Michael Karsch, Legislative Representative


Pension Law and Policy,
By Michael Karsch

By Michael Karsch, Legislative Representative

The California Rule appears to be doing well and is not in jeopardy of dying. One news source, The American Spectator, reported in June that “San Diego’s final capitulation to union demands signals the end of a reform movement that had once showed promise to help fix California’s debt woes.” San Diego had tried to validate the 2012 ballot initiative that had been passed by the voters in the city but opposed by organized labor and the state agency for employee relations. The paper said that the “measure is effectively dead.” The city decided not to appeal their voter-approved Proposition B any more and side with the unions. The city then decided in early June to invalidated the public vote. The article also mentioned the similar defeat of the City of San Jose’s Measure B on pension reform that the voters had approved, but later was challenged by several lawsuits. This measure was described as an assault on the California Rule; its attack by the Public Employment Relations Board led to the State Supreme Court ruling on the on the side of the unions.

The San Diego story also gained the attention of Chicago as it struggles through its deficit problem, much of it attributable to their pension problem. Crain’s Chicago Business reported in June that the “recent collapse of the 2012 San Diego pension fix is a cautionary tale for Illinois because the fatal flaw cited by California courts – with the U.S. Supreme Court declining to get involved – was the failure of city officials to negotiate with employee unions before putting the proposal to voters.”

The stories of the San Diego and San Jose efforts to reform pensions by reducing benefits flew against the California Rule, a judicial principle in California courts, and the staunch protection of negotiated labor benefits remains solid. Illinois enshrines the idea behind the California Rule in its constitution.