San Diego, San Jose voters embrace pension cuts

San Jose Mayor Chuck Reed, right, high fives former San Jose Vice Mayor Pat Dando as they arrive at a campaign party in San Jose, Calif., Tuesday, June 5, 2012. / AP Photo/Paul Sakuma

(CBS/AP) SAN DIEGO - Voters in two major California cities overwhelmingly approved cuts to retirement benefits for city workers in what supporters said was a mandate that may lead to similar ballot initiatives in other states and cities buried under mounting pension obligations.

Public employee unions that aggressively fought the measures weren't able to overcome the simple message supporters used to attract voters in San Diego and San Jose: Pensions for city workers are unaffordable and more generous than many private companies offer. The result is reduced public services in the form of such things as limited hours at public libraries and unfilled potholes.

"The public is frustrated," said San Diego councilman Carl DeMaio, a Republican who staked his mayoral bid on the pension measure and advanced to a November runoff in Tuesday's election to lead the nation's eighth-largest city.

In San Diego, two-thirds of voters favored Proposition B while the landslide was even greater in San Jose, the nation's 10th-largest city. With all precincts counted, 70 percent were in favor of Measure B.

"The voters get it, they understand what needs to be done," said San Jose Mayor Chuck Reed, a Democrat who has called pension reform his highest priority.

"It's going to save the city of San Jose billions of dollars over the next several decades," Reed told CBS San Francisco's Len Rodriguez.

Shrinking tax revenues during the recession are also responsible for service cuts in San Diego and San Jose, but pensions were an easy target. San Diego's payments to the city's retirement fund soared from $43 million in 1999 to $231.2 million this year, equal to 20 percent of the city's general fund budget, which pays for day-to-day operations.

As the pension payments grew, San Diego's 1.3 million residents saw roads deteriorate and libraries and recreation centers cut hours. For a while, some fire stations had to share engines and trucks. The city has cut its workforce 14 percent to 10,100 employees since Sanders took office in 2005.

San Jose's pension payments jumped from $73 million in 2001 to $245 million this year, equal to 27 percent of its general fund budget. Voters there approved construction bonds at the beginning of the last decade, but four new libraries and a police station have never opened because the city cannot afford to operate them. The city of 960,000 cut its workforce 27 percent to 5,400 over the last 10 years.

Tuesday's votes set the stage for potentially lengthy legal challenges by public employee unions. The measures are unusual because they address pensions for current employees, not just new hires.

Opponents say the measures deprive workers of benefits they were counting on when they got hired. Some workers decided against potentially more lucrative jobs with private companies, figuring their retirement was relatively safe.

Those arguments failed to resonate with voters.

"A lot of employees are disheartened," said Yolanda Cruz, president of the San Jose Municipal Employees Federation, who called the outcome disappointing. "We've been made the full problem of what's been going on."

The ballot measures differ on specifics. San Diego's imposes a six-year freeze on pay levels used to determine pension benefits unless a two-thirds majority of the City Council votes to override it. It also puts new hires, except for police officers, into 401(k)-style plans.

More than 100,000 residents signed petitions to put the San Diego measure on the ballot.

Under San Jose's measure, current workers have to pay up to 16 percent of their salaries to keep their retirement plan or accept more modest benefits. New hires would get less generous benefits.

Reed joined an 8-3 City Council majority to put the measure on the ballot. He said after Tuesday's vote that he expected other cities in financial binds to pursue similar measures.

"It's novel but it's certainly not radical," he said. "Mayors across the country are very interested. We're at the leading edge but we're not alone."

(CBS/AP) SAN DIEGO - Voters in two major California cities overwhelmingly approved cuts to retirement benefits for city workers in what supporters said was a mandate that may lead to similar ballot initiatives in other states and cities buried under mounting pension obligations.

Public employee unions that aggressively fought the measures weren't able to overcome the simple message supporters used to attract voters in San Diego and San Jose: Pensions for city workers are unaffordable and more generous than many private companies offer. The result is reduced public services in the form of such things as limited hours at public libraries and unfilled potholes.

"The public is frustrated," said San Diego councilman Carl DeMaio, a Republican who staked his mayoral bid on the pension measure and advanced to a November runoff in Tuesday's election to lead the nation's eighth-largest city.

In San Diego, two-thirds of voters favored Proposition B while the landslide was even greater in San Jose, the nation's 10th-largest city. With all precincts counted, 70 percent were in favor of Measure B.

