State Supreme Court rules San Diego pension cuts were illegally placed on ballot
The
That was the remedy prescribed three years ago by the state's labor board, which said the city must make employees hired since 2012 "whole" by compensating them for the loss of pensions and paying them interest penalties.
The appeals court didn't evaluate that proposal last year because the court ruled the pension cuts had been placed on the ballot legally, overturning the state labor board's decision.
Estimates of how much making the employees whole would cost the city have ranged from
The ruling, which was unanimous, vindicates claims by city labor unions that it was illegal for then-Mayor
The measure, which was approved by more than 65 percent of city voters, replaced guaranteed pensions with 401(k)-style retirement plans for all newly-hired city employees except police officers.
Sanders maintained he took the action as a citizen, not as mayor, and therefore negotiations with unions weren't required.
The
"Sanders supported the signature-gathering campaign," the court said in its ruling, which was written by Justice
In Thursday's ruling, the court stressed that it wasn't taking a position on pension cuts.
"We are not called upon to decide, and express no opinion, on the merits of pension reform or any particular pension reform policy," the ruling said.
Supporters of Proposition B have said they may place a similar measure on a future ballot in the cuts are eventually nullified.
On Thursday, former Councilman
But Demaio said that may still occur.
"Taxpayers must be very concerned by what may happen next," he said in a news release. "Specifically we are concerned that the Supreme Court ruling opens the door for the lower court to consider a yet-undefined "remedy" for the so-called violation of the city of
DeMaio said the remedy could be as small as a fine for not meeting and conferring, or as big as overturning part or all of Proposition B.
DeMaio vowed to appeal any remedy prescribed by the appeals court to the Supreme Court.
Based on the labor board proposal that the city make employees whole, the actuary for the city's pension system estimated in late 2015 that it would cost the city
But the number of employees hired without pensions has increased to more than 4,000 since then, more than doubling the city's potential cost.
In addition, new demographic studies showing the city had been underestimating life expectancies for its retirees prompted city pension officials to significantly increase the projected cost of pensions in 2016.
The labor board recommendation, however, said the city could count against its costs the many millions it has contributed to 401(k)-style retirement plans for those workers.
Because of the particularly strong performance of the stock market since 2012, those retirement plans are worth more than expected. That could make the city's costs relatively minimal.
Employees would also be required to contribute to pension created retroactively for them, further reducing the city's costs.
The state labor board ruling didn't recommend any changes for a separate element of Proposition B, a five-year freeze on pay raises for city employees that expired
The pay freeze was not part of the labor board ruling because the city's labor unions agreed to the pay freeze during negotiations with Mayor
[email protected] (619) 269-8906 Twitter:@UTDavidGarrick
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