San Francisco pension reform initiative qualifies for November ballot

By Patrick B. McGuigan

Published: 02-Aug-2010

SAN FRANCISCO – Jeff Adachi, a public defender in San Francisco, has earned a place in California history with an initiative proposal designed to save taxpayers hundreds of millions of dollars in the next decade.


If approved, the proposal, which qualified for the ballot on Monday (August 2) could provide a model for states and communities seeking to avoid massive budget cuts, tax increases or both due to unfunded mandates in public employee pension funds.  


Oklahoma has one of the weakest teacher pension plans, according to several analyses. The state of California has an estimated $500 billion in pension debt, CalWatchdog has reported.


Adachi‘s Sustainable City Employees Benefits Reform Act has qualified for the November election, the Department of Elections confirmed. Initiative petition circulators gathered the required valid signatures.  


In a statement sent to CapitolBeatOK, Adachi said late Monday, “I would like to thank the people of San Francisco who signed our petitions and the Department of Elections who confirmed qualification of the measure for the November ballot.”


He reflected, “The Sustainable City Employees Benefits Reform Act is a reasonable and moderate step that San Francisco can take to bridge our escalating budget deficit and save $170 million per year. These savings can be used to preserve the services that people rely upon and the jobs that people depend upon.”


Adachi’s proposal is of such wide national interest that he was added as a speaker at the Global Forum on Modern Direct Democracy, being held at the University of California, Hastings School of Law.


In an appearance on Sunday (August 1), during a part of the seminar focused on U.S. initiatives and referenda, Adachi described the frustration he and other taxpayers and public employees have felt after learning that one of every five dollars collected in local taxes are now going to pay benefits for government employees.


Adachi grew frustrated in recent months at budget cuts in the public defender’s office, the closure of public parks and other program cuts driven by cost accelerations in the pension plan.


According to a report recently posted on, “When the economy was booming, San Francisco’s pension liability was largely covered by investment returns. That is no longer the case. In 2010, the city is expected to have to contribute (according to different estimates) between $300 and $575 million to pension costs directly from its general operating budget. The amount of the required direct contribution from city coffers is expected to go as high as $600 million by 2015 if nothing changes. This pressure on the city’s general operating budget from contributions to pensions means that there is less money available for all the other services provided by the city.”

John Diaz of the San Francisco Chronicle recently commented“the crisis over escalating pension and health care costs that has been brewing for years – and ignored by all but a few lonely fiscal conservatives – has reached the breaking point…’This is like the dot-com bubble bursting,’ said Susan Kennedy, chief of staff to Gov. Arnold Schwarzenegger.”

Adachi himself has insisted, “
This isn’t an attack on labor. It’s a math problem.”


In early July, Adachi submitted over 77,000 signatures, far more than the 46,000 valid names required for ballot status. However, advocates were concerned by an unusual provision in local initiative provisions that even a single duplicate name can be used to disqualify more than 1,000 value names. In interviews with CapitolBeatOK, supporters identified that quirk as their leading concern while waiting for word on qualification in recent days.


The almost certainly historic initiative campaign has enjoyed significant support, Adachi says, from Michael Moritz, a Silicon Valley entrepreneur, and his wife Harriett Heyman, a novelist. Moritz is probably best known as an early investor in GoogleYouTube and Yahoo. Although Gov. Arnold Schwarzenegger is not involved in the campaign, some close allies of his also contributed to the petition drive.


If approved by voters in November, the Adachi proposal will save taxpayers some $170 million by requiring employees to contribute 9% into their own pensions. The initiative includes elected officials. Police and fire employees, with comparatively more generous benefits, will begin to contribute 10%.


SF Smart Reform advocates told CapitolBeatOK the plan will maintain 100% medical coverage for all covered employees, allowing a “50-50 shared provision for dependent healthcare.”