An interesting political drama has been unfolding in the troubled city of San Diego for several months. The debate centers around pension reform, and mayoral politics.

On one side, City Councilman Carl DeMaio, a candidate for mayor, was beating the drums of “comprehensive” reform. He released a detailed proposal in November that outlined a series of policies that would flatline the city’s skyrocketing pension obligations.

On the other side, Mayor Jerry Sanders and Councilman Kevin Faulconer attempted to tackle the issue with a more moderate approach that excluded all public safety employees (who make up half of the pension debt) and allowed pension “spiking” to continue.

At the peak of the drama, Sanders and Faulconer declared much of DeMaio’s proposal to be illegal, banned him from participating in discussions, and then publically released their own proposal. The media, business community and DeMaio harshly criticized their plan and forced them back to the negotiating table.

Earlier this month, all three parties released a “unity” ballot initiative, brokered by the Lincoln Club and San Diego Taxpayers Association. The deal essentially contains all of DeMaio’s proposals, with the exception that it did not immediately put new police hires into a 401(k) system.

Needless to say, look for San Diego’s public employee unions to fight these reforms with all of their might.  As we often say here on the FlashReport, public employee unions only have two purposes – to increase their membership, and to increase salary and benefits for their members.  That’s it – it is not terribly complicated.

Of course this “unity” pension proposal will figure heavily in San Diego City politics in 2012 – especially in the race for Mayor.

I have seen polling data that shows the desire for public employee pension reform in the city of San Diego is a major issue – one that will figure prominently in the decision making of voters as they choose a candidate.

Already (and unfortunately) San Diego County District Attorney Bonnie Dumanis has come out against this pension reform measure – making it clear that she does not support public safety employees having a 401k-style retirement package.  However, in coming out against the measure, she declined to offer her vision or ideas on how the city deals with the massive costs associated with the present system that lets these employees retire at the age of 50 with full pensions – many of which are well into the six figure range.  Perhaps Dumanis will propose a large tax increase to cover this unfunded liability?  Other than higher taxes, it is unclear how you would support over the long haul these lavish benefits for public safety workers.

City Councilman Kevin Faulconer gets points for coming to the table and ultimately supporting a much more meaningful pension reform package than that originally proposed by he and term-limited Mayor Jerry Sanders.

The big winner in this pension reform debate is Councilmember Carl DeMaio, who as I said above, has been leading the charge for meaningful pension reform in San Diego.  As long as pension reform is a key issue in the 2012 campaign (which this measure virtually assures), it’s DeMaio’s issue for sure.

Absent thus far from the public square on this issue is Assemblyman Nathan Fletcher, who has made it clear that he is looking at a run for Mayor of San Diego.  Fletcher will need to stake out his position sooner than later, especially with Dumanis weighing in already.  We urge Fletcher to support the Republican Unity Plan on pensions.

It is also worth commenting on a specific provision of the Unity Plan that deals with police pensions.  While we would have preferred a plan that required new police officers to have a defined contribution retirement plan, the Unity Plan stops short of that.  If the measure passes, it will leave it up to the Mayor and Council to decide whether officers will have 401k type retirement benefits.  We know that DeMaio supports a shift that includes all public employees, with no “carve outs” for certain workers.  But when Fletcher opines on this issue, it will be interesting to see what position he takes.

The bottom line is that taxpayers in the city of San Diego can be excited that a pretty good plan is moving forward for consideration.  It is still a modest proposal (a more substantial approach would include moving current employees to defined contribution benefits for their remaining years of service), but is a huge step in a positive direction.

Today we feature a column from San Diego Councilman Carl DeMaio that details the Unity Pension Reform measure.

This entry was posted on Tuesday, April 19th, 2011 at 3:16 pm and is filed under Blog Posts.