State pension initiative fails, local votes in June

A drive to place a statewide public pension reform initiative on the November ballot ended last week, lacking funding like previous attempts. But major local pension reforms are expected to be on the June ballot in San Diego and San Jose.

Gov. Brown is urging the Legislature to place much of his 12-point pension reform plan on the November ballot, despite opposition by public employee unions to key parts. He suggests the cost control could boost support for his tax measure.

The widely watched local ballot measures propose more sweeping changes than the governor’s plan — switching new hires in San Diego to 401(k)-style plans, requiring current San Jose workers to pay more for future pension credits or get lower benefits.

San Diego Mayor Jerry Sanders is scheduled to discuss pension reform today (Feb. 13) at the National Press Club in Washington., D.C. Supporters think the local measure, a potential trendsetter, will draw well-funded opposition from national unions.

The initiative would switch all new city hires except police to 401(k)-style retirement plans and freeze pay used to calculate pensions for five years. Unions are trying to block a vote on the measure, contending bargaining laws have been violated.

Sanders and others led a drive that spent $1 million gathering signatures to qualify the initiative. New hires would get a tax-deferred plan that shifts investment risk from the employer to the employee, like pension-replacing plans in the private sector.

By a vote of nearly two-to-one in November 2010, San Diego voters rejected a half-cent sales tax increase backed by Sanders that was linked to more modest pension changes and other cost-cutting reforms.

San Diego has an estimated $2 billion long-term pension debt. Two disastrous deals in 1996 and 2002 raised pensions and lowered city payments to the pension fund, resulting in lawsuits, a federal moratorium on city bond sales and painful budget cuts.

San Jose Mayor Chuck Reed began looking into pensions when San Diego’s problem erupted, he told Michael Lewis, author of “Moneyball,” in the November issue of Vanity Fair.

Drawing international attention this month, San Jose and formerly bankrupt Vallejo were featured in a Canadian Broadcasting Corporation television news segment titled: “California pension woes a warning to Canada.”

A divided San Jose City Council voted 6-to-5 in December to place a measure on the June ballot that would do what the watchdog Little Hoover Commission said last year is needed to control pension expenses: cut costs for current workers.

Most pension reforms only apply to new hires, taking decades to yield savings. Public pensions are widely regarded to be vested rights, protected by contract law, that can only be cut if the employee is given another benefit of equal value.

The dwindling number of private-sector pensions can control costs by reducing the pensions current workers earn in the future, while preserving pension amounts already earned by service on the job.

One thing expected to allow the San Jose measure to cut pensions earned by current workers in the future was a fiscal emergency, not yet declared. A more recent rationale is based on the city charter only specifying minimum benefits.

The measure would allow workers to continue earning pensions at current amounts, if they agree to help pay off half the pension system’s huge debt. Their contributions could increase up to 5 percent of pay per year, capped at 25 percent.

Or current workers could choose to earn lower pensions in the future, keeping amounts already earned, working longer for full retirement and possibly paying less for pensions than they do now.

These and other provisions of the measure are presumably on the table in mediation with 11 unions. The city is attempting to reach an agreement before March 1, the deadline for changing the June ballot measure.

Although located in wealthy Silicon Valley, budget problems have prevented San Jose from opening four new libraries and a police substation built with voter-approved bond funds. The city workforce has dropped from 7,400 to 5,400 in the last decade.

Dozens of police and firefighters have been laid off, workers given a 10 percent pay cut and $400 million in road repairs delayed. In a state of the city address last week, Reed said pensions have been the biggest single cost driver.

The mayor said retirement costs increased from $73 million a decade ago to $245 million this year and are now more than 50 percent of the base payroll and more than 20 percent of the general fund.

Unions filed a complaint last week accusing Reed of inflating pension cost projections to get concessions in bargaining. A television news team reported that Reed said costs could reach $650 million by 2015, when officials projected $400 million.

Reed said actual costs, not projections, were used in negotiations with unions. He said the $650 million estimate, cited along with the $400 million projection, was an example of what could happen if conditions worsened.

Last week Dan Pellissier announced that California Pension Reform is suspending an initiative drive “after determining the attorney general’s false and misleading title and summary makes it nearly impossible to pass.”

He said if the Legislature fails to reform the “broken” pension system, the group will push another initiative in 2014. Attracting funding for a pension reform initiative has been difficult in recent years, despite favorable public polls on the issue.

