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

Win Tickets to Kaaboo

Two Friday passes get you access to music, comedy, cuisine, and more

5 Places to Watch the Solar Eclipse in San Diego

But safety first — don’t forget your eclipse viewing glasses!

Stone Brewing Releases Collaboration Beer with NOFX

The Punk in Drublic lager celebrates the band’s newly announced craft beer and music festival
Edit ModuleShow Tags
Edit ModuleShow Tags

Most Popular

  1. San Diego Fourth of July Guide 2017
    Celebrate Independence Day all weekend long with fireworks, festivals, parades, drink specials, and more
  2. The Oceanside Revolution
    The North County city has gone from an all-but annexed coastal town by Camp Pendelton to a thriving bed of culinary and artistic success.
  3. The Best of San Diego 2017
    Tacos, pasta, cocktails, spa treatments, and cool craft workshops—we’ve got 99 of the top picks in food, drink, fitness, beauty, and more
  4. 5 Places to Watch the Solar Eclipse in San Diego
    But safety first — don’t forget your eclipse viewing glasses!
  5. Will Weed Smoke Out Restaurants?
    New investment trends are creating challenges for local restaurateurs — for now
  6. The Ultimate San Diego Summer Guide 2017
    Take this season to the next level with our annual roundup of the top beach barbecues, pool parties, concerts, outdoor movies, and more
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

9 Reasons You Need a Better Barber

Get the look and service you deserve at this East Village salon

Enter a Drawing You Could Actually Win

There are more than 1,700 prizes in the Dream House Raffle
Edit ModuleShow Tags
Edit Module Edit Module
Edit ModuleShow Tags
Edit ModuleShow Tags