Adachi and the real politics of pension reform

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Jeff Adachi is pushing pension reform with downtown dollars but not a real political coalition.

While downtown-oriented politicos and out-of-touch corporate columnists tout the political potential of targeting public employee unions with pay reductions and pension plan take-aways – and say the Public Defender Jeff Adachi may be mayoral material for doing so – they forget that electoral success requires coalitions, particularly in savvy San Francisco.

Unlike his cheerleaders, Adachi seems to understand this, downplaying the personal political upside when he talked to the Guardian and other media outlets. Sure, he might just be sandbagging, as his boosters hope he is, but there's good reason to believe that this move could hurt Adachi's chances of becoming mayor more than it helps it.

Much has been written and said about how Adachi's move alienated labor unions and much of the progressive movement. “They urged me not to do it,” Adachi told the Guardian in the final days of his successful signature-gathering effort for a measure that would save the city about $167 million per year by taking that amount out of employees' paychecks.

It's not that pension reform isn't needed. Indeed, San Francisco voters just approved a measure in June to increase the pension contributions for all new city employees, and politicians ranging from Sups. John Avalos and David Campos on the left to Sup. Sean Elsbernd and Mayor Gavin Newsom on the right all agree that more needs to be done, pledging to work with unions on the issue. And given the surly mood of the electorate, Adachi's measure will probably pass.

But that still doesn't make him mayoral material. Unlike Newsom, whose Care Not Cash initiative to take money from poor people helped propel him into Room 200, Adachi doesn't have a strong constituency behind him, unlike the full strength of downtown and the Willie Brown machine that Newsom had behind him.

Downtown will never get behind a mayoral campaign for Adachi, a heavily tattooed defender of criminals who has a strong independent streak, even if they like the fact that he's socking it to the public employee unions, an effort they helped fund. And progressives will now have a hard time ever trusting Adachi to work with them, seeing him now as someone hostile to political process and coalition-building, much like Newsom.

And even Newsom has come out against Adachi and his proposal, even though he loves the pension reform issue and shares some stylistic similarities with Adachi, including a certain political petulance. “Mayor Newsom has been clear that effective, long-term pension reform will come by doing it with our public employee unions, in partnership, not to and against them, in contrast to the Adachi measure,” Newsom Press Secretary Tony Winnicker wrote to the Guardian this week. It was a laughingly hypocritical statement from a mayor who has repeatedly demonized unions and refused to work cooperatively with them, but it's a true statement nonetheless.

Finally, while socking it to public employees may be in vogue right now, during this moment of real economic uncertainty and political myopia, this sort of divisive politics might come to be seen more as opportunistic than courageous. And it's hard to see how the approach that Adachi has taken will somehow add up to an effective political coalition capable of stealing the Mayor's Office from wily politicians like Mark Leno, Leland Yee, or Aaron Peskin.

Consider the fact that even the Police Officers Association – the most conservative, downtown-oriented employee union in San Francisco – also opposes the Adachi measure and other efforts to blame the city's fiscal problems on employees, rather than the large financial institutions that don't even pay any kind of business tax to the city.

So I leave you with the words of POA President Gary Delagnes, writing in the May issue of the POA Journal, sounding a bit like a Guardian editorial writer on this politically sensitive issue: “Even more problematic is the rapidly developing notion that public employee pensions serve as the root of all evil, and are almost solely to blame for all of our economic woes.

“Opportunistic Wall Street insiders, politicians, and robber baron CEOs have manipulated and pilfered our country's financial well-being. They have unconscionably – if not also illegally – lined their deep pockets with the hard-earned savings and pensions of the middle class working man and woman. Accountants from coast to coast have coached multi-millionaires on the art of avoiding paying their true tax obligations. Millions of people were allowed to qualify for mortgage loans by greedy bankers and mortgage brokers that led to trillions of dollars in bailout money. The result is a public incensed about fat cats taking advantage of them. Now, the backlash has set up public pensions and the unions that negotiated them as the scapegoats for his anger.

“Those of use who long ago made the decision to forgo large salaries in exchange for a life of public service, are now being portrayed as greedy and self-centered, taking unwarranted pensions and benefits after 30 years of service as firefighters, police officers, teachers, and nurses. These are shameful accusations, and utterly without merit.”

We couldn't have said it better ourselves, but unlike one of our editorials, this is the perspective of cops and other unions and progressive constituencies that will shape their actions in elections to come.

