State Auditor Report Finds San Jose Likely Overstated Future Pension Costs
SAN JOSE (KCBS) – The California State Auditor has released a new report showing San Jose officials likely overstated future pension costs by millions of dollars, with the higher figures used in the lead-up to June’s controversial pension reform measure.
$650 million was the figure San Jose Mayor Chuck Reed repeatedly mentioned last year as he argued that the city’s pension costs were growing so rapidly that they could reach that total by 2015.
KCBS’ Matt Bigler Reports:
But the audit found that the number was “likely overstated” and the $650 million figure was unsupported.
Reed meanwhile is defending the city’s projection.
“The figure is not overstated, the figure is just a number that you arrive at by looking at what assumptions about the future that you wish to make,” he said. “If you want optimistic assumptions, you get one number. If you have more pessimistic assumptions, you get different numbers.”
Mayor Reed notes that the audit did confirm that the city’s pension costs are rising dramatically, one of the reasons voters overwhelmingly passed a pension reform ballot measure.
City employee unions, who are trying to block Measure B, will likely use the state audit in their lawsuit.
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