Dan Morain

Dan Morain: Ignoring 'rule,' Democrat picks pension fight

Dan Morain
Dan Morain

Chuck Reed, the mayor of the third largest city in California, is a rare breed of politician, a Democrat who can't quite get the orthodoxy right.

He is a Stanford-educated lawyer who graduated from the Air Force Academy and got a master's degree from Princeton. Despite all that book learning, he doesn't seem to grasp what all politicians instinctively know: Never say never.

The San Jose mayor said "people" have "talked" to him about running for statewide office, maybe governor. When I asked if he intends to take the plunge, he answered no. Does that mean never?

"I think never," he answered.

Not that he's counting the days, but Reed will be termed out as mayor in 2015. "I'm going back to have a more normal life in about 17 months. I've done my duty."

He listed reasons why he thinks he'll never run for governor. He'll be 65 next month. He has no desire to live in Sacramento. He figures he'd be about "$20 (million) or $30 million short" of the money needed to run statewide.

Most importantly: "The unions would not be supportive."

Reed violated unspoken Democratic Party rules by sponsoring a San Jose ballot measure to rein in retirement costs in 2012, and is contemplating a further breach by sponsoring a statewide initiative to limit pensions in 2014.

Nearly 70 percent of San Jose's voters approved his Measure B in June 2012. It would save money by giving city workers a choice: switch to a lower pension, or keep their richer benefit but pay more toward their retirement.

The measure is on hold pending the outcome of a suit by unions representing San Jose police officers and other city workers. Reed has spent the week watching the trial before Santa Clara Superior Court Judge Patricia Lucas. The case is expected to end Friday, with a ruling 90 days later.

The side that loses will appeal. If San Jose wins, other cities probably would follow its lead. If courts rule in favor of the unions and find that San Jose's attempt to limit pensions violated the constitutional prohibition against interfering with contracts, other cities would be barred from restricting public employee pensions.

In Reed's view, San Jose simply cannot afford retiree costs. The cost of covering retirement grew from $73 million in 2001 to $245 million 10 years later. San Jose paid the pensions but couldn't open libraries.

Other cities let sidewalks crumble, or don't hire cops to fill vacancies. Many other cities raise fees, which fall hardest on people who can least afford to pay. Stockton and San Bernardino sought bankruptcy, in part because of pension obligations.

"I think we ought to have an alternative to cutting services or declaring bankruptcy," Reed said.

Although he seems to have no desire to run for statewide office, Reed is mulling a statewide initiative that would allow the state and municipalities to scale back pensions for current employees. He has been trying to line up support, particularly from other big city mayors, among them recently termed-out Los Angeles Mayor Antonio Villaraigosa.

Villaraigosa was Assembly speaker in 1999 when the Legislature passed Senate Bill 400, which opened the way for vast increases in pension costs first for the state and later for local governments. But in eight years as mayor of the state's largest city, he saw the impact of pensions on city services.

"I haven't seen the language of his initiative. But as a general proposition – absolutely, I feel very strongly that we have to fix this pension system," Villaraigosa told me Tuesday.

Reed acknowledges that the initiative may never materialize. One reason is money.

Political donors aren't directly affected by the cost of public employee pensions, and don't see the point of spending the millions necessary to persuade voters to approve a pension initiative. Besides, unions would spend huge sums to defeat any initiative that they see as a threat to public employee pensions.

Democrats led the effort to raise pensions and have an obligation to help fix the problem. But they cross labor at their peril, not unlike Republicans who support an immigration overhaul or new taxes.

But given Democrats' dominance of California state politics and Republican antipathy toward labor, Democrats would need to take the lead in any initiative campaign to reduce pension costs for it to have any chance of passing.

Democrats risk their careers if they dare to challenge public employee pensions. So any Democrat who gets involved would have to be a special breed, the sort who isn't quite in the mainstream and doesn't fully grasp the orthodoxy.

Follow Dan Morain on Twitter @danielmorain. Back columns, www.sacbee.com/morain.