Republicans and taxpayer groups are putting money into other measures: overturning state Senate districts, prohibiting government paycheck deductions of union dues used for political purposes, a state spending limit and a part-time Legislature.

A Republican candidate for governor, Meg Whitman, who spent $144 million of her own money on the campaign and finished nearly 13 percentage points behind Brown, rejected a request from a pension reform group in 2010 to fund an initiative.

A Legislature controlled by Democrats, traditional labor allies, is expected to approve a pension package that contains parts of Brown’s 12-point plan. Democrats had already introduced bills covering several of the points.

Among them are curbs on abuses such as “spiking” or manipulating final pay to boost pensions, “double dipping” or collecting a government paycheck and pension and giving pensions to convicted felon.

But whether key parts of Brown’s plan are watered down or blocked remains to be seen.

Unions have criticized or opposed some of the governor’s cost-cutting structural changes: a 50-50 split of normal costs with employers and giving new hires a “hybrid” pension and 401(k)-style plan while also extending the age for full pension payment.

“Current benefits, contributions and retirement ages don’t reflect the changing demographic realities we face and are not sustainable,” Brown said in a letter to legislative leaders on Feb. 2.

“Continuing these plans in their current form will put taxpayers on the hook for substantial costs now and in the future,” he said. “Urgent and decisive action is imperative.”

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at http://calpensions.com/ Posted 13 Feb 12

44 Responses to “State pension initiative fails, local votes in June”

  1. Ted Says:

    Well—- we saw this coming didn’t we.

    Wildly written unlawful initiatives that don’t get donors are the norm.

    Inflating pension costs by the ultra right wing clown posse was expected…..

    What a shame.

  2. gery katona Says:

    As a private sector taxpayer, I am interested in real reform that results in a sustainable system and fairness for all, just like the Governor has asked. I have doubts the legislature is capable of achieving this. How we arrived at unsustainable pension benefits is well-documented; Calpers predicting in 1999 during the dot.com boom a stock market level of 29,000 in 2009, the resulting A.B. 400 which flew through the legislature promising huge benefit increases at no cost to the state and a few other significant increases along the way granted under-the-table so the public wasn’t aware of what was going on. These instances represent poor management by Calpers and the legislatures to bribes and corruption on a 3rd world scale. In the end, the private taxpayer was not treated fair since they do not get comparable benefits and are unwilling to foot the bill. Given this background there is no way we will grant a temporary tax increase until these benefits are scaled back to be fair to the taxpayers. Included has to be current and retired employees (reductions/eliminations in annual increases) even if the law has to be changed. And I don’t want union leaders making recommendations how to pay for existing benefits. That does not resolve the sustainability/fairness issue.

  3. Rex The Wonder Dog! Says:

    There is no such thing as a “temporary tax”, we saw that with Arnold, and now Clown, trying to “extend” these so called “temporary taxes” for 10 years.

    News break, a 10 year tax is not “temporary” and we all know it.

  4. Robert Says:

    Perhaps we’ve finally reached the time where the radical right wing-nuts will have to get real. Instead of trying to advance their unlawful, unethical, immoral, and wholly moronic political agenda, maybe we’ll be able to let experts work with employers and employees to find real and fair cost-saving reforms. How much time and money has been wasted waiting for the rhetoric to pass? It’s time for real solutions.

  5. Christopher E. Platten Says:

    Real reform begins by understanding the cause for recent pension cost increases: the theft of pension fund assets by Wall Street in 2002 and 2008 due to the dot.com and real estate bubbles. Add to this the fact that many California public agencies used the pension plans as their own little bank accounts by failing to make normal cost contributions, sometimes for several years starting in the late ’90s and voila, you have the basis falsely claim that immediate and drastic “reform” is necessary.

    In Reed’s case, deception and pervarication is used to mislead the voters into believing that the cost of pensions will within 5 years more than double that projected by independent actuarial forecasts.

    For decades, public employees have relied on pensions to make up for the established difference in compensation between the public and private sector. That promise must be kept, no matter how much politically driven angst is promulgated by Chamber of Commerce backed politiicians. Level funded defined benefit plans can be legally adjusted, both in terms of funding and in terms of future benefit reforms, to maintain existing benefit packages on a sustainable basis.

