Nonpartisan Public Sector Union Reformers

To declare that union reform, public sector union reform in particular, is a nonpartisan cause, is certain to attract vociferous challenges from defenders of unions, but events continue to trump ideology.

As documented in an earlier post “The Democratic Party War,” even in California, a state where public sector unions wield nearly absolute control, there are increasing numbers of prominent democrats who are standing up to the unions. They include Los Angeles Mayor Antonio Villaraigosa, former State Senator Gloria Romero, President of the California NAACP Alice Huffman, San Francisco Public Defender Jeff Adachi, former Assembly Speaker Willie Brown, and Matt Gonzalez, former President of the San Francisco Board of Supervisors. From education reform to pension rollbacks, Democrats are lining up to make hard choices in California, staring down union power in the process.

A series of similar reality checks are happening all over the United States, as Democrats realize the agenda of public sector unions is often in direct conflict with their ability to fund government programs and infrastructure projects. As reported in the New York Times earlier this week in an article entitled “Cuomo Secures Big Givebacks in Union Deal,” a democratic governor in a union stronghold is making tough decisions in an attempt to restore budget solvency. As reported on June 21st on the website “Intercepts,” in a post entitled “Rage Against the Machine,” Democratic lawmakers in [...] Read More

Why Pensions Are Grossly Underfunded

The San Diego Union Tribune ran a report on June 17th entitled “Escondido firefighters do contribute to pensions.” Apparently this report was to correct an error from a previous article in which the Tribune stated that Escondido’s firefighters did not make any contribution to their pension. In reality the firefighters contribute to their pension fund an amount, in the form of payroll withholding, equivalent to 9% of their salary.

While it is commendable that Escondido’s firefighters do pay something towards their pensions, considering how many safety employees in California still pay nothing, it is important to place this 9% contribution within the perspective of how much it really costs to fund a “3 at 50″ pension.

The following table depicts how much, in terms of percent of salary, an employee will need to have contributed into their pension fund in order to maintain solvency based on various rates of return for the fund.

This table uses after inflation numbers, which makes the returns appear small. In reality, CalPERS, CalSTRS, and most other pension funds, project a long-term rate of inflation of 3.0%. This means that the nearly best case scenarios here, 7.5% before inflation (showing as 4.5% after inflation on the table), are representative of the current official long-term projections used by most pension funds. Based on the official rates of projected returns for pension fund investments, a 30 year veteran, retiring on a “3.0% at 50″ pension, will [...] Read More

California Legislature Aims to Kill Initiative Process

California’s legislature is moving a bill forward that will throttle back the ability to place citizen initiatives on the statewide ballot. As noted in Ballot Access News on May 10th in a post entitled “California Democratic Legislators Advance Bills Injuring Ballot Access for New Parties, Initiatives,” the bill is nearing passage by both houses of California’s legislature:

“On May 9, the California Senate passed SB 168, which makes it illegal to pay circulators on a per-signature basis, if they are working on initiative, referendum, or recall petitions. On the same day, the Senate passed SB 448, which forces circulators of those kind of petitions to wear a button that tells whether they are paid or volunteer. These bills also passed on party line votes, with all Democrats voting “yes” and all Republicans voting ‘no.’”

The impact of this legislation, which is expected to pass the Assembly and get signed by California Governor Brown, will be to double (or even triple) the price of successfully placing a citizen initiative onto California’s state ballot. Anyone who has tried to raise money to qualify a state ballot initiative knows what an advantage the powerful special interests have in this high-stakes political niche, whether they are public employee unions or large corporate interests. Only grassroots organizations with limited access to funding, from taxpayer groups to progressive organizations, are negatively impacted by this legislation.

From Citizens In Charge, a website dedicated [...] Read More

Preserving America’s Retirement Security

An interesting analysis was published last week on Reason.com by Emily Ekins entitled “Differences on Social Security Reform.” In her article, Ekins presented data from a poll that asked whether or not the respondent would support or oppose reducing Social Security taxes and allow individuals to invest in their own retirement instead.

The results were stratified by age, education, income, ethnicity, gender, political ideology, party affiliation and union membership. Some of the results were predictable and showed strong polarization – the older the respondent was, for example, the more likely they were to favor preserving social security as it is, and the younger the respondent was, the more likely they were to favor reducing social security taxes and benefits. Another obvious result from the survey was the split between progressives and libertarians, where the mirror image expressed by their sentiments – progressives 58% vs. 35% opposed, libertarians 57% vs. 31% in favor – bordered on parody.

Crucially, Hispanic voters, rising demographically in the U.S., were opposed 52% vs. 38%; African Americans also opposed lowering social security taxes and benefits, 59% vs. 32%. One needn’t read too much into that, while Hispanics may be destined to become the decisive swing vote in elections of the future, if not already, their political sentiments may change. But reality is about to trump the political debate between those who believe in the ownership society and those who believe in the great society.

The most glaring example of [...] Read More