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Question of the Day
Michael Lotito, a San Francisco labor lawyer who has represented governments, predicted that dire fiscal straits may carry weight with judges.
“It’s a horrible, horrible story for the taxpayer. But worse off the city is, the more they have to lay off, the stronger legal argument they have,” he said.
The cities are also expected to argue that they are not stripping workers of anything they already earned, only changing what they will earn in the future.
“You don’t have a vested right to keep having your salary increased,” said San Diego City Attorney Jan Goldsmith.
The University of Minnesota’s Ms. Monahan said some state courts have recognized that distinction, but not in California, where she said the state courts have held since the 1940s that benefits granted on the first day of employment are protected.
Private companies, whose pensions are governed by federal law, have been whittling away at current employees’ retirement benefits for years. Pensions for state and local government workers are covered by state laws, and those benefits have been left alone for the most part.
Rhode Island has gone further than any other state to cut pensions for current workers under legislation approved last year, and opponents have vowed to challenge it in court, said David Draine, senior researcher at the Pew Center on the States. Other states have fended off legal challenges to the relatively modest step of eliminating pension increases for inflation.
“This is an area that remains legally unsettled,” Mr. Draine said.
San Diego City Councilman Carl DeMaio, a chief backer of the measure who is staking his mayoral bid on a pension overhaul, said he has fielded scores of calls from government officials nationwide interested in copycat measures. He predicted the legal challenges in San Diego will fail.
“We’re showing the way,” he said. “We’re offering a model — at least one model.”
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