Civil grand jury issues report on pensions

June 13, 2012 12:00:00 AM PDT
A civil grand jury the South Bay issued its report on Wednesday blasting the escalating cost of pensions and blaming those benefits for interfering with the delivery of essential city services in San Jose.

ABC7 News spoke with San Jose Mayor Chuck Reed who says his city isn't the only one in trouble, everyone is in trouble at this point. He says that the report is right on the money. He says pension costs have gone up dramatically.

In a 35-page report, the Santa Clara County Civil Grand Jury released its analysis of pension and other post-employment benefits for the county and its cities and towns.

"In San Jose from $73 million to $245 million in the last decade, other cities have also seen substantial increases," said Reed. He says if it isn't reined in, "services will be cut to pay for benefits. We've seen that in San Jose. If we don't get it under control, that's the future for everybody."

Reed says voter-approved Measure B is the first step. It requires current city employees to pay more to keep their retirement benefits or switch to a less-expensive option. San Jose unions like police and fire are fighting back with lawsuits saying the measure violates the state's constitution.

"We believe that this could have been addressed at the bargaining table. All of the unions, including my union offered very significant concessions to pension alternatives and the city ignored all of those decisions," said Yolanda Cruz, president Local 101 of the American Federation of State, County and Municipal Employees Union. She wants taxpayers to know how pensions really work. "Contrary to what's been portrayed, we pay into our pensions for everything. We pay for 50 percent of our retiree health care and we don't receive social security. So this is our only form of pension and our only retirement system that we have."

The mayor says the easiest way to cut back is to change the benefits for new employees, but he says most of the money is spent on current employees.


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