Pension reform: don't blame workers

It's all the rage these days to blame the economy's woes on public workers, whatever the facts are, no matter who the culprit really is

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By Larry Bradshaw and Roxanne Sanchez

OPINION Members of Service Employees International Union Local 1021, who make up about half of all San Francisco city employees — the lowest-paid half — are currently at the negotiating table with the Mayor's Office working out a deal to give back $100 million toward the city's deficit over the next two years. Last year our members gave back $48 million.

Now San Francisco Public Defender Jeff Adachi is proposing a new charter amendment to make city workers pay huge increases in their pensions and health care coverage. Never mind that he draws no distinction between the highly paid managers and the lower paid workers, between those feeding at the trough and those who toil to make and fill the trough. It's all the rage these days to blame the economy's woes on public workers, whatever the facts are, no matter who the culprit really is.

Wall Street speculators crashed the stock market, causing workers' pension funds to lose billions and wiping out their other retirement savings. The losses require local and state governments to spend more to keep the funds solvent. So who do Gov. Arnold Schwarzenegger, Republican gubernatorial candidate Meg Whitman — and Adachi — blame? The victims: the workers.

Insurance companies continue to raise premiums on health care coverage, making money hand over fist. They use those funds to lobby against reforms, from single-payer to the public option. When they win, the costs of continuing to cover workers and their families continue to escalate. Who do Schwarzenegger, Whitman — and Adachi — blame? The victims: the workers.

In an op-ed piece published last week in the right-wing Republican blog FlashReport, Schwarzenegger came out in support of a SB 919, a measure that would significantly increase employees' contribution to the pension fund and decrease their pension payments upon retirement.

Whitman, who is spending millions of dollars of the money she made at Goldman Sachs in quasi-legal transactions, is proposing to not only double employees' contributions to their pension fund and reduce the benefit, but to increase the retirement age and eliminate the defined pension benefit for new hires.

Into this company comes Adachi. He is concerned with the deficit since budget cuts have meant that his office has been unable to cover all the cases it is mandated to defend, and now some of those are being contracted out. Welcome to our world, Jeff.

Adachi has only two months to gather at least 70,000 valid signatures to get the required number to qualify for the ballot. It's highly unlikely that can be accomplished without hiring signature-gatherers.

Herein lies the irony. Adachi is going to have to turn to downtown interests, the very financial and corporate interests that tanked the stock market, and the pension funds, for the money to penalize workers for Wall Street's crimes.

Certainly San Francisco is facing financial problems. But instead of attacking workers, perhaps Adachi and his friends should join us in attacking the real problem. We are working on ideas for ballot measures that can raise new revenue for the city. Now that the city's unions have stepped up and given back together $200 million, it's time for downtown financial interests to contribute. *

Larry Bradshaw is a paramedic and Local 1021 vice president. Roxanne Sanchez is president of Local 1021.

Comments

From my perspective as a City resident (a majority of City employees are not City residents), I am pleased to finally see an elected official with the guts to tackle the City's current $800 million structural deficit as opposed to kicking the can down the road. The easy thing for Adachi to do would be to do what every other elected official in SF is doing about the the enormous structural deficit - nothing.

Sure it is helpful if unions give back $100 million in the form of furlough days but it is a partial, temporary solution. It solves nothing long term. It's more kicking the can down the road.

I don't get the sense that this opinion understands the severity the budget crisis. If Adachi's measure were to pass, the $160 million in cost savings to the City would cover only 20% of the current structural deficit. Based on current actuarial tables provided by the City's actuary Cheiron and rising medical costs, the structural deficit will increase AN ADDITIONAL $1 billion in five more years.

"...Jeff Adachi is proposing a new charter amendment to make city workers pay huge increases in their pensions and health care coverage."

Most City employees pay 7.5 % of their wages as employee contributions to their pensions. Adachi's measure would increase this to 10% for police and fire and 9% for all other miscellaneous employees, hardly a huge increase. Yes, some employees contribute nothing to their pensions but I don't get the impression that the City can afford to be giving free pensions anymore.

"...Never mind that he draws no distinction between the highly paid managers and the lower paid workers, between those feeding at the trough and those who toil to make and fill the trough"

A distinction is drawn between higher paid police and fire employees and miscellaneous employees. Higher paid managers do contribute more because the increase in employee contribution is set as a percentage of wages.

..."Adachi has only two months to gather at least 70,000 valid signatures to get the required number to qualify for the ballot."

46,000 signatures are required.

The "Wall Street, "Goldman Sachs," "Whitman" rant misses the point. If the stock market recovers to to the point where it was prior to the Great Recession, the structural deficit problem still exists. I read the proposed charter amendment. It does not "attack workers." This is silly. It is a partial, reasonable measure to try and restore the long term fiscal health of this great City. The structural deficit is projected to increase AN ADDITIONAL $1 billion in five more years. If it is not addressed and the City goes bankrupt, the situation will be a lot worse. As a long-term resident of the City, I support it.

Thank you for the opportunity to comment.

