08.02.2018

DeMaio Statement on Pension Reform Ruling

California Supreme Court: Prop B Pension Reform Still In Place, But Lower Court May Consider Remedy

Pension Reformers Put Courts and Unions on Notice: Don’t Try to Overturn Vote of the People

The California Supreme Court today issued a ruling on Prop B – San Diego’s landmark Pension Reform Initiative adopted by 67% of San Diego voters in 2012. Government labor unions have been seeking to invalidate the entire measure and had filed three separate legal challenges over the years.

Today’s action dealt with the government union’s bizarre argument that a Citizens’ Initiative (which is a Constitutionally-protected right) is subject to veto by the unelected state Public Employment Relations Board (PERB) and should be subject to “meet and confer” obligations between government agencies and the labor unions who represent the government workers. The Supreme Court ruled that since former Mayor Jerry Sanders was part of the broad-based Coalition that passed Prop B the city somehow had an obligation to meet and confer – thus potentially giving government union bosses a de-facto “veto” on the citizens’ effort.

Former San Diego City Councilmember Carl DeMaio, who authored and led the coalition to pass the measure in 2012, offers the following statement:

“We are pleased that the Supreme Court refrained from ordering the reversal of Prop B – a citizens initiative that was overwhelmingly approved by San Diego voters in 2012. However, taxpayers must be very concerned by what may happen next.

Specifically we are concerned that the Supreme Court ruling opens the door for the lower court to consider a yet-undefined “remedy” for the so-called the so-called violation of the City of San Diego’s duty to meet and confer on pension changes before implementing them. That remedy could range from a simple monetary fine for not meeting and conferring or it could be as wide-ranging as overturning part or all of Prop B.

We will vigorously fight any attempt to modify or overturn any part of Prop B. As a result of today’s ruling, we are prepared to take the following steps:

First, we intend to defend the implementation of the Prop B Pension Reform Initiative in the “remedy” phase of this dispute when the Appeals Court takes up this matter. If the Appeals Court in any way changes or reverses the voter-approved pension reforms in Prop B, we intend to appeal that violation of the People’s vote back to the Supreme Court. That appeal will force the Supreme Court to decide whether the Constitutionally-protected Citizens Initiative right can be invalidated by unelected bureaucrats using a little-known state law. We highly doubt this will occur.

Second, we will proceed with our previously-announced plans to file, qualify and pass a statewide Pension Reform Initiative that will be a Constitutional Amendment that the no court will not be able to ignore. The statewide initiative will apply to San Diego in addition to all other parts of the state and is modeled after Prop B. We are also exploring language in our statewide initiative to reverse any remedy imposed by the Appeals Court.

Third, while we pursue our legal defense of Prop B, we intend to file, qualify and pass another San Diego Pension Reform Initiative for the 2020 election that will shift the cost of any reversal of Prop B to city employees so taxpayers do not bear any costs. This measure should serve as a warning to government union bosses that their attempts to seek any remedy to invalidate Prop B will be met with retaliation by irate voters who will not accept their votes from 2012 being invalidated.”

DeMaio has shown success in raising the funds, collecting the signatures, and waging the campaign to pass reform measures. DeMaio serves as Chairman of Reform California – the statewide reform advocacy organization that helped Recall State Senator Josh Newman in the Primary Election and is currently leading the Yes on Prop 6 – Gas Tax Repeal Campaign. The group helped collect over 1 million signatures statewide in 10 months for both those efforts. A similar effort will be needed to qualify the Pension Reform Initiative for 2020.

Important Language from the Supreme Court Ruling Relating to “Remedy” – Page 25
“PERB observed that it is the province of courts alone to invalidate the results of an initiative election. PERB therefore ordered a make-whole remedy based on compensation lost as a result of the Initiative. The Court of Appeal did not consider the remedy issue because it concluded Sanders and the city had not violated the duty to meet and confer. On remand, the court should address the appropriate judicial remedy for the violation identified in this opinion.”

Facts About San Diego’s Pension Reform Initiative:
 
Switch to 401K Plan: San Diego switched from an overly-generous defined benefit pension program to a 401K-style defined contribution plan for all city employees, excluding police officers.
Reform Vested Pension Benefits: San Diego instituted the first-of-its-kind “Pensionable Pay Cap” to reduce the amount of pension payouts.
Fair Share Contributions: San Diego requires a dollar-for-dollar match between city employees and taxpayers on the cost of pension benefits.