    It is no surprise that folks like Pellissier, Sanders and Reed are amping up their calls for the elimination of pension benefits: first, the call is premised upon a puerile appeal to the voters — “most of you don’t have a defined pension, so why should public employees?” This is a limited basis of appeal to action by voters.

    And that is why, for Sanders and Reed, it is necessary to misrepresent the nature of defined benefit pension plans, the real cause of the increase in current costs, and the real means to deal with pension liabilities.

    Second, time and the economy are mitigating the funding level shortfalls accomplished by the recession. Don’t any of these folks remember that pensions are funded on the basis of decades of growth, and not based on single year experience? Has there been a time in our history when economic recession has not been followed by economic growth? No, addressing the facts is not part of the game for those in office who seek short term success based on the destruction of benefit programs that have served the public, its servants and annuitants for more than a half of a century.

    The unfettered attack on public pensions is nothing more than an extension of an ideological paradigm: reduce wages and benefits to reduce taxes. The result is preordained: watch the middle class disappear.

    Reed, Sanders, et al care not for the long-term consequences of their folly.

    More is the pity.

  6. Ted Says:

    Mr. Platten– well said— nice to hear an intelligent voice of reason out here….

  7. Rex The Wonder Dog! Says:

    Real reform begins by understanding the cause for recent pension cost increases: the theft of pension fund assets by Wall Street in 2002 and 2008 due to the dot.com and real estate bubbles.

    Time to smack some trough feeder whoppers back into the stone ages;

    Half-truth #1: (Multiple-choice) “The pension mess was caused by greedy …
    (a) Employees
    (b) Unions
    (c) Politicians
    (d) Wall Street investors and bankers
    … and they are the ones who should pay to fix it.”

    There is a target for every finger-pointer. The truth is that the pension community has plenty of blame to go around. About half of the underfunding in most public pension plans is attributable to the six-sigma market plunge that nobody saw coming in 2008. When stocks declined by 55 percent in the last recession, more than double the average decline in the 13 previous recessions, that knocked a gaping hole in funding ratios and doubled the average plan’s unfunded liabilities. I guess you could try to blame the big banks and the homebuilders and the money managers and the mortgage brokers and the speculators and hedge funds and the real estate industry and the CEOs of the Fortune 500 with their short-sighted stock options and Fannie Mae and Freddie Mac and the Congress that goaded them to lend to unworthy borrowers in the name of universal homeownership, for causing pension deficits. But I’m at a loss to see how that will ever help us fix the public pension problem.

    Yet that is only half of the story. Long before the Great Recession, the seeds of today’s mess were carelessly sown by politicians who declared pension holidays, unions that bargained for retroactive pension increases, trustees who assumed that investment returns would continue to grow to the moon, employers that granted early retirement incentives and gave away benefits to pass the buck to future taxpayers, pension administrators who were too timid to stand up to self-interested trustees or stakeholders and insist on more conservative practices, accountants who allowed unfunded liabilities to be amortized over two generations, and actuaries abetted by investment advisors who jiggered the investment portfolios toward ever-riskier allocations to enable disingenuous trustees to justify discount rates that would avoid the inevitably heftier contribution rates needed to assure intergenerational equity. Those who point fingers of blame should first look in the mirror.

    http://www.governing.com/columns/public-money/col-pension-puffery.html#ht1

    Second, time and the economy are mitigating the funding level shortfalls accomplished by the recession.

    More myth busting;

    Half-truth #2: “There is no crisis. Once the stock market recovers, there is no problem.”

    Some of today’s pension Pollyannas claim that when stock-market trends return to their historical averages, everything works out. That is simply ignorance and puffery from people who don’t even bother to understand pension math. The actuarial projections used by most public pension plans are already assuming that 85-year historical returns will continue indefinitely, even though many of the major investment consultants have already dialed down their projections for the next decade. Perpetual stock-market increases of 10 percent annually are already baked into the funding ratios that now hover just above 70 percent on average nationwide. Even if stocks return next year to their previous peak levels (DJIA 14,100), that wouldn’t restore pre-recession funding ratios. That’s because there have been no capital gains from equities for the five intervening years while the underlying liabilities have grown about 50 percent. Stocks may have good and bad growing seasons, but there is never a crop failure on the liabilities farm. As I explained last year, stock indexes would have to double in the next two years to restore most pension funds to their 2007 funding ratios. To return the average pension fund to full funding, stock markets would have to produce 14 percent compounded returns the rest of this decade, with no intervening recession. That would put the Dow Industrials at 30,000 in January 2020. I’ll gladly give even odds against that scenario to anyone who wants to buy into that long-shot.