"The voters get it, they understand what needs to be done," said San Jose Mayor Chuck Reed, a Democrat who has called pension reform his highest priority.

"It's going to save the city of San Jose billions of dollars over the next several decades," Reed told CBS San Francisco's Len Rodriguez.

Shrinking tax revenues during the recession are also responsible for service cuts in San Diego and San Jose, but pensions were an easy target. San Diego's payments to the city's retirement fund soared from $43 million in 1999 to $231.2 million this year, equal to 20 percent of the city's general fund budget, which pays for day-to-day operations.

As the pension payments grew, San Diego's 1.3 million residents saw roads deteriorate and libraries and recreation centers cut hours. For a while, some fire stations had to share engines and trucks. The city has cut its workforce 14 percent to 10,100 employees since Sanders took office in 2005.

San Jose's pension payments jumped from $73 million in 2001 to $245 million this year, equal to 27 percent of its general fund budget. Voters there approved construction bonds at the beginning of the last decade, but four new libraries and a police station have never opened because the city cannot afford to operate them. The city of 960,000 cut its workforce 27 percent to 5,400 over the last 10 years.

Tuesday's votes set the stage for potentially lengthy legal challenges by public employee unions. The measures are unusual because they address pensions for current employees, not just new hires.

Opponents say the measures deprive workers of benefits they were counting on when they got hired. Some workers decided against potentially more lucrative jobs with private companies, figuring their retirement was relatively safe.

Those arguments failed to resonate with voters.

"A lot of employees are disheartened," said Yolanda Cruz, president of the San Jose Municipal Employees Federation, who called the outcome disappointing. "We've been made the full problem of what's been going on."

The ballot measures differ on specifics. San Diego's imposes a six-year freeze on pay levels used to determine pension benefits unless a two-thirds majority of the City Council votes to override it. It also puts new hires, except for police officers, into 401(k)-style plans.

More than 100,000 residents signed petitions to put the San Diego measure on the ballot.

Under San Jose's measure, current workers have to pay up to 16 percent of their salaries to keep their retirement plan or accept more modest benefits. New hires would get less generous benefits.

Reed joined an 8-3 City Council majority to put the measure on the ballot. He said after Tuesday's vote that he expected other cities in financial binds to pursue similar measures.

"It's novel but it's certainly not radical," he said. "Mayors across the country are very interested. We're at the leading edge but we're not alone."

[GolfSwimTennis]

I can speak for myself and I think there are many others like me. I had no clue how generous the benefits had become for most of these public sector workers. I would have never ever agreed to such generous benefits. It seems to have started in the mid 80's and escalated out of control in the 2000's. When I discovered how generous the benefits were, I felt mislead, tricked, and taken advantage of. It should be illegal for public sector collective bargaining agreements to be approved without voter approval. It should be illegal for public sector collective bargaining agreements to be approved without clear common language the average voter can understand. Most of the collective bargaining agreements were enhanced over time and the public not properly informed. Typically it was campaign contributions and votes in exchange for favorable legislation. I have to fund my retirement and my children's education, make household repairs, and all of that is being squeezed by higher taxes for less services with declining home values, all because of collective bargaining agreements that did not have plain language and were approved by elected officials receiving campaign contributions and votes in exchange for approving collective bargaining agreements.

[sjc_1]

If they can not get it for free, then they want someone else to pay for it. They pass Proposition 13, the school scores go down and they blame others. They talk about personal responsibility and not blaming others, but they do it themselves all the time.

[cbsnews_viewer]

People want everything for free. They don't want to pay. If they want bare bones public services then they will reap the results. There will be complaints, but they can only blame the voter or themselves if they didn't vote. "New hires would get less generous benefits it says"
But in the end blame De-industrialization. Some economists tell us you can not export a service in a 'service economy'. "Their limited scope for productivity growth makes services a poor engine of growth. The low tradability of services means that a more service-based economy will have a lower ability to export. Lower export earnings means a weaker ability to buy advanced technologies from abroad, which in turn leads to a slower growth". Welcome to the recession.

[sjc_1]

If you can not export the jobs you import the people. You do not need to export service jobs when you can import the people. Health care is suppose to be one of those services, but no one will be able to afford it. It costs the U.S. $2.5 trillion per year for health care and it is bankrupting the country.