The Oakland Police Pension Problem

The Cadillac benefits that the city awards to its police officers are not sustainable in the economic downturn.

At times, Oakland feels like ground zero for the Great Recession. The city is grappling with alarmingly high rates of unemployment and foreclosure. The economic downturn also has crippled the city’s budget. Since the housing bubble burst, Oakland has lost about 20 percent of its annual tax revenues, or about $100 million a year. The city council made huge cuts last year, but is now facing another $30 million budget hole, and is talking seriously about laying off 200 cops — or about one-quarter of Oakland’s police force.

The one bright spot in Oakland has been the substantial drop in violent crime in the past eighteen months. But a massive layoff of police officers threatens to reverse that promising trend. Police Chief Anthony Batts told the Oakland Tribune that he has serious concerns about cutting so many officers and how it will affect crime fighting in Oakland. But the city council may have no choice — unless the well-paid members of Oakland’s police officers’ union agree to start contributing to their own pension plan.

Oakland awarded the union its generous benefits, which include the ability to retire at age fifty with nearly full pay for life, at a time of relative prosperity. The council figured that over-the-top pension benefits would help the city attract and retain quality officers when unemployment was low and the competition for cops was fierce. But in a time of record joblessness, it’s clear that Cadillac pensions are not only unnecessary, they’re foolish.

To his credit, City Councilman Ignacio De La Fuente, who helped broker the cops’ sweetheart pension deal, openly proposed last week that the police union should begin shouldering its share of the burden. In an open letter to the community published on the local blog, A Better Oakland, De La Fuente said police officers should contribute at least 9 percent of their pay to their own pensions. Although it would amount to a significant pay cut, it’s still less than the 13 percent that firefighters contribute to their pensions.

But the cops’ union is under no obligation to reopen its contract. That’s where the police layoff plan comes in. Union officials will be hard-pressed to watch 200 of their fellow officers lose their jobs so that the other 600 won’t have to start paying toward their own pensions.

Yet even if the union agrees, it would only add about $7.3 million to the budget, and thus still leave Oakland with a $23 million hole. De La Fuente is proposing a one-time fix by selling off half of Chabot municipal golf course, a portion of Montclair Golf Course, and all of the Henry J. Kaiser Convention Center on Lake Merritt. He estimates that the city could make $46 million on the three properties.

De La Fuente’s projections may be overly optimistic in the current real estate downturn, and there’s an important debate to be made about selling city assets to fix a single budget, but his ideas are nonetheless worthy of consideration. As a longtime union rep, he also deserves acknowledgement for showing leadership in a time of crisis and for targeting benefits that he helped establish.

Last year, Oakland Mayor Ron Dellums parlayed his Washington, DC connections into $60-plus million in federal stimulus funding for Oakland police officers over three years — the most received by any city in the nation. The money allowed Oakland to avoid cop layoffs in 2009, but with no more plans from President Obama for additional stimulus funds in 2010, Dellums seems to have run short of ideas. For the November ballot, he’s proposing an $18 million annual parcel tax to fund police, but convincing Oakland voters to tax themselves again is likely a long shot. As a result, the council appears to be making a wise choice by not depending on his plan.

It also should be noted that none of the three leading candidates for mayor this year — ex-state Senator Don Perata and Councilwomen Jean Quan and Rebecca Kaplan — have publicly put forth a detailed plan like De La Fuente’s for solving Oakland’s budget crisis. Quan and Kaplan, however, have acknowledged that police pensions are a serious problem, and both are working on solutions for the city’s financial woes. Perata, by contrast, has avoided the cops’ pension issue. No wonder the police union co-opted a city-sponsored event last year to publicly praise and endorse him.

Finally, no discussion of cops and the city budget would be complete without acknowledging that Measure Y — the 2004 voter-approved initiative — continues to exacerbate Oakland’s financial mess. In truth, the city doesn’t need to lay off anywhere near as many as 200 cops, but Measure Y makes it so. The reason is that the measure requires that if the city lays off a single patrol officer, it must stop collecting the $20 million in tax revenues that Measure Y generates each year. It also requires that the city slash sixty-plus police positions funded by the measure before a single regular cop receives a pink slip. To her credit, Quan has proposed suspending that portion of Measure Y for three years.

Three-Dot Roundup

Contract talks between the Oakland teachers’ union and school district officials broke down again last week after the union decided the sides were too far apart. The union is asking for an 8 percent raise over three years, while the district offered a 2 percent raise in 2012. The school district is facing another $100 million budget deficit next year. … A controversial gang injunction sought by Batts and Oakland City Attorney John Russo against members of a violent North Oakland gang appears likely to be granted, the San Francisco Chronicle reported. … State Democratic leaders countered Governor Schwarzenegger’s plan for deep budget cuts with plans for corporate tax increases. … Actor Gary Coleman, who this newspaper ran for governor as a gag in 2003, died at age 42. … And Meg Whitman has regained her large lead over Steve Poizner, and Carly Fiorina has moved ahead of Tom Campbell as the June 8 election approaches, according to the latest polls.


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