Pension Reform

By Ryan Hagen, The Sun
Posted: 04/17/14, 10:54 PM PDT | Updated: 16 secs ago

CLAREMONT >> Skyrocketing pension costs threatened San Jose’s ability to pay for services and will have the same effect in cities and counties up and down the state if changes aren’t made, that city’s mayor told students and others at Claremont McKenna College on Thursday night.

Reed’s proposed changes include a ballot measure to allow cities to reduce what benefits employees will accrue in the future— withdrawn until at least 2016 because of a dispute over the fairness of the ballot title and summary — that drew close attention in San Bernardino and other financially struggling cities.

Indeed, Reed said in answer to a question after the event, San Bernardino is on “the bleeding edge” of a pension-fueled crisis.

“This is a problem all across the state, and (the bankrupt cities of) San Bernardino, Vallejo and Stockton show what can happen,” he said.

In contrast to those cities, Reed said, San Jose saw robust job growth and had seen its general revenues increase by 19 percent over a 10-year period ending in 2012. But over that same time, he said the number of employees had dropped 28 percent — and the average cost per employee jumped 85 percent.

That’s why Reed said Thursday night that he was still committed to pursuing pension reform, even after he’s termed out this year.

He estimated the public relations battle will cost supporters $25 million, and “it’s fair to say the public employee unions … will spend more” in opposition.

“This is California,” Reed said. “Nothing is cheap.”

An audience member who said he drew a pension from Los Angeles County asked Reed why John Arnold of the collapsed energy provider Enron had given millions to the campaign for pension reform and whether Reed had considered turning down his own pension.

To read entire story, click here.