Categorized | State

California Public Pension Reform Heads for First Hearing

 

San Jose Court Battle Could Present Landmark Case for the State

 

Skippy Massey
Humboldt Sentinel 

 

SAN FRANCISCO (Reuters) – California’s third-largest city, San Jose, and its employee unions faced off in court
on Monday over public pension reforms in a case that has
major implications for other local governments across the
state trying to rein in the costs of retirement benefits.

The lawsuit, led by San Jose’s police union, shows how difficult it is for local governments to break benefit promises to current and past employees even when other public services are being cut to pay for them.

San Jose’s pension overhaul was promoted by Democratic Mayor Chuck Reed and approved by nearly 70 percent of voters in 2012 but city unions argue the move violates the rights of its members and is in breach of the California constitution.  They want the court to block the measure from going into effect and to maintain the current pension plan.

“If the unions prevail it will give local leaders elsewhere reason to pause.  If Mayor Reed prevails, they may get even more ambitious in finding new ways to reduce pension outlays,” said Larry Gerston, a political science professor at San Jose State University.

In opening remarks in court on Monday, Arthur Hartinger, a lawyer for the city of San Jose, said that the pension measure was necessary given the city’s strained finances.  ”Retirement cost increases have gone through the roof,” he
said.

But Gregg Adam, a lawyer for San Jose’s police officers, countered that employees’ vested rights are at issue, adding that they can’t be legislated away.  ”Decades of California law say ‘No’,” he said.

The trial is expected to run through Friday.  Santa Clara County Superior Court Judge Patricia Lucas will have up to 90 days to make a ruling on the trial’s central issue of whether the city’s pension overhaul of current employee’s benefits is at odds with state law.  Analysts say her ruling will be appealed.

Reed told Reuters outside the courtroom the city is ready for a long legal fight regardless of Lucas’ ruling.  He said the city would appeal all the way to the California Supreme Court if necessary.

In recent decades, municipalities across the country have provided their workers with higher retirement benefits, both pensions and health coverage, often in lieu of pay increases.  But this has often created a future burden for budgets, made worse in some cases by skipping payments
into pension funds.

Two other California cities, Stockton and San Bernardino, last year filed for bankruptcy due to deep financial problems that include spiking pension costs.  Detroit’s decision to file for bankruptcy on Thursday, the largest U.S. municipal bankruptcy filing ever, was also partly related to the cost of pension and other post-retirement benefits for city employees.

San Jose’s pension reform, which has not yet been adopted because of the lawsuit, does not reduce benefits already earned by employees, but would require them to either pay higher contributions to maintain current benefits or receive lower benefits.

It also requires new city employees to split pension contributions evenly with the city.  San Jose, which has two pension funds, currently pays $8 toward pension benefits for every $3 contributed by its employees, according to Dave Low, a spokesman for the mayor.

Reed made tackling San Jose’s pension spending, which rose to $245 million last year from $73 million in 2001, a priority.  San Jose has had to slash other spending to help cover the costs and balance its budgets.

Savings from the measure will help balance San Jose’s books in future years and restore services cut over the past decade in response to budget shortfalls, said Low.

Unions for public employees don’t see it that way.

“The mayor’s initiative was flawed from the get-go because it pulls the rug out from employees who have worked hard, played by the rules and expected the city to keep its promise,” said Steven Maviglio, a spokesman for Californians for Retirement Security, a coalition representing more than 1 million public employees.  “The foundation of California’s public pension system for nearly a century is that pensions are a legally protected promise,” Maviglio added.

The unions argue that any change in employee benefits needs to be negotiated and cannot just be imposed by the city.  They say the law shields their pension benefits from changes as they are the property of employees tied to their compensation.

San Jose’s public pensions are generous in comparison to others in California, which are already well above the country’s average.

The average San Jose police officer and firefighter who retired in the past decade, and worked for 26 years, gets an annual pension of $100,000, while the average civilian city employee who retired in the past decade, and worked for 20 years, has an annual pension of $45,000, according to proponents of the city’s pension reform measure.

Link:  http://news.yahoo.com/california-cou…232622160.html

* * * * * * * *

….To note, the City of Eureka is not far behind the salary levels of San Jose.

