With veto of AB 1383, Newsom saves California from the next pension crisis – Orange County Register

You know what? Maybe Gavin Newsom isn’t so bad after all.

On Sunday, the governor vetoed Assembly Bill 1383, which would’ve boosted pension benefits for police officers and firefighters, unwinding critical reforms enacted by Gov. Jerry Brown under the California Public Employees’ Pension Reform Act (PEPRA). More precisely, as the Reason Foundation explained, “it would lower the retirement age for police and firefighters from 57 to 55 and loosen the cost-saving salary caps used to calculate pension benefits.”

In vetoing AB 1383, Newsom reflected back on the crises that led to PEPRA and that it’s best to avoid repeating history.

“PEPRA was a necessary reform born of a crisis exacerbated by past policy decisions,” he wrote. “I still recall — before PEPRA’s passage in 2012 — the alarming forecasts, the fierce criticism of public employees, and the growing pressure to eliminate defined benefit plans altogether. This is an era of California history I do not want to repeat. I fear that undoing PEPRA’s reforms, even partially, risks us doing exactly that.”

Newsom no doubt also remembers that because of the runaway pension benefits doled out by governments in California, cities were literally going bankrupt. Many more local governments — and this is an ongoing problem — have had to raise taxes and slash services just to pay for rising pension costs.

As the League of California Cities warned earlier this year, “Increased pension obligations would crowd out funding for core services such as police and fire, parks and recreation, libraries, road maintenance, and housing and homelessness.”

To quantify that, as Govern for California noted, “In the 2024-25 fiscal year alone, state and local governments in California were forced to divert $36.4 billion from essential services to pension contributions, 162% more than just ten years earlier.”

And for what? As Reason’s Mariana Trujillo explained, under AB 1383, “an estimated 86% of taxpayers’ costs will go toward providing additional pension benefits to the state’s highest-paid public safety employees earning more than $160,000.”

It’s against that backdrop that AB 1383 would’ve just reignited pension problems across the state to help highly paid public employees retire sooner. It would have undone the sacrifices local governments made to stabilize their pension debts. And as an unintended consequence, as part of its crowd-out on other public spending, it would’ve also tightened public safety budgets further and made it harder to hire more cops and firefighters. The irony is terrific.

In addition to these direct consequences of AB 1383 is the unavoidable reality that had AB 1383 become law, other public employee unions would immediately demand similar boosts. That’s how California ended up with the pension mess it had leading up to PEPRA and that’s a political headache Newsom fortunately spared the state from with his veto of AB 1383.

Which then raises another issue — the absurdity of the California Legislature even putting AB 1383 on Newsom’s desk.

If California had a remotely serious legislative body, AB 1383 would’ve been killed off long ago purely on fiscal grounds. But instead California has a state legislature beholden to public employee unions. That’s the only explanation for why AB 1383 cleared the Senate unanimously and near-unanimously in the Assembly.

Republican Assemblyman Carl DeMaio, who built his reputation long ago as a pension reformer in San Diego, was the only consistent “No” vote on the bill. Most Republicans turned in their “fiscal conservative” card and folded to the unions, either by abstaining or voting for AB 1383.

Once upon a time the Republican bloc in the Legislature consisted of at least some fiscal conservatives who cared about taxpayer interests and were willing to stand up to public employee unions. Alas, those days are long gone.

Luckily, there was an adult in the room to stop the Legislature from blowing things up.

Gov. Gavin Newsom saved the day with his veto of AB 1383. By standing up to the unions, he demonstrated also that he’s one of the only people in Sacramento with a spine. It might just be the temporary high of a rare fiscal win in California speaking, but moments like this almost make you wonder: maybe he should run for president?

Sal Rodriguez can be reached at salrodriguez@scng.com