Pension reform effort in Southern California ends abruptly

150 150 Cheryl Getuiza

Los Angeles City Hall (Photo Credit: Steve Lyon/Flickr)

Voters in the cities of San Jose and San Diego made history this year. In June, they became the first cities to pass ballot initiatives designed to balance local budgets by cutting retirement benefits for city workers.

A former Los Angeles mayor was trying to make the City of Angels the next to follow, but it appears he has thrown up the white flag and surrendered, at least for now.

Richard Riordan was hoping to gather 300,000 signatures by December 28 to qualify the ballot measure in the spring. The campaign was called “Save Los Angeles.”

According to a statement from campaign spokesman John Schwada, “Riordan recently concluded that the December 28 deadline cannot be met.”

Riordan had said he created the proposal because he is concerned Los Angeles’ out-of-control pension costs will lead the city to bankruptcy. 

Save Los Angeles would require current workers to immediately begin paying more toward pensions and switching new workers to a 401(k) style plan. He was pushing for a May ballot measure.

Mayor Antonio Villaraigosa said,”I have long appreciated Mayor Richard Riordan’s love for the City of Los Angeles and his efforts to keep it strong. Most people concluded, however, that his pension reform proposal went too far and would have cost the City more money than the current system.”

That’s exactly why many unions strongly opposed the proposal, which was introduced in October.

“When we pointed out that this flawed plan wasn’t based on real numbers, would be more costly and force dedicated city workers to retire into poverty after 30 years of service, Angelinos responded,” said President of AFSCME Local 3090 and Coalition of L.A. City Unions member Alice Goff.

It appears labor unions are celebrating this latest win.

“It’s a very significant victory for organized labor. After the passage of initiatives in San Jose and San Diego, earlier this year, it’s clear that organized labor in Los Angeles was ready for this challenge and they mobilized to stop it in a way labor wasn’t able to do it in those other two cities,” said Dan Schnur, director Jesse M. Unruh Institute of Politics at USC. “That said, the issue isn’t going away and the next mayor is going to have to deal with it.”

“This is a huge win for unions in Los Angeles,” said Dr. Fernando Guerra, director of the Thomas and Dorothy Leavey Center for the Study of Los Angeles at Loyola Marymount University. “It just shows that unions are the best organized political actors in L.A. and that they are a power to contend with and that they have a variety of different options that are available to them that are not available to most interest groups. Almost no other group could have tried the strategy that they tried—and that is to go and meet where the signature gatherers for the pension reform were and thwart that. Nobody else could have done that.”

While the campaign has been suspended, Riordan said he is not done.

Riordan’s call-to-action to city leaders and union members is this: Meet over the next several months to save the city from bankruptcy and drastic cuts to city services.

“In retrospect, waiting until after the mayoral election for a ballot initiative may end up being a more effective strategy,” said Schnur. “If the initiative is on the ballot with mayoral candidates who oppose it, then the discussion could get marginalized. But a newly elected mayor who’s forced to deal with a pension’s crisis might be more immutable to a discussion over pension reform than a candidate who’s trying to get elected.”

“These conversations will dominate the first year of the new mayor’s term in office,” said Dr. Guerra. “It’s going to be a priority to deal with it, but not in the way Mayor Riordan was proposing. There is no way that the new mayor can avoid dealing with the number one issue impacting the budget of LA because city government will be so limited in terms of what they can do, because it will impact the continuing hiring of individuals, police employment, as well as city services so this cannot be avoided.”

Addressing the complex pension issue will only benefit from the additional time afforded by Riordon’s setback, some would argue.

 “What cities are going through generally, the city of Los Angeles one of them, is trying to figure out how to finance pensions over time both in respect to employers and employees,” said Fred Silva, California Forward’s Senior Fiscal Policy Advisor. “It’s left to collective bargaining what path people should take. Usually when cities are converting to a different system, there are a whole lot of transition issues that need to be thought out. The initiative process is a very blunt instrument, people need to sit down, take a deep breath and see how they want to move forward. The city of Los Angles is on the right path in figuring out how to get people together to solve this issue.”


Cheryl Getuiza

All stories by: Cheryl Getuiza