Public-employee unions push back with lawsuits over pension cuts
SACRAMENTO—California unions, accustomed to getting their way in the Capitol, lost some ground last year when Gov. Jerry Brown pushed through the Legislature a series of public-pension cuts that affect their members.
Now several labor groups have gone to court in an attempt to reverse some of the cuts, forcing Brown to defend legislation he used to persuade voters that he was being frugal with their tax money.
“We’re just fighting for what has been promised us,” said Jon Rudolph, president of the Deputy Sheriffs’ Assn. of Alameda County.
The overhaul raised the retirement age and lowered the benefits for public employees hired as of Jan. 1 of this year. It also changed the way pensions are calculated, which slices into benefits for workers who were on the job before then.
Advocates for the changes said the cuts were necessary to help reduce California’s mounting bills for retirement benefits, which are expected to cost many billions more in coming decades than the state and local governments have set aside for them. The pension law signed by Brown last year affects retirement systems at the city, county and state level.
If the courts stand with the unions, “I don’t know what more you can do to control the problem,” said Mike Genest, who served as finance director for former Gov. Arnold Schwarzenegger. “In the long run, it could cost taxpayers a lot of money.”
Local labor groups have filed several lawsuits against county retirement systems in an attempt to block various reductions, mostly involving workers already on the job when the cuts took effect.
Court cases in Merced, Alameda and Contra Costa counties have left some of the changes on hold, so pension funds in those jurisdictions must still pay benefits at higher levels than the new law dictates. Lawsuits have also been filed in Marin and San Diego counties, although judges there did not block the cuts.
In addition to the court actions, Assemblyman Luis Alejo (D-Salinas) has proposed exempting thousands of transit workers from the reductions. He says that the pension changes conflict with federal law by infringing on collective bargaining rights and that infringement could block more than $1 billion in annual transit funds from Washington.
The Brown administration has said that no rights are being interfered with and that Alejo’s legislation isn’t necessary to preserve federal funding. And the governor has asked California Atty. Gen. Kamala Harris to fight the unions’ lawsuits.
“We’re committed to keeping the governor’s pension reforms strong and intact, and we’ll continue working to prevent any erosion of these important measures,” said Evan Westrup, a spokesman for Brown.
Brown is viewed as a labor ally but has had a complicated relationship with unions. He allowed state workers to begin collective bargaining during his first stint as governor in the 1970s, and unions backed his 2010 campaign to return to the job. Labor groups also strongly supported his successful tax-hike campaign last year.
However, the governor has largely staked his legacy on improving California’s finances and touted the pension cuts while pushing for the tax increases. Although the changes were not as sweeping as Brown originally proposed, “nobody expected [unions] to take this lying down,” said Dan Pellissier, president of the advocacy group California Pension Reform.
Each of the pension lawsuits is slightly different. The case in San Diego, brought by the county deputy sheriffs association, is the broadest. The group says the pension cuts violate its members’ current contract and shouldn’t go into effect until that expires.
The other cases focus on benefit calculations for employees hired before Jan. 1. Public workers can get larger pensions if more than wages — payouts for unused vacation time, for example — are part of the calculation. Last year’s legislation removed some of those elements from consideration.
For example, in Alameda County, Rudolph said, members of the sheriff’s bomb squad are paid when they’re on call, and they want that money to continue to be factored into retirement benefits for employees who were working before Jan. 1.
In Merced and Contra Costa counties, union members want to keep using end-of-career vacation cashouts to boost their pensions. Rocky Lucia, the lawyer for the Contra Costa County Deputy Sheriffs Assn., said workers risk being denied benefits they have been supporting with regular paycheck contributions.
“Not only has it been promised, it’s been paid for,” Lucia said.
Joe Nation, a former state lawmaker who advocates continued pension changes, said there’s no way to repair the system without including employees who were already on the job last year. Otherwise, he said, it will take too long for the savings to take effect, and state and local officials will probably have to reduce benefits further or increase taxes to make ends meet.
“We don’t have the luxury of waiting,” he said. “We’ll end up without funding for anything else we care about.”
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