(Justin Sullivan/Getty Images)

San Jose Mayor Chuck Reed and four other California mayors are aiming to get a pension reform initiative on the 2014 ballot. The initiative would amend the state constitution, allowing government agencies to alter their contracts with public workers’ unions. Government officials say the change is needed to help struggling cities deal with the substantial costs of pension funds and would only affect future benefits, not those already accrued. But union leaders argue changes to existing contracts would be unfair. We talk to representatives on both sides of the issue.

Guests:
Chuck Reed, mayor of San Jose
Robert Sapien, president of the San Jose Firefighters IAFF Local 230

  • Bob Fry

    If I understand the initiative correctly, it allows past work to be pensioned under the terms of the past retirement contract…but future pension terms are treated under whatever new contract provisions are in place.

    I’m a state worker and if that’s what it does, I’ll probably vote for it. Partly out of principle, it seems fair enough. But mostly out of practicality. The way-too-generous pension terms Grey Davis put in place for “Safety” workers–police and firefighters–are especially onerous for cities and counties, as those salaries are a large fraction of their budgets.

    • Tim Callahan

      Bob Fry Got to love your logic! I got my pension and screw the rest of the current public employees. You’re a real gem, Bob.

      • Bob Fry

        Eh? I’m a current state worker. I’m not retired. The police and firefighters got a hugely generous deal around the new millennium and it’s going to bankrupt cities. All this initiative does is to allow (not require) that FUTURE pension benefits can be negotiated for those FUTURE years worked. So if someone has worked 24 years, is a year from retirement and the pension terms change, they get 24 years under the old terms, and 1 year under the new terms. What’s not fair about that?

        • Steven Maviglio

          So you think that recent public service workers who entered their careers (teaching, firefighting, police work where there is no private sector option for them to go) should have the rules changed in mid-career? That the promise made to them when they were hired should be broken so cities can pay for stadiums, “economic development,” and other non-core government services?

          • Bobby

            Steven, yes, when economic situations change, so do the benefits. In private sector, when a company has a layoff (like the 4,000 people laid off by cisco or 10,000 by Wells Fargo), there are no guarantees. They get two weeks of wages and then unemployment for 26 weeks. Why do state, city, government union workers feel entitled to benefits for life?

            In case you have not heard, the property values in most part of California had dropped by 40% to 50%. The govt Union workers need to take a basic lesson in economics.

          • Steven Maviglio

            And when those folks lost their jobs, who did they turn to for help to get them back at their feet? Oh yes, government workers at EDD, USDA for food stamps, and other programs designed to keep people out of poverty and foster economic growth. And when crime increased and police budgets were cut, and fire stations were closed, and teachers lost their jobs…are you telling me that public sector employees didn’t suffer during the recession as well? Perhaps you are forgetting that public sector workers were furloughed throughout the state, lost 20% of their income, etc.

        • Tim Callahan

          I am a retired City of San José employee. I remember what the deal was when I signed on. I retired more than five years ago. Last year I saw my medical premium rise by 284%. That wasn’t the deal when I retired but Mayor Reed says that’s how he is saving the City money. It seems to me that reneging on a contract is criminal. Obviously Police and Fire in San José don’t like the Mayor’s agenda, that is why 35% of the Police force has either retired or left for other agencies during the last year. Did I mention the 10% pay cut all City employees were forced to take when new contracts were imposed by the Mayor and his crony City Manager? OK, what’s not fair about the above??? Quite a bit!

          • Bob Fry

            Boo-hoo. State employees “enjoyed” arbitrary 1-, 2-, and 3-day per month unpaid furloughs for years. I lost tens of thousands of dollars in that un-negotiated arrangement.

            The initiative only affects future benefits for future work…it doesn’t change a thing for past benefits earned.

  • Livegreen

    Thank you Mayor Reed for doing this. It’s nice to know there are centrist democrats who still believe in good government services first.

    In Oakland the politicians have listened to the unions and given employees a raise first before restoring services. The results?

    They passed a city budget leaving us over 100 officers shorter than before the recession, $400 million in road repairs needed and parks so downtrodden that the public has to use the pushes instead of park bathrooms.

    Good basic government services first. Go Chuck Reed.

  • erictremont

    re: “San Jose firefighters don’t get Social Security benefits”
    Yes, and they also don’t pay Social Security payroll taxes.

  • Bobby

    Mayor Reed is 100% right. The pensions given to government, state, federal employees are ridiculous. Mayor Reed has all of my support.

  • Steven Maviglio

    2% of California’s pensions are over $100,000 (mostly managers); the average CalPERS pension is $26,000.

    Mayor Reed is cropping the picture of recession increases in pension benefits — at the same time 401ks lost billions of dollars for working families. CalPERS has had double digit returns in the past couple years. Enough with the fuzzy math, Mr. Mayor!

    • Bobby

      Steven,

      what about subsidized health insurance for life that government workers get? Folks in private sector don’t get that. I am sure there are many other perks that government workers get such as getting a job while collection pension.

      • Steven Maviglio

        Not all public employees get that, nor do they get the stock options, matched 401ks, flexible time, and many other benefits that private sector workers get. And with the Affordable Care Act, all Americans will get “subsidized health insurance for life.”

    • erictremont

      Are you averaging the pensions of workers who spend just a few years on state or local government payrolls with workers who spend 20 or 30 years on the payroll? If so, the $26,000 “average” monthly benefit that you cite is a meaningless number.

      • Steven Maviglio

        It’s from CalPERS, which pays pensions to state and local employees. If you skew the numbers to include only 30 year employees (a small percentage) that number would be meaningless.

        • erictremont

          You can’t average the pension benefits of an employee who has been vested for 5 years with one who has been vested with 30 years. That is like taking the body temperature of a man who has half his body in an oven and the other half in a freezer and then implying that his “average” body temperature is representative of something—that does not pass the statistical laugh test. There is a good deal of turnover in state and local government employment, the reason why the “average” pension benefits seem low is because many employees don’t stick around long enough to accrue substantial benefits.

          • Steven Maviglio

            But the notion for this ballot measure is the “high cost of pensions.” The facts show that only a tiny percentage are 100k+ and the average is 26k. Furthermore, the legislation signed by the Governor last year capped pensions, stopped double-dipping, and ended some of the offensive provisions. This conversation really ought to be about how we provide MORE people with a secure retirement, not less.

          • Bob Fry

            You’re mixing state and local statistics. I don’t know the numbers accurately, but roughly half of city budgets are police and firefighter salaries and benefits…including pension benefits. Gray Davis unilaterally broke the contract with the taxpayers to give those “safety” workers a very, very generous increase in pension benefits *retroactively* to all employees, even those who retired the next month. It’s breaking the locals and CalPERS.

          • Steven Maviglio

            That’s simply not true. CalPERS is in better shape now than it was when Jerry Brown was first governor. What has hurt state and local governments is the recession and Wall Street — not retirement benefits. And guess who benefits from pension “reform”? Wall Street. 401ks offer lower returns and cost more than defined benefits.

  • trite

    And Mr. Sapien never did suggest what feasible alternatives might be . . . .

    • keepyourslfincheck

      I believe he mentioned decreased accrual rates for present employees as one of the devices the union proposed to the mayor.

  • Gabe

    This is all smoke and mirrors. Chuck Reed has been bought by corporations, period. I keep seeing this race to the bottom mentality and it is so destructive to the American way of life. America prospers when people can afford their basic needs. If some of these posters had their way 99% of us would be living in a van down by the river.

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