A tentative ruling released today in a lawsuit over San Jose’s 2012 pension reform ballot initiative has both sides claiming victory. Santa Clara County Superior Court Judge Patricia Lucas ruled that the city can’t require increased pension contributions from its employees but can reduce pay to cover retirement plans’ unfunded liabilities. Measure B, passed by nearly 70 percent of San Jose voters in June 2012, gave current employees the option of taking a lower pension or paying more for their current plan and required new employees to pay a larger share of their pension costs.
The measure was challenged in court by the city’s police, firefighters’ and engineers’ unions, among others. Mayor Chuck Reed said in a statement that the judge’s ruling “has protected a vast majority of the targeted fiscal savings that will help rebuild essential public services and protect the long-term sustainability of our employee retirement systems.” Reed said, “In particular, this ruling protects $20 million in annual savings the City is already reaping due to the elimination of bonus pension checks and changes to our retiree healthcare plans. Those savings have allowed us to slowly begin restoring services to the public and slowly begin restoring pay to our employees.” But Christopher Platten, an attorney who represented the unions in the lawsuit, said his side was the real victor in the ruling. “We see this as a big win,” Platten said. “Judge Lucas rejected the main contentions in the case.
She rejected the unlawful grab of employee pension security and the shift of pension costs onto the backs of employees.” Platten said the likelihood of San Jose reducing pay to its workers in future contracts was unlikely, noting that many city employees, including police officers and firefighters, have already left for other jobs since the 2012 measure passed. “The city has to bargain in good faith,” he said. “They’re in a catch-22.” Platten said the city touting its side of the ruling “kind of sounds like a football coach on the losing end of a score saying ‘Well we got more first downs.'”
Reed acknowledged in his statement that the judge’s decision to invalidate the pension contribution section of the ballot measure “highlights the fact that current California law provides cities, counties and other government agencies with very little flexibility in controlling their retirement costs.” The mayor is pushing for a state constitutional amendment that will allow local governments to reduce pensions for their workers. Both sides may appeal the judge’s ruling, but if neither party submits an objection within 15 days, the decision will become final.
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