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DeMaio challenges Filner to pension reform debate

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San Diego City Councilman Carl DeMaio at a Thursday press conference challenged his mayoral opponent, Congressman Bob Filner, to a Lincoln-Douglas-style debate on pension reform.

Filner’s campaign declined to respond to DeMaio’s challenge.

“I’m challenging (Filner) to a Lincoln-Douglas debate, man-to-man, one-on-one, to compare our reforms in Proposition B on how we save our city billions of dollars to whatever plan he wants to produce,” DeMaio said. “But he cannot be excused from producing a plan.”

After issuing the challenge, DeMaio then called on Filner to release the pension reform plan he promised 10 months ago but has yet to deliver.

“If he’s going to continue to claim that he has a better plan, or an actual plan, or that somehow the pension issue is behind us, or that the current system is sustainable, then he owes it to San Diegans to produce a detailed, financially assessed plan on what he is talking about,” DeMaio said.

DeMaio issued the challenge at a press conference set up by his campaign. A release announcing the event said Filner would be in attendance for a “debate-style press conference,” but an attempt at confirmation found Filner and his campaign never agreed to participate.

The Lincoln-Douglas debates included multiple events between the two candidates and featured lengthy speaking periods for each candidate. The DeMaio campaign clarified that they’re specifically challenging Filner to one basic debate on the topic of pension reform, but would welcome additional events if that’s what Filner wanted.

DeMaio plans to reiterate the challenge to Filner in each debate and forum going forward, he said.

Of the four primary mayoral candidates, only Filner opposes Proposition B, the pension reform initiative spearheaded by DeMaio that seeks voter approval in June. The measure would switch most new city hires to a 401(k)-style retirement plan and establish a five-year freeze on pensionable pay for employees. If approved, the freeze would serve as the city’s opening position in negotiations with labor unions.

DeMaio argues Prop B would save the city more than $1 billion.

Filner has alleged that the plan’s savings are based entirely on the pensionable pay freeze, which he calls an illegal provision.

A fiscal analysis on Prop B conducted by the city’s Independent Budget Analyst and released on March 19 found the initiative would save $963 million, or $581 million when adjusted for inflation, over 30 years through what it called “potential salary freeze savings.” The analysis noted that the bill allows the city to negotiate pensionable pay increases with employees if it has two thirds support of the City Council.

The same analysis found that switching most new hires to 401(k)-style retirement plans would cost $13 million, or $56 million after inflation adjustment, over the course of 30 years.

Thursday, DeMaio said the IBA report confirms his claims on Prop B’s savings, but waters down its savings by ignoring the shifting of investment risk from taxpayers to individual employees.

The broad outlines of a pension reform plan that Filner has described at mayoral forums have included refinancing the city’s debt through pension obligation bonds. The bonds can be used by cities to take out high interest loans to pay off immediate pension shortfalls.

The returns on pension funds are then used to pay off the interest, and if the investments perform, can even result in profits exceeding what’s owed to the bond issuer. But if the funds don’t perform, the bonds could put the city at greater risk.

At an education-focused debate on Tuesday, Filner said his plan would produce $500 million of immediate savings that could be reinvested in city services that have been cut back in recent years.

“When Filner does get specific he says he wants to refinance, or borrow, to put a patch or band-aid on the city’s pension crisis,” DeMaio said Thursday. “That simply passes on higher debt to our children. It’s the same pattern of failed leadership that past city leaders employed to get us into this problem.”

District Attorney Bonnie Dumanis and Assemblyman Nathan Fletcher both support Prop B. Fletcher has also announced a series of pension reforms that would apply to 720 non-union city employees that could be enacted without a court challenge, which is likely to delay implementation of Prop B.

All four candidates are expected at a mayoral forum hosted by the Little Italy Residents Association Thursday night.

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1 UserComments
Omar Passons 3:19pm April 5, 2012

Pretty sure nothing would be better for DeMaio's campaign than this. A chance to focus on the one thing most people identify him with, without dealing with other issues and getting to talk actual data against, well, no data as far as I can tell. It's a debate about something that most San Diegans already agree needs to happen and eliminates the all-important "what happens next" question that Nathan Fletcher has been focused on his entire campaign. I can't see any reason for Filner to accept this challenge, though it would be great to hear any specifics about his "plan."