Bad Idea: Going Rogue on Budget, Pensions

The ballooning problem of city worker pay has led one mayor to take drastic action, declaring a fiscal state of emergency in his city and using it to backtrack on promised pensions and other benefits for city employees.

San Jose Mayor Chuck Reed is frustrated with his city's public employee unions, and that frustration is understandable. Pay and benefits for public employees, particularly law enforcement, is a problem in San Jose and throughout California.

The specific doctrine Reed is challenging is called "vested rights" -- the notion that when employees contract with the benefit for future pensions and benefits, those promises can't be taken back.

The mayor, a lawyer is arguing that employees are entitled only to the benefits they've already earned -- not the ones they've been promised in the future.

The Bay Citizen, in this story, points out that Reed's challenge is legally significant -- if he wins and sets a precedent.

But given court precedents, defeat is likely. And so Reed is likely to hurt not only the finances of San Jose but also the cause of bringing discipline to employee pensions and retirement benefits.

Employees are certain to fight the mayor at virtually every turn, meaning the city won't get concessions that other, more conciliatory mayors (such as Los Angeles' Antonio Villaraigosa) have realized via more traditional negotiation.

And legal defeats could reduce the leverage of Reed and other mayors, by making even more clear that promises made to unions can't be easily abrogated.

It certainly can feel good to take on labor, especially when it's being unreasonable. But Reed's mission looks and feels like a kamikaze manuever, certain only to hurt himself and his city.

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