Sat05302015

Last updateFri, 29 May 2015 4pm

LOS ANGELES Saturday, May 30th 2015 3:14

TIX FOR TAX

  • WHO WE ARE-Earlier this month, I arrived in San Diego following five days of driving across the country from Wisconsin. I pulled into my friend’s driveway, brought my things inside, and went back to my car to park it on the street. Almost immediately, a cop’s siren and flashing lights went off. I’d left my license in my friend’s apartment, so I…
  • The Hunting Ground: Human Truths of Campus Rape

    Susan Rose
    CALIFORNIA MOVES AGAINST RAPE-On May 13, California moved aggressively against rape on campuses, issuing a directive to all state colleges to “notify authorities when a sexual assault is reported.” Attorney General Kamala Harris and U.C. president Janet Napolitano jointly issued a set of guidelines to encourage collaboration between campuses and…
  • Santa Barbara Spill Underscores Why We Can’t Allow Arctic Oil Drilling

    Ryan Schleeter
    PLANET WATCH-Last week, a major oil spill in Santa Barbara County made headlines after a ruptured pipeline dumped as much as 105,000 gallons of crude oil on the California coastline. The spill stretches across roughly nine miles of state beach with tens of thousands of gallons entering marine protected areas in the Pacific Ocean. The spill took…
  • How Will David Ryu Honor His Campaign Pledges?

    Jack Humphreville
    LA WATCHDOG-In a race that focused on local issues, outsider David Ryu (photo) outpolled City Hall insider Carolyn Ramsay by almost 10 points (54.8% to 45.2%), representing a margin of over 2,300 votes. Yet, since less than 16% of Council District 4’s 153,000 registered voters bothered to vote, Ryu was supported by less than 9% of those eligible…
  • $15 an Hour: If This Ain't Socialism, Then What SHOULD We Call It?

    Ken Alpern
    CONSIDER THIS-Funny how when you accuse, or even suggest, to a liberal (or is it "progressive"? or is it "reformist"?) that he/she is socialist, they get all bent out of shape. One reason that Senator Bernie Sanders of Vermont is so respected is that he says it like it is--he's a sincere socialist who means what he says and says what he means. One…
  • California Dreaming: Booms to Busts, the Optimists are Still Searching for the Gold

    James Preston Allen
    AT LENGTH-At a meeting I attended recently with the management of the Port of Los Angeles, a civic leader voiced his enduring optimism for a bright and successful future. I gave the unsolicited reply, “an ounce of skepticism is worth a pound of optimism.” Others at the meeting said aghast, “Oh, no. How would anything ever get accomplished?”…
  • LA’s Homeless: Not a lost Cause

    Denyse Selesnick
    MY TURN-I was both surprised and rather pleased about the reaction to my recent article. Apparently, many people in Los Angeles are realizing that the Homelessness isn’t just City Hall’s challenge but affects all of our neighborhoods. Even more important, it doesn’t just affect us economically but impacts our sense of humanity and fair play. Yes,…
  • Senate Race: Choosing Kamala or Loretta Comes Down to North vs. South … California

    Joe Mathews
    CONNECTING CALIFORNIA-Are you a Kamala or a Loretta? Attorney General Kamala Harris and Congresswoman Loretta Sanchez—the two leading candidates for the state’s open U.S. Senate seat next year—confront Californians with a choice. But it’s not a choice about competing policies or political visions. Californians don’t have political arguments about…
  • From Tragedy, Healing

    Mike Newhouse
    GUEST WORDS-In the days after Brendon Glenn was killed, in the heart of Venice, I was starkly reminded of one of our community's biggest challenges. But, my perspective may surprise you. What first came to mind was not how we police. It was not about racism or homelessness. It was not about mental illness, or the insidious nature of drug or…

 

  • Can Marijuana Really Kill Cancer?

    Christian Cristiano
    Marijuana enthusiasts have been speculating for years that pot can actually combat certain types of cancer, but it wasn’t until recently that…
  • Study: The Best Way to Quit Smoking … Bet On It

    Francie Diep
    WELLNESS-Oftentimes, money speaks louder than words. Apparently, that aphorism applies to cigarettes too. A new study finds that money incentives…
  • Can Strawberries Help Fight Cancer?

    Christian Cristiano
    WELLNESS-There have been a number of studies over the years that could show evidence of strawberries fighting off cancer. Tong Chen lead a study…




Alert! World’s 10 most dangerous animals

Smashing good job. World’s leaders beating each other up

Trevor Noah warming up for takeover of the Daily Show

 

 

 

 

  

 

 

 

The Key to Pension Savings: Employees Pay Half

REFORM - California’s fiscal issues are as complex as they are plentiful.  Solutions are elusive and often painful.

But there is a fix that will make resources available at every level of state and local government.  The Governor put it together, and Republicans said they wouldn’t change a word.
The most impactful provision of the Governor’s pension reform plan would require state and local government employees to pay half the cost of their retirement plans – not unlike those who are fortunate to work for private companies that match their employees’ 401(k) contributions.

If public employees agree to pay half, the savings will begin immediately and support services and jobs that would otherwise be cut.  The “devastating” cuts that City Administrative Officer Miguel Santana recently warned about don’t have to be so devastating.

Like every other city in California, pension costs in Los Angeles are growing faster than any other spending category.  According to Stanford University’s Institute for Economic Policy Research, the city’s costs for its three pension systems grew 11 percent per year between 1999 and 2011, twice the rate of spending growth on police, fire, health, sanitation, public assistance and recreation.  As the city cuts services across the board, pension costs go nowhere but up.

Paying half won’t be a shock to teachers or state employees.  They already pay half or close to it.  But many local government employees still pay little or nothing for retirement benefits that include guaranteed six-figure pensions and healthcare for life.

According to a study by Capital Matrix, a city employee who begins a career at age 27 with a $45,000 starting salary and normal raises can retire at age 57 with retirement benefits valued at $1.2 million.  A similarly compensated teacher will receive benefits valued at $500,000 and an employee of a large corporation less than $400,000.

Only ten percent of employees in the private sector still participate in a defined benefit (pension) plan compared to 87 percent of state and local government employees.  Taxpayers assume all the risk of a pension plan’s investments, because benefits are guaranteed even when the investments lose money – one of the reasons the city’s pension systems have a $27 billion shortfall.  Governor Brown’s plan would allow current employees to keep their benefits, but future state and local government employees will be offered a more limited pension plan combined with a defined contribution plan that shares the investment risk.

In 1999, the Legislature passed what some have called the most expensive mistake in California history.  Senate Bill 400 increased pension benefits retroactively, and allows employees to pad their final year’s salary with unused vacation time, uniform allowances and educational expenses to inflate pension checks  -- a practice that continues today.  Over 4000 retired LA County employees make more in retirement than they did working.  In Ventura County, almost all of the 148 county retirees with annual pensions of more than $100,000 receive pension checks that are higher than their paychecks.

Public opinion polls show that three of every four voters support pension reform, but they are much less certain about tax increases.  A bi-partisan legislative solution to California’s state and local pension crises would show voters that lawmakers are serious about cutting wasteful spending, and those new taxes will be used for the services we need.  The Legislature has until June 28 to put the Governor’s plan on the November ballot.  Let’s get it done.

(Marcia Fritz is a CPA with the California Foundation for Fiscal Responsibility. She can be reached at marciafritzco@gmail.com) -cw

Tags: pensions, California, Stanford University, pension reform, California Foundation for Fiscal Responsibility








CityWatch
Vol 10 Issue 36
Pub: May 4, 2012

Share