Former San Jose Mayor Returns for State Pension Reform Effort

Ex-mayor and part-time lawyer Chuck Reed will take another crack at statewide pension reform, reviving a campaign to cut public retirement costs and bolster his political legacy.

Reed, who termed out as San Jose mayor at the end of 2014 after a bitter years-long battle defending his signature municipal pensions reform, has linked arms with former San Diego Councilman Carl DeMaio, a Republican, to place a state initiative on the 2016 ballot.

“Without serious pension reform in California, we face a future of cuts to important services and more tax revenues diverted to unsustainable pension payments,” said Reed, who’s also enlisted help from his former mayoral policy aide, David Low.

The measure would target CalPERS, California’s $300 billion public pension administrator, which oversees retirement funds for more than 3,000 government employers. Public pensions have long been considered sacrosanct, immune to renegotiation even in the event of a bankruptcy (although a recent court decision appears to upend that notion).

California’s pension debt has ballooned from $6.3 billion in 2003 to $198 billion in 2013, Reed noted in a statement Wednesday. Meanwhile, unfunded liabilities for public retiree healthcare benefits hover around $72 billion. Pension costs make up the largest debt in most California cities and are projected to jump up by 50 percent for many local governments in the next five years, he added.

“It is clear that politicians in Sacramento are not serious about reforming unsustainable pension benefits for government employees, so voters must take the matter into their own hands and impose reform at the ballot box,” DeMaio said.

Reed’s initiative will rally formidable opposition from public employee unions, who argue that pension cuts unfairly hurt current workers and retirees. CalPERS spokeswoman Rosanna Westmoreland told San Jose Inside that the pension system has already taken steps to ensure the long-term sustainability of its fund without reneging on promises made to public employees. Dialing back pension benefits could hurt a city’s ability to stay competitive as an employer.

“Pensions are an integral part of deferred compensation for public employees and a valuable recruitment and retention tool for employers,” Westmoreland said.

Reed plans to submit his proposed initiative—one that would allow local governments to renegotiate defined-benefit contracts—to the state for review by May. A similar effort died last year, after Reed claimed that California Attorney General Kamala Harris approved ballot language that was biased toward unions.

As mayor, Reed pushed for a local pension reform measure that remains a source of contention between the city and local public employee unions. Parts of Measure B were struck down after a series of union lawsuits challenged their constitutionality in court.

Jennifer Wadsworth is the news editor for San Jose Inside and Metro Newspaper. Email tips to [email protected] or follow her on Twitter at @jennwadsworth.

23 Comments

  1. Talk to Governor Walker from Wisconsin. He will tell you how to screw people of what they have righly earned. Lead by example. Cut yours.

      • It wasn’t as a threat . More a question as to why this [email protected]#$%!F*&^(^) won’t just go away. Hasn’t he inflicted enough damage to the working class

          • I don’t carry a gun , BUT I believe that like you , I am entitled to my opinion.

        • Crazy Uncle SJOTB only hears what he wants to hear and in his world the only valid iterpretations are his own… explaining anything to his type is futile.

          Just let him wipe the drool off his chin, bellow, and then hope he nods off quickly and doesn’t snore so loud that he drowns out the dinner conversation.

          • He sounds more and more like Shane Connolly! This guy is truly desperate. Hey Bubble boy you should read your mentor’s letter. Even he is coming to the realization that their form of pension reform has been an utter disaster.

  2. May be we should put a measure on the ballot to cut government waste, and politician’s bloated salaries. Yeah, that will give us plenty of money for all the things like streets, public safety, libraries, community centers, etc. that we need more than politicians. You know, all the things we pay taxes for but never get…

    • Kathleen. Don’t forget bonehead public “art” projects like painting manhole covers green @ $85k.

  3. For an in depth, well chronicled argument against Chuck’s Koch fueled money grab, one must look no further than San Jose. If municipalities and the state of California as a whole would like to replicate the resounding failure that was Measure B, hop right on Chuck’s “anti-gravy train.”

    Benefits include: increased response times from law enforcement and fire, unprecedented spikes in property crimes such as auto theft and home burglaries, lawless traffic conditions where pedestrians are struck and killed at least twice each month, rampant prostitution, graffiti everywhere you look, a downtown core robust with drug dealers and homeless people but devoid of businesses, a vanishing police force, fully operational fire stations that sit vacant, delusional politicians, news media that supports them, millions of tax dollars tied up in failed litigation, dwindling property values, increased insurance rates, thriving criminal street gangs and the list continues to grow…

  4. Some real leadership by Mayor Liccardo, something that has not been seen in the last 8 years, is about to be exercised in San Jose, as the City’s elected leaders are about to acknowledge that the Measure B version of pension reform is completely unworkable, and was a complete failure. This is a very refreshing turn of events.

    This is also further testimony that chuck reed has secured the title of Absolute Worst Mayor this formerly great City has ever seen. Former mayor reed’s photo should be removed from City Hall and replaced with nothing, to match exactly what he accomplished while he led this City down the disastrous path he chose. The lasting impact of the last 8 years under reed, referred as the Lost Years by many, will take a long time to recover, but at least San Jose tax payers will start to see a new change.

    • Well at least Mayor Reed, through suing MLB in his unsound litigious and bullying way, forced the A’s to move to San Jose, and got a beautiful new ballpark built on the land the city bought and gave to the owner of the A’s. What is not to think his statewide pension ballot won’t be equally successful?

  5. Chuck Reed is just riding the gravy train funded by out of state industrialists who are seeking to preserve their 1% status by scapegoating public employees. Reed’s local effort at pension reform was an abject failure. Why anyone in this state would see his current gig as anything other than the display of his messianic complex personality disorder, I have no idea. California has seen a complete turn around in its state government’s financial outlook. There is no reason to up-end decades of established law on pensions. These are long term issues that can be worked out in the long term. Reed does not have the answer and he has proven it.

  6. Pensions are unsustainable. Private businesses already figured that out and stopped offering them. They are not required for recruiting. Good pay an opportunity to advance by performance and thereby build wealth is the only sustainable model.

    • Yes, but you can’t take Money and pensions and expect that people are still going to want to work in San Jose