After being named mayor in January, Ed Lee pledged that reining in skyrocketing pension costs would be his top priority. He backed a consensus approach that would have the buy-in of labor groups in the hope that such a plan could avoid a fierce and costly battle at the ballot box.
But with a May 24 deadline looming to submit a pension charter amendment for November, the mayor and labor leaders still find themselves far apart on some issues.
Lee has signaled his support of certain money-saving provisions that don’t make labor leaders happy. One point of contention includes possibly increasing the full benefit retirement age for public safety officers from 55 to about 60.
Financier Warren Hellman’s pension working group has been meeting since November and plans to work with Lee to “merge” its ideas into one measure, a spokesman said.
“We are almost at the finish line,” said spokesman Nathan Ballard. “Within weeks we’ll have a finished product that will have the support of the mayor and the supervisors.”
Yet labor is concerned about how much employees will be asked to increase their pension contributions. Most workers currently contribute 7.5 or 9 percent to their pensions. But labor leader Bob Muscat, who is participating in the pension talks, said The City is looking at contributions as high as 14 percent, which he said would be “disastrous” for some city workers. Labor has explored increases of up to 3 percent over the current amounts.
Although labor’s aim is also to emerge with a compromise measure, Muscat said that labor has considered putting its own measure on the ballot. “We are not going to get rolled over in the end here,” he said.
Participants say they are hopeful that a compromise can be reached to avoid another ballot box battle over pensions, as when Public Defender Jeff Adachi placed Proposition B on last November’s ballot. That measure would have forced city workers to pay more into their pensions and more for their dependents’ health-care benefits. Labor unions joined forces to fight the measure, spending nearly $1.6 million on the effort. Adachi’s campaign spent about $1.1 million.
Meanwhile, Adachi is again moving forward with his own proposal. But he said he would drop it if The City’s measure goes far enough.
“If there’s an opportunity for a consensus proposal that will avoid having a repeat of last year, that would be the best,” Adachi said. “But again, I think that voters expect that there is a real solution.”
Gabriel Metcalf, director of the public-policy think tank San Francisco Planning and Urban Research Association, who has been involved in the pension talks, said that “the labor proposals and the Adachi proposals and the mayor’s proposals are not that far apart.”
Metcalf said a united front makes it “much more likely to get something passed.”
SF’s pension chip-in on skyrocketing pace
- $357M Contribution fiscal year 2010-11
- $422M Contribution fiscal year 2011-12
- $537M Contribution fiscal year 2012-13
- $796M Contribution fiscal year 2014-15
Source: Controller’s Office