From San Francisco to Modesto, California voters Tuesday sent a strong message that they want to cut generous public employee pensions, whose soaring costs are devouring funds for cops, libraries and other services.

The results cheered local officials such as San Jose Mayor Chuck Reed, who's seeking a March special election on his own controversial pension reform proposal, as well as advocates for a statewide measure aimed at slashing the costs of public retirement packages.

"It certainly demonstrates solid public support for pension reform," Reed said Wednesday. "Even in a labor-friendly town like San Francisco, 68 percent said yes."

Yet voters Tuesday also signaled that there are limits to how far they're willing to crack down on police, firefighters, teachers, librarians and other public workers. San Francisco voters approved the milder of two pension reform proposals on the ballot, one backed by the mayor and many labor leaders. They rejected a tougher measure by Public Defender Jeff Adachi, author of a similar measure that failed last year.

And in Ohio, voters who had swept Republicans into the statehouse a year ago rallied behind public worker unions to dump a GOP law that curtailed government employee rights to bargain over compensation.

"I think it's a potent political issue, but it helps to engage unions instead of giving them a stiff arm," said Steve Maviglio, spokesman for Californians for Retirement Security, which represents public employee unions. Voters "understand the need to change the system but don't see the need to take a wrecking ball to it."


Public pensions have grabbed voter attention in recent years as the sour economy drags down tax revenues and the investment returns that were supposed to pay for large pension boosts granted to cops, firefighters and other government workers in the more prosperous late 1990s.

At the municipal level, sharply rising costs to fill multibillion dollar gaps between what governments promised their retirees and what they have set aside in pension funds have eaten into budgets for basic services.
It's a particularly acute problem in California.

San Jose is facing an 11th straight multimillion dollar budget deficit next year. Its pension costs have soared from $73 million a decade ago to $245 million this year and are expected to reach $432 million in four years, almost half the size of the city's general operating fund.

While revenues have risen 20 percent in a decade, staffing has plummeted to cover rising employee costs. San Jose earlier this year laid off 66 police officers -- the first such layoffs in its history, while a new police substation and several branch libraries sit empty for lack of staffing.

Similar tales of woe can be heard in other cities to varying degree -- most dramatically in Vallejo, which declared bankruptcy in 2008. Voters there repealed a "binding arbitration" law last year over heavy union opposition that city officials blamed for unaffordable pay and benefit deals with employees.

Palo Alto voters overwhelmingly repealed a similar arbitration law Tuesday, as did voters in San Luis Obispo earlier this year. San Jose voters agreed to sharply limit arbitration last year.

In Modesto, voters strongly approved a nonbinding measure calling for public employees to receive 401(k)-type retirement plans similar to what most privately employed workers have, in which the employer contributes toward savings but doesn't promise a regular retirement income.

Modesto voters by even wider margins endorsed nonbinding measures to raise public employee retirement ages and make it harder for them to boost their pensions by artificially inflating their pay in their final year.

"This is on everyone's mind," said Larry Gerston, a San Jose State political science professor. "The question is how far do you go?"

Gerston agreed with other political analysts that Ohio's Republican Gov. John Kasich overreached in backing a bill to curtail collective bargaining rights. Though polls showed support for some aspects, such as making workers pay more for their benefits, critics said it went too far. Unions saw it as a life-or-death battle and heavily outspent the law's backers in their successful referendum repealing it.

The labor victory in Ohio, however, doesn't necessarily mean that a blue state like California is immune to public employee rollbacks, though achieving them will take a much more nuanced approach than the GOP in Ohio took.

Already, labor groups in California are gearing up for a major fight next year over an attempt to restrict their ability to collect members' dues for political purposes. Initiatives to roll back labor's collective bargaining rights, raise taxes and retirement age on public employee groups and to overhaul the pension system are all in the works and will test labor's political stamina, if not the public's views toward unions next year.

Given the rough economic times, 2012 may not be the same as 2005, when California voters turned back Gov. Arnold Schwarzenegger's effort to curtail public employee unions' benefits.

"Back then, people had no sense of what was going on with pensions," said Ben Tulchin, a Democratic political consultant who worked with the South Bay AFL-CIO Labor Council on the losing side of the Palo Alto pension measure, as well as the campaign to defeat Schwarzenegger's proposals. "The mood has definitely gotten harder for public employee unions on that front."

So much so that union-backed Democratic Gov. Jerry Brown proposed his own statewide pension reforms that include boosting current and future employees' contributions toward their retirement. Pension reform advocates called it a surprisingly substantive approach, though some argued it needed to go farther.

Gil Duran, Brown's spokesman, said: "Especially in these tough times, voters are looking for fairness and something that is sustainable over the long term."

Dan Pellissier, president of California Pension Reform, a group seeking a state ballot measure that would go further than Brown's reform proposal, said Tuesday's vote shows "folks are ready to make fundamental changes."

But it's much harder to pass something statewide, where two-thirds of ballot measures fail, in part because voters are cynical about who's behind the campaigns. And though Californians have expressed outrage toward some egregious cases of pension benefit abuses, they may be hesitant to accept wholesale changes, especially if they are being pushed by partisan players.

Gerston noted that voters are more likely to favor local measures that address particular circumstances of their communities, where they have higher trust in local than state officials and a more intimate sense of the costs and trade-offs of employee benefits.

Unions bitterly oppose Reed's proposal, which faces a decisive vote by a divided council in December, which they argue goes too far and violates their legal "vested" pension and bargaining rights. Maviglio likened it to the "extreme" measure voters repealed in Ohio.

Reed argues it's similar in many ways to Brown's plan and calls it reasonable, arguing San Jose can't afford a milder solution like what voters approved in San Francisco.

"We're in a much more difficult financial condition than San Francisco," Reed said. "We're facing service-level insolvency next year. We need reforms that affect next year's numbers, not over time."