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LOS ANGELES Tuesday, July 7th 2015 12:43

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Pirates at the Port (of Los Angeles)

Jack Humphreville
LA WATCHDOG-The growth of the Port of Los Angeles and its ability to maintain and create good paying jobs and its market share of imported cargo are under siege by external market forces as well as the demand by the San Pedro and Wilmington communities to finance $400 million of public benefits over the next ten years. The Harbor Department, one…

Why I Support 'No Gays Allowed'

C.J. Prince
GUEST WORDS-Last week, a Tennessee retailer made headlines when he took the whole we-won't-bake-cakes-for-gay-weddings thing to the next level. In response to last week's Supreme Court marriage ruling, Jeff Amyx, owner of Amyx Hardware, taped a "No Gays Allowed" sign to his storefront window. Amyx, who is also a Baptist minister, explained to WATE…

Never on Sunday

Paul Hatfield
GREEK VOTE, A PERSPECTIVE-According to the lyrics from the memorable theme to Never on Sunday (enjoy the trailer), it is OK to kiss in Greece except for Sunday. However, on this past Sunday, July 5th, Greek voters invited the EU to kiss them. I need not mention the part of the anatomy, though. Contrary to some extreme views, this does not mean the…

LA Transpo Slowed to a Crawl by Outdated and Ignored Laws

Ken Alpern
GETTING THERE FROM HERE-Reform of the City Charter or its Bylaws is almost certainly in order, but it's no secret that the City of LA … for all its hype about being for "sustainable living" and being "environmentally-friendly" … is burdened by a host of either outdated laws (which encourage inappropriate overdevelopment) or ignored laws (which are…

You’ll Never Guess Why I love Los Angeles

Fred Mariscal
LATINO PERSPECTIVE-I remember the first time I went on a vacation outside of Mexico. We went to Los Angeles when I was 6 years old. I didn’t have to wonder why my dad choose Los Angeles, he knew I wanted to go to Disneyland and meet Mickey Mouse. That first trip we took that summer made me fell in love with this City. Los Angeles has everything a…

Unsolicited Advice for New LA Councilmember David Ryu

Joe Linton
GUEST COMMENTARY-Los Angeles City Councilmember David Ryu. Photo via ryuforcouncil.com It’s July. That means a new budget year for government agencies, where there is some turnover: some new faces, new officers, and new committees. LA County Supervisor Mark Ridley-Thomas is the new chair of the Metro Board of Directors, replacing LA Mayor Eric…

LA Working on Plan to Plaster the City with Digital Billboards

Adrian Glick Kudler
GUEST WORDS-People in Los Angeles love digital billboards!! We can't get enough of them! Give us more!!! Oh, thank god, the LA City Council is ON IT. Lawsuits have tragically darkened so many of those blinky, flashy ads, but yesterday the City Council's Planning and Land Use Management Committee voted to bring them back big time. They want to…

The Persuaders: California Hospital Association

Bill Raden
CAPITAL AND MAIN SPECIAL REPORT-The nurses who showed up at state Senator Richard Pan’s Capitol office in May were furious. They had been assured by Pan, a Democrat from Sacramento, that he would be on their side when it came time to vote on Senate Bill 346, a charity care measure aimed at providing transparency to the state’s currently murky…

Vacations are a Necessity…Not a Luxury

Denyse Selesnick
Since most of the readers of CityWatch are “high achievers” you have undoubtedly faced the situation where you feel you can’t afford to take a vacation right now because of a million different reasons. Many of these boil down to one…without your presence things will fall apart. Really, they are just excuses … not reasons! Getting away from your…

 

  • Costco: Free Range Liars!

    Christian Cristiano
    WELLNESS POLITICS-Eight years ago grocery retailer Costco (COST) pledged to transition out of using eggs from chickens in small cages to cage free…
  • 10 Things Over-Thinkers Are Tired Of Over-Thinking

    Lindsay Holmes
    WELLNESS-While writing this intro, I deleted the first paragraph approximately six times. My thoughts ranged from "Just get to the point already" to…
  • Can Procrastination Give You a Heart Attack?

    Christian Cristiano
    WELLNESS-A study posted in the journal of behavioral medicine linked procrastination with hypertension and cardiovascular disease. Specifically…



Thu Jul 16, 2015 @12:00AM
LA Equality Awards RSVP
Thu Jul 30, 2015 @ 6:00PM - 08:00PM
A Taste of Chatsworth


One More Time! Grateful Dead say goodbye.

USA World Cup Soccer win … sealed with a kiss

 

 

 

 

  

 

 

 

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

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