Mayor Chuck Reed’s 18th floor office high above San Jose California offers a down to earth view of the public pension crisis. “We have less police officers in the city of San Jose than we had ten years ago even though we increased the budget in the police department by nearly 100 million dollars.” Most of that money, says Reed, went towards paying retirement benefits.
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You can watch Reed’s interview here.
Reed is leading the charge to amend California’s constitution to help cities reform their public pension plans. In 2012, 69% of San Jose voters approved Reed’s pension reform referendum Measure B. It placed new city employees in a lower cost retirement plan and gave current employees an option. They could either pay more out of their own pockets to keep their current retirement plan or opt in to the new less expensive one at no additional cost. It also eliminated the 13th check, a bonus check sometimes issued to retirees.
Opponents, lead by AFSCME The American Federation of State, County and Municipal Employees, sued to prevent Measure B’s implementation. The unions won a partial victory late last year. San Jose, under Reed’s leadership is appealing. “Where does it say that we can never ever modify retirement benefits except to make them go up?” says Reed. He asserts that changing California’s constitution is necessary to avoid expensive legal fights, “to put language in the constitution to make it clear that we should be able to negotiate changes for future benefits for future years of service.”
Reed and his backers filed a ballot initiative with the California Attorney General to allow voters to amend their state constitution. But chances of that initiative being on the November ballot look slim. Reed is suing the Attorney General over the language in the ballot initiative calling it misleading and unfair. He’s also trying to raise the millions of dollars needed to campaign for the initiative once it is in play. It’s a fight Reed promises to continue after leaving office later this year. “If we can’t provide services at a reasonable level and all we are doing is paying for retirement benefits, what’s the point of being a city?”