A groundbreaking pension reform ballot measure would save San Diego taxpayers up to $2.1 billion, according to a comprehensive financial analysis released today.
“Taxpayers simply can’t afford to keep paying the staggering pension costs of city workers year after year, decade after decade,” Mayor Jerry Sanders said. “This ballot measure will restore us to fiscal sanity, creating a system in which city workers receive retirement benefits no better and no worse than the average taxpayer footing the bill.”
Sanders is working with council members Kevin Faulconer and Carl DeMaio, San Diego County Taxpayers Association and The Lincoln Club of San Diego County to qualify the Comprehensive Pension Reform (CPR) Initiative for the June 2012 ballot.
The campaign’s official kickoff is tonight (Thursday, June 30) from 5 to 7 p.m. at Trellises Restaurant at the Town & Country Hotel (500 Hotel Circle, San Diego 92108).
The analysis shows savings would begin almost immediately. Total projected savings:
- Year One: $2 million to $3 million saved
- After five years: $90 million to $105 million saved
- After 10 years: $395 million to $460 million saved
- After 20 years: $950 million to $1.3 billion saved
- After 27 years: $1.2 billion to $2.1 billion saved
“Our analysis demonstrates that the initiative will result in short- and long-term savings that the City desperately needs,” said Lani Lutar, President & CEO of The San Diego County Taxpayers Association. “Taxpayers are fed up with unsustainable pension costs. This measure provides aggressive reform that ends pension spiking and requires government employees to pay a fair share of pension costs.”
The San Diego County Taxpayers Association compiled the financial analysis with input from actuary Bill Sheffler and data from a number of sources, including the City and the San Diego City Employees Retirement System.
“Financial experts thoroughly vetted these numbers,” Faulconer said. “We are asking voters to do something significant, so there should be no surprises. This analysis gives voters the surety they need to support these very important changes. If we don’t make these changes, the City’s annual pension payment will soar to $468 million in 2025. That type of cost would decimate taxpayer services.”
If ultimately passed by the voters, the analysis of the CPR Initiative shows it would reduce the City’s total pension payments every year. The City’s current projected payment, for example, in 2018 is $347 million. Under the CPR Initiative, it would be reduced to $307 million – a $40 million savings in a single year that could instead pay for much needed city services.
“This measure helps solve San Diego’s budget problems,” DeMaio said. “It will free up millions of dollars for parks, libraries, police, fire and other neighborhood services. It also will shift investment risks from taxpayers and give the City more certainty in budget forecasts.”
The ballot measure would end pension spiking; require city employees to pay a fair and equal share of their pension costs; move new employees except police recruits into a 401(k)-type retirement plan; require complete and full online disclosure of pension payments to city retirees; and remove the veto power employees have over pension reforms.
If approved, the CPR Initiative is expected to serve as a model for other local governments throughout the state and nation, many of which are struggling to rein in soaring pension costs.
Click here to see CPR’s analysis, and click here to read today’s front-page story about it in the San Diego Union-Tribune.
Paid for by Comprehensive Pension Reform for San Diego (CPR for San Diego) with major funding by San Diegans for Pension Reform and The Lincoln Club of San Diego County, advocates for responsible city finances. 7185 Navajo Road Suite P – San Diego CA 92119