The Legality of Measure B
Thursday, 07 June 2012
By Sharon McElhone
Labor unions declare Measure B illegal and unconstitutional. Now that the measure passed, they will fight it in court backed up by sixty years of court rulings. But for Mayor Chuck Reed, Vice Mayor Nguyen, and Council members Constant, Herrera, Liccardo, and Oliverio, it’s the only way out of San Jose City’s mounting debt and compromised infrastructure.
Either way San Jose residents voted yes on Measure B on Tuesday, June 5th and put into play a controversial measure that would modify retirement benefits for city employees. Some provisions are going to be effective immediately while others will begin one year from now.
The issue is that over a ten-year period retirement costs jumped from $73 million to $245 million, creating what many government officials call an unsustainable payroll for the city to maintain. Under the previous charter, city employees contributed less than a quarter of the cost of their retirement benefits. The city’s contribution to employee retirement pensions consumes 20% of the general fund and was projected to increase for years. Chuck Reed says, “Measure B is a solution to a billion dollar problem and will allow us to restore services that have been cut for the last ten years. The savings will start small but will grow over forty years time.”
The new measure modifies the old charter. Now employees’ retirement contributions will increase and employees will pay a larger share of the retirement benefits. There will also be a voluntary reduced pension plan for current employees, as well as cost and benefit limitations for new employees, modifications to the disability retirement procedures, and during fiscal emergencies COLA may be temporarily suspended. Lastly, voter approval will be required for any future pensions benefits.
As for the legality of Measure B, those against it such as Helen Chapman, former chair, San Jose Parks Commission; Pattie Cortese, San Jose Taxpayer; James Spence, President, Association of Retired San Jose Police Officers & Firefighters; and John S. DiQuisto, Retired Captain, San Jose Fire Department, say employees have proposed “dozens of legal pension reforms that would have increased retirement ages, reduced benefit levels, and lowered COLA’s. Police and fire even proposed to cut pensions back to 1972 levels.”
They also say that city officials rejected these proposals and have used inaccurate financial projections to scare the voters into supporting Measure B. Furthermore, Measure B is, according to unions, unconstitutional because it violates existing contracts and employees’ vested rights. Mieke Pagan, longtime San Jose resident and community activist, is disappointed with the outcome. She says, “I think it is very unfair.
They have contracts that they negotiated and basically they are reneging on what they promised.” Those against Measure B also maintain that city officials have distorted San Jose’s budget and pension issues and say that city employees don’t receive social security benefits, and the average annual federated pension is $37,885 rather than the exaggerated $100,000 per year plus healthcare benefits.
In a unified written response from Kris Valderrama-Lobo, AFSCME communications, she writes, “labor negotiations with San Jose have been frustrating all along.” The letter from AFSCME also states “good-faith negotiations are the key to addressing budget and pension challenges.”
Still, the city council has given explicit direction to a senior city attorney to file an action for declaratory relief asking the court to address and resolve all legal issues regarding Measure B. The senior attorney is not a union member and will seek outside council. To support Measure B and resolve legal issues surrounding it, the city is spending one hundred thousand dollars, but Mayor Reed believes it is worth the expense to move forward and solve the debilitating fiscal problem of rising retirement costs.
While the measure has been called a “risky” move and unions prepare to fight the measure in court, San Jose citizens will only see the effects of Measure B, positive or negative, when or if city services start to be reinstated to what they used to be: libraries increase their hours, police stations start to hire again, road paving starts anew...
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