Proposition B: Pension Prop Doesn’t Solve the Problem, Will Pass By Large Margin

by on May 5, 2012 · 9 comments

in California, Economy, Election, Labor, San Diego

Like the good people of the German hamlet of Hamelin, the citizens of San Diego have turned to a Pied Piper to rid this town of a pressing plague. In our case, it’s the legacy of our municipal employee pension plan, which, left unchecked, could sink the city into bankruptcy. For a solid decade starting in the 1990’s, the pension plan became the “go to” place for politicians to finance impossible dreams—PETCO Park and the 1996 GOP Convention among them—and leave the bills for future generations to pay.  The city’s’ employees unions, if they had any objections, were bought off with a series of increasingly lucrative deals that promised pensioners unlimited prosperity.

It was the best of times. San Diego’s politicians pulled off huge projects without asking for tax increases. The unions seemed to have gained new-found respect as equal partners in the developer/politician/union troika that ruled over “America’s Finest City’. And, lest we forget, all but a few of us bought into the myth that the stock market was headed into the over 30,000 range in coming years. The boom/bust cycle of capitalism, so we were told, had been “fixed” through the wise management of our financial leaders.

Then the bottom fell out. Millions of Americans saw their savings disappear as the stock market tanked and real estate—the bedrock of our prosperity—values collapsed. From the City government’s point of view, things were pretty grim; tax revenues were plunging, and the woefully deficient capital that had been put aside for future obligations like pensions was worth less as each day passed.

What happened in San Diego continues to plague the city. The streets became shabby, public services reduced, and it seemed to get worse every year. People wanted answers, and San Diego’s politicians were desperate to give them a fall guy. The City’s unions were the palpable targets because it was the unpaid promises of previous power-brokers, in the form of increasingly large payouts to pensioners, which showed up on the balance sheets as the source of immediate problems.

Remember this truck-sized ad that DeMaio had driven around to different parts of the City a while ago? Yeah, sure, city librarians made $227,000. Okay, Crock DeMaio, what other lies are you spreading these days? Hmmmm?

Into this mess wandered one young Carl DeMaio (whom we’ll dispense with in future episodes of this saga) and he saw an opportunity too good to be true.  Fresh faced, with the visions of the Heritage Foundation dancing in his head, he took up the cause. He went from presenting the City of San Diego with an award for its fiscal prowess to lightening rod for taxpayer anger in just a few short years.  Never short on ideas for publicity stunts and untroubled by the restraints of truth, Carl has made this his cause. Fueled by seemingly unlimited access to electronic media—rumors that he has his own dressing room at KUSI are untrue—and his ability by virtue of his position as a City Councilman to use the public’s monies to print and distribute his ;positions, DeMaio has successfully sold the populace of our fair city on his views.

Proposition B is his baby. He helped write it, led volunteers in an aggressive signature gathering campaign and is using it as the centerpiece of his Mayoral campaign. To hear the TV ads tell it, Carl is going to save us. “He’s a good man with a good plan.”  And the corrupt cronies at City Hall will surely fall from power with a mere sweep of his Mayoral scepter.

The arguments for and against Proposition B hardly matter. Everybody “knows” of the City pensioners drawing obscene amounts of money from the public coffers. Everybody “knows” that these outrageous payouts were possible only through the efforts of the unions, who must now be scorned and flayed without cessation. Never mind that the examples Carl loves to cite were management personnel—not represented by unions—whose pensions will be unaffected by Prop B.

This is not to say that the unions aren’t culpable in the pension crisis. They mortgaged their members’ future both politically and financially in pursuit of a seat at the table of the troika of power. The politicians from that era are long gone, and the developers of the day have gone on to bigger and better things. The unions got stuck holding the bag. The premises behind Proposition B include a kernel of truth and, for a conservative activist like Carl DeMaio, it was all he needed.

From the point of view of a progressive activist, Proposition B is a bitter pill to swallow. If you strip away the legalese its main money saving provision is one that is only advisory in nature: the City Council is implored, by the passage of this act, to enact a pay freeze. They don’t have to do it if they don’t feel like it. That is our great and wonderful reform.  All the rest of the wonderful things that are promised in Proposition B either don’t save the city money (401K plans) or have already been agreed to in previous negotiations between the city and the unions.  So at the end of the day what we have here is the public being asked to symbolically punish City workers.

