California lawmakers are once again advancing a familiar and costly mistake — one that risks leaving future generations to pay the price.
Assembly Bill 1383, introduced by Assemblymember Tina McKinnor, D-Inglewood, would increase pension benefits for public safety employees — allowing earlier retirement with higher payouts — while reducing the contributions those employees are required to make. The bill provides no new funding to cover these expanded obligations, which would further destabilize the California Public Employees’ Retirement System (CalPERS) and local government budgets.
We’ve seen this before. During my second term as chair of the Orange County Board of Supervisors in 2012, I joined several Southern California supervisors and former governors Pete Wilson, Gray Davis, and George Deukmejian to discuss how the “Public Safety Realignment Act” — intended to reduce the state prison population by shifting inmates to county jails — was affecting public safety at the county level.
My focus at the event was on the negative fiscal impacts of Senate Bill 400, signed by Gov. Davis in 1999, which dramatically increased the costs of public safety employees. The law’s 50 percent increase to defined benefit pension plans, retroactive to the date of hire, exploded the costs of every local government with a pension plan. The result? Counties were forced to make massive cutbacks and layoffs.
After the meeting, Gov. Davis offered a blunt assessment: “If I knew then what I know now, I would never have signed SB 400.”
But he couldn’t really know the full extent of the costs because the bill was packed with questionable fiscal actuarial assumptions and financing gimmicks, and the proposal was substantially amended and voted upon within a few days. Within the rushed legislative process, watchdogs were sidelined by the speed of the amendments drafted in the union halls. Then-CalPERS president William Crist famously exclaimed SB 400 would not cost “a dime of additional taxpayer money.”
Indeed, the fallout from SB 400 was so severe that the Legislature ultimately passed — and Gov. Jerry Brown signed — the California Public Employees’ Pension Reform Act of 2013, known as PEPRA, in an attempt to rein in spiraling pension costs and impose greater discipline on the system.
Fast forward to 2016. The Los Angeles Times and CalMatters joined forces to examine the results of SB 400’s massive pension formula increase. Their reporting validated that what was promised to taxpayers as cost-free instead resulted in billions in additional pension costs.
Ten years later, California’s local governments are choking on annual defined-benefit pension payments. The city of Costa Mesa sends one dollar out of every five it spends to CalPERS. It’s not alone. These costs are reducing funds available for essential government services and forcing “service insolvency” at all levels of government.
Yet here we are again. My former colleagues in Sacramento are now considering another ill-advised pension benefit increase for public safety employees through AB 1383. Have they learned nothing from the past — or are lawmakers simply ignoring the math?
One would hope that legislators would stop playing games with statutory retirement calculations to avoid repeating the catastrophic fallout of SB 400 a quarter century ago.
But AB 1383 moves in the opposite direction. The bill would lower the retirement age and allow the PEPRA requirement that many employees pay roughly half the cost of their pensions to be negotiated away behind closed doors. It shifts more of the burden onto taxpayers without transparency or public accountability.
Once enhanced benefits are granted to public safety employees, other bargaining units will inevitably seek the same terms, leaving taxpayers holding the bag.
Any pension restructuring process should be transparent and accountable to the public and not arranged in behind-the-scenes deals with elected officials whose campaigns are largely funded by the public sector unions backing this bill.
AB 1383 is now in the Senate, where it should be summarily killed, especially in light of the multibillion-dollar deficits the Legislative Analyst’s Office is predicting for this year and ongoing into the future.
If lawmakers instead send AB 1383 to Gov. Gavin Newsom’s desk, he should veto it before it becomes a millstone around the necks of California taxpayers for generations — and around his own 2028 presidential ambitions.
John Moorlach is the director of the Center for Public Accountability at California Policy Center. He served as state senator for California’s 37th Senate District from 2015 to 2020.