Posted by Guest C.J. Roses on May. 05, 2010 @ 7:11 am

Well said!

Posted by Guest on Jun. 17, 2010 @ 11:04 am

CJ Roses' comment is spot on. Pension costs are a looming crisis in this City. The amendment only leads to partial reform, but it's a start. And it's not an attack on City workers -- it makes them pay only part of their fair share for generous pensions that the City can't afford. The City's employees should be embracing reform because without it, I fear the the City is going to end up in Chapter 9 like Vallejo some day and who knows what would happen to the pensions under that scenario.

The article's call for new revenue measures is unconvincing. No one wants to pay higher taxes or fees so that public workers can maintain generous pensions. The City/county can't even perform the fundamentals like keeping our roads in repair and we have a $6.6 billion budget.

The references to Goldman and Wall Street are also red herrings. The article doesn't exactly trace anything Goldman did to workers' pensions.

Posted by Patrick on May. 05, 2010 @ 8:39 am

Meg Whitman is too close to the corrupt and fraudulent investment bank, Goldman Sachs.

Posted by Earl Richards on May. 05, 2010 @ 9:25 am

It's near impossible in politics to ask anyone or group to give anything up.
Governments can be toppled trying to act responsibly. The safer path is
to avoid problems, deny their existence for as long as humanly possible or more commonly blame the problem on someone else or an out group that doesn't poll terribly well. Scapegoating has a long and ugly tradition in mass politics.

American society is not immune from this phenomenon/disorder. This is the dark side of "populism." Jimmy Carter told Americans that they were indulgent, faced an energy consumption problem and had to change. He got one term. The public's answer was to elect a former actor who channeled myths and confirmed easygoing Americana assumptions.

A little noticed document prepared by Ben Rosenfield and Harvey Rose
for the Board of Supervisors lays out the current problem for San Francisco
government in 21 pages. Here is the link:

http://sfcontroller.org/ftp/uploadedfiles/controller/budget_information/...

The financial news is not good, and it's going to get any better unless there is substantive change.

San Francisco faces a $2 billion gap over the next 3 fiscal years. Adachi's measure might close about 1/4 of that gap. Even after the latest concessions, it's a fact 425 City employees will lose their jobs in the coming fiscal year. At a time when even San Francisco faces double digit unemployment what are the odds these workers will find another job? These workers are not just statistics, they won't be on the job to to help members of the San Francisco public cope with the consequences of an economic downturn that has been especially hard on private sector employees. These job losses translate into lost health insurance that in turn place new demands on the public healthcare system; those running out of unemployment benefit end up either leaving town or seeking
county general assistance; new demands on the criminal justice system and
emergency services. Demand may be down for most private goods and services, but that is not true for state or local governments. San Francisco has cut and will continue to cut public services at a time when people need help the most.

1021 Representatives make one good point. In fairness, city workers have given back and it's time for those who can afford to pay more for local government. No new revenue measures have gone to the voters since 2008. That is something the present administration has to own. Unfortunately, many decisions made in better economic times contributed to the creation of this $2 billion gap. That is not sufficient for today's political leadership to avoid its responsibility to face up to it. Having said how important new revenue is to the solution, even a $200 million annual revenue package won't close this $2 billion gap. Like Adachi's plan, a revenue measure if approved this November might help get San Francisco through roughly 1/4 of the problem. More will have to be done.

The ideal answer to thischallenge is for our elected political leadership to show
enlightenment and courage. They will have stand up and be prepared to lead public opinion instead of either simply flirting with it or avoiding it It's a time for political risk takers who want to take responsibility for the current state of affairs. Those of us on the sidelines can help this by not enabling the town's toxic and narcissistic political blogosphere, avoid fingerpointing comparatively minor imperfections in our pols and encouraging them to move beyond "safe" issues. One organic gardening exercise with Prince Charles is probably sufficient for a generation..
.
The issue of compensation and benefit for the city workforce also needs to be on the table. To date even modest efforts to control something as obvious as firefighter overtime have been shot down. Does San Francisco have the resources to pay its existing workforce what it now pays them, and still provide the public the services they deserve? No. If taxpayers are willing to pay more and public employees can be called on to sacrifice in exchange for job guarantees the City can close its budget gap, and weather the worst recession in 80 years. That would be a true civic achievement. An overall 8-10% real wage and benefit cut with some provision to mitigate the effect on lower paid workers --those making under $50,000 a year who are trying to support their families -- and new revenue could successfully close the $2 billion gap.

This approach would be the most humane and rational way out of a fiscal crisis that is now in its 19th month. San Francisco would retain a dynamic public sector. City agencies would not bleed skilled workers. Those working in City agencies would no longer live in constant fear of losing employment. San Francisco has a surplus of bright, talented political consultants who can sell anything to anyone at anytime. Politically this can be done, but some of the baggage and animus from old fights and wars would have to be set aside. Do we have the maturity for that? The verdict on this definitely out.

The status quo of what we've seen is the alternative to this. It is a piece by piece dismantling of City government. It's a local version Grover Norquist's fantasy of "drowning government in a bathtub." Progressives should have a viable answer to it.

