Sunday, January 22, 2006

Nixon Goes To China! Steve Lopez Tackles (Kinda) Public Pensions!

http://www.latimes.com/news/local/la-me-lopez22jan22,0,1393497.column?coll=la-headlines-california

In today's Sunday Times, LA Times investigative reporter Steve Lopez takes a break from his regular column and tackles the two biggest issues facing California.

Runaway public pensions and health care costs.

Now there are those who may disagree about these being the biggest issues facing us. Some may claim that education or police or fire or.... whatever.... is more important.

The problem is that in a surprisingly few number of years we are going to be paying more money to people who are no longer working for government than we are paying those who are actually working for us. And in time - 100% of the budget of every level of government will be required to pay for just the pensions and health care costs of former public employees unless there is a drastic change in the rules.

The only other option is wait until the day comes we have to close all the schools, lay off all the police and the fire fighters and fire every government worker- other than those who collect the taxes to pay for those pensions, of course.

Now today's column raises this problem - but offers no solutions and not near enough raw data - or enough real world projections to see where will will be in 20 or 50 or 100 years from now so the public can have the information it needs to understand how serious the situation is.

So after spending a week on Skid Row - maybe Steve Lopez should spend much of the next month talking to and reporting on all sides of this issue.

It's about the only thing he can report on that's even more frightening that what he saw on Skid Row.

Below are only a handful of the horror stories Steve recounts:

In other words, a firefighter who averages $80,000 a year on active duty can retire at $100,000 or more by basing it on a year in which his salary was inflated by overtime, accrued vacation, shift differentials and other factors."

And then he gets cost-of-living adjustments on top of that," said Richman. "We are currently paying for two police departments or two fire departments" in many cities, Richman added, meaning that the total payout to retired public safety employees is as much as the pay for active employees."

And it's going to get worse, because the retirement age has been lowered to 50 over the past few years, and at the same time people are living longer."

Another problem is that it's the most experienced employees who leave. Why continue working if you can sit on a beach at 90% of your salary, or get a job somewhere else and double your money, as hundreds of cops have done?

John Welter was assistant police chief in San Diego when, at 55, he became chief of police in Anaheim. Now 56, he's got a $100,000 pension from San Diego and $175,000 salary in Anaheim.

There are a lot of hard questions that need to be asked - and a lot of far harder answers that need to be produced.

So let the debate begin. No politician with any future plans to run for office will ever dare tackle this subject - so it's all up to you Steve....

1 comment:

Christopher Koontz said...

lets not talk about how we got here? lets not talk about funds shifts between what was to be set-aside for future pension costs and what promises were made in the form of legally binding contracts

the pension problem is overblown, its been fixed for new employees so its just a glut of expensive employees but nothing we can't handle