Transit unions won the first round in their battle with Sacramento over Gov. Jerry Brown’s pension reforms. But under a deal negotiated between Brown and the U.S. Department of Labor, which sided with the unions, their victory may be only a temporary one.
At issue is whether the 1964 Urban Mass Transportation Act shields unionized bus and commuter rail workers -- current and future -- from the changes in public employee pensions enacted by state lawmakers last year. The law is designed to preserve the “rights, privileges and benefits (including continuation of pension rights and benefits) under existing collective bargaining agreements or otherwise.”
Unionized workers at the Los Angeles County Metropolitan Transit Authority complained to the Labor Department, which threatened to hold up grants to Metro and other agencies. Brown and other top state officials pushed back, arguing that the 1964 law wasn’t intended to bar agencies from unilaterally changing the benefits for workers not yet hired -- who have no collective bargaining rights -- or stopping current workers from “spiking” their pensions.
Labor Secretary Thomas E. Perez encouraged the state to simply exempt transit workers from the pension reforms, but Brown refused. On Wednesday, Perez brought the hammer down, notifying the Sacramento Regional Transit District that a grant it was expecting was being withheld because of the dispute. Meanwhile, Brown announced his support for a new bill to mollify the Labor Department by exempting transit agencies from the pension changes for one year while challenging Perez’s reading of the law in court.
The bill, which is on a fast track, would clear the way for $1.6 billion in grants to flow to transit agencies throughout the state in the near term and, by one account, more than $4 billion in the coming year. But it would also allow new transit workers to pay less into their retirement accounts than other new public employees will be required to do, and permit retiring transit workers to engage in the sort of pension padding that those in other agencies are no longer allowed to do.
Brown had little choice in the matter; the huge number of dollars at stake gives the feds all the leverage. Still, it’s good that the state will ask a judge to reject the Labor Department’s ruling, because it’s hard to imagine that Congress wanted legislative bodies to have no ability to adjust the pensions offered to new transit workers without the prior approval of the union they’ve not yet joined.
It’s one thing for Perez to stand up for the collective bargaining rights of transit workers. But as The Times’ editorial board argued last month, last year’s state law “doesn’t eliminate current workers’ right to bargain over wages, terms of employment or provisions of their existing pensions.” The main issue is future pensions, and lawmakers have the responsibility -- and need the ability -- to adjust those benefits as needed to preserve the solvency of public employee pension funds.
The bill to temporarily carve out transit workers would extend the exemption automatically if a district court ruled against the state, giving Brown time to appeal. If the court ruled for the state, however, the exemption would end immediately.