One Response to “California Public Pension Reform Heads for First Hearing”

  1. Your style is very unique compared to other folks I have read stuff from.

    Many thanks for posting when you have the opportunity, Guess I will just book mark this page.

Trackbacks/Pingbacks


Leave a Reply

HumSentinel on Twitter

RSS Progressive Review

  • Pocket paradigms
    You meet alot of process people in Washington. They're like vehicles without a drive belt. They make a lot of noise; they just can't go anywhere. Getting things done is now a radical act. Then there are the virtual people. They only exist as images of themselves. Talking to one of them is like watching a bad cable show without a zapper. Some scient […]
  • Word
    It's what you learn after you know it all that counts -- Baltimore Orioles manager Earl Weaver […]
  • William Burroughs getting in the Halloween spirit
    VIA CURTIS KISE […]
  • Down East Notes
    PUBLIC INFORMATION ANNOUNCEMENT Town of Freeport, MEOn Monday evening, October 27, 2014, the Maine State Police informed Freeport’s Police and Fire Departments that Ms. Kaci Hickox would be stopping in Freeport for one night on her way to her home in Fort Kent. Ms. Hickox is a healthcare worker who recently returned to the United States after caring for Ebol […]
  • The new Middle Ages
    Some readers may recall our occasional thesis that we are living in a new Middle Ages in which the masses are up against a relatively few paranoid lords in well moated castles aka Washington and NYC. We were please to find that Monty Python was on this case some time ago.VIDEO […]
  • Mid and late career teachers are underpaid
    Center for American Progress:Mid- and late-career teacher base salaries are painfully low in many states. In Colorado, teachers with a graduate degree and 10 years of experience make less than a trucker in the state. In Oklahoma, teachers with 15 years of experience and a master’s degree make less than sheet metal workers. And teachers in Georgia with 10 yea […]
  • What's happening
    What happens when you criticize Teach for America? Over 214,000 doctors won't participate in the new plans under the Affordable Care Act analysis of a new survey by Medical Group Management Association shows. It's about a quarter of the total number of 893,851 active professional physicians reported by the Kaiser Family Foundation.The 29 states whe […]
  • FBI comes up with new assault on Constitution
    Guardian - The FBI is attempting to persuade an obscure regulatory body in Washington to change its rules of engagement in order to seize significant new powers to hack into and carry out surveillance of computers throughout the US and around the world.Civil liberties groups warn that the proposed rule change amounts to a power grab by the agency that would […]
  • How corporations staged a coup against America
    Vox - In September, a proposal to amend the US Constitution to allow tougher campaign finance and election spending restrictions went down to defeat in the Senate, on a party-line vote. Now, a new analysis by Common Cause rounded up the latest lobbying filings to find which interest groups disclosed lobbying against this amendment.There are no great surprise […]
  • US kept jailing people despite drop in crime
    OFF THE CHARTS […]
  • White House coverup of the day
    Washington Post - Bloomberg White House correspondent Margaret Talev noted how the White House stopped giving details on the fine wines served at state dinners, an opaque measure that she exposed in this story. In pursuing the piece, said Talev, she got the runaround from White House press officials, making her “so mad at them.” […]
  • Word: The space explosion could have been worse
    Karl Grossman - This event underlines again the folly of using nuclear power in space — something the United States and Russia are again actively planning. An explosion on launch is not unusual — indeed, one out of 100 rockets fail on launch. But, consider if radioactive materials were on board — as will be the situation for the proposed U.S. and Russian nuc […]
  • The real Clinton story: 1982
    Stories the media doesn't tell you about the Clintons and the state that made them  A DEA report uncovered by Ambrose Evans-Pritchard will cite an informant claiming that a key Arkansas figure and backer of Clinton "smuggles cocaine from Colombia, South America, inside race horses to Hot Springs." The London Telegraph's Ambrose Evans-Pric […]
  • Real economics: Wages
    Among all employees nationally, 56 percent are hourly workers, and 32 percent of these, or more than 21 million, earn less than $10.10 per hour, according to University of Virginia researchers in the Weldon Cooper Center for Public Service’s Demographics Research Group. The Labor Department reports that the 13 states that raised their minimum wage in 2014 ha […]
  • Pocket paradigms
    A real simple rule on privatization: Ask the following question: Is this something about which citizens should have a say? If the answer is yes, don't privatize. - Sam Smith […]