Public Pensions and the Initiative Process: Winds of Change?

Abstract

The most recent recession has put considerable stress on state and local government budgets and has pushed public pension reforms to the spotlight. Through the lens of the initiative process, this paper intends to examine the impact of the Great Recession on public pensions in California local governments. Based on a review of the literature and a study of local government budgets, Comprehensive Annual Financial Reports and other reports, this paper reviews 13 pension reform measures passed by voters in California cities and counties in an attempt to answer the question: What has caused the pension measures to be put on the ballot? The paper finds that the recent economic downturn, market crash, poor public decision-making, negative coverage, and inability of the State to solve pension problems all contributed to the rise of local ballot measures on public pensions, and through the initiative process, the voters decided to take public pension reforms in their hands. Essentially, ballotbox pension reforms reveal the public’s distrust of government. The victories of local pension mea sures in California have attracted national attention, and may inspire other cities and counties in California and other states to attempt similar actions.