The Biden administration’s decision to block California’s access to $12 billion in federal public transit funding resurrects an old battle over California’s 2012 pension reform law. However this conflict is resolved, it should not entail any effort to upend the highly necessary California Public Employees’ Pension Reform Act.
PEPRA, which was signed into law on Sept. 12, 2012 by Gov. Jerry Brown, implemented a range of modest and common-sense reforms to help mitigate the unsustainable trajectory of pension costs.
The bulk of the reforms impact public employees hired after implementation of the law, with less generous pension calculations allowed.
In response, the U.S. Department of Labor (DOL) in 2013 under President Barack Obama blocked California’s access to federal transit funding on the grounds that PEPRA violated the collective bargaining rights of transit employees.
In 2015, U.S. District Judge Kimberly J. Mueller rejected the DOL’s arguments, noting that the law doesn’t prevent collective bargaining over pensions and concluded the department “misrepresented the law and did not consider all relevant factors.”
In the interim, however, California responded to the Obama administration’s withholding of federal funds by temporarily exempting transit workers from the pension reforms.
That should be avoided this time as the Biden administration has now followed in the Obama administration’s footsteps by similarly holding up federal transit funding over PEPRA.
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