San Jose Retirement at 50 Threatens Solvency: Muni Credit
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Police officers and firefighters in San Jose, California, can retire at age 50 with 90 percent of their pay. The deal has left Silicon Valley’s capital so short of cash that a library and community center has stood unused since its completion two years ago.
The predicament of the 10th-biggest U.S. city reflects the painful choices that rising public-worker pension and health costs are inflicting on municipalities. In San Jose, the burden has become a $2.7 billion unfunded liability, costing the city its AAA bond rating. Next month, voters will decide on a measure that would trim the city’s payments for its two pensions.