(PR): CALIFORNIA SUPREME COURT RULES AGAINST UNION IN PENSION REFORM CASE BUT FURTHER REFORMS IN DOUBT
Today (4), the California Supreme Court issued its decision in Cal Fire Local 2881 v. CalPERS. The Court concluded that the opportunity to purchase a certain benefit called “air time” wasn’t protected by the Contract Clause and therefore was not a vested right. Although the ruling was a rare loss by California’s powerful labor interests, the court deferred deciding the broader issue of the breadth of the so-called “California Rule.” That rule, unique to California, provides that no pension benefit provided to public employees via a statute can be withdrawn without replacement of a “comparable” benefit, even as deferred compensation for services not yet provided.
Howard Jarvis Taxpayers Association filed an amicus curiae brief in the Supreme Court and was joined in its brief by the Ventura County Taxpayers Association.
“We applaud the court for its recognition that the Legislature can withdraw certain pension perks,” said HJTA President Jon Coupal, “but at the same time, this ruling leaves undisturbed a unique interpretation of the public’s obligation to continue unaffordable post-employment benefits. The state and local governments need more flexibility to deal with California’s pension crisis while still protecting the legitimate expectations of public employees.”
HJTA President Jon Coupal stated that “pension obligations at the state and local level are ‘crowding out’ other public spending. As a result, schools, highways and public safety spending has been hurt. Pension reform is critical if California is to ever extricate itself from the ‘mountain of debt’ comprised mostly of unfunded pension obligations.”