San Jose Voters Approve Pension Overhaul By Wide Margin
SAN JOSE (CBS SF) — San Jose’s much-debated pension reform Measure B passed with 70 percent approval on Tuesday, marking a major victory for Mayor Chuck Reed, who has been watched nationally for his attempts to rein in retirement costs.
The results mirrored a similar pension reform measure in San Diego, which passed with nearly 70 percent of the vote.
Tom Saggau, a union political consultant, said Measure B’s passage would be swiftly followed by legal action by the city employee unions.
Among the changes contained in Measure B, new employees would pay 50 percent of pension costs, while current employees would be given the option to choose a lower-cost plan or pay more for their current one. According to Saggau, that amounts to the city walking away from a contract it made with employees.
“It’s absolutely unconstitutional … we’re going to court very shortly to litigate over Measure B,” Saggau said.
Reed said Wednesday morning he expected the measure to be challenged in court but is confident the measure will withstand any litigation.
KCBS’ Mike Colgan Reports:
The measure would also give the City Council the right to temporarily suspend retiree cost-of-living adjustments during fiscal emergencies and would require voter approval for any future increases in retirement benefits.
Reed has said the city’s retirement costs have tripled in the last decade and now cost the city $245 million per year.
KCBS, CBS 5 and Chronicle Insider Phil Matier:
In other San Jose measures, Measure A, which clarifies the Board of Supervisors’ jurisdiction over the operation of county jails, passed easily with 77 percent voter approval.
Four measures on the ballot in the county all garnered more than the 55 percent approval they needed to pass.
Measure C, which authorizes the West Valley-Mission Community College District to issue $350 million in bonds, appears to have passed with 59 percent approval.
Measure E, a Milpitas Unified School District bond measure, passed with 64.5 percent approval.
Measures G and H, which will benefit the Mountain View Whisman School District and the Cupertino Union School District, each garnered 66 percent support.
Voters in two major California cities overwhelmingly approved measures to cut retirement benefits for city workers Tuesday in contests being closely watched as states and local governments throughout the country struggle with mounting pension obligations.
Supporters for pension reform in both San Jose and San Diego had a straightforward pitch: Pensions for city workers are unaffordable and more generous than many private companies offer, forcing libraries to slash hours and potholes to go unfilled.
“We believe people are tired of having services cut back because of big pensions,” San Diego Mayor Jerry Sanders, a Republican who is being forced from office by term limits, said recently.
San Jose’s pension payments jumped from $73 million in 2001 to $245 million this year, equal to 27 percent of its general fund budget. Voters there approved construction bonds at the beginning of the last decade, but four new libraries and a police station have never opened because the city cannot afford to operate them. The city of 960,000 cut its workforce 27 percent to 5,400 over the last 10 years.
Opponents, led by public employee unions, say the measures deprive workers of benefits they were counting on when they got hired. Some workers decided against potentially more lucrative jobs with private companies, figuring their retirement was relatively safe.
“This is part of a broader effort to attack workers and to make their lives miserable,” San Diego Councilman Todd Gloria said during a debate on the San Diego measure.
Thom Reilly, former manager of Clark County, Nev., and now a professor of social work at San Diego State University, said opponents face a difficult task. He expects the California measures may spawn similar efforts elsewhere if they pass.
“The ones who are actually paying the taxes will never see these benefits in their lifetimes, so there’s not a lot of sympathy in the public,” he said.
The ballot measures differ on specifics. San Diego’s imposes a six-year freeze on pay levels used to determine pension benefits unless a two-thirds majority of the City Council votes to override it. It also puts new hires, except for police officers, into 401(k)-style plans.
More than 100,000 residents signed petitions to put the San Diego measure on the ballot.
Under San Jose’s measure, current workers have to pay up to 16 percent of their salaries to keep their retirement plan or accept more modest benefits. New hires would get less generous benefits.
Reed, a Democrat, joined an 8-3 City Council majority to put the measure on the ballot. He said Tuesday that he expected other cities in financial binds to pursue similar measures.
“We’re at the leading edge but we’re not alone,” he said.
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