West-Coast Wisconsin: Californians Vote for Public Sector Pension Cuts

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 gotmost of the attention yesterday, other votes took placearound 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 votedoverwhelmingly 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 evenbigger margin, 71 percent to 29 percent (as of last night). As in SanDiego, the cost of maintaining city worker pensions has skyrocketed from $73million a decade ago to $245 million this year. That’s fully 27 percent of thecity’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 retireearly, meaning they’ll collect this money longer than most retirees. In some cases,public sector retirees get out early enough that they can get anotherjob while collecting their generous pensions.

But it looks like taxpayers have had enough. The newly passed San Jose measure is more aggressive than previouspension adjustments, because it isn’t limited to future hires. It forces current employeesto make a choice between donating substantially more to their ownretirement–up to 16 percent more–or accepting a lower pension amountwhen they retire. The measure also makes other adjustments, includingending bonus pension checks and suspending annual pension increases atthe 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 SanJose’s Measure B — a City ballot measure that unlawfully modifiespension benefits for city employees — San Jose’s Police Officers, FireFighters and other workers will file multiple lawsuits to enjoin theCity from implementing the unlawful changes to employee pensions, healthcare and disability benefits.

Regardless of the outcome in San Jose, the writing is onthe wall for public sector unions. Given a clear choice, two ofAmerica’s largest cities in one of its most progressive states sidedoverwhelmingly with taxpayers. Added to the results in Wisconsin, this has all the hallmarks of a trend.

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