s deputies, without voter approval. The looming cost of public pensions casts a shadow over the state’s financial future. Many workers in the private sector can only dream of the kinds of pensions that longtime county employees rack up -- for example, 55% of their salaries from their top earning years for those who work 20 years. And even liberal San Francisco has required voter approval on pension enhancements for 100 years. What could be simpler than letting voters decide what they can afford?

In fact, Measure J is too easy. It would allow public officials to escape the hard work of negotiating contracts that won’t bankrupt the county. Pensions are complicated, and their place in the scheme of the county’s 30-year financial projections is even more complicated. Voters aren’t in a position to understand these complications, and they shouldn’t have to. In the interest of responsible financial decision-making, we urge a no vote on Measure J.

One provision in the measure guarantees voters that when a pension increase is placed on the ballot, an analysis would be made available to the public “of the cost and the funded and unfunded actuarial accrued liability attributable to the retirement benefit changes proposed by the amendment.” It’s hard enough to construe that phrase; how are typical voters supposed to make sense of an actuarial study?

The argument -- valid enough -- is that elected officials often rely on union donations to their campaigns and afterward feel obligated to approve new perks for union employees. That certainly has happened in the Los Angeles Unified School District, which faces crippling retirement obligations for its employees. Negotiators also find pension plumping an easy way to avoid a contract impasse when there’s too little money for a reasonable salary increase. The bigger pension doesn’t come out of this year’s budget. The money probably won’t be in the public coffers 20 or 30 years from now either, but that’s someone else’s problem.

As a practical matter, Measure J doesn’t solve the county’s current dilemma, a pension plan that is only 73% funded. Voters wouldn’t be able to trim benefits; they could only prevent future increases. And supervisors could still add to the county’s pension obligations by raising salaries, because the size of the pension correlates to employees’ highest wage-earning years. In fact, supervisors would be under increased pressure to fatten salaries, knowing that pension enhancements were unlikely to make it past voters. As a policy matter, it’s not the voters’ job to relieve supervisors of making tough contract decisions and being accountable for them.