To a near capacity chamber of residents, public union members and representatives the San Jose City Council voted 6 to 5 to place a controversial measure(.pdf) before the voters on the ballot next June to reform retirement pension benefits for public employees.
Voting in favor of the ballot measure and against a three month extension to refine and modify the pension proposal were Mayor Chuck Reed, Vice Mayor Madison Nguyen, Pete Constant, Rose Herrera, Sam Liccardo and Perluigi Oliverio.
Voting against the measure were Ash Kalra, Nancy Pyle, Donald Rocha, Kansen Chu and Xavier Campos.
San Jose's unionized workers and retirees have come out in opposition to the approval of the proposed ballot measure calling it a breach of legal protections for public worker pensions.
Having vowed a legal battle if the measure is approved, a challenge in court is all but certain.
With the passage of California Assembly Bill 646(.pdf) – an amendment to the Meyers-Milias-Brown Act - and signed into law by Governor Jerry Brown on October 9 to take effect next year could require the city of San Jose to spend time in fact-finding procedures after reaching an impasse with city employees over the specifics of the ballot measure - procedures that will push the vote well into the end of 2012 or beyond.
Both the San Jose Police and Firefighters unions have accused Mayor Reed of manufacturing a fiscal crisis and actuaries for both unions' pension funds have dramatically lowered the city's projected figures, cutting down what had originally been stated as an $80 million deficit to about $25 million.
In a statement, Mayor Reed said that the current pension program remains unsustainable and a ballot measure is needed to bring it under control citing that costs have more than tripled from $73 million to $245 million in the last decade and could top $430 million by 2015, thus destroying the city's ability to maintain basic public services.
The ballot measure as proposed by Mayor Reed would not affect retirees and current city employees but would reduce benefits for new hires and potentially suspend cost-of-living adjustments (COLAs) for retirees for as long as five years if a fiscal emergency is declared.
Under the ballot measure, if passed by the voters, current employees could switch to a reduced pension plan that costs less or pay more to keep the existing benefits and includes changes to disability retirements to mitigate potential abuses.
The measure would also require voter approval for future pension increases.
In a statement to the San Jose Mercury News Jim Unland, president of the San Jose Police Officers' Union, said “I'm confident we can work out these difficult problems before us,” but adds that the Council vote to approve the ballot demonstrates “to us that talk is for naught and that it's a waste of time.”
Vice Mayor Nguyen was quoted as having argued the ballot language would give the City and unions an opportunity to re-engage in mediation.
