San Diego Pension Reform Initiative, Proposition B (June 2012)
Proposition B will:
- Give new city workers a 401(k) with a city match instead of a guaranteed pension.
- The guaranteed pension for newly-hired public-safety workers will max out at 80% of the individual’s salary. Currently, the cap is at 90%.
- San Diego's overall payroll will be capped for five years at its 2011 level of less than $600 million annually. 
- The San Diego city charter in effect at the time Proposition B was approved had a provision that required a majority vote of all city employees to approve any changes to retirement benefits. Proposition B eliminated that provision from the charter.
According to supporters, Proposition B will save the city $8.3 million in the first year, $141 million over the initial five years and nearly $1.6 billion through 2040.
The approval of Proposition B attracted national attention, as did the approval of a pension reform measure in San Jose, San Jose Measure B. The pension reform victories were seen as a blow for public employee unions, and opened up the possibility that taxpayer activists in other cities would attempt similar initiatives.
On July 31, 2012, San Diego Superior Court Judge Luis Vargas denied a union request for an injunction to postpone the city’s implementation of Proposition B. Vargas ruled that the city's "meet and confer" obligations had been met, and that the city can go ahead and start implementing Proposition B.
- These final election results are from the San Diego County elections office.
The question on the ballot:
|PROPOSITION B: "Should the Charter be amended to: direct City negotiators to seek limits on a City employee's compensation used to calculate pension benefits; eliminate defined benefit pensions for all new City Officials and employees, except police officers, substituting a defined contribution 401 (k)-type plan; require substantially equal pension contributions from the City and employees; and eliminate, if permissible, a vote of employees or retirees to change their benefits?"|
|“||We knew that the crisis was so severe in San Diego that the public wanted pension reform. But those government employee unions owned the city council. Those city council members were not going to voluntarily reform pension benefits. So you're talking about a very small group of special interests - the government employee unions - controlling the city council and keeping in essence the rest of our city held hostage. So we knew we had to get this on the ballot. Put the issue in the hands of the people to actually get reform done.||”|
—Carl DeMaio, former San Diego City Councilmember
The campaign committee supporting the measure was called "San Diegans for Pension Reform."
- Mayor Jerry Sanders
- City councilmen Carl DeMaio and Kevin Faulconer
- KUSI-TV in San Diego. This station ran a special show, "Pension Crisis: The Fight to Get it on the Ballot", and said, "KUSI supports pension reform, and hopes after viewing the special you will choose to sign the petition, and give voters a chance to take control of San Diego's budget and our future."
Sanders and DeMaio had originally proposed competing pension reform initiatives but eventually negotiated a compromise pension reform initiative (Proposition B) that they both supported. The major point they originally disagreed about was whether pensions for public safety workers (fire and police) should or should not be included in the pension reform effort.
Arguments in favor
Jerry Sanders said, "“If approved by voters, this initiative will dramatically rein in pension costs, freeing up hundreds of millions of dollars to support city services such as police, fire, parks and libraries. Public employees should not have any better retirement benefits than the people they serve."
City councilmember Kevin Faulconer said, "This plan protects the taxpayer. It ends the pension system as we know it. It gives us the money we need for a range of neighborhood services and it shields the city from years of costly legal battles."
The 2011, San Diego had a $2.1 billion shortfall from the money it needed to pay promised pensions.
About $1.5 million was contributed to the campaign for a "yes" vote on Proposition B, along with an additional $323,000 in non-monetary contributions.
The official ballot pamphlet arguments against Proposition B were signed by:
- Nan Brasher, President, California Alliance for Retired Americans
- Pat Zaharapolous, President, Middle Class Taxpayers Association
- Frank De Clerq, San Diego City Fire Captain
- Edward B. Harris, Lifeguard Sergeant
- Mary M. Enyeart, 9-1-1 Emergency Dispatcher
In the official ballot pamphlet, opponents of Proposition B made these arguments against it:
- "Proposition B Increases City Retirement Costs by $54 Million in the first three years. That's money that could go to improving public safety, restoring library and recreation center hours, and fixing our crumbling roads. And there's no guarantee that the ballot measure will actually save the city any money. The city's own analysis shows that the Proposition B retirement plan for new employees is more expensive than the existing plan."
- "Proposition B does not freeze pay. All projected saving from Proposition B are from a pay freeze that may not occur because pay increases are allowed with a two-thirds City Council vote, which the Charter already requires for negotiated pay increases. Employees have not had a pay increase for five years. City employees have made heavy sacrifices while Councilman DeMaio provided his staff with a 20% pay raise and refused to take a 6% pay cut along with everyone else."
- "Retirement Benefits Have Been Substantially Reduced. In 2009, San Diego reduced pension benefits for new employees and increased employee contributions by 6 percent of their pay. Total retirement benefit changes will save the City over $1 Billion."
- "Unfair to Employees. City workers are excluded from Social Security and for most of them Proposition B will eliminate the pension that serves as a substitute. Proposition B will leave some first responders without either a pension or Social Security, making it harder to recruit and retain public safety professionals. Proposition B will cost the City more, but employees will get less."
- "No Cap on Excessive Pensions. Proposition B does nothing to address $100,000 pensions. Although city workers' average pension is $40,000, some highly paid city managers and politicians receive pensions of over $100,000."
About $182,000 was contributed to the campaign for a "no" vote on Proposition B:
|National Public Pension Coalition||$25,000|
|American Federation of State, County and Municipal Employees||$17,500|
|California School Employees Association||$15,000|
Path to the ballot
Supporters of the initiative collected over 94,000 signatures from registered voters of the city by October 14, 2011 in order to qualify the measure for the ballot.