    For decades, public employees have relied on pensions to make up for the established difference in compensation between the public and private sector.

    Totally false. Public employees are paid more than the private sector in every job category except post graduate like IT or doctor.

    The unfettered attack on public pensions is nothing more than an extension of an ideological paradigm: reduce wages and benefits to reduce taxes. The result is preordained: watch the middle class disappear.

    The middle class has alreadu disappeared, thansk to the public unions who are now the new 1%ers. The poor are now paying for the trough feedign 1%ers.

    Nothing feels beter than shutting down the lies the Christopher E. Plattens of the world try to spin :)

  8. Honestly Puzzled Says:

    While no one can argue that public employee pension is unnessesary, the manner in which San Jose conducts its negotiations with its employees is disheartening, demoralizing, and dishonest. Many were led to believe the Mayor’s Vanity Fair offered $650 million pension deficit was the target. Only recently, and after repeated pleadings were bargaining units given the current number, resulting in a declared deficit of less than half. This was a textbook example of bad faith negotiation. There is still hope among some that in the interest of public and transparent fairness, The city will return to honest bargaining and accept that previous sacrifices already given will be accepted. The door remains open to meaningful reform and collaborative employee dialogue. But, a contrite attitude on the part of the Mayor would help a lot to heal the damage.

  9. Ted Steele, Head Renter, it's cozy up here in Rex Poodle's tiny head! Says:

    Hey Poodle blow hard– thanks for another dull-normal cut n paste that we will never read! Drivel ! Have a nice day!

  10. Tom Saggau Says:

    See NBC Bay Area Investigative Report: San Jose’s Fuzzy Pension Math:
    http://www.nbcbayarea.com/news/local/Guessing-Pensions-138981764.html

    See Follow up report here:
    http://www.nbcbayarea.com/news/local/City-Manager-fires-back-following-NBC-Report-139134264.html

    Real reform should be based upon real numbers. These 5 San Jose Unions, SJ Firefighters Local 230, SJ Police Officers Association, IFPTE Local 21 (Architects/Engineers, Mid-Level Managers, and Maintenance Supervisors) have all offered reforms that will decrease what San Jose spends on pensions.

    Their respective proposals have been rejected because they don’t save enough money…hogwash! The numbers the City has been using are bogus, balderdash, phony, made up, not based in fact, deceitful, not true, pulled out of thin air or thick air, off the top of their head, without back up and or analysis…

  11. Rachel Says:

    The key to pension reform is honesty. While most retirement systems are in decent shape, some, like San Jose’s and San Diego’s are not. When SJ Mayor Chuck Reed uses phoney figures to position himself for higher office, he misses the opportunity to collaborate with city labor unions and build real reform based on…..honesty.

  12. Rex The Wonder Dog! Says:

    The key to pension reform is honesty. While most retirement systems are in decent shape

    Most?? What planet are you living on-Planet Trough Feeder??

    The muni’s whose pensions are NOT in danger are the very rare exception. All across the entire nation, not just CA, public pensions are upside down.

  13. Tom Saggau Says:

    Rex confirms yet again why I support spading and neutering of Pets!!!

  14. Sunshine Says:

    The elected officials and the city manager of San Jose have been publicly putting out that there is going to be a much higher bill for funding pensions than their actuarials told them was accurate. This was to deceive voters into voting a certain direction this coming June armed with the wrong information. This number was also used to obtain 12.5% pay and compensation cuts with city employees. Now, these same elected officials and city manager are going into full damage control spin after being exposed by a very tenacious television journalist.

  15. Dale Says:

    I find it sad that pension reform is causing so much debate when the laws are so clear. There are union representatives that are at the table wish to resolve it to assure that fair pensions remain and that the system is sustainable, now and in the future. For a public employee, who has no “safety net” of social security, this is what was promised and why they stay where they are when they could make more in private industry. For everyone who wishes to take this away, keep in mind, if they are successful and the precedent is set, who will protect you when the private employer decides to recoup any matching funds to your 401K and also to make up any difference due to the losses? Who do you think fought at the forefront for workers rights a these years? To paraphrase an old saying: When they came after my neighbor, I watched and said nothing. When they came for my co-worker, I watched and said nothing. They have come for me, why won’t anyone stand up and help me?