Proposition B does do two things: it serves as a platform for Carl Demaio’s Mayoral campaign and it provides an effective propaganda tool to further the meme that all things governmental must be constrained. There is no doubt that the City was/is facing a severe financial crisis and that pension plans were/are at the core of the problem. This issue is that Proposition B does nothing other than provide a soap box for a bunch of hard core ideologues. It fails to recognize that many of the issues surrounding pension payouts have already been resolved in the taxpayers’ favor.

Those who “know” will carry the day come June. Proposition B will surely pass.  Like the citizens of Hamelin, San Diegans have rid themselves of one problem only to discover that there is a price to be paid. And like the citizens of Hamelin, we’ll discover that it is our children and their future that represent the currency that will be exchanged to do this deal.

 

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{ 9 comments… read them below or add one }

avatar RB May 5, 2012 at 11:26 am

If Prop B was passed 20 years ago, their would be no $2 billion pension mess and each employee would have his own 401k/403b plan. Defined benefit pension plans no longer work and should be ended. This is not just a San Diego problem caused by PETCO. There are cities, counties, and states all across this country (none of which built PETCO or had a GOP convention.) sinking under employee pension plans.

Does government exist to serve the community or is it the purpose of government to serve its employees and their pension plans?

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avatar Ben May 5, 2012 at 2:16 pm

Interesting analysis, but I’m not sure concluding as if we’ve already lost is the way to go. The election hasn’t happened and the latest polls show support for Prop B slipping. http://www.utsandiego.com/news/2012/may/05/poll-pension-initiative-lead-shrinks/

With one month left, it seems like a good time to take a stand against Austerity measures like Prop A and Prop B in San Diego!
Stop Prop A: https://www.facebook.com/stoppropa
Stop Prop B: https://www.facebook.com/events/380630281983307/

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avatar The Gunny May 6, 2012 at 8:41 am

If you don’t vote no on Prop B, there is an alternative to speaking volumes, vote for anyone but Carl and get him out of the C St hallways!
Besides, what’s with Carl’s minions posting up 10ft by 10ft “Vote for Carl” signs all over OB? Has there been a party/paradigm shift we didn’t know about? Kinda disconcerting.

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avatar doug porter May 6, 2012 at 8:55 am

no paradigm shift that we’re aware of, although there has always been a hard core of righties in OB. A vote for Carl is a vote for Darth Vader.

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avatar The Gunny May 6, 2012 at 4:44 pm

I didn’t think so Doug, but to see that “graffiti” posted in your part of town was, like I said, disconcerting at best.

Fight the good fight and vote for anyone but Crazy Carl.

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avatar Monty Kroopkin May 7, 2012 at 10:02 am

Slogan: I’M ON A HEALTHY DIET, SO JUST HOLD THE MAIO!

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avatar Rick May 7, 2012 at 10:27 am

The mayor of Hamelin embraced privitization in hiring the Pied Piper to rid the city of rats. When the mayor reneged on the deal, the citizens ended up paying the Piper with the loss of all their children.

DeMaio, the frontrunner in the mayoral race, champions privitization of city services.

Please vote!

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avatar The Gunny May 7, 2012 at 1:07 pm

At who’s cost? Remember the deal to remove the debris from the affected area of RB? Hmmm who’s district was that? Oh yeah Carl! And how much did the city have to drop in going after those contractors, and how bad did the taxpayers get hosed after that sweet deal?
History can and will repeat itself with this guy.

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avatar Anna Daniels May 15, 2012 at 12:43 pm

Linda Perine has written a must read letter at Vof SD http://tinyurl.com/c4j3745 She questions the real motivations of the most strident voices who want to fix the pension and but ended up crafting such a poor solution. Here is here conclusion:
“No, Prop. B doesn’t do much of anything to fix the pension, but it will do a lot of other things that advance a very different agenda than pension reform.

If you are a proponent of the Grover Norquist plan to “shrink government so you can drown it in a bathtub,” Prop. B shines. It will blow a multi-million-dollar hole in the city budget for years going forward, causing more brownouts, closed libraries and rec centers, more potholes, more service cuts at every level.

If your campaign supporters will benefit greatly when the city — hamstrung by Prop. B-induced budget deficits — must privatize and outsource basic government functions to those very same supporters, Prop B looks darn good.

If blaming the pension shortfall that was caused by misallocation of pension monies to fund the 1996 Republican Convention and Petco Park on city employees helps your mayoral campaign; sign up for Prop. B.

If using half-truths, voter anger and the complexity of pension issues to create a stewing cauldron of resentment that might get you elected mayor; Prop. B fills the bill.

Prop. B definitely does a lot of things. Fixing the pension is not one of them.”

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