Jeff Adachi’s Statement to the Rules Committee

Public Defender Jeff Adachi’s Statement to the Board of Supervisors’ Rules Committee, June 23, 2011:

As San Francisco’s Public Defender and as a long-time citizen of our great City, I appreciate the opportunity to testify before the Board of Supervisors’ Rules Committee.

We are holding these hearings because there is now clear recognition from all quarters of the City that we face a very serious problem with our finances. Unfunded pension obligations are set to explode in the next four years and are set to push the city into bankruptcy. We have a serious problem that demands a serious solution.

The Pension Reform Act delivers reform that is fiscally responsible, sustainable and fair to all. We need to do what is best for the City by securing its fiscal future and protecting its vital services while holding down taxes. We need real pension reform---right now. We need to do it right, do it once, and not kick this can down the road. Because soon the can is going to fall off a cliff.

I want to personally thank the Mayor for his leadership on the pension issue, and for bringing so many parties to the table to address this problem. But unfortunately, and respectfully, Mayor Lee’s plan for pension reform falls far short of the savings our city needs.

According to Controller, the Mayor’s cost sharing proposal between employers and employees will save just $750 million dollars over the next ten years. The Pension Reform Act, however, will save the City $1.25 billion dollars over the next ten years. Simply put: The Pension Reform Act will save the City $500 million dollars more than the Mayor’s plan over the next decade.

And how would the City make up that $500 million shortfall? It will have no choice but to hike taxes, raise municipal fees, and slash vital services like school funding. Indeed, the effects of our unfunded pension obligations are already being felt by our children. For the second year in a row, our City was forced to cut education and summer school programs for over 10,000 students. If we do not make these pension reforms now, we’re going to be forced to make far deeper cuts to education and other vital city services very soon.

Another shortfall of savings under the Mayor’s plan is on the issue of pension “spiking.” Pensions are “spiked” when a city employee’s salary is suddenly increased at the end of a career, which in turn sets their pension for life. “Spiking” will cost the city tens of millions of dollars if we do not have the courage to end it.

Mayor Lee’s plan would only calculate pensions based on the employee’s final three years of service. If we are serious about preventing “spiking” we should calculate pensions over a longer time frame — the employee’s final five years of service. That’s what the the Pension Reform Act does, to finally end the abuse of “spiking.”

We also need to make the plan fairer. Currently, the mayor’s plan treats employees who earn $100,000 the same as employees who earn $50,000. That just isn’t fair.

This is not about “us versus them,” but about doing what’s in the best interest for the whole City and ensuring its future. Because our City does big things. We are pioneers and problem solvers. And the City needs and deserves a big solution to a big problem. The Pension Reform Act is the single best way for us to confront this challenge head-on and to solve it, once and for all.

We must do pension reform right---and do it once.

Thank you for your time.

The Smart Pension Reform website