West-Coast Wisconsin: Californians Vote for Public Sector Pension Cuts
The fight to recall Governor Scott Walker in Wisconsin started over a showdown with public sector unions. While the recall election got
most of the attention yesterday, other votes took place
around the country in which citizens had a chance to weigh in on similar issues.
In California, the state's second and third-largest cities both voted
overwhelmingly to cut pension benefits to city workers. In San Diego,
Proposition B passed by a solid 2-1 margin. As of last night, the lead was 68 percent to 32 percent.
Looking at the budget figures, it's not hard to see why "Prop B" was so popular. In 1999, San Diego paid $43 million into its retirement fund. This year, that figure was $231 million, 20 percent of the total city budget.
Meanwhile, in progressive San Jose, a similar Measure B won by an even
bigger margin, 71 percent to 29 percent (as of last night). As in San
Diego, the cost of maintaining city worker pensions has skyrocketed from $73
million a decade ago to $245 million this year. That's fully 27 percent of the
city's annual budget.
The Wall Street Journal notes that the average San Jose police officer or firefighter who retired since 2007 is earning a
$95,336 pension. Not bad, especially since these employees often retire
early, meaning they'll collect this money longer than most retirees. In some cases,
public sector retirees get out early enough that they can get another
job while collecting their generous pensions.
But it looks like taxpayers have had enough. The newly passed San Jose measure is more aggressive than previous
pension adjustments, because it isn't limited to future hires. It forces current employees
to make a choice between donating substantially more to their own
retirement--up to 16 percent more--or accepting a lower pension amount
when they retire. The measure also makes other adjustments, including
ending bonus pension checks and suspending annual pension increases at
the city's discretion.
Not surprisingly, city worker unions aren't giving up their golden parachutes without a fight. An email issued this morning by San Jose unions warns, "Following the passage of San
Jose's Measure B -- a City ballot measure that unlawfully modifies
pension benefits for city employees -- San Jose's Police Officers, Fire
Fighters and other workers will file multiple lawsuits to enjoin the
City from implementing the unlawful changes to employee pensions, health
care and disability benefits."
Regardless of the outcome in San Jose, the writing is on
the wall for public sector unions. Given a clear choice, two of
America's largest cities in one of its most progressive states sided
overwhelmingly with taxpayers. Added to the results in Wisconsin, this has all the hallmarks of a trend.