GOP Ballot Measure Relies on Illegal Maneuvers, Resulting in Higher Costs, Phantom Savings and No Safety Net for Workers
San Diego County Labor Council / June 30, 2011
Mayor’s Proposition Depends on Breaking State Law In Order To Achieve Lion’s Share of Projected Savings
The Republican ballot measure to leave city workers without Social Security or any other retirement safety net includes a maneuver that Mayor Sanders claimed was illegal just a few months ago.
According to the ballot measure’s supporters, the section of the proposition requiring the city to freeze pensionable pay for 5 years accounts for up to 87% (or $1.1 billion) of the savings heralded by supporters. It is against California state law to impose a pay freeze for that long without bargaining in good faith with employees first.
“They’re counting chicks that will never hatch under state law,” said Lorena Gonzalez, the San Diego Labor Council’s Secretary-Treasurer. “This proposition leave workers without Social Security or any retirement safety net and assures the City will find itself back in expensive courtroom battles like in the Mike Aguirre days. Those are steep prices to pay for what appears to be minimal savings compared to the status quo.”
Other reasons why this ballot measure is BAD for San Diego:
- BAD FOR THE LONG TERM: Additionally, it appears to be a better deal for the city to keep the employees in the pension system. In year 27 of the lower scenario, the costs of the 401-K begin to outpace the savings from reduced payments to the pension system. This begs the question of why the Republican campaign cut off the chart at year 27 instead of going further, because it is clear that this measure has the potential to end up costing more in the long run.
- BAD FOR THE SHORT TERM: The supporters are admitting that the short-term costs outweigh the savings even if the measure is found to be legal. The San Diego City Employees Retirement System said that moving to a 401-K will cost the City $94 million over the first six years because money for new employees will not regularly be directed to the retirement system. That’s the last thing San Diego needs as police, fire and other city services have been cut during this recession.
- BAD MATH: The ballot measure uses an apples-to-oranges comparison in assumptions, assuming that salaries are going to grow 4 percent annually in the current pension plan and only 2 percent annually in the proposed 401-K plan. This is a dishonest comparison.
- TAKING CREDIT FOR WHAT’S ALREADY HAPPENED: The Republican campaign is taking credit for the pick-up savings, even though that has already been eliminated through collective bargaining between the City and its employees.
Media availability: The “Just Say No, San Diego” campaign will be available to the media for interviews and on-camera appearances to respond to the Republican ballot measure to leave city workers without Social Security or any other retirement safety net.
Please contact Evan at 619-850-2790 or emclaughlin@unionyes.org
{ 6 comments… read them below or add one }
City workers receive no Social Security. They currently receive a guaranteed City pension and a supplemental pension. (And yes, employees pay into both). To gamble away their future by giving ALL of their retirement savings to the same crooks that have tanked the economy is 1) punitive in intent 2) hypocritical because the “business” model is a combination of Social Security AND 401K plans and 3) gets the camel’s nose under the national tent of ultimately turning over Social Security to the private sector.
The city pension problems are not the result of ‘crooks’ that tanked the economy.
The $2-3 billion pension problem was caused by the the elected ‘crooks’ on the city council, the union leader ‘crooks’ that agreed to underfunding in return for their individual benefit increases and the members of the pension board ‘crooks’ that ignored their finacial responsibilties to employees
Please note; People who have ignore the short term noise and kept their investments long term have seen their 401k or 403b recover while the city pension problems remain.
If the city does not provide a defined pension through Social Security or through its own mechanism, city employees will be thrown to the crooks who tanked the economy. Explain “short term noise” to the unemployed, people who have lost their homes and are struggling with student debt.
RB- are you against returning city workers to the Social Security system?
I am for returning city workers to the social security system.
IMO, a secure retirement is like a stool and requires at least three legs.
One leg or one source of funds is social security. One leg or one source of funds is a pension or retirement account. And the last leg or source of funds is home equity or personnel savings. If you remove any one leg from a stool or any one funding source from retirement, you have no stability.
As for those unemployed, they need to ask the President’s economic team why their plan of more government is not working.
RB- I agree with you on your definition of retirement stability for the workforce. We have an opportunity to work together to assure workers that one of those legs- social security- will exist for them . ;)
We just heard: The proponents of the ballot measure to end collective bargaining and take away a retirement safety net for city workers are having a media briefing at 4:30 today at the Town and Country Hotel’s Lexington Room in Mission Valley.