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

North Park Local Stars in Discovery Channel Reality Show

A new survival show challenges contestants to master the wild

Garden Giveaway!

Armstrong Garden Centers is handing out five $50 gift cards and offering fun, free workshops

4 San Diego Group Bike Rides to Check Out

Take your cycling to the next level by riding in a pack
Edit Module
Edit ModuleShow Tags
Edit ModuleShow Tags

Most Popular

  1. San Diego's Best Restaurants 2016
    From barbecue to vegan options, there’s a bit of manna for everyone in this year’s list of the city’s best
  2. What's It Like to Be the CEO of the Smartest Company in the World?
    We went to Illumina’s headquarters to find out
  3. The 12 Most Important People in Design Right Now
    See what they’re up to and working on in San Diego
  4. 54 Summer Travel Ideas
    Get out of town!
  5. Making a MasterChef
    MasterChef winner Claudia Sandoval on the life-changing ups and downs
  6. FIRST LOOK: Carnitas' Snack Shack
    San Diego's kings of pork, Carnitas Snack Shack, crack open their third location at Embarcadero Marina
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.

More Than 1,300 Prizes are Ready to be Given Away

What are you waiting for? Buy your raffle ticket now

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

Win 1,000 Cash Back on Your Solar Install and 500 Cash

Brought to you by Sullivan Solar Power

Win 2 tickets to Kenny Chesney at Sleep Train Ampitheatre!

Brought to you by Corona Light and Kenny Chesney

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.
Edit ModuleShow Tags
Edit Module Edit Module
Edit ModuleShow Tags
Edit ModuleShow Tags