By Doug Porter
Over the last few days we’ve heard, via the Union-Tribune and the Wall Street Journal’s free marketeers, a tale of woe arising from the ruling of a state agency holding that the city of San Diego violated state law by not negotiating with employee unions over a 2012 ballot measure that eliminated guaranteed pension benefits for most city employees.
Now we’re being told that greedy unions have circumvented the will of the voters. Talk-show host Carl DeMaio says the agency making this determination is a “kangaroo court.”
UT columnist Steven Greenhut says:
Pension supporters say this was not a city initiative – but something put on the ballot by voters. They say the board’s recent vote to approve the earlier ruling raises troubling constitutional questions by placing the right of unions to negotiate benefit changes above the rights of voters to weigh in on such matters.
Then-Mayor Jerry Sanders worked hand-in-glove with local right-wing politicos to create and sell a “reform” program promising to save taxpayers untold millions of dollars. They lied, they cheated, and when they were called on it, said “so what?”
From KPBS:
“It was literally campaign central in the mayor’s office,” Michael Zucchet, the union’s general manager, told KPBS Midday Edition on Monday. He said Sanders’ staff was involved with drafting the initiative and raising funds to support it.
“None of that was disputed (in previous hearings),” Zucchet said. “The city’s argument was basically, ‘Who cares? At the end of the day the citizens are going to vote on it.'”
The voters passed Proposition B by a large margin, believing approval would save a city already crumbling around the edges from certain bankruptcy. Steven Greenhut and Carl DeMaio would like you to ignore the fact that even voter initiatives must comply with state law and the constitution.
A Potentially Costly Error
The city has saved money on pensions since 2012, thanks to a five-year freeze on pensionable pay, negotiated with the unions (apart from Prop B) representing city workers. Any substantial savings from Proposition B are still years away. And they may not ever happen. In fact, the former mayor’s decision to play fast and loose with the rules may cost the citizens of San Diego dearly.
From NBC7:
…the California Public Employment Relations Board (PERB)[…] ordered the City of San Diego to reinstate traditional pensions, and retroactively reimburse the employees “for the value of any and all lost compensation, including but not limited to pension benefits.
The city will also owe employees 7 percent interest for any losses since Prop. B took effect, and be required to pay their attorneys’ fees – now estimated as running into seven figures.
The 65-page PERB order included this language: “… the city cannot exploit the tension between the MMBA and the initiative process to evade its meet-and-confer obligations.”
Easier Said Than Done
City Attorney Jan Goldsmith says this decision should be appealed, meaning it will end up in the court system. That’s easier said than done, right wing angst notwithstanding.
The decision to appeal will have to be approved by the City Council. That’s doable, in part because Democrat Sheri Lightner supported Proposition B. The District One councilwoman is termed out, and the battle over her replacement is going to be the big local political battle in 2016.
Depending on those election results, the council’s support could waver, particularly if this case ends up in the appellate process. And, as the present city attorney pointed out in the UT, it’s highly unlikely he’ll be in office when it comes time for oral arguments before the court of appeal. A new city attorney might feel differently about the wisdom of the strategy being presently pursued.
Through this whole process (prior to passage and since the latest ruling) the city’s unions have been consistent with their message: talk to us.
It’s conceivable that some variation on the pension process could have been achieved without going to the ballot box. We’ll never know. The city government–and this is the crux of the matter–didn’t ask.
401k: Fraud and Profit
Once you understand this basic fact, the selling of pension reform via Proposition B is revealed for what it really was: a chance to score political points (we saved the city!) and denigrate the employee unions (how dare they try to bankrupt us!).
There is, in fact, a problem with how public pensions are structured. Their liquidity–ability to pay–was based on the false promise of everlasting economic growth and the premise of the market not being “bubbled” via greedy investment strategies.
At this point in time, it’s become increasing obvious that going the “reform” route–usually some 401k defined contribution system–exists primarily as a vehicle for enhancing the retirements of executives in the financial services industry.
