California Pubic Employee Unions vs. California Taxpayers

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Cities in California have started to take notice that Pubic Employee Unions are not their friends.  The teachers, cops, and firefighters are quickly bankrupting the state.  Depending on the assumptions you use, California is between $300 billion and $800 billion in the hole in terms of their pension funding. And that doesn’t count retiree health care costs.  California’s Governor, Jerry Brown, likes to crow about how the Democrats have balanced the budget.  Don’t believe a word of it, California’s finances are all smoke and mirrors.

Over the last few years though, the leadership in San Jose and San Diego actually passed real pension reform and, of course, it’s currently tied up in the courts.

Next up on the reality train is Ventura County.

After the Ventura County Board of Supervisors on June 10 voted 4 to 1 to put a popular initiative to eliminate public employee defined-benefit pensions on the ballot, a coalition of public employee unions filed suit to prevent the initiative from going to a vote of the people in November. If the courts rule in favor of the 40,500 petition signers, Ventura County could save $460 million and spark a statewide taxpayer assault against California’s $450 billion in unfunded public employee defined benefit pension obligations.

The Ventura County Taxpayers Association paid for a study that looked at the impact of changing the pension plans for Ventura County public employees.

The study found such an action would reduce the county’s unfunded long term liabilities by $1.8 billion and save $460 million in short term cash-flow contributions.


Despite the county’s number of employees only growing modestly, Ventura County’s annual pension contribution for its 15,000 public employee participants and retirees has jumped by 260% from $45 million in 2004 to $162 million in 2013. According to the Los Angeles Times, four fifths of county retirees who receive pension payments of over $100,000 per year are now getting a larger cash pension benefit than they earned while actually working due to pension spiking.

Not a bad deal.  Work some overtime in your last three years on the job and get a pay increase when you retire.  Well, it’s not a bad deal unless you’re a taxpayer.

Needless to say there are legal issues involved in doing this.  You can read the linked article for the details, but the bottom line is that in California courts the unions could prevail against this particular effort to keep Ventura County out of Bankruptcy Court.

This is exactly the kind of stuff that has California and Illinois losing businesses to neighboring states (and Texas) every month.  If pension and healthcare costs are not reined in quickly, both California and Illinois will look like Detroit.  It would appear that even a vast majority of California’s lefty residents can understand basic arithmetic.

To unions across the State of California, the Ventura County initiative is an existential threat to a decade of pension spikes. Last January, a statewide poll issued by the Public Policy Institute of California found that switching new state and local government hires to a defined contribution system similar to a 401(k) plan was supported by 73% of likely voters. If unions cannot keep the initiative off the ballot, California voters seem poised to solve unfunded defined benefit pensions problems by eliminating them.


Let’s see if that translates into “change” at the ballot box.  We wonder how many of the 73% that support real pension reform understand that the current system was delivered to the unions by the Democratic Party, bought and paid for with union votes?





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