SACRAMENTO — California officials filed suit Friday against the U.S. Department of Labor, arguing that the federal agency cannot deny billions of dollars in mass transit money to the state based on pension reforms that lawmakers approved last year.
Gov. Jerry Brown’s office said in announcing the lawsuit that the Democratic governor wants to defend a 2012 law requiring state employees to contribute more to their pensions to ensure the retirement system remains viable.
Unions representing public transit workers had objected to the new pension requirements, arguing that a decades-old federal law prohibits such changes to their pensions outside of the collective bargaining process. Department of Labor officials ultimately agreed and refused to certify that California agencies were complying with federal statute.
That blocked at least $1.6 billion in U.S. Department of Transportation grants to California. The funds began flowing again when the state and federal governments struck a temporary deal.
The state’s lawsuit, filed in U.S. District Court, says the federal government’s position will prevent future legislatures from amending any law that affects the employment terms of transit workers.
“It will result in the loss of billions of dollars in federal funding to California transit providers and constitutes an arbitrary, capricious, and unconstitutional effort to coerce California to alter a pension reform law adopted for the benefit of California’s citizens and public employees,” the lawsuit states.
More than 80 California transit agencies, including the Sacramento Regional Transit District, which joined in the court challenge, depend on federal money for their operations and capital projects, according to the lawsuit.
The lawsuit argues that the recent changes in state law primarily affect new public employees while current employees only saw limited changes, comparing the approach to previous federal pension changes. It states that a range of retirement issues remain subject to collective bargaining.
Brown also announced that he signed legislation to keep federal money flowing while the state challenges the federal ruling. That measure, AB1222, Democratic Assemblymen Roger Dickinson of Sacramento and Richard Bloom of Santa Monica, temporarily exempts local transit agency workers from the pension changes.
The legislation expires at the end of 2014, but the provisions could become permanent if the judge sides with the Labor Department.