The contrast is remarkable: In San Francisco, Mayor Edwin Lee sits down and actually negotiates with his City’s labor unions over a ballot measure amending the City Charter to help get rising pension costs under control. In San Jose, Mayor Chuck Reed decides to “go nuclear,” as the NY Times put it, by vowing to declare a fiscal state of emergency and put a measure directly to the voters making sweeping changes to retirement benefits, even for current retirees and active employees, without any negotiation with the affected unions. Reed’s move makes what Public Defender Jeff Adachi had proposed to do to pensions in San Francisco before the SF unions and Mayor Lee had sat down to solve the problem, look like the efforts of a rank amateur when it comes to hacking away at public workers’ retirement benefits.
First the good news: Herculean efforts by all of San Francisco’s labor unions – aided immeasurably by philanthropist Warren Hellman – resulted in a negotiated agreement with the City of San Francisco to present to the voters in November a joint City-Labor ballot measure amending the City Charter to provide real pension reform. Here are some of the highlights: (1) contribution rates for active employees will “float” in accordance with the SF Retirement System’s (SFERS’) funding status, but can never rise so far as to break an individual employee financially and, conversely, can decrease as SFERS improves its actuarial health, (2) a second tier is created for new employees with pension caps and an increase in the retirement age to 58 for public safety workers (65, for non-public safety workers); and (3) contributions will be required from both current and future employees to a retiree health care trust fund.
These adjustments are far more reasonable than what Jeff Adachi contemplates taking to San Francisco’s voters in the fall, and the choice for the voters should be clear: support a negotiated agreement which the City and its unions hammered out together in good faith rather than back a renegade measure that was never part of the collective bargaining process. To my mind, the law on this subject is almost of less importance than the moral imperative: it’s far better from a practical as well as an ethical perspective to solve problems working together than by ramming a one-sided solution down the other party’s throat.
Sadly, the latter is the approach that San Jose’s Mayor Reed seems bent on taking and his moral stature declines proportionately. Despite the San Jose POA’s demonstrated track record of consistently working with the City to confront whatever fiscal challenge may lie ahead, Mayor Reed has sidestepped the negotiation process and proposed the unilateral implementation – by voter fiat – of draconian changes to current workers’ benefits. The list of takeaways is jaw dropping in both size and severity but here are some of the worst of the worst: slashing the accrual rate to 1.5% per year of service, increasing the retirement age to 60 for public safety and 65 for all other employees, and cutting the 3% COLA down to 1% (including the COLA received by already-retired employees).
In one fell swoop Mayor Reed joins the likes of Governors Scott Walker of
Wisconsin and Chris Christie of New Jersey who have made names for themselves by championing the dismantling of benefits won by public workers to a degree that makes similar efforts pale in comparison. As the NY Times opined, “[I]n what may become a test-case with national implications, Reed is asserting that public employees have no ‘vested rights’ to the specific terms of their pension plans and benefits going forward.”
Such a proposition is more than a little legally dubious, and the SJPOA, along with the other San Jose unions, is preparing for the legal battle sure to come should the City Council decide to place Reed’s measure on the ballot and it ultimately wins approval by the voters in November. The tragedy, of course, is that such a legal battle need not occur if Reed were to follow the example laid out for him by his San Francisco counterparts.
But that would involve collaboration and cooperation which just doesn’t seem to be part of Reed’s style at the moment. He’d rather pick a fight over pension benefits than sit down personally with his City’s unions, as did Mayor Lee in San Francisco, along with other civic leaders and entrepreneurs such as Warren Hellman, to attempt to find a mutual course out of San Jose’s fiscal mess. And because of such a mindset, Mayor Reed is that much smaller a man and San Jose that much smaller a city.
“Roll the Union On . . .”
