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 IF IT'S BROKEN...FIX IT

Getting Serious about LA’s Sidewalk Repairs: A Five-Point ‘Let’s-Get-On-with-It’ Plan

Ken Alpern
FIXING LA-Last Tuesday night's City Council Board of Public Works and Budget Committees met and allowed a lot of good public input to a series of concerned and available Councilmembers and City officials. The attendance and input were both outstanding--I want to thank Councilmember Mike Bonin, in particular, for allowing the outreach and advice to…

Latino Politicians Putting Climate Change Ahead of Constituents

Joel Kotkin
POLITICS-Racial and economic inequality may be key issues facing America today, but the steps often pushed by progressives, including minority politicians, seem more likely to exacerbate these divisions than repair them. In a broad arc of policies affecting everything from housing to employment, the agenda being adopted serves to stunt upward…

Worlds Apart on Kathryn Steinle: When Political Opportunism Reigns Supreme

John Mirisch
MUSING WITH MIRISCH-The small Swedish Jewish Museum in Stockholm is tucked away on a side street. Discreet signage instructs would-be visitors to push a button which activates a camera, so they can be screened before they are granted entry. The museum's permanent exhibition fills one fairly small room. Most of the objects on display are Jewish…

Garcetti Passes, Wesson Fails

Jack Humphreville
LA WATCHDOG-Our Los Angeles Times has issued midterm letter grades for Controller Ron Galperin (B-) and City Attorney Mike Feuer (B+) and will be posting grades for City Council President Herb Wesson this Sunday and Mayor Eric Garcetti the following Sunday. Our City is facing many difficult issues, ranging from a lagging economy, relatively high…

What LA Really Needs: A Part-time City Council and a Part-time Mayor!

Dennis Zine
JUST THE FACTS-There are so many serious and pressing problems facing the City of Los Angeles and few if any real solutions are being proposed or implemented by our elected and appointed leaders at City Hall. I will start with the current city budget. Former Mayor Antonio Villaraigosa had a $7.7 billion total budget in the 2013-2014 fiscal year.…

Why Don’t the City’s Women Managers Hire More Women?

Denyse Selesnick
MY TURN-Perusing the web is a little like the soap operas of yesteryear. You get suckered in! One link leads to another link and then one is exposed to a barrage both facts and idiocy. The reason for this discussion was my attending a July Valley Alliance of Neighborhood Councils (VANC) meeting with the Department of Water and Power. General…

Cleaning Up LA City Hall: ‘It’s What’s Legal That’s the Problem’

Bob Gelfand
GELFAND’S WORLD-Everyone understands that developers own our city government. Sure, there are some officials here and there who are upright and independent, but recent history shows that the developers typically get their way in spite of public opposition. Whether it is a zoning change for an office tower or the required permits for a new mall,…

Not So Fast LA! Let’s Consider the Real Costs of Hosting the Olympics before We Jump In

Greg Nelson
SPORTS POLITICS-On Monday, Boston withdrew from its offer to be the nation’s bidder for the 2024 Summer Olympic Games. In January, Los Angeles finished second to Boston when the U.S. Olympic Committee made its decision. After Boston was selected to polish up its bid before submitting it to the International Olympic Committee for a final decision,…

Party Crashing for Political Access: Schwarzenegger and My Pantsuit

Charlotte Laws
CALIFORNIA ACCESS POLITICS-Party crashing—or gate-crashing, as it is sometimes called—is an art form that I stumbled upon as a teen. I taught myself how to finagle into any event, anywhere, anytime. It required being part private eye, part actress and part chutzpah machine. I had to think outside of the box, throw myself into the role, and whip my…

 

Reynolds Rap Video: Joey has hope for the pope in Philly.





Art or Ad? LA’s mural law written in gray ink

Escape the Room-Conan goes for the record … and the laffs


LADWP Rates Overview

 

 

  

 

 

 

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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