  16. Christopher E. Platten Says:

    Two comments in reply to “Rex the Wonder Dog”:

    1. I am more than happy to engage in a public debate with the “Wonder Dog” on this issue — and I will not insist that the “Wonder Dog” reveal his/her/their(?) true identity, as I have.

    2. I cannot be guilty of “lies” since “Wonder Dog” agrees with my analysis, at least, in large part. It is therefore no “wonder” that the “Dog’s” statement fails to acknowledge my point: “Level funded defined benefit plans can be legally adjusted, both in terms of funding and in terms of future benefit reforms, to maintain existing benefit packages on a sustainable basis.”

  17. Rex The Wonder Dog! Says:

    Tom, correct me if I am wrong, but didn’t we destroy your bogus comments the last time you showed up here with those SEIU “talking points”??

    Me thinks YES we did :)

    http://calpensions.com/2011/12/08/pension-reform-does-san-jose-know-the-way/

  18. Rex The Wonder Dog! Says:

    Stale says;
    I find it sad that pension reform is causing so much debate when the laws are so clear. There are union representatives that are at the table wish to resolve it to assure that fair pensions remain and that the system is sustainable, now and in the future.

    LOL..another trough feeder with the same old “talking points”..I bet you wear one of those purple SEIU shirts when you sleep at night!

    OK Baby Einstein, having 50 y/o GED educated cops and FF’s (who are already being paid 10 times market rate for an UNSKILLED job) who are “retiring” with $10 million pensions is not fair nor sustainable.

    Why do you clowns make this so easy for me ?? :)

  19. Rex The Wonder Dog! Says:

    For a public employee, who has no “safety net” of social security, this is what was promised and why they stay where they are when they could make more in private industry.

    You would never be making more in the private sector than what you make in the public sector. In fact most public employees would betaking haircuts of 50%-90% of what they are comped in the trough feeder world. No unskilled/semi skilled jobs in the real world have $200K comp packages and allow one to “retire” at age 50, like GED cop and firewhiner do. Teachers in the private secotr are paid 1/2 of a public school teachers. A DMV clerk job is the equivalent of a $15K-$20K bank teller job.

    And the fact is most public wemployees would more than likely be fired b/c their work ethic is not up to private sector standards.

  20. Rex The Wonder Dog! Says:

    Christopher E. Platten Says:
    2. I cannot be guilty of “lies” since “Wonder Dog” agrees with my analysis, at least, in large part. It is therefore no “wonder” that the “Dog’s” statement fails to acknowledge my point: “Level funded defined benefit plans can be legally adjusted, both in terms of funding and in terms of future benefit reforms, to maintain existing benefit packages on a sustainable basis.”

    The devil is in the details as they say.

    YES, a funded DB that had a retirement age of 65-67 like SS does, and had similar payouts of $30K like SS does is fully sustainable. But that is not what the public sector pensions are all about-are they??? I don’t recall retroactive pensions increases anywhere in world history except publis union employees-do you Chris??

    Public employees have pensions that pay 10 times the $30K the private sector egts- paid to employees only 50 years old, whi coudl live TWICE the number of years he actually worked. (Google Craig Bowen of the San Ramon Valley FD). We are not your sugar daddy Chris, we are not here so you can be part of the 1%ers. CA public employees are comped TWOCE that of the private sector and are the highest paid in the nation.

    So your comment is a straw man argument like all the rest.

    When YOU Christopher E. Platten agree to DB’s with caps on them of say $60K max (TWICE that of SS) at the same age as SS then you will have a legit point. But please don’t try to come on here and claim gov DBs are sustainable when 50 Y/O GED educated employees are walking off with $1-$10 million pensions. Won’t work. Try that SEIU beach party, or a SJFD BBQ, those will go over good there. But not here.

  21. SeeSaw Says:

    gery katona, you give yourself permission to make recommendations on how things should be handled–while, at the same time, you do not want the unions, who represent the workers, to have the same priviledge. Who do you think best knows, the details, inside and out, and how to go about determining, what is fair–I’m sure you would appoint yourself. Well, I have news for you–no current employee, or retiree in any State of CA, public retirement system, is going, to be asked to give back, what they have already earned and vested–so you can just forget about that. There are plenty ways to attain pension sustainability, such as stopping egregious spiking, which occurs in certain County plans, and capping the amount of base salary that may be used in the pension calculation. Taking away air time purchases and double dipping are both losers, when it comes to the costs of pensions. And so is the proposed Hybrid Plan. You need to think and act reasonably–not punitively!