Posted by John on May. 05, 2010 @ 11:30 pm

It's near impossible in politics to ask anyone or group to give anything up.
Governments can be toppled trying to act responsibly. The safer path is
to avoid problems, deny their existence for as long as humanly possible or more commonly blame the problem on someone else or an out group that doesn't poll terribly well. Scapegoating has a long and ugly tradition in mass politics.

American society is not immune from this phenomenon/disorder. This is the dark side of "populism." Jimmy Carter told Americans that they were indulgent, faced an energy consumption problem and had to change. He got one term. The public's answer was to elect a former actor who channeled myths and confirmed easygoing Americana assumptions.

A little noticed document prepared by Ben Rosenfield and Harvey Rose
for the Board of Supervisorslays out the current problem for San Francisco
government in 21 pages. Here is the link:

http://sfcontroller.org/ftp/uploadedfiles/controller/budget_information/...

The financial news is not good, and it's going to get any better unless there is substantive change.

San Francisco faces a $2 billion gap over the next 3 fiscal years. Adachi's measure might close about 1/4 of that gap. Even after the latest concessions, it's a fact 425 City employees will lose their jobs in the coming fiscal year. At a time when even San Francisco faces double digit unemployment what are the odds these workers will find another job? These workers are not just statistics, they won't be on the job to to help members of the San Francisco public cope with the consequences of an economic downturn that has been especially hard on private sector employees. These job losses translate into lost health insurance that in turn place new demands on the public healthcare system; those running out of unemployment benefit end up either leaving town or seeking
county general assistance; new demands on the criminal justice system and
emergency services. Demand may be down for most private goods and services, but that is not true for state or local governments. San Francisco has cut and will continue to cut public services at a time when people need help the most.

1021 Representatives make one good point. In fairness, city workers have given back and it's time for those who can afford to pay more for local government. No new revenue measures have gone to the voters since 2008. That is something the present administration has to own. Unfortunately, many decisions made in better economic times contributed to the creation of this $2 billion gap. That is not sufficient for today's political leadership to avoid its responsibility to face up to it. Having said how important new revenue is to the solution, even a $200 million annual revenue package won't close this $2 billion gap. Like Adachi's plan, a revenue measure if approved this November might help get San Francisco through roughly 1/4 of the problem. More will have to be done.

The ideal answer to thischallenge is for our elected political leadership to show
enlightenment and courage. They will have stand up and be prepared to lead public opinion instead of either simply flirting with it or avoiding it It's a time for political risk takers who want to take responsibility for the current state of affairs. Those of us on the sidelines can help this by not enabling the town's toxic and narcissistic political blogosphere, avoid fingerpointing comparatively minor imperfections in our pols and encouraging them to move beyond "safe" issues. One organic gardening exercise with Prince Charles is probably sufficient for a generation..
.
The issue of compensation and benefit for the city workforce also needs to be on the table. To date even modest efforts to control something as obvious as firefighter overtime have been shot down. Does San Francisco have the resources to pay its existing workforce what it now pays them, and still provide the public the services they deserve? No. If taxpayers are willing to pay more and public employees can be called on to sacrifice in exchange for job guarantees the City can close its budget gap, and weather the worst recession in 80 years. That would be a true civic achievement. An overall 8-10% real wage and benefit cut with some provision to mitigate the effect on lower paid workers --those making under $50,000 a year who are trying to support their families -- and new revenue could successfully close the $2 billion gap.

This approach would be the most humane and rational way out of a fiscal crisis that is now in its 19th month. San Francisco would retain a dynamic public sector. City agencies would not bleed skilled workers. Those working in City agencies would no longer live in constant fear of losing employment. San Francisco has a surplus of bright, talented political consultants who can sell anything to anyone at anytime. Politically this can be done, but some of the baggage and animus from old fights and wars would have to be set aside. Do we have the maturity for that? The verdict on this definitely out.

The status quo of what we've seen is the alternative to this. It is a piece by piece dismantling of City government. It's a local version Grover Norquist's fantasy of "drowning government in a bathtub." Progressives should have a viable answer to it.

Posted by John on May. 05, 2010 @ 11:32 pm

There is nothing right or fair about giving civil service workers way way more generous pensions then what we will ever get or be able to save working for ourselves or working for small companies or large ones. It is totally unfair. Screw those boomer civil servants who expect me to work for them for the next thirty years so that they retire comfortably while I slave away. SCREW EM!!

Posted by Albert on Jun. 07, 2010 @ 9:13 pm

This bill is the democrats give away to the public employees unions. The unions saw Vallejo go bankrupt and there sweet heart deals float away with it. So they connived with the states democrats to make it tougher for a city to go bankrupt, oddly partially thanks to their terrible fiscal policies at the state level. These contracts may bankrupt the city, but your democrat overlords will do all they can to keep their union masters happy.

I suggest anyone with any concern for the state and the city contact your state representative on this menace to good government... and open and naked pandering.

Posted by mr matlock on Jun. 17, 2010 @ 12:15 pm