Time has run out, and so, apparently, has the inclination for civil debate. Tuesday is the last chance for the San Jose City Council to place a reform measure on the June 6 ballot, so it needs to approve a final version of its ever-evolving pension reform proposal.
Until a few weeks ago, we clung to the Pollyanna hope that San Jose and at least some of its unions — particularly police and fire — could reach agreement on pension reform and avoid a bitter fight over the ballot measure. But time has run out.
While San Jose’s financial outlook is improving, it does not change the fact that the city’s two pension funds, laden with unfunded liabilities, are not sustainable at current benefit and cost-sharing levels. Reductions in long-term liability in the actuaries’ most recent projection are a result of pay cuts and reductions in staffing, including about 200 fewer police officers and firefighters. This has dramatically reduced levels of service; it’s no answer for employees or for residents. We can’t cut our way out of the pension trap.
The proposed measure today is magnitudes better than the overreaching first-draft put forward by Mayor Chuck Reed in May. In fact, it’s close to an alternative suggested by Councilman Don Rocha but dismissed at the time by the council majority as too timid. The measure resets fixed pension benefits at a fair level — still greater than the private sector offers, but that’s necessary to keep San Jose competitive with other cities in recruiting talented workers. If benefits elsewhere remain higher, San Jose will have to increase salaries to compete. That way, taxpayers will be paying for the services they’re receiving. Padding pensions pushes the burden onto future generations.
The city bears some of the responsibility for failing to reach agreement with the unions; Reed has hardly set a conciliatory tone. But last month, union leaders and their lobbyists trashed any remaining possibility of civil debate. And we do mean trashed. They trumped up controversy over a worst-case pension estimate used by Reed last year, fired off ethics and other drama-laden complaints purely for the publicity value and falsely asserted that the years-away estimate had influenced unions’ concessions to save jobs in the current year. What a crock.
The unions think they can reverse some of the ballot measure reforms in court. Maybe they can, although the current proposal looks more defensible than earlier ones. The city should plan now to expedite the resolution of inevitable court challenges.
This week, council members agreed to put off consideration of a tax or bond measure until after the June election. That was smart. Residents are not happy with closed libraries, fewer police patrols and crumbling city streets — but they know pension costs have tripled over the past decade from $73 million to $245 million. most of it out of the general fund that pays for police officers and librarians. Voters need to know that pensions are under control before they’ll agree to pay more to City Hall.
If pension reform paves the way for a revenue measure, and the economy continues to improve, San Jose will be able to rebuild its workforce and restore services without digging itself into another deficit hole. That should be everyone’s common goal.