From Greece to Vallejo, California, countries and cities have been fighting to stay solvent. San Francisco could soon be facing its demise if pension reform is not addressed. Public Defender, Jeff Adachi, in a bold move, has decided to take on the powerful unions in an effort to save San Francisco from fiscal disaster by spearheading pension reform.
At a recent gathering at the home of a concerned citizen, I learned more about SF Smart Reform (which will appear as Proposition B on your ballot in November) and was surprised, in fact shocked, by the numbers supporting the need for pension reform.
Government workers have historically received generous pensions because they made lower salaries than their private sector peers. Not anymore! At a $93,000 average per year salary, City employees earn over double that of private sector employees who average only $46,000. An April article on SFGate.com stated: “More than 1 in 3 of San Francisco’s nearly 27,000 City workers earned $100,000 or more last year – a number that has been growing steadily for the past decade.”
Take a look at The San Francisco Employee Retirement System (SFERS) vs. private sector retirement plans: Private employees fund their retirement accounts (generally 401(k) or IRAs) and when they retire they get back what they put into these accounts plus (or minus) any monies made (or lost) via investments. While 401(k) and IRAs are generally conservatively invested, they are not guaranteed. Public pensions on the other hand are guaranteed, if they lose value the taxpayers have to ante-up the difference.
San Francisco’s pension and health-care costs rose from $175 million just five years ago to $525 million this year; it is expected that within two years the city will be paying $675 million. This is simply NOT sustainable—even with a healthy economy. Mayor Gavin Newsom has said that he has already addressed pension reform. For specifics go to this site: http://www.baycitizen.org/budget-crisis/story/newsom-already-reforming-pensions-my-way/. An advisor to Governor Schwarzenegger who is intimate with the numbers assured me that Mayor Newsom’s efforts at pension reform were akin to “rearranging the deck chairs on the Titanic.” Very few politicians are willing to tackle pension reform in a meaningful way, and for good reason: unions are huge contributors to their campaigns. Make no mistake: PENSIONS WILL HAVE TO BE REFORMED BY THE VOTERS. Politicians will continue to ask taxpayers to pay more taxes and fees rather than take on the unions.
Union leaders will frame this debate as David vs. Goliath—and they are right—but what they won’t tell you is that they are Goliath. They bused protesters, replete with band, to the meeting that I attended. They WILL turn out to vote. They want you to believe that this proposition takes their pensions and health-care away. It doesn’t.
What Prop B will do as quoted from the Yes on B website:
Require all city employees, including elected officials, to contribute 9-10% of their salaries toward their own retirement pensions and pay $96 per year for their own health care, far less than most workers in the private sector pay.
Save taxpayers over $120 million a year, money that can be redirected to schools, fire protection, street repair, children and senior services.
Prop B does not cut health care costs or pension benefits for any city employee or their dependents; it just requires city employees to contribute towards these costs.
Almost half of City employees pay nothing toward their pensions and some of these workers can retire at 55 with 90% of their salary for life. Mr. Adachi told me that those in the private sector would have to put away 65% of their income to match City employees’ pension values.
I’ll leave you with this startling number: 1 in 5 taxpayer dollars goes toward City employee pensions and health-care benefits—that’s 20% of taxpayer dollars going to support less than 4% of the city’s population. (This number is expected to jump to one third of every dollar within five years!) This means potholes aren’t being fixed, summer schools get canceled, and our parks are being neglected. We are supporting overly generous pensions to City employees at the expense of our present, and to the detriment of our future. PLEASE VOTE YES ON PROPOSITION B.
For more information follow this link: http://www.voteforpropb.com/COST_OF_HEALTH_CARE.pdf
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