Encinitas could face higher pension costs for its firefighters and police if Gov. Gavin Newsom signs a bill that cleared the California Legislature on Tuesday, Sept. 1.

Assembly Bill 1383 would let first responders hired after 2013 retire with full benefits at 55 instead of 57. It would also allow unions to bargain for pension accrual rates up to 3% per year of service, up from the current 2.7% cap. The bill passed the state Senate 33-0 and the Assembly 70-2, KPBS reported.

The city approved a four-year contract with the Encinitas Firefighters' Association in December 2025, a deal the San Diego Union-Tribune reported will cost $3.094 million over its term. City Manager Jennifer Campbell said when the council approved the contract that the agreement valued employees "while also being fiscally responsible."

If Newsom signs the bill, Encinitas could face pressure to negotiate higher pension benefits in future bargaining rounds. Across California, some fire and police unions have already inserted contract clauses that reopen pension talks if the bill becomes law. In Napa, the city's new five-year firefighter contract includes such a provision, according to KPBS.

"I would say there's going to be immense pressure on local government agencies to increase retirement benefits to the maximum rate allowed," attorney Michael Youril of Liebert Cassidy Whitmore, a firm that represents public agencies, told KPBS.

Statewide, government employers and employees would need to contribute an additional $282 million to the California Public Employees' Retirement System (CalPERS), according to the state Department of Finance. CalPERS actuaries estimate the bill would increase the present value of future benefits by $4.8 billion, according to a CalMatters analysis. The costs could climb by hundreds of millions more if all public safety agencies agree to pay maximum benefits.

The Department of Finance, which reports to Newsom, recommended lawmakers reject the bill.

The Encinitas City Council also voted 5-0 on Wednesday, June 17, to amend the city's CalPERS contract, according to Ordinance No. 2026-06. Council members Bruce Ehlers, Luke Lyndes, Allison O'Hara, Destiny San Antonio and Tony Shaffer all voted in favor. The specific terms of that amendment were not detailed in the public record reviewed for this article.

Local governments statewide have opposed AB 1383 and are urging a veto. Napa Mayor Scott Sedgley, a retired firefighter, captured the bind cities face.

"We want to pay our police and fire and all our employees all we can, but it has to pencil out at the end," Sedgley told KPBS.

Public safety unions counter that the bill addresses recruiting and retention problems. It would not fully reverse former Gov. Jerry Brown's 2013 pension reform law, which required post-2013 hires to work longer and contribute more. If signed, AB 1383 would be the first enhancement to public employee pensions since that law took effect.

Under California's standard bill-signing deadline, Newsom has until Wednesday, Sept. 30, to act. The next regular Encinitas City Council meeting is Wednesday, Sept. 9.