Comments

Dear Steven,

True, a venture capitalist put up money to get the signature campaign rolling.

Do you think he is another capitalist-scumbag going for a power grab?

Further, do you think Matt Gonzalez is just another capitalist -scumbag going for a power grab?

How about Adachi, who has spent his entire career fighting for the poor and disenfranchized in the Public Defender's office. Another capitalist-scumbag?

These people have all seen the writing on the wall. We can pass nickel-and-time tax measures like higher parking meter rates, and keep cutting park & rec, year after year (most of the tax hikes I am in favor of), but this problem is not going to get solved, not without pension reform.

We're spending 28 times more on pension and health care costs for public-sector retired workers than fixing the streets. This is the first year with no summer school.,

It's a systemic problem. And it needs fixing .

Posted by Barton on Jul. 20, 2010 @ 5:51 pm

And you support regressive revenue generators such as increased parking fees? Better to tax someone who makes what Adachi makes a little bit more. Or venture capitalist super-star Michael Moritz, who together with his wife contributed $150,000 to the Adachi campaign. They live in SF. Could they give back a little, too? Like City employees already have?

Posted by Guest LD on Jul. 20, 2010 @ 6:11 pm

Steve, I usually don't get all teary-eyed when reading the Guardian blog, but I have to say that I'm amazed and impressed by the important civic discourse you're curating. This post has unearthed so many passions on both sides — and they don't fall along traditional political fault lines. I applaud the Guardian and the Weekly both for braving these tempestuous waters. Both papers should spend more time digging into the numbers and comparing them with pension payout levels in other cities so we can all make informed choices in November.

Posted by Michael Stoll on Jul. 20, 2010 @ 11:47 pm

Thanks, Michael, and we do intend to analyze these numbers in more details as the election nears. And I agree that there's been some good discussion here, broken down into two main areas: policy and politics (including political process). While I acknowledge the need for pension reform, as many have argued here, I do think this particular policy could have benefitted from being put through a deliberative political process as it was being crafted. But I also agree that in the current political climate, it will probably pass nonetheless, although it will be a ugly, divisive campaign to get it there, which could have been avoided by a more collaborative approach on the front end. Adachi and Gonzalez are smart guys, as others have said, but they each have lone wolf streaks that hinder their ability to build coalitions, and that hurts the progressive movement.

Posted by steven on Jul. 21, 2010 @ 10:52 am

Until now, I have strongly advocated for reducing pension formulas for FUTURE years of service for CURRENT (as well as new) workers ...... a VERY unpopular position in the eyes of those riding the Civil Servant gravy train.

I'm about to become even more unpopular with this group, as I now believe the likelihood of this happening (soon enough and with sufficient formula reductions) is so low that a much better direction, and perhaps the ONLY way to avoid the financial disaster bearing down on communities throughout the nation is to OUTSOURCE 90+%of all Civil Servant positions.

The CRITICAL CRITICAL CRITICAL need is to STOP the further growth of the pension liability from the excessive pension formulas granted EXISTING employees, and the ONLY way to do this quickly and VERY effectively is OUTSOURCING.

And guess what … it's ALREADY been tested … and the sky didn’t fall in … and the residents of Maywood, CA seem very pleased with the results of outsourcing 100% of their employees. Read all about it here:

http://www.nytimes.com/2010/07/20/business/20maywood.html?pagewanted=2

Posted by Tough Love on Jul. 21, 2010 @ 9:50 am

Yes, I agree. These pension threads have better discourse than the usual mud-slinging and coarse screaming from the righty and lefty NutJobs.

I support Adachi's measure only because the costs we will be facing in the future are astronomical unless action is taken. Pensions will destroy the quality-of-life in our public domain (whether it be parks, hospitals, or schools, etc) unless something is done.

SF has an underfunded costs for retiree health insurance of $4 billion. The reported actual cost estimate for full funding of the liability was $431 million for the year ending fiscal year 2008-2009, of which only $120 million was actually paid in that year for premiums of current retirees. This means that the City's retiree health care liability grew by over $300 million in that year, and is likely to grow by even larger amounts in the future.

This is huge, and it is only going to get worse and worse.

And I don't see anything draconian about making city workers fund their own pensions to the tune of 7.5%. That's what normal people do (Social Security).

Posted by Barton on Jul. 21, 2010 @ 9:50 am

That's an interesting article, Tough Love. It shows that people are willing to tighten their belts to save their jobs.

