SACRAMENTO (AP) — The federal government on Friday delayed its threat to withhold billions of dollars in California transportation grants in a dispute over public pension reforms while negotiations continue with Gov. Jerry Brown's administration.
The U.S. Department of Labor warned this month that the pension reforms pushed successfully last year by the Democratic governor appear to violate a federal regulation requiring that transportation agencies protect employees' collective bargaining rights.
But department spokesman Michael Trupo said in an email that the government "is working closely with the Governor's Office to resolve the issues involved in certifying federal grants to California's transit districts. While those efforts continue we will hold off on making any decisions about individual grants."
A decision on nearly $268 million in grants to the Los Angeles County Metropolitan Transportation Authority had been expected Friday. Funding for projects in Orange and Sacramento counties also are jeopardized by the pension dispute.
The disagreement imperils more than 100 federal grants, potentially costing the state $1.6 billion in federal money statewide this year alone.
"This is very important to the People of California — both for jobs and pension reform," Brown hand-wrote at the bottom of a letter to the federal agency in May, urging the release of the money.
The governor noted that he signed the original law granting collective bargaining rights to state employees. That was in 1977, during his first term as governor.
Brown argued that California's relationship with unions stands in stark contrast with other states that acted to limit public employees' collective bargaining rights. The pension changes, intended to deal with a massive unfunded liability, were enacted through the legislative process rather than through negotiations with the unions.
Jim Evans, a spokesman for the governor, said the administration is gratified by the delay and said the state and federal governments are working to solve the problem.
The problem began with a new state law that increases local and state government employees' pension contributions and provides lower retirement benefits for newly hired employees.
That harms transit employees' current and future collective bargaining rights in violation of federal regulations, labor unions and the federal agency said.
The administration is considering seeking legislation that would temporarily exempt transportation employees from the pension law while transit districts sue over the federal interpretation.