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Measure J is seen as a sure bet

O.C. unions aren't even fighting plan to require voter approval of pension increases.

October 24, 2008|Christian Berthelsen | Berthelsen is a Times staff writer.

Orange County's Measure J may be the closest thing to a sure bet on next month's ballot. Voters appear to so strongly favor the idea of requiring their approval of any future increases in county employees' pensions that unions for government workers aren't even campaigning against it.

The bigger question is whether Measure J will make much of a difference in pension costs.

If approved, the measure would amend Orange County's charter to require that retirement benefit increases for county government workers -- awarded through bargaining agreements with the county Board of Supervisors -- be approved by a majority of voters before they could take effect. A study of the benefits' cost would be published in voter pamphlets before such an election.

The measure was placed on the ballot by the Orange County Board of Supervisors in July as part of a larger ongoing battle between the board and the county's unions to rein in the cost of government workers' retirements.

Those costs have been growing in part because of generous deals made with the unions earlier this decade that have left the county's pension fund with far less money than it needs to pay benefits in the coming years.

Ironically, the idea of putting such benefit hikes to a vote has its roots in one of the most labor-friendly cities in the West. San Francisco has had such a rule on the books for more than a century, and as a result, it has more money than it needs to cover worker retirement costs.

By contrast, other local government pension funds in California had on average 88% of the money they need, according to an annual survey of the state's public retirement systems released last month by the state controller's office. Orange County's plan is 71.5% funded.

Voters "should be able to say up or down whether they agree with accepting a new liability and whether that should be borne by themselves and their kids," said John Moorlach, chairman of the Board of Supervisors, who has led the county's charge on public worker pensions. "When we create a debt like that, we should involve the voters, just as we do with bond measures."

But having already secured such lucrative agreements in the past, the county's public employee union leaders say they aren't likely to seek additional pension enhancements for a long time. Though union and county leaders regularly meet to hammer out multiyear contracts, pension enhancements have been part of the final deal only a handful of times in recent decades.

"This is really a nonissue," said Nick Berardino, general manager of the county's largest public employee union, the Orange County Employees Assn. "There's not going to be any future increases in the retirement formula. It's as good as we're going to get, and it's as good as we're going to try to get, in the next several decades."

Still, union leaders are opposed to the measure, saying it would interfere with the negotiating process and pass responsibility to voters for a job that politicians are elected to do.

In 2001 and 2004, county supervisors -- an entirely different board than the members who currently serve -- cut handsome deals with employee unions on retirement benefits with the expectation that the pension fund's investment returns would pay for the additional cost.

For example: The deals allow, after 30 years of service, sworn law enforcement personnel to retire at age 50 with 90% of their pay and general government workers to retire at 55 with about 80% of their pay.

But as investment returns have decreased -- and employees' expected life spans have increased -- those deals have left the county's pension fund with $2.7 billion less than it will need over the next 30 years to cover its costs, below what experts consider a safe level.

Critics fear that the ever-increasing costs will ultimately force the government to either raise taxes or cut deeply into services to cover the shortfall.

Measure J is just one piece in a broader war between the supervisors and unions over pensions. Supervisors also voted to file a lawsuit seeking to overturn a portion of their labor agreement with the Assn. of Orange County Deputy Sheriffs, and have sought to replace board members of the Orange County Employee Retirement System who were viewed as too sympathetic to labor. Unions also have renewed their request to have management of their pension plan taken over by the statewide CalPERS system, though it was rejected by the supervisors earlier this week.

Supporters and opponents of Measure J say their internal polling shows it probably will pass.

Supporters, including the Orange County Taxpayers Assn., have raised about $100,000 for a campaign that includes lawn signs around the county. Unions, by contrast, concluded early on that the measure showed such strong signs of passage that they chose not to spend money to fight it.


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