La prensa

The $100,000 income club a red-herring for pension reform?

Created: 09 March, 2012
Updated: 26 July, 2022
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3 min read

Editorial:

As the race for mayor in the city of San Diego heats up, the main topic of this year’s campaign will be Pension Reform. The main proponent behind the reform effort on the ballot this June is mayoral candidate Carl DeMaio. He, in essence, is running two campaigns: the Pension Reform Initiative and of course his mayoral campaign. And as expected, both are intrinsically intertwined.

The success of the pension reform initiative will go a long way in determining the success of the DeMaio for mayor campaign. For this reason, as a newspaper we are seemingly updated daily by the DeMaio camp on pension reform issues. Apparently DeMaio is a one trick pony: he rarely sends out any other news updates on the rest of his campaign platform. Readers and viewers of news note that DeMaio is able to attract a lot of air time touting the issues of pension reform.

DeMaio’s latest missive goes on about the increase in the number of employees earning $100,000 this past year. He states that there is a 9% increase over last year.

We have a few issues with his latest news.

First, the growth of those earning $100,000 or more included several Chief Financial Officer’s salaries and other executive type salaries. In today’s market CFOs earning this type of salary is the norm. Anything less and the city would be unable to hire the type of professional required to adequately fulfill these positions. For example, this same week it had been recommended that the city council salary be increased to $175,000 to be more in line with the market. Of course with this being an election year, political salaries was voted down… this time.

It was the fire department where the greatest increase in those earning over $100,000 was most significant. This is a catch-22 sort of situation. Over the years the city council has decreased the annual budget for the fire department, leading to fewer new hires, which then required the existing personnel to do more, work longer and earn overtime. When most candidates run on strong Fire and Police platforms, DeMaio is suggesting further cuts to an already slimmed down department.

Our second issue with this type of information is that we see this as a red herring. The pension reform initiative is primarily targeted at the rank and file workers within the city whose contracts are negotiated through the collective bargaining process. These are the workers who have seen their pay cut, their benefits cost rise, and they earn a lot less than $100,000 per year, more like $40,000 per year. Yet it is with the rank and file where the pension reform will have the greatest impact.

DeMaio is using the salaries of CFOs and other top executives to rationalize the reform, and further erode the income of the middle class working families.

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In reality pension reform will have little impact on the salaries of San Diego’s CFOs. Police and Fire personnel will in the long run be taken care of by the voters who insist on these services and by elected officials who normally support strong Police and Fire services, with the exception of DeMaio.

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