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Riordan Surrender on LA Pensions Shows Tough Path for Pension Reform Ballot Measures in California
The decision by former Los Angeles Mayor Richard Riordan today to end his effort to slash retirement security for public workers in Los Angeles is another example of how difficult it is to circumvent the bargaining table in an attempt to reduce pension costs.
"The plan proposed by Riordan to close the defined benefit pension system as a way of saving money was both simplistic and costly to taxpayers," said Tyler Izen, president of the Los Angeles Police Protective League, the leading opponent of the measure.
According to Izen, the proposed charter amendment would have dramatically increased the City's required payments to LA's three pension systems by millions of dollars. These increased costs, which would have been in addition to already scheduled contributions, would have taken effect as soon as the systems were closed to all future employees and would have continued at the increased level for a decade or more.
And that's the problem with most other attempts at the municipal level to roll back pensions. These agreements were made in good faith with public employees. Any attempt to "unwind" them means significant up front costs.
That's exactly what helped derail a statewide ballot measure on the issue. The nonpartisan Legislative Analyst criticized the proposal put forward by Republican operative Dan Pellisier last year for its heavy up-front costs to taxpayers, and said savings wouldn't result for years.
Labor also was quick to point out who was bankrolling the pension "reform" efforts in LA -- billionaires like Riordan. That also made it a tough sell as well.
Let's hope the billionaires sniffing around for a 2014 ballot measure on pensions take notice of what happened to Riordan's proposal in LA.
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