SAN DIEGO: Pension reform scores big with voters

San Diego Union-Tribune ^ | 6/5/12 | Craig Gustafson

[SmithL]

A ballot initiative that would replace guaranteed pensions with 401(k)-style plans for most new city hires appeared likely to pass as early returns showed 69 percent of San Diego voters in favor.

Proposition B is viewed by supporters, including Mayor Jerry Sanders, as pivotal to moving the city past a decade of financial problems that stem, in part, from the decision by past city leaders to twice increase benefits for workers without identifying a way to pay for them.

Labor unions, which strongly oppose the measure, say Proposition B is illegal and will be tossed out by courts. They also contend that a negotiated deal to significantly reduce pensions for new hires in 2009 makes the initiative unnecessary and unfair to future employees.

Proposition B, also known as the “Comprehensive Pension Reform” initiative, was crafted by Sanders, City Council members Carl DeMaio and Kevin Faulconer, the pro-business Lincoln Club and the San Diego County Taxpayers Association. It eliminates pensions in favor of 401(k)s for all new hires except police officers and proposes a five-year freeze to the portion of current workers’ salaries that is used to calculate future pensions.

The city’s independent budget analyst estimated the initiative would save taxpayers about $950 million over 30 years if the freeze is enacted. If not, the measure increases the city’s costs by $13.5 million over the same period.

[SmithL]

Pension Reform scores a twofer in the so-called Golden State.

[noinfringers2]

All public employees should be in the change even police and fire departments. Why are the reformers shying away from such an action?

[willgolfforfood]

Ya gots to crawl befo you can walk.

[Soul of the South]

“Pension Reform scores a twofer in the so-called Golden State.”

I agree this is encouraging news. However, the unions will no doubt take this reform to court. The California Supreme Court has a history of ruling conservative voter initiatives unconstitutional.

[Venturer]

Does anyone really think that anyone can retire on what 401k’s are paying today?

Rot’s O’ Ruck.

[sphinx]

Labor unions, which strongly opposed the measure, say Proposition B is illegal and will be tossed out by courts. They contend the mayor violated labor law by using his position to advance the initiative and avoid required negotiations with employee unions.

The excerpt omitted the second sentence of this paragraph. It seems the unions are not arguing that the reform is substantively illegal, but rather that the mayor erred procedurally. I know nothing about the intricacies of California law on such subjects, but this claim seems highly speculative. Which, of course, will be no bar for leftist judges, but that's another story.

Retroactivity is always problematic and should be a last resort, but provided this reform only affects new hires, it should be legally uncontestable for the city to reevaluate a financially disastrous situation and adjust its practices going forward.

[Marko413]

I lived in SD for 18 years and one thing I know, as long as the 9th Circuit Court is around, I don’t think any positive reform is possible. The people of CA could vote it in by 80% and the court would still declare it unconstitutional.