  22. SeeSaw Says:

    RWD, you are the “wopper-tellingr” king, so I think you ought to lay off the posters, who are actually trying to spread the truth. The Governor’s tax-increase initiative will increase taxes on the rich, for five years, and will raise the sales tax, a half-cent on everyone–not ten years, as you are spreading. As for public pensions being ten times that of a private worker, you also exaggerate to “wopper” territory. My spouse gets a carpenter pension (DB at that) that is so small, it doesn’t even pay his medical insurance premiums. Adding that tiny stipend, to his SS benefit, he gets about half of what I do, when I also add my 457(b) benefit to my CalPERS pension. That is two times more, that I get Rex, not ten times! I will agree with anyone, who thinks that my spouse worked harder than I did. Its time that the private sector is fairly treated–and that does not mean pulling the public-sector workers down, just to make things even.

  23. Ted Steele, Head Renter, it's cozy up here in Rex Poodle's tiny head! Says:

    The Poodle continues to pick the odd character making too much and tries to use that as HIS straw man—– Poodle– we’re on to you little buddy! LOL zzzzzzzzzzzzzzzzzz mmmmmmmmmmmmmmmmmmmmm it’s warm and cozy up here living in the poodle’s tiny head……

  24. Ted Steele, Head Renter, it's cozy up here in Rex Poodle's tiny head! Says:

    oh….and……..Santorum for President! LOLOL This is just fun.

  25. Rex The Wonder Dog! Says:

    RWD, you are the “wopper-tellingr” king, so I think you ought to lay off the posters, who are actually trying to spread the truth

    Seesaw, you have served up so many Whoppers here you’re now Burger King’s BIGGEST franchisee!

  26. SeeSaw Says:

    How about elaborating, Rex. Pinpoint any statement I have made that is not true–and counter it with documentation–not a whopper opinion.

  27. spension Says:

    Looks like the SJ Mayor kept saying $650 million as the pension deficit when the real number is $430 million. Seems to me like a $430 million deficit is still a big problem; also it does seem that San Jose has some serious $ shortfalls.

    What would be interesting is for the pro-Union advocates to give the deficit number of their proposals. Do they have a way to get $0 deficit in 2015-6?

    People definitely do not want to have their taxes raised to pay >$80K/year pensions of public employees. I know generous pensions were legally guaranteed to many public employees (3% at 50, guaranteed 3% raises every year after retirement, etc). But where will the money to pay those pension benefits come from?

    From reducing our children’s school schedules to 4 or 3 days a week? From ending public universities? Closing parks? Anyone, Beuhler?

    A rapidly escalating cost area is medical insurance. Can we just form an agreement with Canada to let Canada run a single payer system in California? Would that free up enough money to pay the pension deficit?

  28. Ted Steele, Head Renter, it's cozy up here in Rex Poodle's tiny head! Says:

    lol— so I guess its ok the mayor made up the numbers?? LOL ok ok ok——

  29. Ted Steele, Head Renter, it's cozy up here in Rex Poodle's tiny head! Says:

    kind of makes one wonder what other numbers the anti worker republican crowd is fudging!

  30. spension Says:

    Ted Steele, is a $430 million pension debt OK? What will union proposals reduce that number to?

  31. Semper Fidelis Says:

    Regarding San Jose, is the author saying that he believes what Mayor Reed says and/or writes? Seems to me it is pretty clear that lying has been going on when you define lying as the intent to convey a false impression. The wording in press releases, article quotes and especially the Mayor’s June 2011 Budget Message appears quite calculated to mis-characterize information so that voters will draw inaccurate conclusions and be swayed to vote in support of draconian pension reform measures at the ballot box. The mere intended institutionalization of such measures into the City’s Charter demonstrates an eagerness on the part of the Mayor and his allies to bind the hands of future San Jose City Councils that cannot be undone or modified without other costly ballot measures. This contrived method of change also suggests a significant level of pessimism that any real reform can be achieved in any other manner. Real reform cannot be tethered to false representations. It must be a process with courageous and collaborative leadership on both sides of the negotiations table, and conducted with unquestionable integrity and full disclosure of the facts. Would you want it any other way? That said, there needs to be some major process improvements on the city side in San Jose (including courage, collaboration, integrity and facts)!

