Newsom Cites Pension Crisis As He Vetoes Bill To Enhance Retirement For Police And Firefighters

Unions for California police and firefighters came close to sweetening retirement benefits for their members, but the memory of California’s pension crisis ultimately was too much for Gov. Gavin Newsom.

Newsom on Sunday vetoed a bill that would have enhanced retirement perks for police and firefighters despite near-unanimous support from state lawmakers and heavy pressure from public safety unions.

Newsom in his veto message wrote the bill would partly reverse a 2012 law that former Gov. Jerry Brown championed when California’s major funds were spiraling from Great Recession losses.

Brown’s law, the Public Employees Pension Reform Act (PEPRA), required civil servants to work longer to earn a full retirement and pay more money from their own paychecks toward their pensions.

“I still recall — before PEPRA’s passage in 2012 — the alarming forecasts, the fierce criticism of public employees, and the growing pressure to eliminate defined benefit plans all together,” Newsom wrote. “This is an era of California history I do not wish to repeat.”

Brown’s pension law led to a significant change in retirement for public safety employees. It requires them to work until age 57 to retire instead of 50. It adjusted their retirement formula from 3% a year to 2.7% a year.

Police and firefighters unions today say 57 is too late because of the toll their careers take on their bodies and their exposure to hazards. They backed Assembly Bill 1383, which would have lowered their retirement age to 55.

“AB 1383 gives us something important: Two more years with our families,” California Professional Firefighters President Darrell Roberts said last week at a rally with hundreds of police and firefighters on the Capitol steps.

But the bill by Democratic Assemblymember Tina McKinnor of Inglewood would have done more than just lower the retirement age. It also would have increased the cap on pension earnings that Brown’s law imposed and would have allowed public safety unions to negotiate more lucrative pension formulas as high as 3% per year of service.

Those changes would have driven up costs for California government employers such as cities and counties by hundreds of millions of dollars a year, according to estimates from the California Public Employees’ Retirement System.

California cities and counties opposed the bill because of the potential costs.

The bill “represents the greatest long-term financial threat to the sustainability of cities in years,” La Verne City Manager Ken Domer said in a recent interview with CalMatters.

A coalition of cities, counties and special districts issued a statement commending Newsom’s veto.

“At a time of severe fiscal uncertainty and growing demand for services, it is more important than ever for state leaders to help control costs,” the statement read.

McKinnor’s bill had overwhelming bipartisan support. It passed the Senate 33-0 and the Assembly 69-2.

Several lawmakers spoke at the rally last week, where firefighters held signs that read “Firefighters deserve a safe retirement” and police carried ones that read “Keep California safe. Recruit. Retain. Sign AB 1383”

Democratic Assemblymember Stephanie Nguyen of Elk Grove told the crowd, “This is just the beginning. After we get this signed, we will do more. We will fight for more to show you that we appreciate you.”

Roberts of California Professional Firefighters in a statement Sunday said the union was “deeply disappointed” in Newsom’s veto.

“To every CPF member, this fight is not over.  I made a commitment to you all;  we will keep fighting for retirement security, and we will stand together,” he wrote.

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By Adam Ashton, CALMATTERS