Edit ModuleShow Tags

Tackling the Pension Problem

SD's takes the lead on pension reform


Published:

(page 1 of 2)

Mayor Jerry Sanders speaking
Photo by Sam Hodgson

Mayor Jerry Sanders

There is an undeniable shift happening at the foundations of San Diego government right now—one that requires a steady diet of alphabet soup. Everyone will feel the impact, but it comes buried underneath acronyms like MEA, PERB, Prop B, and DROP. What it’s really about is mountains of money.

But in the wake of the great recession, virtually every city paying retired city employees through pensions was faced with a new reality: Its pension funds, which are invested in the stock market, had taken devastating hits. In San Jose, “the funds combined lost close to $1 billion,” says Michelle McGurk, spokesperson for San Jose Mayor Chuck Reed. “And it is definitely a nationwide problem.”

That pothole you drove through for months on your way past a closed library? That’s the recession trickling down into your neighborhood. With pension payments looming, governments have stopped paying for the basics. The response in California, and nationwide, has varied.

In June, San Diegans passed Proposition B, which froze pensionable salaries and abolished pensions for new city employees. The fact that a majority of voters passed the legislation sent a clear message to lawmakers that their constituents did not want the issue of pension reform to be stalled in a political quagmire. And it set an example for other cities struggling to get bipartisan reform measures passed. What’s more—even though Prop B is held up in court right now—both candidates for mayor of San Diego promised to implement the reforms if the courts uphold them.

“San Diego is at the forefront of public pension reform.”

Experts agree San Diego is leading the nation in pension reform efforts. “San Diego is at the forefront of public pension reform,” says Carl Luna, professor of political science at San Diego Mesa College. “Cities across the country have played fast and loose with their pension obligations and have gotten behind the eight ball.”

Some cities, like San Bernardino and Stockton, are responding by declaring bankruptcy. They say their pension problems are just too overwhelming and they hope bankruptcy courts will help them reduce the debts they owe to their pension systems. “Bankruptcy causes its own problems,” Luna says. Benefits paid to employees drop, making that city less attractive to potential hires. “Then the question is: Where will you get the competent employees that you want?”

Edit ModuleShow Tags
Edit ModuleShow Tags

More »Related Stories

Where to Go for a Perfect Girl Scout Cookie and Beer Pairing

'Cookies on Tap' comes to several San Diego breweries this weekend

3 Last Minute San Diego Valentine’s Day Ideas

Because procrastinators deserve love, too

5 New (and Newish) Pizza Places to Try in San Diego

Some of our favorite spots for celebrating National Pizza Day
Edit ModuleShow Tags
Edit ModuleShow Tags

Most Popular

  1. San Diego Magazine's Travel Awards 2018
    Cast your vote now for your favorite hotels, travel companies, and attractions
  2. 15 Coolest Jobs in San Diego and How to Get Them
    We asked 15 San Diego professionals with the coolest jobs in town how they landed their gigs—and how we could steal them
  3. First Look: Cloak & Petal
    The owners of Tajima bring Japanese small plates to Little Italy with Cloak & Petal
  4. First Look: Bivouac Ciderworks
    A new craft cidery opens in North Park, designed for the outdoors person in all of us
  5. Green Rush: Inside San Diego's Emerging Cannabis Industry
    Marijuana's legal. How did it go from evil death drug to medical miracle and billion-dollar industry?
  6. La Jolla Playhouse's 'The Cake' Tackles a Timely Topic
    The writer and producer behind hit TV show This is Us brings a sticky subject to the stage
Edit ModuleShow Tags

Promotions

Go Ahead... Ask McMillin!

At McMillin Realty, we are encouraging you to bring us your real estate questions. We will answer these questions….. for free.

Not Your Grandma's Orthotics

New year, new – shoe? Staying on your feet for long hours at a time just got a whole lot more comfortable with Wiivv’s BASE custom insoles
Edit ModuleShow Tags
Edit Module
Edit Module

Connect With Us:

Edit ModuleShow Tags

Sponsored

Enter a Drawing You Could Actually Win

There are more than 1,700 prizes in the Dream House Raffle

Buy a Raffle Ticket, Win This Rare Sports Car

Donate to a good cause to seriously upgrade your ride
Edit ModuleShow Tags
Edit Module Edit Module
Edit ModuleShow Tags
Edit ModuleShow Tags