  32. SeeSaw Says:

    Spension, who is proposing to raise taxes to pay for pensions? The pensions are going to go on, whether or not there is a tax increase. The tax increase, the Governor is proposing will be used for education and public safety–not pensions.

  33. Ted Steele, Head Renter, it's cozy up here in Rex Poodle's tiny head! Says:

    LOL spensions—– wow——-ok— I’ll give you the abridged answer because frankly this is a waste of space——

    unfunded liability is almost a nonsense word—– I don’t buy into it. In the case of the Country’s largest pension fund–ALL previous pension payouts for the last 88 years HAVE been funded, not unfunded. The funding coms from 3 sources- the employee, employer and the fund. Like your home mortgage, the unfunded liability you have will be paid off unless you have no money and you default.

    You won’t. Probably.

    While the pensions have been adjusted from time to time to meet actuarial prognostications, they still remain cash positive and in my view they will so remain.

    So—- I view the debt in that way.

    Now in the case of San Jose—- perhaps there are issues with the cash basis of the fund but falsehoods about the so called liability is just a shocking development. It strikes me as a pretty evil thing to lie about the quality of workers’ life savings after 30 years of a contract. If I were a San Jose voter I would dispatch the mayor to perhaps a job more in line with his ethics or skill set, maybe real estate, or the fast food industry?

    On the health care idea you have—- frankly you may have close to a good idea there!

  34. spension Says:

    Money is fungible, Seesaw… paying account A with the new tax frees up money from Account B to cover the pensions of privileged public workers.

    Deafening silence as to whether a $430 million deficit in San Jose is acceptable, or the amount by which the counterproposals of the unions would reduce that deficit.

    Accusing the Mayor of lying doesn’t help achieve a solution. He probably was careless, and definitely got his number wrong, but it seems to me there is still a gigantic $430 million deficit from pension problems. It might feel good to divert attention to the exaggerating mayor, but I see no useful step forward that results.

  35. Tom Saggau Says:

    Spensions, First it is not a deficit but rather a projection. The actual projection for FY 15-16 is not $650M, or $431M or even $400M, it is….about $300M or about $50M more than what it is today.

    Second, 5 unions including the firefighters, police officers and ifpte local 21 (CAMP, AMSP, and AEA) have proposed pension reform that is legal, fair and reasonable. Go to the City of San Jose’s website to see for your self: http://www.sanjoseca.gov/employeeRelations/RetirementReform.asp

    Lastly, exposing the lie, which the electronic media has done, provides an opportunity to deal with facts and data and not the nonsense that has been coming out of City Hall.

  36. SeeSaw Says:

    The State’s liability to CalPERS is only 3% of the total budget, Spension, so I don’t see how pensions have any connection, to tax increases. The pension liabilities will be paid, whether or not the tax increase passes. In the meantime, the state needs new revenue. The pensioners are not going to go away, so if you choose not to help pay for education and public safety, it is your choice. I choose to help. Even with a pension, I make a lot less than many, who do not have pensions. Trying to set pensioners apart from other Californians, when all the citizens of CA, have the same obligations, to this state, is just plain disingenuous.

  37. Rex The Wonder Dog! Says:

    The State’s liability to CalPERS is only 3% of the total budget

    LOL..another seesaw WHOPER. Most of the “states money” is passed through to the local munis-such as the school districts-where over HALF of the state money goes seesaw, and the school districts then pay 10.5% of that half to PENSIONS, that right there is over 8% of the states budget not counting another dime.

    Local muni’s are paying anywhere form 15% to 30% of their general funds for pensions, and it is going up every year.

    Seesaw, I’ll take some fries with that whopper you just served up :)

  38. Rex The Wonder Dog! Says:

    Tom Saggau Says:
    February 14, 2012 at 6:22 am
    Second, 5 unions including the firefighters, police officers and ifpte local 21 (CAMP, AMSP, and AEA) have proposed pension reform that is legal, fair and reasonable.

    Tom, any more of those tall tales and I am going to start calling you Pinocchio!

