SAN JOSE--On the day that politicians from two major Bay Area cities teamed up in their fight against labor unions, Gov. Arnold Schwarzenegger touched down briefly in San Jose as part of a victory lap across the state after unveiling a budget deal that was paved by steep concessions from the Service Employees International Union.
Calling the state’s pension costs the “silent thief of our budget,” Schwarzenegger said his deal would save California $383 million this year.
The budget was three months overdue, but Schwarzenegger touted his labor deal as “a great victory.”
At a press conference, the governor spoke alongside San Jose Mayor Chuck Reed and San Francisco Public Defender Jeff Adachi, two Bay Area politicians who are also battling unions over pension reform measures. Adachi is the author of Proposition B, which raises city employees health and pension contributions.
Schwarzenegger’s deal raises by 3 percent the amount that state employees contribute to their pensions and hikes the retirement age from 55 to 60. Pensions for new hires hereafter will be calculated with formulas set before SB 400, a measure passed during the height of the dot-com boom that Schwarzenegger has criticized as too generous.
The governor blamed the state Senate for passing SB 400 in 1999, which he said has led to a rise in pension costs from $150 million 10 years ago to $6.5 billion today.
“That is crazy,” Schwarzenegger said. “It’s crowding out other programs.”
After the press conference, Reed and Adachi met in person for the first time and soon after said that they would mutually support each other’s campaigns.
In San Jose, Mayor Reed, a Democrat, is backing ballot measures V and W. Measure V would require outside arbitrators to consider factors such as the city’s growth rate during contract talks when direct negotiations between the unions and the city fail. Measure W would create a second tier of benefits for new hires.
Both said that progress in pension reform at the state level made it easier for them to broadcast their campaign messages at the local level, especially with Schwarzenegger’s public support.
“Since the state got us into this mess in the first place, it was good to see the state take this big step,” Reed said in an interview in his City Hall office Friday afternoon.
Adachi said in an interview that the work being done by the governor, Reed and Los Angeles Mayor Antonio Villaraigosa showed that leaders across the state “understand the severity of the problem.”
“Now it’s incumbent upon cities to get this done,” Adachi said.