Cities throughout the state of California have come to the realization that paying anyone 90 percent of their highest year’s salary for the rest of their life starting at age 50 is fiscally unsound and completely unsustainable. Of the roughly 20 cities that had binding arbitration in California, many have either repealed it, restricted it or are considering a move to do so. Last November in San Jose, 66 percent of the voters said “yes” to a measure that severely restricts the process and potential awards of binding arbitration even though the police and fire unions spent more than $800,000 to defeat it. Stockton voters successfully passed a measure to completely eliminate binding arbitration from its charter this past November. The political environment and fiscal conditions of cities and states has completely changed since these benefit packages were first approved. Interestingly, an obscure provision of San Luis Obispo’s City Charter says that pension benefits can only be increased, but not decreased, by the city council without a vote of the people. Wonder how that got in the charter?
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