San Diego's Measure B creates a new retirement tier replacing defined benefits with a 401(k) and lowers public safety's maximum retirement benefit to 80% of salary. The measure also caps city payroll at 2011 for five years, risking massive layoffs for the city.
The legal challenge to the San Diego measure started even before the election. Unions filed an unfair practice charge with PERB in February because city leaders refused to meet and confer about the changes. PERB quickly granted their request for injunctive relief and filed a lawsuit in San Diego to stop the measure from going before voters. While the court initially ruled against PERB, the case was promptly appealed and oral arguments are scheduled for June 13, 2012. PERB also issued a complaint against the city.
The San Jose measure seeks to shift the city's contributions to the pension system to employees, likely 16% of their salaries. It also provides that if the cost-shifting provision is struck down, as many expect it will be, the city can dramatically slash salaries to make up the difference. The plan also limits disability retirements, lets the city council take away retirees' cost-of-living-adjustments, and prices retirees out of the city health insurance plan.
San Jose police and firefighters immediately filed lawsuits in state court to stop enforcement of the measure. The firefighters lawsuit, Robert Sapien et al. v. City of San Jose et al. seeks declaratory and injunctive relief and a writ of mandate prohibiting enforcement of Measure B. It argues the measure violates California state constitutional protections related to due process, the prohibition on breaking public contracts, and restrictions on seizing property. The POA's lawsuit, San Jose Police Officers' Association v. City of San Jose et al. makes similar claims and also alleges violations of freedom of speech, separation of powers, the MMBA, the parties' MOU, and the California Pension Protection Act. The City of San Jose also filed a preemptive lawsuit in federal court seeking a declaration that the measure is not unconstitutional.