San Francisco Public Defender Jeff Adachi. Photo by Luke Thomas.
By Jeff Adachi, Fog City Journal exclusive.
March 14, 2011
Some have questioned why I, as a long-time supporter of progressive policies and programs, chose to venture into the uncharted waters of pension reform. The answer is simple. I believe in the value of government, particularly in providing a safety net for the poor and those who need the services the government provides. When a government no longer has the ability to provide these services, everyone suffers.
I became aware of San Francisco’s pension problem through advocating for my department’s budget. Beginning in 2005, year after year, I saw pension and benefits cost rise, while services and programs were cut or eliminated. Funding for education, parks, street repair, AIDs, senior and after-school youth programs, mental health clinics, drug treatment programs and other basic services has evaporated while pension costs continue to escalate. Today, we spend one out of every seven dollars on pension and benefit costs for city employees; in five years, it will be one out of every four dollars.
In the next twelve months, pension costs are projected to increase by nearly $100 million more than last year. Think of the number of jobs, programs and services that will have to be cut to pay this debt. These costs come at a time when the City faces a $380 million budget deficit. The health service system is in far worse shape. The City owes $4.4 billion in unfunded health care costs for City employees and has saved only $9 million to pay for it.
Some may argue that taxes should be raised to pay for these costs. Yet progressive elected officials have shied away from putting tax measures before the voters at a time in these difficult economic times. And even if there was a planned tax measure this November, it would have to raise $300 million — ten times what last November’s millionaire real estate transfer tax was projected to raise — over the next three years to keep pace with pension costs.
Others argue that losses in pension funds are the fault of Wall Street and that the pension problem shouldn’t be solved on the backs of city employees. But does it follow from this that taxpayers should be required to cover losses in the city worker’s pension fund and should cut basic services to cover these losses?
But there is a more compelling reason why progressive-minded persons should support pension reform. If we don’t act to ensure the sustainability of these benefits programs for city workers, the pension and health benefits system will eventually begin to fail. Pensioners won’t get their pension checks and city workers won’t get their health benefits. And the collateral damage will be that more and more city workers will have to be laid off so the city can continue to pay its pensions to retirees, adding to the national unemployment rate, which is hovering at 9 percent.
Pension reform is a fundamentally progressive issue. Real pension reform would be a testament to the strength of progressivism by demonstrating that we can protect jobs, services and programs by fixing our pension and benefits system.
While conservatives have seized on rising pension and benefit costs as a vehicle to push their anti-union agenda, we cannot cede the responsibility for addressing this fiscal challenge to the right. We must protect collective bargaining for workers, while presenting a solution that strikes an appropriate balance between our obligations to retired workers and the need for continued city services.
Shortly, I will introduce a new ballot initiative that will help reduce costs while ensuring that the pension and health benefit system is protected for future generations of workers. And the initiative will do so in a manner that is fair and equitable. The highest-earning workers, including elected officials, will be asked to contribute more, while the lowest-earning workers will be entirely exempt, a lesson learned from the last pension reform effort. The reforms will help eliminate the abuses of the pension system that benefit a few workers at the expense of others. Residents, elected officials, city employees and labor leaders are invited to review the proposals at www.sfpensionreform.com and provide any comments or ideas.
Reforming our pension and benefits system for city employees is a problem we must fix now. Elected officials, especially those running for citywide office, can no longer deny that a crisis exists because they don’t want to offend city employees or labor. The fact that pension reform is one critical component of a more comprehensive solution, which may include changes to our tax policy, generation of other revenue, and even state or federal cooperation, is no reason to excuse supporting real reform.
The Hunger Site
March 17, 2011 at 5:47 pm
Tami,
Marc Salomon’s health insurance costs the taxpayers of San Francisco $36,000 a year. He pays nothing. Nor is he willing to pay anything.
h.
March 16, 2011 at 8:31 pm
From day one I agreed with Jeff about the problem- i had “Funding the public defender” as one of my Facebook activities. It’s his “solution” i oppose. He has been a fierce advocate for justice for the poor in the criminal justice system… He has established so many programs and services to help people transform their lives, that he will always have my deepest respect as Public Defender, but it has been a shocking betrayal to see the man I profoundly admire side with the wealthy elite, who do not support his public defender work, they’d let the poor rot in jail for eternity, to attack public workers.
We all know the economy is cyclical under capitalism and when Wall Street lost all that money, there went the pension funds. As the economy rebounds, so will the pension fund.
Marc and I do not agree on much, but on this he is one-hundred percent on target. I advocate for capping salaries and pensions. I do not think anyone should vest in five years. And he is also right that Jeff failed to come to labor and work out a collaborative agreement.
As an underpaid, overworked public sector worker myself, I think people should bear in mind the quality and caliber people running our government and whereas I oppose extravagant salaries and perks, there needs to be some incentive to recruit and retain quality people. When Arnie cut our pay fifteen percent, retirements surged, there went a lot of experience and talent. And those newbies that could find better opportunities quit their jobs in my office faster than you could say “boo.” We lost a lot of talented folks because of the economic assault.
Jeff’s premise is also flawed because he gives greedy insurance companies a free pass whereas a single payer health system would eliminate the profit motive and reign in costs.
March 15, 2011 at 12:21 pm
Adachi for Mayor!
