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San Jose mayor planning pension initiative in 2016

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POSTED April 4, 2014 1:03 a.m.

SACRAMENTO  (AP) — San Jose Mayor Chuck Reed said Thursday that he is pressing ahead with a proposed ballot initiative that would give local governments more leeway to cut public employees’ future pension benefits, saying he will target the 2016 ballot after losing a court challenge this year.

“We have not stopped working on this. We will not give up,” Reed, a Democrat, told the Sacramento Press Club.

He and a group of other California mayors had hoped to put a proposed constitutional amendment on the November ballot, but they lost a lawsuit that challenged Attorney General Kamala Harris’ description of the initiative.

The mayor said he will appeal the judge’s ruling, which he believes gave too much deference to the attorney general.

The proposal is based on one Reed persuaded voters to approve in 2012 in San Jose, California’s third most populous city, where pension payments jumped from $73 million in 2001 to $245 million in 2012, or 27 percent of the city’s operating budget. The city eliminated a quarter of its workforce and imposed a 10 percent pay cut across all departments.

The city is scaling back future retirement benefits for current employees and new hires, but many of the changes remain in limbo after they were challenged in court by public employee unions.

He said rising pension costs have been a major drag on local government budgets nationwide, and those governments must act to keep themselves solvent without severely cutting basic services such as police and fire.

“This is a reasonably fair solution. There is no perfect solution,” he said. “There is no totally fair way to do this. Is it fair to cut services to taxpayers year after year to balance the budget? It is fair to cut retirees’ pensions years after they’ve retired? Is it fair to cut benefits that have already been earned by your current employees?”

The proposed initiative would have allowed city, county and other governments to reduce future benefits through collective bargaining or a local vote.

Steve Maviglio, a spokesman for unions opposing the plan, said Reed has been unable to win sufficient political or financial support for his initiative so far, and the political climate is likely to be less favorable by 2016. By then, government budgets are expected to be more stable and a wide presidential election field will likely send more Democrats and union supporters to the polls.

“There’s been more than 600 contracts in 400 jurisdictions where employees are paying more for their retirement; they’re handling it at a local level,” Maviglio said.

He said a few instances of “tension between management and labor, such as in his community,” do not mean California needs to adopt such a change statewide.

“Labor does not have its head in the sand on this issue, and that’s why there’s been so many concessions at the bargaining table,” Maviglio said.

The petitions that would have been used to gather signatures for this year’s ballot said the initiative would “eliminate constitutional protections for vested pension and retiree health care benefits for current public employees, including teachers, nurses, and peace officers, for future work performed.”

In his lawsuit, Reed called the description, written by Harris, “inaccurate and misleading” because it did not make clear the initiative would protect pension benefits that workers had already accrued.

 

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