Newsom Vetoes AB 1383 — and Gets This One Right

Dear John,

Every once in a while, Sacramento delivers a surprise.

Gov. Gavin Newsom vetoed AB 1383 this week, stopping a high-profile effort by public safety unions to roll back key provisions of California’s 2012 Public Employees’ Pension Reform Act (PEPRA) that could have radically increased pension costs for state and local governments. 

The veto was anything but inevitable. AB 1383 moved easily through the Legislature with overwhelming bipartisan support, passing 33–0 in the Senate and 69–2 in the Assembly. That support came despite warnings about the long-term fiscal consequences from an army of local government leaders, fiscal experts, and veterans of California’s hard-fought pension battles over the last quarter century.

Legislators were unwilling to risk the political blowback from crossing powerful police and firefighter unions pushing the bill, particularly in an election year, according to Lance Christensen, California Policy Center's Vice President of Government Affairs. That made Newsom’s veto all the more surprising to seasoned Capitol observers.

“Jot this date in your journal of impossible moments,” said Christensen. “I’m going to congratulate and thank Gov. Newsom for vetoing a fiscally irresponsible bill, AB 1383. Yes, let’s value our public safety employees, but not at the expense of service insolvency in every city and county in the state.”

The stakes were substantial. AB 1383 would have created billions in additional long-term pension obligations for state and local governments. The bill would have allowed public safety workers to collect at 55 what they now earn at 57 while opening a new 3-percent-at-55 tier. And because the richer formulas are bargained in closed-session meetings where the public is not present, government employers can quietly agree to shoulder even more of the workers’ share, shifting still more onto the unwitting public.

Taxpayers would have absorbed hundreds of millions of dollars in new pension liabilities to enhance an already generous retirement benefit — without receiving any additional public safety services in return.

California has been down this road before.

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