California sues federal government to protect pension reform and recover transit funds

Two developments in Sacramento on Friday, as detailed in this news release from the office of Governor Jerry Brown:

SACRAMENTO – Moving to defend Governor Edmund G. Brown Jr.’s landmark package of pension reforms, the state of California today sued the U.S. Department of Labor for improperly denying federal grants to California public transit providers after it erroneously concluded that the pension reforms constrain workers’ collective bargaining rights.

“Bringing this lawsuit is just another step to ensure that our pension system is viable long into the future,” said Governor Brown.

The court filing can be found here.

Governor Brown proposed legislation in September to ensure that $1.6 billion in federal grants continue to flow to transit districts after the U.S. Department of Labor denied grant money to the Sacramento Regional Transit District. The Sacramento transit provider is a co-litigant in the case, which the state filed through Caltrans, whose own federal transit grant was denied last month.

Today, the Governor signed the bill (AB 1222), authored by Assemblymembers Richard H. Bloom (D-Santa Monica) and Roger Dickinson (D-Sacramento). The legislation temporarily exempts local transit agencies’ workers from the California Public Employee Pension Reform Act of 2013 to allow the state to pursue its case in court and creates a state loan program to assist transit operators that have lost federal transit grants.

Earlier this year, Governor Brown sent a letter to acting U.S. Department of Labor Secretary Seth Harris on this issue.

The Department of Labor ruling jeopardized more than three billion dollars in federal grants for Metro, including money needed to help build the Regional Connector and the first phase of the Purple Line Extension. The signing of AB 1222 allows those funds to once again flow (when or if the government shutdown ends); the lawsuit is intended to resolve the issue for good in court.

Categories: Policy & Funding, Projects