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Mayor Reed goes to great lengths to claim that Measure B is reasonable “reform.” If that is the case, then why are many San Jose police officers ready to head for the hills if Reed’s scheme is approved by voters this June?
The simple answer is that Measure B will slash the take home pay of officers so badly that it will force many of them to leave the San Jose Police Department and take jobs with other agencies to earn a living wage. San Jose’s officers are already the lowest paid police in the bay area, and they pay more into their retirement than any other police agency in the region. Some people may think that officers leaving is to be expected and it won’t be that big of a problem, but when you lose 200+ officers in the next two years or less it will be impossible to replace them fast enough. The City is planning on having two police academies of 35 officers each completed by the end of 2013. Normally, about 20% of the trainees do not complete the academy so this doesn’t come close to making up for that huge loss of man power. Since the San Jose Police Department is already below the minimum number of officers needed to police the city effectively, this will be a recipe for disaster. I personally know of over 30 officers that are now near their end of their hiring process with other police agencies, and I am sure there are at least that many more that I don’t know about. Many are fed up and aren’t going to wait around to see what happens with Measure B.
You may be thinking that there can’t possibly be 200+ police jobs out there. Just as an example, The San Francisco Police Department alone is planning on hiring well over 200 officers in the next 2 to 3 years in order to replace an aging group of officers that will be retiring. They are heavily recruiting San Jose officers as we speak and have already hired five. San Francisco police officers are paid much more and have a good retirement plan. Other cities in the bay area also know that they can avoid the high costs to hire and train new recruits because they will be able to draw on the highly trained San Jose officers that are ready to join the exodus. Why hire San Jose police officers and not train recruits? This is because San Jose officers are experienced and well trained. Fresh recruits in contrast cost approximately $150,000 per officer to hire and train. As of this writing, 53 officers have already resigned from the San Jose Police Department and moved on to some of these other police agencies. Of the 66 officers that were laid off last year, 30 of them declined when offered their jobs back. Add that to the 53 and you have 83 officers lost; 83 officers that the city of San Jose paid roughly $12,450,000 to hire and train.
So what is the driving force that is causing this to happen? What is it about Measure B that is so horrible? In a nutshell, Measure B does not change a current officers’ pension; instead it makes the officers pay more of their salary into their retirement…….much more. I will try to lay it out as simply as I can.
Just for reference here is what officers were paying into their retirement in the 2009-2010 fiscal year:
% of base pay paid into retirement 8.18%
% paid into retiree medical 4.78%
Total base pay reduction: 12.96%
This is what San Jose officers currently pay into retirement:
% of base pay paid into retirement: 10.38%
% paid into retiree medical 7.01%
Total base pay reduction: 17.39%
This coming July the percentages taken out of base pay will increase. (This will happen regardless of whether Measure B passes or not):
% of base pay paid into retirement: 11.13%
% paid into retiree medical: 8.26%
Total base pay reduction: 19.39%.
In addition, San Jose police officers agreed to a 10% pay cut that began in July of 2011 and will be in effect at least until June of 2013. That puts the current take home pay reduction at 27.39%, and it will bump up to 29.39% when the new fiscal year starts this July. That is almost a 30% pay reduction that officers are already going to be struggling with. Measure B will take even more.
Specifically I want to point out sections 6(c) and 15(c) of the initiative. What those sections say is that current employees will be required to contribute either an additional 16% of their salary into their retirement, or if that section is found to be illegal in court, the city will instead take 16% in pay cuts over the next five years. The cuts would be in 4% increments starting in July of 2013 and topping out in July of 2016. If that weren’t bad enough, Measure B also calls for employees to pay for half the cost of retiree medical. For police, half of the cost is 16% of base pay. That would basically double the percentage that officers pay for retiree medical from 8.26% to 16%.
So to break it down more simply with round numbers:
% base pay reduction that will be in effect this July regardless of what happens with Measure B: 29%
additional payment into retirement (or pay cut) if Measure B passes: 16%
Additional percentage paid into retiree medical if measure B passes: 8%
The percentage that an officers’ pay would be reduced as of July of 2016:
This is before taxes and health/dental costs are included.
As mentioned above, San Jose officers voluntarily gave up 10% of their pay at the beginning of the 2011-12 fiscal year. The City has stated that they want this pay cut to be on-going. Because of this, I am assuming this 10% cut will still be in effect come July of 2016. San Jose Police Officers would go from having their pay reduced by 12.96% in 2009 to 53% in 2016!
Now Mayor Reed and his supporters on the city council like to say that city employees can avoid having all this extra money taken out of their checks by opting in to the “VEP” (Voluntary Election Program). But they always forget to mention that the VEP does not exist yet, and probably won’t exist for a long long time.
Section 7 of Measure B talks about this VEP that employees could theoretically opt into. It is a retirement plan that reduces the benefits employees accrue going forward. The city says if employees opt into this VEP plan they can avoid having all that additional money taken out of their checks. BUT………it states in the second sentence of that section, “The implementation of the VEP is contingent upon receipt of IRS approval.” Well, San Jose has not received that approval. In fact, Orange County (among others) has been trying to get IRS approval for their similar plan for four years without success. Most legal experts say that getting such approval is unlikely since it would involve changing the federal tax code. Changing the tax code means the U.S. Congress must get involved. In other words, the city will be attempting to force its employees into a VEP that does not and will not exist. Since there is no VEP, all city employees will have to choose between having their take home pay drastically cut, or resigning.
Even the Mercury News seems to get this. Here is an excerpt from one of their editorials from November of last year:
“But the plan is pending IRS approval. Welcome to the club. Some 25 similar plans have been submitted since 2005, when the IRS placed a moratorium on them, apparently to come up with a consistent standard. Six years have passed with no action, and for all anybody knows, it could be another six before the IRS rules.”
Mayor Reed constantly says these reforms are “reasonable”. But he will not break it down and show the public these numbers and facts because he knows the majority of people would not support it. How could anyone think that taking 53% from an employee’s paycheck is reasonable? He knows that because Measure B is long and complicated, most people will not take the time to read it. So the public remains uninformed. They appear to be about to vote yes on something that will drive San Jose police officers to other agencies much faster than the City will be able to hire and train replacements. If the intent of Measure B is to restore city services including public safety? It will do just the opposite.
Damain Bortolotti is a San Jose Police Sergeant and is also a member of the San Jose Police Officers’ Association Board of Directors