Former San Jose Mayor Chuck Reed said the pension reform initiative he proposed would “place a check and balance on politicians, who have done a horrible job of looking out for the state’s fiscal situation.”

LOS ANGELES - The backers of a ballot measure to give voters direct decision-making authority over California state and local government employee pensions are waiting to see how the state attorney general treats it.

The state Legislative Analyst's Office released its analysis of the measure Monday, giving Attorney General Kamala Harris two weeks to draft a title and summary for the measure.

Its supporters could then begin gathering signatures to get it on the November 2016 ballot.

The measure is former San Jose Mayor Chuck Reed's second stab at getting a statewide pension reform initiative on the ballot.

He pulled last year's effort in March after a waging a failed legal challenge to Harris's summary, which he said was biased in favor of public employee unions.

In June, Reed, a Democrat, joined with former San Diego City Councilman Carl DeMaio, a Republican, to introduce a different pension reform initiative.

It would give voters the right to determine the amount of, and manner in which, compensation and retirement benefits are provided to state and local government employees.

"We are thrilled to see the LAO say that our mandate will produce significant savings," DeMaio said in an interview Wednesday.

State employee union backers say the LAO's analysis supports their arguments.

Dave Low, chairman of Californians for Retirement Security, which opposes the initiative, called it a "Trojan horse that will undermine the retirement security of millions of California families with unknown costs to taxpayers under the guise of giving them more power."

The total unfunded liabilities of California governmental pension plans are hundreds of billions of dollars, according to the LAO analysis. The California State Teachers Retirement System alone had $74 billion in unfunded liabilities as of the end of fiscal 2013-14, according to the report.

Most pension systems have required employees to make additional contributions, according to the LAO.

Under Reed and DeMaio's measure, defined benefit pension plans would not be available to new employees unless specifically authorized by voters, which makes it likely that such benefits would be reduced or eliminated in many jurisdictions, according to the LAO's report.

It would mainly affect new employees beginning in 2019, but also would affect current employees as they move between government employers in the future, according to the report.

Even if defined benefit plans were established for employees, the report said the initiative would lower costs because employees would be required to pay half their cost.

While governments would realize savings from the items noted above, according to the LAO report, there would be offsetting costs related to the closure of defined benefit plans.

Government employers also might be forced to increase other elements of compensation to attract employees, the LAO wrote.

"There is no significant uncertainty as to the magnitude, timing, and direction of the fiscal effects of this measure and its effects on current and future governmental employees' compensation," the LAO wrote.

The LAO's office also said that the measure would likely be the subject of legal battles.

Reed has a wait-and-see attitude regarding the language that Harris will choose for the measure.

"The AG's decision, unlike the LAO's analytical report, is a political one," Reed said. "She made a political decision last time; and it was inaccurate and not fair. I do not know if she will do it again."

Harris, a Democrat is running for the U.S. Senate after winning re-election as attorney general in 2014.

The measure would "place a check and balance on politicians, who have done a horrible job of looking out for the state's fiscal situation," Reed said.


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