The 2012 measure approved by San Diego voters aimed to rein in the city’s public employee pension obligations. However, this measure was overturned by the California Supreme Court, leading to record-high pension payments for the city. The pension board recently approved a payment of $533.2 million, adding to the city’s total pension debt of $3.3 billion.
City officials are facing a large budget deficit of roughly $250 million, with the annual pension payment surpassing $500 million for the first time. These payments are expected to increase in the coming years, putting a heavy burden on taxpayers.
The measure, known as Proposition B, aimed to replace the public employee pension plan with a defined-contribution system for new hires. Despite initially saving the city “hundreds of millions of dollars,” Prop B was overturned by the State Public Employment Relations Board in 2016 and invalidated by a California Superior Court Judge in 2021.
The overturning of Prop B highlights the power of public sector union bosses in California, who view taxpayer dollars as an endless resource. Defined-contribution plans, common in the private sector, offer more flexibility and stability for workers compared to defined-benefit plans.
While San Diego’s experience with pension reform has been challenging, other cities in California, such as San Jose, have faced similar setbacks. Despite these challenges, it is crucial for elected officials and voters to continue pushing for reforms that ensure the long-term financial stability of public finances.
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