Monday, February 28, 2010 |The scene that day last August in the Orange County Hall of Administration was something to behold. A gathering of Republican supervisors and labor leaders talking amicably about public sector pensions and being lauded for their efforts to work together toward long-term solutions.
“Orange County has done a better job of addressing issues proactively,” said Daniel Hancock, the chairman of the Little Hoover Commission, a bipartisan panel out of Sacramento that was in the process of a 10-month study on the issue.
Hancock and other commission members credited local officials with working together on such reforms as cutbacks on retiree health benefits and a hybrid 401k-style pension tier for new workers.
The message was clear: cooperation trumps confrontation.
“The Commission learned that building support for the hybrid plan meant that stakeholders needed to get past ideology to focus on their goals: to save the county money and provide retirement security for workers, read the report.
“The key, said Nick Berardino, president of the Orange County Employees Association, was to accept the reality of the situation. “The unions are here. They’re not going away,” he said. “The pension problem is here. It’s not going away. Accept it.”
But the Republicans aren’t going away either. And since the November election “shellacking,” as President Obama put it, of Democrats and their union backers, the GOP has wasted little time in launching direct attacks on public sector unions.
Organized labor has responded with a weeks-long protest — the likes of which hasn’t been seen in Madison since the Vietnam War. And union workers nationwide, from both the public and private sectors, have demonstrated solidarity with protests of their own.
One such event – where the mood was combative – was held in Santa Ana’s Civic Center Plaza on Friday.
“They want to kill unions as a whole,” said Julio Perez, political director for the Orange County Labor Federation, who led the rally. “These attacks are going to be permanent.”
While Orange County hasn’t had nearly the drama of the upper Midwest, tensions are definitely running high. This month, the local GOP organized a “pension boot camp” with the unmistakable intention of assembling an army of local elected officials to fight the unions.
The idea is to motivate city council officials to file more and more lawsuits challenging pensions as well as entering each negotiation with the goal of replacing traditional pensions with 401K-style retirement plans.
Orange County labor leaders answered back with an open letter to local officials, warning them not to get too swept up in the Republican’s anti-pension fervor.
In the midst of all this, the Little Hoover Commission last week issued its final report. And it didn’t mince words.
The commission – which studied public pensions for six months from April 2010 – called on the legislature to allow local governments to renege on pension deals struck over recent decades.
Calling the situation dire, the commission concluded that hybrid benefit plans wouldn’t be enough to get local governments out of large unfunded liabilities connected to pensions.
“Freezing earned pension benefits and re-setting pension formulas at a more realistic level going forward for current employees would allow governments to reduce their overall liabilities – particularly in public safety budgets,” concluded the report.
Despite the stark conclusions of the Little Hoover report, labor leaders say there remains much that can be accomplished through negotiations. Agreements on retiree medical benefits have already saved the county nearly $1 billion, said OCEA Communications Director Jennifer Muir.
“Real reforms can only be made through respectful and constructive discussions grounded in reality,” Muir said.
Yet Baugh said those realities have changed, at least in Orange County…at least for the GOP.
“It’s difficult to imagine you’re going to get there by a straight negotiation,” Baugh said, adding that options like the hybrid 401K-pension plan now being sought at the county government aren’t enough to solve a $3.7 billion unfunded liability.
And Baugh isn’t hopeful that Sacramento is going to move on legislative options, which leaves the initiative process.
“It’s difficult to do this city by city, jurisdiction by jurisdiction, so there’s an argument that a statewide solution should be implemented,” Baugh said.
That kind of approach – a ballot drive as opposed to closed-door union negotiations – doesn’t require cooperation. In fact, it’s just the opposite. It requires whipping up party regulars.
“I think we’re moving that way,” Baugh said, noting that party activists were researching what kind of initiatives to offer – such as limiting pension time buybacks and other concepts urged by the Little Hoover Commission.
The message from Baugh to his troops is clear: confrontation trumps cooperation.