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Erica Holloway

The Strange Bedfellows of Pension Reform

The woes of public pensions seems a universal problem. Governments around the globe grapple with these unsustainable money pits in the hopes of avoiding more trouble down the road.

San Diego’s not unique.

But just a year out from the 2012 June primary, we’re seeing lots of hubbub about the pension reform ballot measure out trying to beat the clock on submitting enough valid signatures to get it before San Diego voters for consideration.

Tied into this issue: the mayor’s race. Councilman Carl DeMaio’s planted himself firm in the center of this issue along with his drum-beating partners, Mayor Jerry Sanders and Councilman Kevin Faulconer, who support his opponent, fellow Republican District Attorney Bonnie Dumanis.

In an even stranger turn, she does not support the pension reform.

Ah, don’t you just love politics?

On the outs of the issue, until just mere hours ago, the third Republican mayor candidate Assemblyman Nathan Fletcher. He officially tossed his support behind the comprehensive pension reform.

What we’ve seen in this already heated political cycle is that Fletcher and DeMaio can raise some coin. In just 25 days, Fletcher said he raised more than $300,000 last month to DeMaio’s claimed $270,000, which he matched dollar-for-dollar for a total of $540,000.

So far, the Dumanis camp is silent.

The Fletcher support of the pension reform is a noteworthy move. Unlike DeMaio or Dumanis, he’s not been dealing with downtown city politics as long or to the same degree. In a fairly organic progression, he erred on the side of caution, took his time to learn up on the issue and made a thoughtful announcement.

Dumanis does not like the proposal, which would require all new city employees except police officers to switch to a 401(k) system. She has not laid out what her plan would be.

The proposal also include a five-year salary freeze for current workers, death and disability benefits for employees and a cap on future police pensions, among other things.

Though there’s been squabbling between proponents and opponents of the savings, the most regularly used estimates put the cost savings to taxpayers between $1.2 billion and $2.1 billion over the next three decades.

This sort of change isn’t unexpected. The Department of Defense is weighing options of switching the military over to a 401(k) system among other major budgeting changes to deal with its own shrinking budget.

Fletcher’s defined himself a bit more as a candidate with this decision. We’re getting more of a sense of who he would be as mayor. Beyond the Marine, the family man, the staffer-turned-politician, he’s flexing some executive leadership chops.

We’ll likely need to see more than his co-signing of other people’s efforts. But it’s certainly a solid conservative step in the right direction in the wake of being the lone Republican to vote for a controversial bill that would add the historical contributions of lesbian, gay, bisexual and transgender Americans to public school textbooks in California.

It will be interesting to see how key a role comprehensive pension reform plays in polling for these races. Though, with the debt problems plaguing governments worldwide, it’s probably safe to be seen as a fiscally-responsible candidate.

(Cross posted on SD Rostra)

2 Responses to “The Strange Bedfellows of Pension Reform”

  1. Robert Bosich Says:

    The down fall on Euro monarchies commened when a French king started public education of the masses….

    Education performance is the key to an informed electorate. The masses have no clue what 40 years of Democrat rule has down to our fiscal well being.

    Pension structures are complicated; voters are daff; don’t look to much pension changes until some union loon cries out “Let them eat cake”.

  2. Erica Holloway Says:

    Dear Robert:

    Thank you for your thoughts.

    While difficult, all governments will find it crucial to solve this issue. Moody’s and others will soon be tying structural pension debts to bond ratings. While San Diego City’s not enjoyed the most solid bond rating in recent years, even stable governments, like the County of San Diego, could be facing bond rating drop offs.

    Voters in San Diego fully grasp the pension woes, as its been an ongoing public conversation for years now. Though whether they agree with the current proposal remains to be seen. However, voters last year rejected a sales tax increase pushed heavily by the mayor, Labor and others to balance the budget.

    The time seems ripe to make needed and drastic budgetary changes to rectify future structural debt.