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California pension reform ballot initiative delayed until 2018

A group of current and former local government officials in California announced Monday they will refile later this year at least part of their proposal for a ballot initiative to change how state and local government employee compensation and benefits are determined.

Former San Jose Mayor Chuck Reed and former San Diego City Council member Carl DeMaio said in a statement they plan to refile at least one of their pension reform measures “later this year for the November 2018 ballot. By then we will know the outcome of a key court case that might limit the public employee unions' capacity to spend 'unlimited' resources against pension reform.”

The bipartisan coalition had originally announced its proposal last June for a November 2016 ballot initiative.

The proposal includes requiring voter approval of any defined benefit plan for new government employees or any increases in compensation and benefits; the prohibition of any taxpayer subsidies of more than 50% of the cost of compensation and benefits; and the prevention of impediments, delays or challenges of approved state and local ballot measures.

The coalition last June cited “public employee pension debt” in California rising to $198 billion in 2013 from $6.3 billion in 2003 as a main reason for the ballot initiative proposal.

“Every year we delay serious pension reform, public employers make more unsustainable promises to new employees and public retirement debts grow,” Messrs. Reed and DeMaio said in the statement. “We need pension reform to protect our education system and vital public services from these fast-growing burdens. Although our polling today shows continued strong public support for pension reform, we believe 2018 will provide an even better environment for substantial reform as rising retirement costs further squeeze their schools and local agencies budgets.”