San Jose will vote on slashing pensions

March 8, 2012 at 10:50 AM
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SAN JOSE, Calif., March 8 (UPI) -- The San Jose, Calif., City Council voted to put a measure on the ballot to slash the skyrocketing pensions of union workers, officials say.

Pensions for city workers in San Juan have grown from $73 million in 2001, to $245 million this year, consuming more than 50 percent of city payroll.

"Our biggest cost factor over the last decade has been skyrocketing pension costs," Mayor Chuck Reed told CBS.

The cost of pensions have driven the city to close three libraries, and cut 2,000 jobs, among them 49 firefighters and 66 police officers. "Taxpayers are paying for services," Reed said. "We're unable to deliver that and it's just going to get worse if we don't get control of these costs."

Union workers go into retirement receiving up to 90 percent of their salary for life. Reed wants to cap it at 65 percent for new hires and wants current employees to pay more into the system. The initiative to slash pensions will be decided by voters this summer; however, unions are planning to sue the city in the meantime.

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