The PJ Tatler

Two California Cities Pass Government Union Pension Reform

Signs of fiscal sanity appeared in the Golden State Tuesday. While all eyes were on the Wisconsin recall, voters in San Diego passed Proposition B:

A ballot initiative that would replace guaranteed pensions with 401(k)-style plans for most new city hires received overwhelming support Tuesday from San Diego voters who were clearly fed up with the decade-long civic discussion about the city’s pension problems.

Proposition B is viewed by supporters — including Mayor Jerry Sanders and City Council members Carl DeMaio and Kevin Faulconer — as pivotal to moving the city past its fiscal woes that stem, in part, from the decision by previous city leaders to twice increase benefits for workers without identifying a way to pay for them.

San Diego’s vote wasn’t even close: Prop B won with more than 66% of the vote.

Voters in San Jose passed a similar proposal, called Measure B. The measure includes a number of reforms:

  • Current employees keep pension credits already earned but must pay up to 16 percent more of their salary to continue that benefit or choose a more modest and affordable plan for their remaining years on the job.
  • Limit retirement benefits for future hires by requiring them to pay half the cost of a pension.
  • Suspend current retirees’ 3 percent yearly pension raises up to five years if the city declares a fiscal crisis.
  • Discontinue “bonus” pension checks to retirees.
  • Require voter approval for future pension increases.
  • Change disability retirement with the aim of limiting it to those whose injuries prevent them from working.

Both San Diego’s and San Jose’s proposals passed despite serious union opposition. Voters in El Cajon also handed Big Labor a defeat, changing the city to a charter form of government. That, according to UT-San Diego News, “will allow the city to set pay levels on some civic projects, freeing city hall from having to follow state prevailing-wage laws.” Unions use prevailing wage laws to force labor costs up, reducing non-union companies’ cost advantages on government bids, and raising the overall cost to taxpayers.

The state of California faces a massive $16 billion deficit. Could Gov. Jerry Brown read the results in Wisconsin and his own back yard as a sign that major union reforms are possible in Sacramento?