A controversial measure passed in San Jose, Calif., on Tuesday that will cut government pensions in favor of budget surplus, spurring debate between employee unions and voters.
The reforms call for current government employees to pay up to 16 percent of their salaries to continue the benefit or choose a more affordable plan, according to the San Jose Mercury News. The measure also limits retirement benefits for future hires by requiring them to pay half the cost of pensions.
"I want to thank the voters of San Jose for their commitment to fiscal reform and to creating a more sustainable future for our children and grandchildren," Chuck Reed, mayor of San Jose, told the Mercury News.
City employee unions are expected to challenge the reforms in court, arguing that the changes are illegal.
Yolando Cruz, president of the city’s largest union, told the Mercury News that the new pension policy is “an unfortunate way to spend taxpayer money fighting it in court because we will definitely take it there. Taxpayer money would be better used getting services back."
The city expects to receive $9 million in surplus in the upcoming budget because of the cuts but may run into a $22.5 million shortage the year after.
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