Why Public Worker Pensions Could Become A 2012 Flashpoint

June 6, 2012 2:41 pm

While Wisconsin Gov. Scott Walker cruised to victory in Tuesday’s failed recall — a stinging defeat for public employee unions in itself — two lower-profile municipal referenda in California that could slash public sector pensions passed overwhelmingly as well. The confluence suggests 2012 will be marked by fights at both the local, state, and national level over retirement security for public sector workers.

Voters overwhelmingly approved ballot measures in both conservative San Diego and liberal San Jose that seek to close municipal budget gaps by cutting worker pensions — not just pension plans for future workers.

This situation is unusual.Typically these decisions fall to local elected officials, who are skittish about cutting benefits, particularly to current workers or retirees. But the success of these initiatives could boost conservative efforts to target public sector pensions across the country.

The question now is whether the results will stand. Union officials in both San Jose and San Diego plan to challenge the cuts in court, arguing that they violate contracts between the cities and their employees.

But in the absence of new taxes, leaders of cash strapped cities say they have few better options than cutting pensions.

“Public safety workers have faced an outcry from taxpayers over the size of their pensions,” according to the Wall Street Journal. “San Jose Mayor Chuck Reed, a Democrat elected in 2006, blamed cuts in city services such as library hours and police staffing largely on rising pension costs. … ‘Now that we are getting control of retirement costs, we can cautiously start to restore services,’ Mr. Reed said.”

If public opinion has really turned against public worker pensions, and efforts like these spread, Democrats will find themselves forced to choose between defending a key constituency and angering the public; or alienating a key piece of their voting base.

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