Opinion: “Vulture capitalists” pension-reform measure poised for failure

If the squealing by the forces behind attempts to blow up the state’s public pension are any indication, the truth must really hurt.

In the last few days, both the nonpartisan Legislative Analyst’s Office and Attorney General issued their judgment on pension reform proposals being proposed by former Schwarzenegger aide Dan Pellissier. And it wasn’t pretty.

The LAO noted that the proposals would cost governments more than $1 billion per year for up to 30 years. 

On top of that, the LAO also noted that the measures probably wouldn’t survive in court, and had serious constitutional problems. 

In other words, the LAO’s not-too-subtle message to voters is clear: this measure won’t do anything to address the pension issues in the headlines, and it deserves to be sent to the scrap heap of other Pellessier measures attempting to punish civil servants. Former Schwarzenegger Finance Director Mike Genest, who has received more than $130,000 in contracts (including $20,000 in taxpayer dollars) for his failed pension reform proposals, immediately mocked the LAO’s report. But apparently Genest’s comments are more motivated by self-interest than in a real concern for the pension system; the LAO had previously applauded Governor Jerry Brown’s pension proposals and had issued far-reaching reform recommendations itself.

But the LAO’s “F” grade on the initiatives hasn’t stopped the Republican backers of these sloppily-written measures from trying to find contributors. But even effort appears to be failing. The Sacramento Bee reported last week that proponents don’t have anywhere near the financial backing they claimed. It notes that California Pension Reform reported raising just $128,600 late last month, mostly from Silicon Valley venture capitalists. The only major contributors are three Silicon Valley “vulture capitalists” who contributed $25,000, including one with strong links to Bain Capital, the Mitt Romney-led company that’s being raked over the coals in recent days. 

Apparently, even potential GOP financial backers see these measures for what they really are —  bad for taxpayers and bad for California. 

Meanwhile, last week, Attorney General Kamala Harris provided her straight-forward assessment of the measure. She noted that it would hurt teachers and other public employees hard, would have constitutional implications, and repeating the LAO’s assessment, said it would cost more money than it would save for decades.

Good for her to level with voters about what these measures really do. And if these measures make the ballot, voters will have an honest view about what they’re all about instead of the propaganda being advanced by the Wall Street backers of these measures.

Now you’d think, after the LAO’s panning of the measures and the AG’s assessment, that anyone with common sense would pronounce these measures DOA.

But the Republicans behind the measure — former GOP Party Chair Duf Sundheim and former Schwarzenegger aide Dan Pellissier — are still trying to convince some naive funders to plow money into a campaign that will go nowhere. Even with the bad reviews from the LAO and AG, the pro-pension slashing forces have said they will poll their two measures once they get the Title and Summary to see which one does better, and then shop that to possible funders.

Apparently they’re more interested in what polls better than what’s the best public policy for the state. Sad.

Fortunately, the Legislature is taking the LAO’s advice to be methodical and careful in designing measures to improve the state’s pension system. Next week, it will hold another hearing on the issue.

That’s the proper path to take. The Legislature should continue to craft common-sense pension reform proposals, measures that focus on eliminating abuses in the system and guaranteeing the retirement security that millions of Californians were promised.