San Jose Asks Court to OK Pension Cuts

     SAN JOSE (CN) – San Jose claims in Federal Court that a pension reform ballot measure is a legal way to avoid a budget crisis, and seeks a declaration that the measure does not violate city employees’ rights.



     Measure B, which the City Council placed on the June 5 ballot and voters approved last week, requires public employees to pay more into their pension funds or get reduced benefits.
     San Jose claims in its complaint that its ability to provide vital services is “threatened by dramatic budget cuts caused in large part by the climbing and unsustainable cost of employee benefit programs, exacerbated by the economic crisis.”
     The city’s payments for retirement benefits have increased by more than $100 million in the past year, and it expects the costs to increase to $319 million: roughly 24 percent of the general fund, according to the complaint.
     That’s why it put Measure B on the ballot, the city said.
     “Measure B is intended to adjust post-employment benefits in a manner that protects the city’s viability and public safety, at the same time allowing for the continuation of fair post-employment benefits for the city’s workers,” the complaint states.
     “Without the reasonable cost containment provided in Measure B, the economic viability of the city, and hence, the city’s employment benefit programs, will be placed at risk.”
     The San Jose Police Officers’ Association, which is the lead defendant, and unions representing firefighters and other municipal employees claim the ballot measure is illegal.
     The city seeks a declaration that the measure is legal and does not violate due process. Measure B contains a grace period until June 2013, which will delay increased pension contributions.
     “In light of the threat to essential city services, the express grace period referenced above, and the need for the city to begin implementation of Measure B, it is urgent that the court swiftly adjudicate the legality of Measure B,” the city says.
     Defendants include the San Jose firefighters union, and the local chapters of the Municipal Employees’ Federation and the City Association of Management Personnel.
     San Jose is represented by Arthur Hartinger with Meyers, Nave, Riback, Silver & Wilson.

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