He’s the only public official actually doing anything to address this crisis. The cops and firefighters don’t give a crap if other City workers are laid off or services suffer. 76% of cops don’t even live in the City. Why should they give a crap if the Department of Health’s budget get’s cut? In a survey done a couple of years ago it was revealed that one current firefighter lived in Kansas City and another in upstate Washington. When you’re off 20 days a month and making a couple of hundred thousand, the plane fare is inconsequential.
Adachi for Mayor!
h.
March 15, 2011 at 8:50 am
The injustice here is that it was not current employees who were contracted with to provide retirement benefits to current retirees, it was the City and County of San Francisco which made those contractual arrangements and owns those obligations.
Social Security was set up so that current workers paid for current retirees’ benefits. Public employee pension funds were set up differently.
The current predicament is not because the City entered into sweetheart deals with employee unions, rather because the custodians of the City’s retirement fund failed in their fiduciary duty and they lied to us as conditions deteriorated.
Nothing should change until there is an investigation into that mismanagement. Forcing current employees to pay for current retiree benefits without any indication that the retirement fund will be in any condition to pay future retiree benefits is not acceptable.
Given that Willie Brown, who led CALPERS into its current predicament, and Newsom appointed the SF Retirement Board membership, let’s not hold our breath for any accountability to be leveled in their direction.
It is always easier to focus on the immediate problem, to blame the rank and file workers and to shift the responsibility for fixing this onto them, to focus on immediate cash savings, than to do what it takes to structurally reform the pension and pay regimes to relieve the City of its contractual obligations in the long run.
Capping salaries at $100K and pensions at $50K for current employees will reduce obligations over the long term without forcing current employees to take on the City’s obligation to pay pensions to current retirees.
Asking the feds for a special bankruptcy to relieve the City of pension obligations > $50K would also do the trick.
But that’s the kind of heavy lifting that might step on the wrong toes, the toes of the powerful, so we’re not going to be seeing anyone go there.
Those of the rules of the game when billionaires are calling the shots.
-marc
March 15, 2011 at 2:33 am
Mr. Norton,
Adachi can affect global politics and put Wall Street in its place if he only chooses to do it? Jeeez, and I thought I was smoking some good shit.
Adachi for Mayor!!
Buster Posey for District Attorney
Winston Campos for Police Chief
Go Giants!
h.
March 14, 2011 at 9:31 pm
Adachi for Mayor!
Even Downtown’s in-house pollster, David Binder had Jeff with a 44% approval rating today without his even being in the race.
The pension and health care insurance melt-downs are our own version of the Japanese reactor disasters. Just a tad slower. This year we’ll see over 300 million in lay-offs and service cuts and next year it will be worse. Given that discretionary spending from the 6.6 billion dollar budget is only around 1.3 billion that rate is around 25% a year. And, rising.
Adachi for Mayor!
Mirkarimi for Sheriff
go Giants!
h.
March 14, 2011 at 2:20 pm
Ralph – Adachi is a nationally-known figure who clearly has the power to act globally. Where he leads, others follow. There are any number of campaigns he could take up to hold Wall Street responsible for the crisis they created. Instead, he chooses to attack city workers. Shame on him.
March 14, 2011 at 1:44 pm
Mayor Lee, the Board of Supervisors, and Adachi only have the power to act locally, not globally. They do have the ability to do something about the out-of-whack San Francisco Employees’ Retirement System. But they will have to leave to higher powers the solution to this country’s financial mess. But you knew that already.
March 14, 2011 at 1:08 pm
Progressives should support progressive reforms. The nature of those reforms can either be hammered out collaboratively or they can be fashioned behind closed doors.
Progressives should frame problems and solutions in terms of progressive values. When one side allows the debate to be framed in terms favorable to their opponents, they’ve already lost.
When those reforms are crafted in secret, when those reforms are crafted with billionaires at the table and in terms favorable to the wealthy who prefer to operate shaded from sanitizing sunshine, then the presumption should be that those reforms are not progressive reforms.
Jeff Adachi might have had first hand experiences that have led him to be concerned about how pensions impact the general fund. But Jeff Adachi has no demonstrated expertise in the area of employee compensation.
His sole source solutions, billionaires aside, have no more intrinsic value as policies than anyone else’s. This appears to be slightly less worse than Prop B, but the devils are in the details and the macro climate in which this discussion is transpiring is toxic.
And by working in secret with billionaires at this time in our history, Jeff Adachi has further demonstrated that he has no particular expertise in putting forth a measure that has the support of progressives.
Jeff, it is not all about you and your need to “solve this problem,” or to be seen as “solving this problem.” You’ve allowed your ego to get involved in this and that has led you to make poor choices. This is a perfect example of one of the major the pitfalls of single member elected offices.
Given the macro political climate concerning unions, social security and health care, the last thing we need is for an ego driven campaign supported by billionaires to be put forth as a progressive policy initiative.
A progressive solution to this problem would be to do what organized labor has not–unite organized and unorganized workers towards sustainable solutions to bring retirement and health care security to all.
-marc
March 14, 2011 at 11:27 am
The tag line for INSIDE JOB, the recent, award-winning documentary about the ongoing financial crisis is:
“Takes a closer look at what brought about the financial meltdown.”
http://www.imdb.com/video/imdb/vi751502873
Sounds like good advice for Adachi.