Posted on 11/20/2016 7:17:21 PM PST by SeekAndFind
Back in the summer of 2012 the City of Los Angeles realized that they had a serious budget problem on their hands and the culprit, as in so many other cities, was the city’s extremely generous pension plan for municipal workers. Mayor Antonio Villaraigosa, backed by the city council, jumped into the fray and passed what was then described as sweeping pension reform and patted themselves on the back for a job well done. (LA Times, 2012)
Despite a raucous protest and threats of a lawsuit from city labor unions, the Los Angeles City Council voted Tuesday to roll back pension benefits and boost the retirement age to 65 for new civilian employees.
The council voted 14-0 to approve the plan, which budget officials say will save $30 million to $70 million over a five-year period. The changes will not go into effect until a final vote in 30 days. In the meantime, the council instructed city negotiators to meet with union leaders “to find common ground and to avoid litigation.”
Good thing they got that sorted out, eh? Really dodged a bullet there. So, four years down the line, how well have those reforms worked out? Well… let’s just say that things could have gone better. (LA Times, this week, emphasis added)
Today, Los Angeles taxpayers are underwriting retirement benefits that are among the nation’s most generous — at a cost that has never been higher.
The city’s general fund payments for pensions and retiree healthcare reached $1.04 billion last year, eating up more than 20% of operating revenue — compared with less than 5% in 2002.
L.A.’s vaunted pension reforms have not cut the city’s pension costs; at best, they have modestly slowed their rate of growth.
It’s only the fact that Hollywood and a few other big dollar enterprises keep their revenues far above average that’s stopping L.A. from sinking into fiscal dysfunction. Having 20% of your budget going to pension payments isn’t just massive… it’s unsustainable in the long run. Going back to the 2012 article I linked, the answer was right there in front of them. None of the modest reforms they enacted applied to current employees (who number more than 20K), only to new workers. Several large groups, including firefighters, police and water department workers were excluded from the reforms. And all of those pensions for existing workers are based on their salaries, which average anywhere from 20 to 42 percent higher than their civilian counterparts. No wonder their budget has this massive hole in it.
How many cities and states have seen seen this pattern repeated in? Pensions basically bankrupted Detroit. Chris Christie has spent a huge amount of his term fighting the bloated pension system in New Jersey. Cities from Cincinnati to Billings, Montana, Charleston, Portland and Chicago (which is at the top of the list) comprise the dozens of municipalities with the most massive unfunded pension debts hanging over their heads. Have we learned nothing?
If we’re to be brutally honest about how we got to this point (as well as what to do going forward), failure was baked into the cake from the beginning. The real issue is found in the fact that government employee unions were the ones negotiating with the municipal and state governments for the best, most expensive benefits they could manage. Unfortunately, in virtually every major city in the country, the government was run by the Democrats. Given what you no doubt already know, think about that for a moment. It means that the Democrats were negotiating against the Democrats. Nobody was representing the taxpayers and, perhaps even more seriously, nobody was there to keep their own appetites in check.
Now the chickens are coming home to roost in too many of these cities and the unions have crafted their deals so carefully that there is little the government can do to dig themselves out of massive budget holes. Los Angeles isn’t going under yet because of their fat budget, but looking at the bottom line on their ledgers it’s easy to see that it would only take one bad economic turn in their fortunes for the bottom to fall out of it. The public workers unions have feathered their beds quite nicely at the expense of everyone else, but you always wind up killing the goose that’s laying the golden eggs eventually.
It’s kinda fun to watch those who consistently vote for democrats get destroyed by the policies they so much want...
Pay them in Pesos, Bullet Train vouchers and Carbon Tax Credits.
Put extremely simply: If the person who promised you those benefits didn’t pay for them, you’d best go look them up and ask them where they are.
Otherwise, the city council today could pass a budget which would outline every penny of spending for the next 200 years and tie the hands of every future city council. As that is obviously silly, no one could possibly tie a future budget, the SAME GOES FOR PROMISED BENEFITS.
Any city council, at their whim and as PART OF THEIR JOB can discontinue any and all benefits. And until city councils walk in with that attitude, any ‘negotiations’ will simply be how much of the union can embezzle from public funds.
I’ve always advocated for every city to stop offering any benefits at all; pay city employees a flat hourly wage where they can buy their own health insurance, surrender wages to have as many days of free time as they please, pay taxes, etc. Act like the sovereign entity you are.
Force a sale of most of the city owned properties—leave a few parks to set up tents for the city managers to have a place to do what they do.
Maybe Trump will bail them out. Bwahahahahahaha...
Pay them in Pesos, Bullet Train vouchers and Carbon Tax Credits.
Lets move that Secession movement along...
Of course, all this will mean is that Moonbeam Brown, the chief DemocRAT of them all, will impose upon us taxpayers, a major bailout.
They were counting on Hillary to do that. Nope, not gonna happen
I suppose they will expect a bail out.
Basically lawmakers who approve sweetheart deals are no longer in office by the time its apparent they won’t deliver as promised.
Such sweetheart deals have no real money behind them - its just an IOU with a promise of future funding. Good luck with it when it doesn’t materialize.
We have lots of unfunded pension plans around the country and one way or another, taxpayers are ultimately on the hook for them.
What do they want for nothing, a rubber biscuit?
....and no more federal funding.
Good luck with that
Well, take a look at California’s first city to go bankrupt, Vallejo.
They didn’t include the cops and the fire fighters, which account for about 80% of the city’s direct budget, they didn’t deal with CALPERS, so they will go into bankruptcy again. And if you look at Stockton, CA (the other large municipal bankruptcy) the morons there also ignored the judge’s allowance to abrogate their union contracts, so they will go back in as well.
Folks, this is going to be happening all over the country. It isn’t just California, it’s everywhere. This nonsense about “public safety employees” getting to retire at 50 is going to hasten our demise. Our local fire district has had two chiefs retire in close succession ( one replaced the other then left a year later). They are retiring at more than they were paid! With fully paid healthcare these 50 year-olds and their wives can expect to live until they are at least 80. You do the math when they are getting $250,000 a year plus benefits. And the rank and file union FF’s do almost as well.
“We have lots of unfunded pension plans around the country and one way or another, taxpayers are ultimately on the hook for them.”
I disagree. Here in CA the judge has already told two cities that they could abrogate their union contracts in Chapter 9. The fact that their leaders chose not to do it (this time) doesn’t mean that it won’t happen in the future, These PE pensions are unsustainable. When the people finally have had enough (like they have shown by electing Donald Trump), these pensions will be given serious haircuts. I mean when they do, some retired cop or fire fighter is going to have to sell his ski boat or his cabin, poor baby!
Why would they get more AFTER retiring than they earned while working?
.
LA is also a sanctuary city...let them beg
We may need an amendment that no pensions be guaranteed by the government; that was how it worked for quite a while.
This is how debt and our unbacked, fiat currency fund the progressive nanny state.
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