How to Reform Pensions at the Ballot Box

How to Reform Pensions at the Ballot Box

Posted By Stephen Goldsmith | June 27, 2012 in Governing the States and Localities

Please explain the budget and service context that led you to pursue the recently enacted pension reforms in San Jose.

San Jose Mayor Chuck Reed

Leading up to the passage of Measure B earlier this month, the city had been forced to deal with quickly growing budget shortfalls for 10 years in a row. By 2011, the gap had reached $115 million, with much of the increase coming from increases in pension costs. For example, the city's annual pension contribution grew from $73 million in 2001 to $245 million this year. The reductions in basic services the city could provide were dramatic, and the consequences of corresponding cuts were falling on the backs of the very workers that pensions are intended to serve. In the years leading up to this month's ballot measure, for instance, we cut our workforce from 7,400 to 5,400 workers.

With independent analysis showing another 12 years of increases in pension costs, we feared we were driving the city toward essential-service insolvency. We knew we needed to take action both on behalf of taxpayers, as well as that of the city's public servants.