Lawsuits to remove
- See also: 2012 ballot measure litigation
On February 13, 2012, the California Public Employee Relations Board (PERB) ruled that the fact that two elected city officials spoke in favor of the initiative meant that the initiative, although sponsored by private citizens, had run afoul of the city's so-called "meet-and-confer provision". That provision in the city's labor contracts requires the city to meet-and-confer with designated public sector union representatives when a change to the city's labor agreements is under consideration. Since a "meet-and-confer" meeting did not take place and would have had to take place (according to the February ruling of the California Public Employee Relations Board), the existence of the initiative amounted to an unfair labor practice, according to the PERB ruling. Subsequent to that ruling, the PERB requested a preliminary injunction to keep the measure off the June ballot.
According to Joan Raymond, the president of AFSCME Local 127 in San Diego, "(The ruling) adds credence to what we've been saying all along during this initiative process, that it is a city-sponsored initiative and there is no way Sanders was acting as a private citizen."
The complaint itself said, "As the city’s CEO and chief labor negotiator, this mayor has used his city-paid time, resources, power, prestige, visibility and 'good offices' to inspire, write, negotiate, endorse and sponsor the proposed citizens initiative which he has described as his legacy as mayor."
Jan Goldsmith, the San Diego City Attorney, argued against the legal merits of the PERB complaint. She said, "When it comes to a citizens' initiative, it belongs to the 116,000 who signed for it. For hundreds of years, governors and mayors have said, 'I'm going directly to the people. PERB came up with this loony idea that before you go to the people you go to the labor unions and negotiate whether that's okay."
Response of supporters
Jerry Sanders responded to the ruling, saying, "The bottom line is this measure has rightly qualified for the ballot. The public deserves the opportunity to vote on this. We will vigorously fight to give voters the right to decide this matter."
Carl DeMaio, another supporter of the initiative, said, "I am completely confident that the courts will dismiss this desperate lawsuit and uphold the constitutionally protected right of citizens to place measures on the ballot through the initiative process. It is outrageous that government unions and their Sacramento defenders are trying to claim they can veto the citizens' constitutional rights in this matter, but it provides yet another example of the contempt the government unions have for the taxpayers of San Diego and the lengths they will go to in protecting their unsustainable pension payouts."
February 21 ruling
Dato said that in order to remove an initiative from the ballot, the invalidity of the measure has to "be clear beyond a doubt", and that the PERB complaint did not make it clear beyond a doubt that there was a problem with the pension reform measure.
Hud Collins lawsuit
Hud Collins, a San Diego mayoral candidate, filed a lawsuit to remove Proposition B from the ballot, claiming that it amounts to a revision of the city charter, not an amendment. According to the city charter, "revisions" to the city charter can only be introduced by the city council or a charter review commission.
February 22 ruling
On February 22, 2012, judge Steve Denton ruled against the Collins lawsuit. Denton said that although the pension reform measure, if enacted, will result in significant changes in how the city's pension plans work, it does not amount to a change to "the very framework and structure of city governance" and therefore does not rise to the level of a "revision" to the city's charter.
- Real Pension Reform, website supporting Proposition B
- San Diego Can Do Better, website opposing Proposition B
- List of local propositions on the June 5, 2012 ballot in San Diego County
- San Diego mayor goes on the offensive
- Pension reform measure would save $940 million over 30 years
- 2 California cities vote on public pension cuts
- ↑ 1.0 1.1 1.2 San Diego Union Tribune, "Ballot measure aims to revamp pension system", March 24, 2011
- ↑ Rancho Bernardo Patch, "Pension Reform Measure Officially on June Ballot", January 30, 2012
- ↑ 3.0 3.1 3.2 San Diego Union Tribune, "Pension battle pitched over signature-gathering", June 26, 2011
- ↑ Capitol Weekly, "Locals targeting pension changes", May 7, 2012
- ↑ Associated Press, "2 California cities vote on public pension cuts", June 5, 2012
- ↑ NPR, "Public-Employee Pensions Face A Rollback In Calif.", June 9, 2012
- ↑ NBC San Diego, "Prop B Carries on After Judge Denies Injunction", July 31, 2012
- ↑ Reuters, "San Diego's polemic plan for California pension woes", December 3, 2010
- ↑ KUSI-TV, "Solving the Pension Crisis: The Fight to Get It on the Ballot"
- ↑ KUSI, "City leaders propose pension reforms for the June ballot", March 25, 2011
- ↑ San Diego Union Tribune, "Should police, firefighters get 401(k)s? With poll", February 25, 2011
- ↑ San Diego Union Tribune, "Propositions A, B are much-needed reforms", May 31, 2012
- ↑ 13.0 13.1 San Diego Union Tribune, "Two pension ballot measures become one", April 5, 2011
- ↑ 14.0 14.1 KPBS, "Fundraising Amps Up For Proposition A, B Committees", June 1, 2012
- ↑ Voice of San Diego, "Pension Initiative Supporters Say Campaign Is Signature-Proof", July 12, 2011
- ↑ San Diego Union-Tribune, "401(k) supporters spent $1.1M on petition drive", October 31, 2011
- ↑ 17.0 17.1 17.2 17.3 KPBS, "Pension Reform Ballot Measure Will Go To Court", February 13, 2012
- ↑ 18.0 18.1 KPBS, "Will The San Diego Pension Reform Initiative Make It To Ballot?", February 16, 2012
- ↑ 19.0 19.1 19.2 19.3 10 News, "Judge: Pension Reform Initiative Will Stay On June Ballot", February 21, 2012
- ↑ San Diego 6 News, "Twice in Two Days, a Judge Rejects Effort to Remove Pension Reform Initiative From June Ballot", February 22, 2012