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AJR-9 Social Security: mandatory coverage.(1999-2000)

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AJR9:v96#DOCUMENT

Assembly Joint Resolution No. 9
CHAPTER 40

Relative to Social Security.

[ Filed with Secretary of State  May 26, 1999. ]

LEGISLATIVE COUNSEL'S DIGEST


AJR 9, Ortiz. Social Security: mandatory coverage.
This measure would memorialize the President and the Congress of the United States not to include mandatory Social Security coverage on noncovered state and local government employees in any Social Security reform legislation.

WHEREAS, The Social Security Trust Fund is expected to have insufficient funds to meet its obligations by 2032; and
WHEREAS, Comprehensive Social Security reform is necessary to ensure continued viability of the Social Security system for the millions of current and future beneficiaries; and
WHEREAS, Legislation is expected to be considered in Congress which is intended to provide financial stability to the Social Security Trust Fund; and
WHEREAS, Mandating coverage for all newly hired noncovered state and local government employees has been suggested by some as one of the possible options for financing Social Security reform; and
WHEREAS, State and local government employers were initially precluded from participating in the Social Security system when it was established in 1935 on the basis that it was considered unconstitutional for the federal government to tax state and local governments; and
WHEREAS, State and local governments established retirement plans to meet their needs in lieu of Social Security coverage; and
WHEREAS, The federal government is now searching for avenues to finance the failing Social Security Trust Fund; and
WHEREAS, Mandating Social Security coverage on all newly hired noncovered employees extends the solvency of the Social Security Trust Fund a mere two years; and
WHEREAS, Mandatory Social Security coverage results in a tax increase of 6.2 percent each for the state and local government employer and employee; and
WHEREAS, There are currently over one million noncovered public employees in the State of California most notably public school teachers, faculty, and administrators, and public safety, as well as numerous city, county, and special district, employees; and
WHEREAS, Estimates project a cost of at least $12.5 billion to California’s state and local government employers, primarily school districts, and newly hired workers over the first 10 years of implementation; and
WHEREAS, Education reform is a critical priority for the State of California; and
WHEREAS, Mandatory Social Security coverage will have a devastating impact on California’s ability to implement education reform measures, such as class size reduction; and
WHEREAS, This increased tax from mandatory Social Security coverage would come at the direct expense of education programs, benefits, and services for students and employees in California; and
WHEREAS, State and local government employers in California may have no choice but to reduce services such as law enforcement, fire protection, health, programs for senior citizens and the disabled, library, parks and recreation, refuse collection, and recycling programs in order to pay this new federal tax; and
WHEREAS, Benefits currently provided by California’s state and local government retirement plans may need to be reduced due to the cost imposed by mandatory Social Security coverage; and
WHEREAS, The increased employee tax will result in a significant reduction of a newly hired worker’s take-home salary; and
WHEREAS, Reducing the current retirement benefit structure and the take-home salary of workers will have an adverse impact on the recruitment and retention of public employees in California and employee morale; and
WHEREAS, This new tax is a shift of federal government burden to our communities to solve a federal problem which our state and local governments had no hand in creating and under which there will be no benefit paid to our workers for more than a generation; and
WHEREAS, Compelling state and local governments to participate in the Social Security system provides no benefit to these public employers, school districts, or students; now, therefore, be it
Resolved by the Assembly and Senate of the State of California, jointly, That the Legislature of the State of California urges the President and the Congress of the United States in the strongest possible terms not to include mandatory Social Security coverage on noncovered state and local government employees in any Social Security reform legislation; and be it further
Resolved, That the Chief Clerk of the Assembly transmit copies of this resolution to the President and Vice President of the United States, to the Speaker of the House of Representatives, and to each Senator and Representative from California in the Congress of the United States.