K-12 Tax & Spending Climate: San Jose Confronts Pension Burden

Bobby White:

The Bay Area's biggest city next week is expected to issue a five-year forecast that will likely become part of a rancorous debate over how to overhaul municipal pensions and ease their growing burden on San Jose.

With costs outpacing revenue, the city has laid off or cut the positions of more than 20% of its work force in the past three years.

The forecast, which is issued every year by the Office of Management and Budget, will be used by the City Council and mayor to decide what cuts need to be made to reach a balanced budget.

San Jose officials and unions disagree over the size of the city's projected pension burden, but the city's actual costs have been rising for years as returns on pension-fund investments haven't kept pace with retiree payouts, which were negotiated during better economic times.

About 25% of San Jose's police and fire retirees receive pensions of $100,000 or greater, according to city records.

Posted by Jim Zellmer at February 26, 2012 2:00 AM
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