Pension reform – however modest and halting – is progressing in local government.
This week, Sacramento County supervisors approved a new contract negotiated with one of the county’s largest unions that calls for employees to pay their full 9percent share of pension contributions by 2016-17.
In return, more than 1,100 county workers in Local 39 will receive pay raises of between 2 and 4 percent in 2014 and 2015, pegged to the consumer price index, a 4 percent hike in 2016 and between 2 and 5 percent in 2017. The net cost to the county over the five years totals $760,000.
You can quibble whether the five-year contract is too long or the raises too generous, but there’s no doubt that the pension change is significant.
In the city of Sacramento, nearly all the major unions over the last few years also have agreed to pay the full employee share of pension costs.
There’s one glaring exception, however. The city police union is refusing to go along, unless the higher pension payments are offset with sizable pay raises. Now, the city pays both the employer share of 9 percent of salary and the employee share of 9 percent into the California Public Employees’ Retirement System.
The Sacramento Police Officers Association’s contract expired June 30. With no agreement in sight, the City Council has authorized binding arbitration – a high-stakes proposition for both sides, and for taxpayers.
A three-person panel – one picked by the city, one by the union and the chairman agreed to by both sides – will hold public hearings, go through the evidence and be able to meet privately with city and union representatives. Under the City Charter, if there’s no deal by the end of the hearings, each side would submit a final offer. The arbitration panel must pick one or the other – it can’t split the difference – and choose the one that “most nearly conforms” to measures such as cost of living, pay and benefits in comparable California cities and the city’s ability to pay.
The process is expected to take several months. Until a conclusion, the city will pay $450,000 a month in pension costs it wants the officers to cover.
What is happening in Sacramento does not help foes of San Jose Mayor Chuck Reed’s proposed statewide ballot measure, who say pension matters should be decided locally at the bargaining table. Although the pension reform law passed last year will eventually cut costs for cities and counties, its most significant changes cover only new workers. Reed’s ballot measure would allow cities to trim future pensions earned by current employees.
Meanwhile, cities and counties are facing higher pension bills right now from CalPERS, which is trying to replenish its coffers after the recession. Pension costs are taking a larger bite of local budgets, starving basic services to residents.
As elsewhere, Sacramento police officers have built a deep reservoir of respect with the public. But the union’s stubbornness already has led to layoffs and fewer officers on patrol. As this impasse drags on, public esteem will erode. That should be the last thing that officers want.