Administration May 2, 2006

San Diego Mayor Calls for Cutbacks to Close Pension Shortfall

February 17, 2005 (PLANSPONSOR.com) - Faced with a $1.4 billion deficit in San Diego's beleaguered pension system, Mayor Dick Murphy wants to freeze wages and roll back pension benefits as part of new contract proposals for four labor unions.

Reported by

Fred Schneyer

The proposals come as city officials try to cut the shortfall in half over the next two years, according to a news report on NBCSanDiego.com.

Murphy said that all 12,000 city employees would be asked to make big sacrifices in the short term that would help balance the city’s budget in the long term. In addition to a two-year salary and benefit freeze, Murphy said he wanted to cut new employee pension benefits and retiree medical coverage.

“I acknowledge that city employees are being asked to shoulder a heavy burden,” said Murphy, according to the news report. “But I believe the city must take strong measures to insure the continued viability of the pension system and the fiscal stability of the city.”

Union leaders said that the cuts would be very hard for city employees to bear.

The city’s pension system has been plagued with nearly continuous scandal and controversy in recent years over its funding levels and officials’ recent pension decisions.