The alternative is...

Vallejo. Bankruptcy.

A Vallejo looms ahead for San Francisco unless action is taken.

Posted by Barton on Jul. 21, 2010 @ 9:53 am

For one thing Maywood is a city of 50,000 as opposed to 1 million (on a workday). There is most likely not a single building over 5 stories tall in Maywood. In other words running a major city like San Francisco is a complex, technical undertaking. The skill and expertise required -- firemen, cops, building inspectors, engineers, etc -- means higher salaries. Furthermore, public institutions are inherently more transparent than a private company and therefore more apt to fall under public control. Which is, for reasons we can all figure out on our own, a good thing. In short, outsourcing, especially on a large scale, could very well be the worst approach to any kind of government. Privatizing does not work.

The notion of pensions "killing" funding for other programs ignores too many other factors that are involved in balancing a budget. For one it ignores the fact that potential sources of revenue exist, such as David Chiu's proposal for a more progressive payroll tax. The hotel tax is another. So anyone can just as easily say that City services will be gutted by tax breaks for corporations.

The pension system is getting attention only because of the broader economic melt-down. The City hasn't had to "cover" pension costs until only recently. The apocalyptic numbers of underfunded pensions goes hand in hand with anti-pension, and therefore anti-worker, hysteria. At best these grand jury figures are forecasts. Who can predict 2012 or 2015? Given this mob mentality surrounding public workers, some skepticism of these numbers is not only healthy but necessary.

This Adachi thing is just being rammed down people's throats without any real debate or negotiation with the concerned parties. Even after those parties have "given back."

Posted by Guest LD on Jul. 21, 2010 @ 11:29 am

Dear Guest LD,

Let me preface, by saying that it seems clear that you are a Civil Servant riding this gravy train, and don't want change. Your references to "given back", "without real ... negotiation", and the utterly ridiculous comment ........ "The pension system is getting attention only because of the broader economic melt-down." ...makes your status quite clear.

With respect to the last quote above, ON AVERAGE, Civil Servants pensions are about 4 times (6 times for "safety workers") more generous than the pensions of Private Sector workers making the SAME pay, having the SAME years of service, and retiring at the SAME age.

And you think these excessive pensions (80-90% of which is paid for with taxpayer, not employee funds) doesn't deserve attention ???

Well I do, and I've come to realize that the tinkering-around-the-edges is grossly insufficient and ineffective. Politicians are too beholden, and do not have the stomach (for the fight) to demand appropriate and sufficient givebacks from the Unions.

That's why if not 100%, we need to OUTSOURCE 90+% of all Civil Servant positions. It's the ONLY solution.

Posted by Tough Love on Jul. 23, 2010 @ 4:15 am

LD, I understand your argument.

But, since pension costs will consumer ONE-FOURTH OF ALL CITY GOVERNMENT REVENUES soon unless action is taken, I don't think raising taxes on the upper-middle-class and richer (say, $90,000 a year) is going to do much to dent this problem.

By the way, these same pension problems are looming big-time at the state level. CALPERS had to dip into the general fund to cover its pension costs this year, too.

The days when stock market gains could push this problem under the table are over, folks. We are living in tougher times now.

Posted by Barton on Jul. 21, 2010 @ 1:54 pm

CITY WORKER HOARDS WATCHING MICHAEL JACKSON FUNERAL AT WORK TAKE DOWN SERVER

I guess the paper-clip pushers at city hall can get away with kind of this stuff since there isn't much adult supervision over there.

from Matier & Ross).

An estimated 31 million people in the United States watched Michael Jackson's memorial service - a good number of them, apparently, at San Francisco City Hall.

So many workers tuned into the Jackson farewell on their desktop computers that the city's server nearly melted.

In an emergency memo fired off to workers as the gloved one was being mourned Tuesday, human resources director Micki Callahan warned that "due to the large number of city employees watching the Michael Jackson services on their work computers, our Internet capacity has reached the saturation point."

"Please immediately remind all employees that city computers are to be used for city business only," Callahan scolded.

Posted by Barton on Jul. 21, 2010 @ 3:05 pm

(Hopefully) by 2012, and certainly by 2015, barring some other man-made disaster, times will not be as tough.

According to the Economic Policy Institute, corporate profits are currently 5.7% higher than they were in Q4 2007 while the number of jobs available are down 5.9% in comparison to the same period.

http://www.epi.org/economic_snapshots/entry/corporate_profits_have_recov...

