Mayor Chuck Reed is a good lawyer. That’s why his pension reform proposal for the city of San Jose made no sense. It is one thing for a Rose Herrera or Pierluigi Oliverio to support a blatantly unconstitutional local measure, based on a weak legal opinion of a law firm whose bottom-line will be enhanced even if the proposed law is struck down. But our good mayor knows better.
The protection of contracts is established law by the U.S. and California constitutions. A City Charter does not supersede, even if interpreted correctly, the established contract rights in the superior law of those constitutions.
That’s why Mayor Reed is moving forward with a statewide petition to change the state Constitution. It is the biggest admission we have to date that he understands the legal flaws to San Jose’s pension reform initiative, which voters passed last year.
But as one observer told me, “The Mayor took a boat with a hole in it out to sea and decided, once the boat was swamped, to fix the hole.”
That was the best metaphor I’ve heard regarding Reed’s pension reform efforts. In sum, the proposed ballot initiative is a tacit acknowledgement that his proposal can’t pass judicial muster. When that happens, the whole house of cards called “pension reform” comes crashing down around the city of San Jose and its next mayor. All of the “savings” from pension reform become illusory; all of the attorney’s fees, court costs, and political upheaval increases; and the decline of public employee morale results in real costs to the city treasury.
Meyers-Nave, the outside law firm that wrote the legal opinion defending Measure B, is asking for an additional $650,000 to their contract. If authorized by the City Council, San Jose’s legal fees could rise to $2.75 million, and probably much more before it is all over.
More importantly, many voters will become angry with government because most don’t understand why a majority vote of the people will not be honored.
Mayor Reed understands this and his statewide proposal will give him some political cover. But the fix will be too little, too late to save the San Jose boat.
Moreover, there are problems with his proposed solution. First, governing employee contracts by the ballot box is a bad idea. Second, polling shows strong opposition to Reed’s proposed solution. Third, and most importantly, even if he is successful in changing California’s Constitution, that pesky contracts clause in the U.S. Constitution remains.
Even this conservative U.S. Supreme Court, five members of whom would like to stick it to unions, would be loathe to overturn 200 years of precedent and put all government contracts at risk. Even if narrowly drawn, a decision that modified the right of contract would send a chilling message to corporate America, as they are the biggest beneficiaries of government agreements.
Whatever happens going forward, Mayor Reed was told that his “legacy” would be pension reform. It was almost unfathomable to think Reed would choose a short-term political victory as his legacy, knowing that it will be struck down by the courts.
But that is what happened, and Reed now finds himself politically adrift, trying to repair a craft that was never sea-worthy.
Rich Robinson is a political consultant in Silicon Valley.