City pension reform requires a compromise 

Politics, as the saying goes, is the art of compromise. With a May 24 deadline rapidly approaching to place a measure on the November ballot, now is the time for San Francisco’s politicians and union leaders to find common ground and unite behind one strong measure to address The City’s pension crisis.

Fortunately, a consensus has emerged that reform is necessary. Just about everyone is aware that the skyrocketing cost of benefits for the 26,000 city government employees threatens to swamp everything else in the city budget in the coming years, leading to massive layoffs, drastic service cuts and onerous tax increases and fee hikes.

Several pension reforms have been proposed, and all have good things in them.

Public Defender Jeff Adachi is back with a modified version of his Proposition B, which was defeated 57 percent to 43percent by voters in November after facing strong opposition by employee unions. Mayor Ed Lee has made pension reform his top priority, and has put forth a proposal that lacks the specifics of the Adachi reform but shares its sliding scale for contributions. And even the unions have stepped up to the plate with a proposal that promises to save nearly as much as Adachi’s reform.

That’s the good news. The bad news is that if all three measures are on the ballot, it would lead to confusion for voters, who may throw their hands up and reject them all. It would also result in another expensive campaign a la Prop. B in which more than $2.5 million was spent by both sides — with the result being the status quo.

Adachi, Lee, union leaders and other interested parties such as financier Warren Hellman must sit down and work out a compromise that combines the best of the various reform proposals. But at the same time, the effort to seek consensus should not result in a watered-down solution that doesn’t fix the problem. San Francisco can’t afford to kick this can down the road any longer.

There are already several areas of agreement in the proposals, such as extending the retirement age before employees receive a full pension and ending pension spiking. There is also agreement that employees need to contribute to their health care — a benefit that is facing a $4.4 billion unfunded liability.

The main disagreement concerns how much of their pay employees should contribute to their pensions. The Lee and Adachi proposals want employees who earn more to contribute more and to base the rate on the escalating costs of the pensions to The City. The unions are willing to contribute more but want to cap the rate. A possible compromise could be a sliding scale with a cap.

With so many leaders in so much agreement on heading off this fiscal crisis, it only requires the will — and the art of compromise — for them to come together to fix the problem. We hope they will — we can’t afford another Prop. B battle this November.

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