The most auspicious sign of grassroots support for perestroika was last week’s smack down of public employee unions in San Jose and San Diego. For the first time in recent memory, the unions suffered a humiliating defeat — the measures passed by a margin greater than two to one — as voters endorsed deep reform of the pension burdens bringing these cities to the brink of bankruptcy. Backed by its Democratic mayor, Chuck Reed, San Jose’s measure B aims to reduce pension benefits for both future and current hires. Unsurprisingly, the public employee have threatened to sue.
This may precipitate what could become the California equivalent of a prairie fire. Like San Jose and San Diego, many other California cities are on the verge of bankruptcy. Union-dominated Los Angeles could be the next big domino to fall, according to the city’s own chief administrative office, and has been forced to boost its bonded indebtedness and cut back on critical infrastructure spending to stave off the inevitable.
As services drop and taxes rise — California’s already are among the nation’s highest — voters increasingly realize that one of the main problems is over-generous pensions for public sector workers. This is reflected in the sad reality that the state consistently competes with Illinois for the worst bond rating in the country. Most recently, the state upped its deficit estimate to $16 billion from a $9.2 billion estimate made just in January.