(Sept. 5 -- By the Editorial Board)
It's a crying shame, but Gov. Jerry Brown had no choice but to cave and exempt transit workers from the state's pension reform law, at least temporarily. The U.S. Department of Labor was poised to cut off billions in federal grants to local transit districts if California did not back off. So the governor has made a necessary strategic retreat.
But he cannot afford to surrender. Brown says he plans to pursue the issue in court. Sacramento Regional Transit is the test case. Because RT complied with state law and applied pension reform to its workers, the federal government withdrew $54 million in federal funding previously approved for work on RT's light-rail extension to Elk Grove. Some $14 million of that money may be lost permanently because the bill to exempt transit workers from pension reform, which the governor has pledged to sign, won't reach his desk in time to forestall federal action on part of the grant. Statewide, some $1.6 billion was at risk this year alone.
Why is this travesty allowed? An obscure provision of federal law requires transit districts to collectively bargain with their unionized government workforces. When local transit officials applied state pension reform to their workers, various transit worker unions sued, claiming the pension law violated their collective bargaining rights. The state argued forcefully that it did not, that pension reform was necessary to protect the solvency of dangerously underfunded pension funds. U.S. Labor Secretary Thomas Perez sided with the unions and threatened to withhold federal transit funding if an exemption for transit workers was not enacted. A bill by Assemblyman Roger Dickinson, D-Sacramento, that would do so - at least until the dispute can be hashed out in court - is now pending in the Legislature and the governor plans to sign it.
The governor had to retreat on this issue. Given California's still-fragile recovery, the state cannot afford the multibillion-dollar hit that the federal government's wrongheaded actions would cost. That said, pension reform is too important to allow federal blackmail to upset it. Lavish government pension giveaways have pushed local governments into bankruptcy in some cases and to the brink in others. Even now, the Bay Area Rapid Transit District is mired in a lengthy labor dispute in part over pensions. BART's pension costs have risen 126 percent since 2005. BART workers don't contribute anything to their own pensions. Transit-dependent riders regularly endure hefty fare increases so BART workers can retire at age 55, some with pensions bigger than their pay checks.
California is rightly attempting to rein in such extravagance. Incredibly, the federal government, which contributes nothing to state government pensions, is standing in the way. That's outrageous.
The governor's legal challenge must not be some lackluster pro forma exercise. If transit workers keep this exemption, pension reform will unravel across the board. Police officers, firefighters and clerks at the Department of Motor Vehicles will demand exemptions as well. The governor needs to fight this battle all the way to the U.S. Supreme Court if need be. And if he fails there he must take the battle to Congress and demand a change in law.