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Unlimited double dipping is back for most elected officials in California, thanks to laws passed quietly by state legislators in budget bills in 2015 and 2017.
Lawmakers had largely banned the practice of taking both a government salary and pension simultaneously with pension reform legislation aimed at curbing abuses in 2013.
The latest law, which took effect Jan. 1, extended the free pass to county pension system retirees, including those receiving a pension from San Diego County’s fund, known as SDCERA. Additional benefits aren’t racked up while in elected office, though.
We don’t know why the state changed its mind on this because the change did not generate any discussion among lawmakers. It was placed inside much larger budget bills.
Former San Diego County District Attorney Bonnie Dumanis drew attention to the issue locally in recent weeks.
Last year, attorneys for Dumanis — who is running for a seat on the San Diego County Board of Supervisors — reached out to SDCERA officials to discuss the impact that getting elected could have on her annual $269,000 pension, as first reported by the Union-Tribune.
The law firm Best Best & Krieger argued that Dumanis could take a salary on the Board of Supervisors — totaling at least $172,450 — and keep her pension payments flowing, according to letters first obtained by attorney Cory Briggs. That would be $441,450 in combined annual income if elected.
Rather than exit retirement, and be reinstated as an employee, her attorneys at Best Best & Krieger pushed to preserve her retiree status.
“We find support for the proposition that Ms. Dumanis may serve on the Board without reinstatement. Moreover, we would argue that Ms. Dumanis could serve on the Board without reinstatement, with or without salary,” wrote attorneys Isabel Safie and Marissa Morimoto on Sept. 5, 2017.
Once the 2017 legislation was signed into law, Morimoto wrote SDCERA officials again on Sept. 28, saying in part, “SB 112 would permit her to receive the salary associated with such elective position in addition to her retirement allowance.”
SDCERA officials agreed, but a spokesman for Dumanis has since said she never planned to take the supervisor salary if elected. In an interview, Dumanis said she had planned to publicly decline the salary on the campaign trail but had not yet done so when the pension inquiries became public.
An earlier version of the attorney memo that was never sent to SDCERA, but shared by Dumanis, included explicit language indicating Dumanis planned to decline the salary. That language was removed from the final version.
“The first memo was a strategy memo,” Dumanis said.
VOSD asked Dumanis why her attorneys argued her right to something she never planned to take. She provided a response written by her attorney, Safie.
“Our job as attorneys is to provide our clients with all the information needed to make an informed decision.… we evaluate all of the client’s options, including options that are broader than a client’s initial inquiry,” Safie wrote in an email to Dumanis on Feb. 12. “When you retained us to determine whether you could be elected to a public office without reinstating from your retired status, you made it clear that you intended to waive any salary attributed to service in an elected public office.”
Dumanis said she did not push for the law change that would allow her to collect both a pension and a salary. Asked whether she supports it for all elected officials, she said, “I am not taking a position one way or another…. I don’t pass judgement on anyone. I have a sizeable pension and I do not feel comfortable taking an additional salary of $172,450 to serve in a job that I feel energized and passionate about.”
Dumanis is the only person who has inquired with current SDCERA management about collecting a pension and receiving an elected official salary at once, according to a pension fund spokesperson.
The California Public Employees’ Pension Reform Act of 2013, or PEPRA, didn’t stop all forms of double dipping, but it did place strict limits on the income that retirees who collect a pension could receive simultaneously from government employers within the same pension system.
Generally, unless it was an emergency, retirees could work for an employer within the same pension system for up to 960 hours a year. After that, they’d have to exit retirement — stopping the flow of pension checks — or forfeit their pension benefits while taking a salary.
The two newer laws — passed in 2015 and 2017 — carved out exceptions to those rules for elected officials. Video recordings show there was no discussion or debate on the floor of the state Assembly or Senate when they passed. They also didn’t attract public support or opposition in advance.
That’s partly because the new double dipping rules were buried in budget trailer bills, which don’t get the normal vetting traditional state legislation does. Trailer bills skip policy committees and are supposed to contain laws related to the state Budget Act, though significant policy changes and political favors can also get thrown in, too.
Without much ado, one of PEPRA’s major provisions was rolled back for elected officials.
An earlier attempt by the California Public Employees’ Retirement System, or CalPERS, in 2014 to use the normal legislative process to pass a law allowing elected officials to double dip attracted more attention and was ultimately unsuccessful.
“This bill erodes potential savings to pension systems,” officials with the state Department of Finance wrote in an opposition letter to SB 1219 in 2014. “The PEPRA restrictions were crafted to prevent retirees from returning to work and receiving a pension while earning a paycheck. The addition of these two exemptions harms this policy objective.”
