Two California cities, San Jose and San Diego, the tenth- and eighth-largest cities in the country respectively, just voted overwhelmingly to rein in excessive union pensions. In San Jose the ballot measure that passed was called Measure B, while in San Diego it was called Proposition B, but the message was the same: The day of excessive union pension benefits extending upward and outward to infinity is coming to a close.
San Jose’s Measure B, which passed with nearly 70 percent of the vote, gives union members a choice: increase their contributions to their pension benefits from its current level (between 5 percent and 11 percent) to 13 percent, or switch to a lower cost plan with reduced benefits. It also sharply reduces benefits for new hires and tightens rules to qualify for disability benefits.
In San Diego, Proposition B which passed 66 percent to 34 percent, eliminated pensions for new workers altogether, providing them with traditional 401(k) defined contribution plans instead. It also puts a freeze on pay levels for five years and, most importantly, removes elected officials’ ability to approve increases in pension benefits without voter approval.
As San Jose Mayor Chuck Reed expressed it, the voters “understand the direct connection between skyrocketing pensions and the cuts in services…. They recognize that the [present] system is simply not sustainable.” And San Diego Mayor Jerry Sanders echoed Reed: “These pension systems are simply unsustainable.”
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