The stakes are heating up over how The City plans to reduce pension and health care costs for government workers.
Public Defender Jeff Adachi will meet with Mayor Ed Lee today to discuss how to move forward with a proposal for the November ballot to reduce skyrocketing labor costs, but Adachi said he is willing to go out on his own if the “consensus” proposal from Lee and labor leaders fails to adequately address the costs.
Adachi was much-maligned for introducing Proposition B to rein in city workers’ costs by making them pay more into their pensions and more for their dependents’ health care benefits. It failed at the polls in November as a result of a labor-led effort to defeat it that came with a promise to address the problem in a collaborative way.
Adachi is drafting what he is calling the “Son of B,” and plans to submit the measure to the Department of Elections in March. He would have to gather signatures to place it on the ballot. Adachi said he would be willing to drop the
proposal for one “consensus” measure if he thought it went far enough. He said the proposal needs to be “more drastic than what was contemplated with Prop. B.”
What he is considering is mandating that The City never pay more than 50 percent of the total pension contribution. If a worker’s pension contribution is 7.5 percent and The City must contribute 18.2 percent, the city worker would have to pay an additional 5.4 percent, which would result in a 50-50 split at 12.9 percent each.
Next fiscal year, The City is expected to contribute $375 million — a $100 million increase from this year — toward pension costs, according to the city controller. That is about 18.2 percent of The City’s payroll.
He is also considering changing pension calculations from the average of a two-year salary to a five-year average for all new employees. Adachi is also considering that The City does not pick up more than 50 percent of the health benefit costs of the dependents of workers who earn more than $50,000 a year.
Christine Falvey, Lee’s spokesman, said since becoming mayor, Lee has been “committed to working with everyone to put real long-term pension reform on the ballot this fall.”
Lee’s meeting with Adachi is part of that commitment to work with all the stakeholders. Falvey said Lee is waiting for more financial analysis before proposing any specific solutions.
Public Defender Jeff Adachi, the champion of Proposition B — a city worker pension reform measure — is now drafting the “Son of B.” Here are some proposals he may include in the potential November ballot measure:
- City is prohibited from paying more than 50 percent of the total pension contribution
- Change the pension calculation from two-year average salary to five-year average for all new safety employees
- For all new employees, only employee’s base salary is used to calculate amount of the pension, excludes things like bonus pay
- Change the normal retirement age from 55 to 57 for all new safety employees
- Change the normal retirement age from 62 to 65 for all new miscellaneous employees
- Employer cannot pick up more than 50 percent of cost of dependent health coverage for all employees earning $50,000 or more
- Require retired city employees who receive pensions in excess of $50,000 to pay an additional 5 percent to the health care trust fund for retiree health
Source: Public Defender Jeff Adachi