The numbers are staggering, in fact, overwhelming: the City of Los Angeles’ annual pension and retirement health benefit bills (just for police and fire) will escalate over the next five years from $423 million to $1 billion. That makes the paltry few million dollars shortfall that the city is being tied in knots over today small change.
A few months ago we ” title=”LA Times”>LA Times
features a commentary about Community Advocates’ chairman, former Mayor Richard J. Riordan, one of the only leaders willing to talk honestly about what LA’s future looks like if things continue as they are and the pension crisis remains unresolved.
As he told the
Times
, “We need some adults to come alive in the city and talk through how to meet that liability…if that doesn’t happen we shouldn’t rule out bankruptcy.” Riordan warned the
” title=”comparative study”>comparative study of the pension obligations of the 50 states set against the funds the states have set aside to pay those bills, their findings don’t inspire confidence—-a trillion dollar gap:
“While the economic crisis and drop in investments helped create it, the trillion dollar gap is primarily the result of states’ inability to save for the future and manage the costs of their public sector retirement benefits,” said Susan Urahn, managing director, Pew Center on the States. “The growing bill coming due to states could have significant consequences for taxpayers—higher taxes, less money for public services and lower state bond ratings. States need to start exploring reforms.”
Clearly, we are not alone.
Whether the answer is bankruptcy, changing the retirement structure going forward, or even discussions with unions to alter the plans presently in place—-the failure to be forthright about the dire circumstances we face is not an option.
Yet the LA City Council dithers. In January it defeated an effort to place a measure on the June ballot to roll back benefits for newly hired city workers and future hires. Mayor Villaraigosa’s spokesman said, “this is not the time to panic.” He and a representative of city council president, Eric Garcetti, said they thought they could achieve more by negotiating directly with the unions that represent civilian city employees. Lots of luck, the city’s unions were even opposed to the January measure that was aimed at future hires.
The time for kicking the can down the road and hoping for some other level of government to take their chestnuts out of the fire is past. Virtually every level of government faces the same stark choices. As the Pew Center wrote, it’s time to “start exploring reforms”—-however painful that may be.
Mayor Riordan may be the only local leader telling it like it is and acting like an “adult.”
