Wednesday, Aug. 15, 2007| In voiceofsandiego.org a couple of years ago I responded to Mike Aguirre’s offer for a public dialogue on the pension crisis. Here was his dead-end response on October 12, 2005:
In his latest letter, city employee and DROP participant Richard Dell’Orfano (‘Thirst for Power’) takes up my offer to discuss how we can get the unpaid pension benefits paid. He suggests a pension tax levy and increases in service fees. He also wants to raise the property tax rate from 1 percent to as much as 1.34 percent. These are options that should be considered. . .”
He likely considered my suggestions for a few tortured seconds, but ever since resolved to use every ruthless legal tactic he could imagine to rollback pension benefits.
On July 24, 2006, the following article appeared in signonsandiego.com:
An attorney for the city’s largest employee union is demanding that the City Council levy a new tax on San Diego property owners to help pay municipal pension obligations.
In a letter sent to Mayor Jerry Sanders and the City Council, SDMEA attorney Ann Smith stated that “adding such a ‘pension’ tax to the city’s annual tax levy is not a matter of discretion, but rather a matter of duty, and therefore, enforceable by the courts.”
. . .Because of the city’s “revenue-challenged status,” San Diego is unable to meet its pension obligations, Smith argued. Because of that, she said the city charter mandates that the council impose the pension tax.
“By this correspondence, MEA renews its request that the city fulfill its mandatory duty under the charter to add such a pension tax to its annual levy, and that the city do so no later than the last day in August 2006 as required by the City Charter,” Smith’s letter concludes.
Because an annual levy “to meet the requirement of the pension funds” is not a “special tax” it does not require voter approval and instead can be imposed by the City Council, the attorney (Ann Smith) said.
In response, however, City Attorney Michael Aguirre said that there is “no legal authority” to impose a tax on residents without a public vote. Obviously his reading comprehension is selectively impaired because the City Charter (Section 76) specifically states no popular vote is required for a pension tax levy. The courts have ruled the city has to pay up. Rather than cut services, the better way is to amortize its obligations annually with a small pension tax.