A few months ago I had lunch with a well-connected, well-respected member of the San Diego cognoscenti. You know, one of those people whose fingers are everywhere, but leave fingerprints nowhere. I said it seemed to me there were certain clear-cut things that could be done to resolve some pension problems. I didn’t understand why our leaders didn’t stop yelling at each other and just get together and fix it.
She sighed, put her fork down, gave me that look that people like her give to people like me and said, “Linda, what makes you think they want to fix it?”
For a long time I did not understand why people like mayoral candidates Carl DeMaio and Nathan Fletcher and the San Diego County Taxpayer Association’s Lani Lutar were saying that Proposition B “… reforms the retirement plans for ALL City of San Diego government employees.” No it doesn’t. Not even close.
The fact is the so-called Comprehensive Pension Reform initiative (Prop. B) is neither comprehensive nor reformative. It is a time bomb that will blow up the city budget and embroil the city in lawsuits for years to come. Its supporters cannot guarantee that Prop. B will save the City a single penny.
Look, one can disagree with the politics of Carl DeMaio, Nathan Fletcher and Lani Lutar. I do. But of all the words I might choose to describe them, dumb is not one of them. So when I look at the Prop. B train wreck of over-promise and under-deliver, I know that this is not their best work. If a lot of well-intentioned people got together to figure out a real fix to the San Diego pension, Prop. B is not what they would produce.
401(k)
Originally Prop. B proponents touted the 401(k) plan as a multi-million-dollar money saver. Then the Independent Budget Analyst actually looked at the numbers. Turns out the 401(k) plan costs more money than the current defined benefit plan — more than $56 million over the next 30 years, when adjusted for inflation.
Even worse, switching to the 401(k) plan blows an estimated $100 million hole in the city budget over the next several years. It turns a hard-earned budget surplus into a crippling deficit.
Pay Freeze
According to “a “fact” sheet promulgated by Prop. B supporters Prop B. “imposes a cap for five years on individual pensionable compensation,” which they say will save the city nearly a billion dollars. This, too, is untrue. Prop. B suggests that the City Council’s initial negotiating position should be for a five-year pay cap. See the difference between “impose” and “suggest you negotiate”? Even the City Auditor observes that since the city currently possesses the authority to negotiate or propose the same terms as outlined in the ballot measure, no material change results from the passage of Prop. B that would support a reasonable expectation of savings. In other words, Prop. B doesn’t do anything to impose a salary freeze or save the alleged billion dollars.
So the 401(k), rather than saving millions, costs millions. The so-called “pay freeze” is actually a pay “suggestion.” Additionally, there is a very strong argument that Prop. B violates California labor law. The city will rack up millions in legal fees litigating a proposition that may never be implemented. Prop. B fails at every level.
At this point you have to ask — Carl, Nathan, Lani, is this the best ya got?
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.
Linda Perine lives in Mission Beach and is active in local politics. How will you be voting next month? Submit your thoughts here.