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.


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