The previous bill received support from the California State Association of Counties, the California Special Districts Association, the Rural County Representatives of California, League of California Cities and others.
“We generally support letting elected officials keep their retirement benefits, because otherwise they would be discouraged from running for office,” said Dorothy Johnson with the California State Association of Counties. “We would hate for well-qualified, passionate local leaders to be deterred from serving their communities because they wouldn’t be able to support themselves or families, potentially.”
Paul Smith, vice president of governmental affairs for the Rural County Representatives of California, said rural districts were disproportionately affected by the PEPRA prohibition against double dipping, and getting the law changed was “very, very important.” He said his organization actively lobbied for the change.
“By and large, compensation for board of supervisors is minimal. Very, very small,” Smith said. With salaries anywhere from $20,000 to $40,000 a year in rural counties, there is “No way to make a living off this.”
Smith also had problems with the inequity of the PEPRA rules. For instance, a retired school teacher with a CalSTRS state pension could serve in most salaried elected positions without issue, while retirees with a CalPERS pension could not, he said.
Only those collecting a pension and salary from a public agency in the same pension system are subject to limits. City pension systems can also make up their own rules. At San Diego’s pension fund, known as SDCERS, Port of San Diego and San Diego International Airport retirees are subject to PEPRA, but City of San Diego retirees are not, officials said.
SDCERS allows city retirees to collect a pension and a salary as an elected official without limitation, while retirees who return to work as employees are limited to 720 hours of work a year while receiving a pension.
As for why elected officials should be permitted to double dip while employees continue to face strict limits, Smith said, “By and large, in rural counties, supervisors make much less than rank and file employees.” Plus, he said, on the campaign trail, “This is a political issue… Someone hired doesn’t have that level of scrutiny by the electorate.”
Given the lack of public discussion about the law change, Voice of San Diego reached out to each local state lawmaker who voted for or against the bills that allowed unlimited double dipping for elected officials to find out if they support the change and why.
Some, like Sen. Joel Anderson who voted no on both bills, bemoaned the process used to get the changes through.
“Nothing good can come from hiding policy in budget bills to avoid the scrutiny of a policy committee,” Anderson said in a statement. “The super-majority’s leadership sidesteps transparency when they bury unheard policy in last minute budget trailer bills. This practice is an affront to the public’s will and Prop. 54,” which required more public disclosure for state legislation.
Assemblywoman Lorena Gonzalez Fletcher voted yes on both bills, but said this specific change was less memorable.
“I vaguely remember it. I don’t think it was as clear as when you see it in practice,” she said in an interview. “It was described to me as rank and file trash truck drivers, retired with a reasonable pension.”
Though generally supportive, Gonzalez Fletcher — whose husband Nathan Fletcher is also running for county Board of Supervisors — is appalled by the prospect Dumanis could take advantage of the change.
“It’s gross that she wanted to pull a salary as well,” Gonzalez Fletcher said. “She never changed her position that working-class pensions are unsustainable. It’s the hypocrisy that bothers me in this.”
Dumanis supported city pension reform that eliminated pensions for most new hires and offered 401(k)-style retirement benefits instead.
“We saw it with Jerry Sanders. We’re seeing it with Kris Michell, who was very active with Prop. B. Now, Dumanis,” she said, referring to a 2012 city initiative that eliminated pensions for new hires and made other changes. “These same people are now trying to get everything out of the system for themselves.”
“The fact we don’t call out the hypocrisy every time we see it is appalling,” she added.
When asked to address the criticism head on, Dumanis responded, “I don’t think it’s hypocritical at all. I earned a pension. Whether I was in favor of Prop. B or not, I earned the pension. I was always going to get the pension. Prop. B was a different circumstance with a different agency, with different financial problems. And again, many elected officials are doing just that, whether they were opposing Prop. B or supporting Prop. B. So, I think it’s a red herring and a campaign stunt.”
Sen. Toni Atkins said in a statement she supported both bills in 2015 and 2017 “to fix PEPRA’s unintended consequence of potentially discouraging people who have held jobs in public service from running for office after retirement.”
Assemblyman Rocky Chavez’ chief of staff said the Oceanside lawmaker supports the elected official pension exemption, but voted against both bills for other reasons.
Representatives for Senators Ben Hueso and Patricia Bates, and Assembly Members Todd Gloria, Brian Maienschein, Randy Voepel, Marie Waldron and Shirley Weber did not answer questions about the law change. Hueso, Gloria, Waldron and Weber voted in favor of the bills, Maienschein voted yes on one and no on the other, and the others voted against.