Napa and Benicia mayors warn that changes to pension reform law could undermine government services

By Brian Hendershot, Cal Cities Advocate managing editor,  and Johnnie Piña, legislative advocate. Additional contributions by Belinda Torres, 2026 Ronald O. Loveridge Summer Fellow

AB 1383 (McKinnor) may be well-intentioned, but it will make it harder for cities to maintain core services, local leaders told lawmakers on Monday. The bill expands pension benefits for public safety employees and rolls back parts of the Public Employees' Pension Reform Act (PEPRA).

Napa Mayor Scott Sedgley, a former fire captain, said the measure will cost his city $3 million annually to implement. “Every additional ongoing cost means fewer resources available for the services our residents rely on,” he told the Senate Appropriations Committee.

Cal Cities opposes the measure, as it would undermine reforms that have helped cities better manage retirement costs. CalPERS estimates the bill would create $8.2 billion in new costs for CalPERS employers, with unknown, but likely high, costs for the county and independent pension plans.

Benicia Mayor Steve Young noted that his city lost its biggest employer last year, creating an approximately $10 million annual hit to its General Fund. “Once these liabilities are created, future city councils, county boards, school districts, and taxpayers become responsible for funding them regardless of the economic conditions or budget realities,” he noted.

The measure increases the pensionable compensation cap, lowers the retirement age from 57 to 55, establishes a new retirement tier, and allows local agencies to negotiate enhanced pension formulas for public safety employees. Proponents of the bill, which includes police and firefighting unions, say AB 1383 would help increase retention and recruitment.

Many cities have been approving salary increases on the assumption that retirement costs would remain steady. “We support strong retirement benefits, but those benefits must be sustainable,” said Sedgley, who noted it could force cities like Napa to choose between funding public safety and funding road repairs. “The progress made under PEPRA has helped improve fiscal stability for public agencies and now is not the time to take a step backwards.”

Young agreed. “We can support public employees, maintain competitive retirement benefits, and honor our commitments without creating billions of dollars in new unfunded pressures for future generations,” he said. “AB 1383 moves us away from that balance.”

Former Gov. Jerry Brown, who signed PEPRA into law, offered this sobering analysis to CalMatters earlier this year. “The great danger of pensions is that risk comes later when the current lawmakers and advocates are no longer around, so the current leadership has to act as stewards for future beneficiaries, and that is very difficult because the future is not here, but the present is now.” 

The committee placed the bill on its suspense file for additional consideration next week. To learn how your city can make its voice heard, contact your regional public affairs manager.