Government officials and municipal bankruptcy experts across the country are watching San Jose closely because of a plan to reduce benefits — drafted by Mayor Chuck Reed, a Democrat, and passed by 70 percent of voters in a referendum last year.The plan is being opposed in court by unions that represent city workers and say it is illegal under state law. It would introduce a second tier for new city employees involving much lower pension and health benefits. It would also alter pension benefits for existing workers, allowing them to choose either a similar, second-tier benefits plan or to pay significantly more out of their own pockets for the benefits they had come to expect.The outcome of the case is expected to have a major impact on municipal budgets around the state and, perhaps, the country. If a state court rules later this year or early next year that the referendum allows San Jose to alter pension plans for existing workers, and it survives appeals, similar measures are expected to pop up elsewhere.
If the tax revenue from Silicon Valley isn’t enough for progressive officials to maintain the bare minimum of social services that it is their basic duty to provide, then there’s a problem in the approach. It’s not the fault of corporations, greedy millionaires, China, or Wall Street. The crisis is in the blue model itself; if it can’t handle the warm, rich, entrepreneurial currents of Silicon Valley, then it probably can’t swim anywhere.[Image of Silicon Valley courtesy of Wikimedia Commons]