At least it's a good start

Today I was going to moan about the inordinate growth in government employee compensation, and throw a tantrum about intransigent labor unions. Now the Grand Jury has taken care of the former, and some of our labor unions are tempering the need for the latter.

It appears that some of San Jose’s labor unions now realize that an unhealthy city is detrimental to their long term well being and are taking the lead in helping to turn the tide on the city’s dire financial straits, so instead I’ll reflect a bit on that.

Seven employee unions, including the firefighters and the POA have sharpened their pencils and are floating a proposal that provides nearly $50 million in general fund salary and benefit reductions in the upcoming fiscal year, and an additional $39 million in the following fiscal year. This seems to be a good start at closing the gap while preserving essential city services.

Among the concessions proposed are immediate pay reductions for the next two years of 7.5% for non-sworn employees and 5% for sworn employees. The unions estimate that the lower compensation levels will reduce city retirement contributions by $7 million this year. Also, by not laying off people, the city saves over $9 million in unemployment insurance expense. The wage reductions would reduce non-general fund spending by nearly $12 million, for a grand total of around $62 million in overall savings.

This is the kind of leadership we need to help bring San Jose closer to a sustainable city budget. As the union coalition notes in a letter to Mayor Reed and the City Council “if we work together to provide all bargaining units a path they can follow then we will have avoided the abyss that we are collectively headed for.” The letter concludes “we hope that the City will…[work] with us to convince all bargaining units to work together, share the pain, and save services.”

I applaud this effort by the unions, but have a few of questions. First, given that sworn employees have benefitted from the same rampant growth in compensation, why does the proposal clip their pay only 5%, versus 7.5% for non-sworn employees? Second, the proposal retains step increases. Why can’t the unions accept a proposal of “true zero” increases? And finally, why is nothing said about health insurance costs?

Class, here’s today’s assignment: call, write or email your city council representative and tell them to seriously consider the proposal. If you belong to one of the unions not currently part of the coalition, let your union leadership know what you think. Kudos to the unions for taking this step toward resolving the issues facing our city. City management should not reject it out of hand, but work hand in hand with union leadership to craft the solution that retains the city services that we deserve.