OPINION Some have questioned why I, as a long-time supporter of progressive policies and programs, chose to venture into the uncharted waters of pension reform. The answer is simple: I believe in the value of government, particularly in providing a safety net for the poor and those who need help. When the government no longer has the ability to provide these services, everyone suffers.
I became aware of San Francisco's pension problem through advocating for my department's budget. Beginning in 2005, year after year, I saw pension and benefits costs rise, while services and programs were cut or eliminated. Funding for education, parks, street repair, AIDS, senior and after-school youth programs, mental health clinics, drug treatment programs and other basic services have evaporated while pension costs continue to escalate. Today, we spend $1 out of every $7 on pension and benefit costs for city employees; in five years, it will be one out of every $4.
In the next 12 months, pension costs are projected to increase by nearly $100 million more than last year. Think of the number of jobs, programs, and services that will have to be cut to pay this debt. These costs come at a time when the city faces a $360 million budget deficit.
Some may argue that taxes should be raised to pay for these costs. Yet progressives have shied away from tax measures in these difficult economic times. Even if there is a planned tax measure this November, it would have to raise $300 million — 10 times what last November's millionaire real estate transfer tax raised — over the next three years to keep pace with pension costs.
While conservatives have seized on rising pension and benefit costs as a vehicle to push their anti-union agenda, we cannot cede the responsibility for addressing this fiscal challenge to the right. We must protect collective bargaining for workers, while presenting a solution that strikes an appropriate balance between our obligations to retired workers and the need for continued city services.
Shortly, I will be introducing a new ballot initiative that will help reduce costs while ensuring that the pension and health benefit system is there for future generations of workers. And the initiative will do so in a manner that is fair and equitable. The highest-earning workers, including elected officials, will be asked to contribute more while the lowest-earning workers will be entirely exempt, a lesson learned from the last pension reform effort. The reforms will help eliminate the abuses of the pension system that benefit a few workers at the expense of others. Residents, elected officials, city employees, and labor leaders are invited to review the proposals at www.sfsmartreform.com and provide any comments or ideas.
The fact that pension reform is one critical component of a more comprehensive solution that may include changes to our tax policy, generation of other revenue, and even state or federal cooperation, is no reason to excuse supporting real reform.
Jeff Adachi is San Francisco's public defender.
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