From analyst John Wasik at Forbes:
The 401(k) plan was never meant to be a mainstream pension plan and is a poor substitute for one. It’s a voluntary program that was intended to supplement retirement savings – one of those quirky little options in the byzantine tax code that employers seized upon as a way to save money while pretending that they were doing the right thing by their employees.
Talk show host DeMaio has put up an “alert” on his website, rolling out a veritable word salad of misstatements and flat out lies to buttress his point, which is:
San Diegans must speak up NOW and loudly to protect their constitutional rights to vote on reforms like Prop B!
Perhaps what we really need is less yelling and more quiet negotiations.
DeMaio is trying to take his pension ideas statewide for the November 2016 general election, and the last thing he needs is an outbreak of reasonableness.
A Shame-a-Licious Idea
Here’s an idea from a Republican businessman that I’d like to see make the ballot, if for no other reason than to hear the arguments against it, via Politico’s California Playbook:
Republican real estate executive John Cox is taking on an army of new opponents: the entire California state legislature and its big donor backers. Cox is sponsoring a campaign finance initiative that would require all California state legislators to wear the logos of their biggest donors in a fashion that’s readily visible to voters — not unlike shirts worn by NASCAR drivers, which display their sponsors. He’s taken to setting up a full-size display of 120 cut-outs of state legislators, wearing their sponsors logos, around the state.
As of Dec. 31, his “Name All Sponsors California Accountability Reform” (NASCAR) measure has been given the required title and summary by the California Attorney General’s office — and has been cleared to collect signatures for possible placement on the November 2016 ballot. “Not a joke,” he tells POLITICO, but a serious effort to underscore the corrosive effects of money in politics.
Already, Cox says he’s hired paid signature gatherers who “will hit the streets later this week,” and vows to spend $1 million of his own money to get 365,880 valid signatures by April 26 required to get the measure on the November ballot. Full story here: http://politi.co/22I5kZb
Political Correctness Triumphs in Orange County (LOL)
As part of the Orange County Register’s annual rant about California’s new laws for 2016, two measures were singled out for special scorn.
As ridiculous as this may seem, the editors were okay with posting a scathing rejection of the vaccination bill requiring children to be fully vaccinated to attend school or daycare. Gubmit overreach, y’know.
Their second peeve got re-written, after Assemblywoman Lorena Gonzalez, author of the fair pay for cheerleaders bill, angrily tweeted an excerpt from the original editorial:
Being a newspaper editor in Orange County obviously has fringe benefits, such as working with neanderthals who always think you’re smart, even when you’re being a stupid sexist.
Video Wars: The Donald Awakens
Since Donald Trump has released his first “you’d better be afraid” TV ad…
…We (h/t Rich & Anna) thought it would be appropriate to remind people of Pete Wilson’s “the Mexicans are coming to take your stuff” TV ad from 1994.
And while I’m at it, here’s AFL-CIO President Richard Trumka’s response to The Donald’s message:
FYI–SDFP Editor Rich Kamar posts a new and interesting video almost every day. (And sometimes two-a-day.) It can always be found in the top right-hand corner of this page.
On This Day: 1869 – The nation’s first labor convention of Black workers was held in Washington, D.C., with 214 delegates forming the Colored National Labor Union 1914 – Ford Motor Company announced that there would be a new daily minimum wage of $5 and an eight-hour workday. 1978 – The Sex Pistols’ U.S. concert debut took place.
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Doug Porter
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The Wagner Act requires “the employer to bargain with the appointed representative of its employees.” I don’t think it differentiates between a corporate employer and a public employer, does it? Therefore, the city is out of line to put it on the ballot and let the public decide because the public’s interest is to have lower taxes and more services both of which can be accomplished by doing away with defined benefit pensions and instituting 401ks which puts the entire risk on the individual for his or her retirement and decreases the city’s responsibility and obligation to provide a pension for employees of a fixed amount for life.
“…a campaign finance initiative that would require all California state legislators to wear the logos of their biggest donors in a fashion that’s readily visible to voters…”
How about if journalists and teevee talking heads just ask each candidate to name the three largest donors to their campaigns and PACs? Surely each candidate has the answer on the tip of his or her tongue. It’d be a nice way to start televised debates.