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Judge Prohibits San Jose from Cutting Pensions of City Workers

Even though the voters of San Jose passed a referendum last June to allow the city to cut city workers’ pensions and health benefits, Santa Clara Superior Court Judge Patricia Lucas ruled that the referendum violates California law, finding that California law does not allow San Jose to make workers to pay an additional 16% or switch to a less generous plan.

As in Michigan, the California state constitution prohibits limiting the pensions of state and municipal workers. In Michigan, a bankruptcy court in Detroit ruled that pensioners’ rights may be affected regardless of the constitutional protection. Unlike Detroit, however, San Jose is not in bankruptcy — even though one-fifth of its budget is being used to pay for the health and retirement benefits of city workers.

Meanwhile, in a parting shot to unions, New York City Mayor Bloomberg condemned the "labor-electoral complex" and said that the current levels of benefits owed to city workers across the country are unsustainable.

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