Is California Waking Up to the Problem?

Recently The Wall Street Journal ran a piece on the huge uproar over taming the public unions, which are bankrupting so many local and state governments. Of course, we know about Wisconsin, but I was amazed to read that even here in California, an increasingly liberal and out-of-control blue state, things are changing for the better when it comes to the feeding frenzy of the public unions.

According to the Journal, some people in California, which now has a huge deficit of 26 billion dollars, are starting to wake up to the problem. For example, Costa Mesa, in Orange County, just fired half of its work force. Days later, Los Angeles reached a tentative deal in which workers would pay more into pension and health plans.

Then there's San Francisco, about the last place in California you would expect to find an official determined to fight the financial weight of its public unions. But the man taking on the unions in San Francisco is its Public Defender, Jeff Adachi, who runs an agency of lawyers that provide legal services to poor people. He is a card-carrying San Francisco Democrat. Why is he worried about public union costs? As he sees it, payments for public pensions and health care are defunding social programs and the entire network of support services.

Last year he got up an initiative, Proposition B, which would have required current workers to pay more toward pension and health-care costs. He got some surprising help. For example, he got financial support from a prominent local Democrat, Mike Moritz of Sequoia Capital. California's most famous living Democrat, former Assembly Speaker and San Francisco Mayor Willie Brown, supported him. He collected 76,000 signatures. Even though Prop. B lost by 13 points beneath a mudslide of public union money, Adachi is retooling his proposition for another vote this November.

This is not the only good news from San Francisco. A few weeks ago, a small group of current and former municipal officials and taxpayer advocates in the San Francisco Bay Area convened to form California United for Fiscal Reform.

Its co-chairs are Adachi and Stephanie Gomes, the outspoken city council member from Vallejo, famously the largest California city to declare Chapter 9 bankruptcy. Their first meeting this month attracted representatives from Menlo Park, Pleasanton, Contra Costa County, and Sonoma County. The Journal quotes Gomes as saying, "These costs are a tsunami. If we can't rely on the state to fix it, we have to do it locally, and we have to join together, because the unions are joined."

The message is reaching other areas of the state too. In Orange County, the California Foundation for Fiscal Responsibility and the Pacific Research Institute recently held a "Pension Boot Camp," where some 175 elected officials and others heard talks such as, "What hasn't Calpers [the state’s public-employeee retirement system] told you?"

The catch is that much of these retirement systems are protected from cutbacks due to constitutional mandates. That means the lead on major reform would have to come from the mercurial Gov. Brown. He talked about it in his campaign, but not much since.

But the Journal reports that high-level help for the embattled locals may come from another California official, U.S. Congressman Devin Nunes. Rep. Nunes is building support for his Public Employee Pension Transparency Act, which would require states and municipalities to produce a coherent picture of their pension obligations. Imagine that. The bill says that they can stay opaque if they wish, but failure to disclose would cut them off from the federal tax exemption for muni bonds.

Serious Californians know how much trouble they're in. Last June, the Civil Grand Jury in San Francisco (again, notice this is from san Francisco) issued a report on pensions, "The Billion Dollar Bubble." Its conclusion: "This report is a warning of a deepening crisis in the City's financial condition. . . . We cannot wait."

A report last month from the state's respected Little Hoover Commission said that California has no choice but to take on the court decisions mandating pension costs.

So maybe the state is waking up. Let’s do our part by supporting those officials who see the problem and are willing to do something about it.