    The unskilled cops and ff’s have had their compensation DOUBLED over the last 10 years, so your claims of pension reform are as big of a whopper as seesaws claims;

    Right now, the cost of paying a firefighter is foremost on city officials’ minds. Take San Jose, Calif. Over the past decade, the cost of firefighter wages and benefits in the big California city has increased 100 percent, while city revenues have only risen by 20 percent, according to Michelle McGurk, a spokeswoman for the mayor’s office. The average firefighter, she says, now costs the city more than $180,000 per year. Moreover, the highest-paid employees in San Jose aren’t high-level city managers — or even the city manager — but upper-level members of the city fire service. Firefighters with 30 years of service can retire as early as age 50, with 90 percent of their salary.

    http://www.governing.com/topics/public-workforce/firefighters-feel-squeeze-shrinking-budgets.html

    Tom, all the Firewhiners need a 50% pay cut-same with the cops. They are GED jobs, not worthy of $200k per year. Sorry.

  39. Tom Saggau Says:

    Rexall,
    Funny you say tales, because as usual you are chasing yours again. You bark up the wrong tree of misinformation and lies, clearly you were never properly potty trained by your owner and the the kennel you must return for proper training.

    You defend lying because you are most at home with those that do, not doggie do do, but do. Clearly you should seek medical and mental help ASAP, not SPCA, but ASAP:
    http://www.petwave.com/Dogs/Dog-Health-Center/Mental-Disorders.aspx

    Now go and dig up some additional lies to post and we will wad up our newspaper and swat you on your wet nose once again.

  40. Ted Steele, Dean of Students Says:

    And of course– as always…..these zealots can’t write a lawful measure to advance their shaky positions!

    http://www.10news.com/news/30448488/detail.html

  41. Rex The Wonder Dog! Says:

    Tom, feel free to respond to my 2-4-12 6:54AM post (and the link which destroyed your comment that the public unions are working to fix the problem, especially the cops and ff’s whom are receiving the most money in salary and benefits, for which the educational requirement is a HS diploma) after the your attack comments are over and done with. :)

    Public employees are only working 30 years while private sector works 50, Public employees receive benefits as high as $300K per year indexed for inflation at age 50 while SS is maxed out at $30K with no mandated annual index at age 67.

  42. spension Says:

    The media reports on San Jose were quite clear that the 15-16 deficit was projected to be $430 million. Still haven’t heard the number that the union advocates say their proposals will reduce that to.

    Calpers alone reports a $107 billion uncovered liability in their June 30, 2011 report. That exceeds the entire $92 billion California General fund proposed in the new budget.

    And assumption of more reasonable investment return rates vastly increase Calpers’ liability.

    I can’t imagine how new taxes in California would *not* go toward the pension system. Unless a system of lockboxes and firewalls is put in place, preferably voluntarily as an offer in collective bargaing by all the state unions, no taxes will ever pass.

    If the unions fail to seize the day, look forward to 3 day school weeks, closures of parks, libraries, and more potholes.

  43. Tom Saggau Says:

    Spensions, for the love of god get informed:

    http://sanfrancisco.cbslocal.com/2012/02/09/unions-accuse-san-jose-mayor-of-exaggerating-pension-costs/

    http://sanfrancisco.cbslocal.com/2011/09/29/san-jose-unions-offer-concessions-on-pensions/

    What media reports are you looking at, those produced by Rexall the Wonder Pooch?

    See NBC Bay Area Investigative Report: San Jose’s Fuzzy Pension Math:
    http://www.nbcbayarea.com/news/local/Guessing-Pensions-138981764.html

    See Follow up report here:
    http://www.nbcbayarea.com/news/local/City-Manager-fires-back-following-NBC-Report-139134264.html

  44. spension Says:

    Good grief, Tom Saggau, I used your link (posted on Feb 13, 2012 at 6:31pm)

    http://www.nbcbayarea.com/news/local/Guessing-Pensions-138981764.html

    “Internal emails show Cheiron was instructed to follow certain rules, including using out-dated numbers that did not factor in the pay-cuts and massive layoffs that had taken place earlier in the year.

    These calculations became the new projection and pushed the official number up about $30 million- the new projections became $430 million dollars for retirement costs by the year 2015.”

    Cut the puffery, and tell me the number that replaces $430 million union proposals are adopted.

    The $107 billion CalPERS deficit comes from reading their financials on their web site. The $92 billion/year California general fund from the governors website.

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