No ‘Fiscal Emergency’

By Jim Unland

Good news has been hard to come by as of late. That is until yesterday. The city of San Jose Police and Fire Retirement Board voted yesterday to accept the plan actuary recommendations on pension costs for next year. And surprise, surprise, pension costs shrank to the tune of $55 million in the police and fire plan. That’s not a typo—$55 million will come off the projected budget deficit as a result of pay and concessions and concessions agreed to by police officers and firefighters.

Initially, the city expected to pay $160 million in pension costs based on an outdated 2010 estimate. Mayor Chuck Reed used this data to create an artificial “fiscal emergency” based on data that has now been disproven by an independent actuary. What San Jose has is not a fiscal emergency but rather a leadership emergency.  Mayor Reed’s answer to his numbers being wrong? Well, he still wants to plow ahead with his unlawful pension scheme, which will lead to litigation and hundreds of millions of dollars of risk for the city. Let me be clear, we support lawful pension reform and as a matter of fact, we presented to the city just yesterday a new proposal to roll back pension benefits to 1996 levels for new hires and current police officers and firefighters who opt into this plan.

Today a coalition of unions will also unveil a “Zero Service Cuts” budget that will bridge the remaining $25 million deficit and create additional time to negotiate on legal reform. Instead of taking his ball and going home, Mayor Reed should roll up his sleeves like other big city mayors and work for solutions that will stand up in court. It is a shame that he is creating a solution in search of an unidentified problem.

What is the five-year budget forecast? What is the true size of the problem we are trying to solve? Only with numbers based upon retirement board actuary’s work will we know.  June ballot measure needs to be placed on the ballot 88 days prior to the election. It makes sense to let the actuaries do their job and not guess at what the problem could be.  Leadership requires a steady hand, and, boy, are we in need of that in San Jose today.

You would have thought that yesterday’s news would have been greeted with happiness at City Hall. Instead, the Mercury News reported that the mayor and city manager “greeted the news with skepticism and some dismay.” This is not the news they wanted.  This does not bolster their arguments for a fiscal emergency.  In fact, the vote for that isn’t going to happen because they at least want to hang onto some shred of credibility.

What does still appear to be happening is that the mayor is moving forward with his unlawful ballot measure in June. Instead of a March election though, he wants an election in June. A couple questions arise from this. If the election isn’t going to take place until June, why does the council need to vote on it now? And if sunshine is such an important aspect of everything we seem to do here at the city, why have the mayor and his council allies decided to “[d]ecline to permit rebuttal arguments in the June 5, 2012 Voter’s Sample Ballot”?  That is just plain disgusting and shows the true colors of this mayor and city manager.

Yesterday was a good day for those who deal in facts and verifiable data. Our plan is 85 percent funded, up from 70 percent. But don’t think for a second that the Police Officers Association and Fire Fighters Local 230 believe that the city’s fiscal future is all roses. We have submitted new pension reform proposals, and we will continue our efforts to bring long-term structural reform to our retirement plans. These changes have to be legal. We hope that with this bit of good news the city will return to the negotiating table and together we can find solutions to the long-term challenges ahead.

Jim Unland is President of the San Jose Police Officers' Association. This article was orginially published on San Jose Inside and has been reposted on Protect San Jose with permission of the author.