You have to hand it to the city of San Diego. In California, garden variety public sector incompetence or corruption is not going to get you headlines. We're not easily impressed. You've got to shoot the moon. Unfortunately for their citizens, San Diego did just that in the middle of the last decade.
In 2005, then-mayor Dick Murphy resigned after it came to light that the city had been systematically underfunding its public pensions based on wildly unrealistic market predictions while simultaneously increasing benefits. There was a proliferation of criminal investigations afterward. Worst of all, San Diego was left with a $1.4 billion deficit in the wake of the scandal and dubbed "Enron by the Sea" (which really could be the new marketing strategy for the entire state -- "Complete fiscal collapse has never looked this good!")
What's remarkable is how aggressively San Diego (which suffers from dramatically fewer of the liberal pathologies that beset cities like San Francisco and Los Angeles) is attempting to right the ship. The citizens of "America's Finest City" (their choice of nickname, not mine -- though I'd argue that they're at least in the running) put together nearly 116,000 signatures to qualify an initiative for this June's ballot that would shift San Diego's public employees (with the exception of police) to 401(k)-style defined contribution pension plans for new hires. Polling has put support for the initiative amongst San Diegans at about 70 percent. Estimated savings? $1.2 billion.
Of course, public-sector unions are coming at this with everything they've got. They're currently trying to bottle it up in court. If that fails, you can be sure that they'll finance the mother of all opposition campaigns for the initiative; the state's major public employee unions spent nearly $400 million attempting to influence the political process in the last decade -- well beyond any other interest group.
But if the track record of current Mayor Jerry Sanders is any indication, the will of public-sector labor will not be the be all and end all of city policy. An article in Governing Magazine sheds some light on the city's innovations:
"The city also has implemented an effort that creates "managed competition" in which some city departments must offer the lowest bid in order to continue their operations, lest they be replaced with a third-party contractor who can do the job cheaper."
"So far, employees who sweep the streets, maintain the vehicle fleet and work in the city publishing shop have all won those bids by pitching proposals that reduced expenses for the city. The next competition will involve the city's landfill operations. "Employees know where the fat is," Sanders said."
"Meanwhile, under Sanders' leadership, the city has shed about 1,800 positions, made pay cuts and freezes, and pushed huge reforms to the retiree health care system expected to save the city at least $700 million over 25 years."
Imagine that: public servants actually being asked to serve the public. Keep at it, San Diego. The rest of the Golden State needs your example.