Our boom-bust economy runs in cycles for better or often times worse. Already recovery at the top is underway. The pension funds are solvent. The Adachi measure addresses disaster that may never come, or at least one that could be blunted significantly.

Posted by Guest LD on Jul. 21, 2010 @ 4:20 pm

LD, the city pension funds are not solvent. Not by a longshot.

Pension liability (pension costs for retired people that could not be covered by worker payments into the system or the city's investments) grew by over $300 million last year.

Tha'ts nearly 1/10 of the entire city budget.

And it is just going to keep climbing at these rates, keep eating money that should go to parks, schools, roads, healthcare for the poor, etc.,

Harvey Rose says the stock market has to rise 15% a year over the next decade just to cover current obligations.

Do you see the New York Stock Exchange DOW trading at 30,000 in ten years (up from 10,000 now)? You really think the city can ride this out through stock investments?

If so, time for you to get a stock broker (you sweet eternal optimist, you!).

Posted by Barton on Jul. 21, 2010 @ 4:45 pm

"Harvey Rose says the stock market has to rise 15% a year over the next decade just to cover current obligations."

Or stocks can make a modest comeback and, coupled with new revenue sources, the givebacks already in place, and no abuses such as "spiking," the "tsunami" turns into a hot tub.

Posted by Guest LD on Jul. 21, 2010 @ 5:57 pm

2-year treasuries at 0.60% yield and the Fed Funds target rate sitting near 0% say a lot about where folks see the market investment returns for next year or so ... Jobless recovery, folks holding onto jobs longer to make up for retirement savings decreases, and young people getting screwed, screwed, screwed by the greediest generation ever.

Posted by Jamie Whitaker on Jul. 22, 2010 @ 12:58 am

Greediest generation of bankers, financiers, and their brethren. Not that I read Forbes magazine all that much, but this was interesting:

"The Bureau of Economic Analysis reports that U.S. corporations are sitting on $1.6 trillion in cash reserves, a record amount, because they are reluctant to expand in the uncertain policy environment."

http://www.forbes.com/2010/07/06/economy-deficit-debt-opinions-columnist...

Hmmm, "uncertain policy environment." Translation: US corporations feel they don't have enough money and clout and will stall for gifts and concessions from Obama and co. at the expense of everyone else.

That's beyond greedy. That's holding people hostage.

Don't blame workers with good benefits.

Posted by Guest LD on Jul. 22, 2010 @ 9:02 am

Nice DIVERSION GUEST LD......

No, the REAL problem is excessive Civil Servant pay, pensions, and benefits.

Posted by Tough Love on Jul. 23, 2010 @ 4:21 am

Then it MUST be true. Especially if Tough Love SAYS SO.

Whatever.

Posted by Guest LD on Jul. 23, 2010 @ 9:10 am

What's the matter LD ..... kicking your feet because your diversion from the real issue ....... your EXCESSIVE (in CAPS !) pay, pensions, and benefits .... isn't working ?

Posted by Tough Love on Jul. 23, 2010 @ 9:42 am

Right. Outsourcing is the ONLY solution. See refutation of that line of thinking above.

Funny thing about Maywood, too, is that they "outsourced" city services to neighboring municipalities, not so much private companies.

Look, you can drink the Kool-Aid all you want, but the fact is private companies are by design beholden only to owners or shareholders. That's not democracy, especially if we're talking about city government.

Public employee pay, pension, and bennies are and have been "working." With the exception Jeff Adachi himself and a handful of high-ranking cops, they are not excessive. The Adachi measure is a heavy-handed swipe at decent employee benefits at a time when the economy is obviously in the tank and so (supposedly) are retirement funds. But people are pissed off and short sighted, so they go bananas when the Republican PR machine puts the spotlight on public employees. Mob mentality ensues, hence terms such as "excessive," "gravy train," and on and on and on.

Posted by Guest LD on Jul. 23, 2010 @ 10:09 am

Quoting ..."Public employee pay, pension, and bennies are and have been "working."

Are you kidding? It may be working for YOU, but it certainly is NOT "working" out very well for the taxpayers, and unless we put a quick end to it (as would be accomplished by outsourcing), its gonna get a heck of a lot worse.

Posted by Tough Love on Jul. 23, 2010 @ 2:01 pm