V
editor’s note
voices
Pension politics by Foon Rhee
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4 | sn&r | 05.09.19
are projected to increase to $131 million in 202425 from $64 million in 2017-18. Also like other California cities, Sacramento is on the hook for retiree health care, even The Sacramento City Council’s though it eliminated the budget hearings this year will benefit for all new hires spotlight retiree costs in the except firefighters by 2014. debate over Measure U money. The long-term liability is estimated at $429 million; the proposed budget includes more than $1 This month comes a yearly ritual: the million to pay down that amount. Sacramento City Council holds budget hearings Before I get angry messages from city and a parade of interest groups seek more retirees, let me make a few things clear: I realize money—the arts, fire, parks, police, youth that salaries for government work are generprograms, the list goes on and on. ally lower and that pension benefits offset that What often doesn’t get talked about nearly difference. I also know that under current law, enough are the costs of pensions and health care pension benefits that exist when an employee for former firefighters, police officers and other starts working cannot be cut without additional city retirees. These costs—along with the next compensation. recession that may be overdue—are the storm I’m just saying what city officials also clouds gathering on an otherwise sunny financial are—that the increasing costs of retiree benefits outlook for City Hall. are unsustainable and that the city can’t absorb So it’s a little ironic that a huge cash them by itself. windfall—from the Measure U half-cent sales Whether workers pay a bigger share depends tax increase approved by voters last November— on closed-door contract negotiations with unions. will spotlight the issue of pensions and other City Hall is still working with the firefighters retiree costs. union on a new deal to replace one that expired In City Manager Howard Chan’s proposed in December; the agreements with police officers budget, revenues are rising by $79 million, or and other major unions end on June 21. Those 15%, for 2019-20 over 2018-19, mostly thanks to additional labor costs are not factored into the the additional $50 million from Measure U. But budget forecast. spending is increasing by $53 million, mostly With so much money at stake, you can’t due to higher salary and pension costs. ignore the political power of city unions. To keep his campaign promise that the new Steinberg and Councilmen Allen Warren, Steve Measure U money wouldn’t go to pensions and Hansen, Eric Guerra and Larry Carr are up for salaries, Mayor Darrell Steinberg is calling for re-election in March 2020. the $50 million to be spent on neighborhood Council members (whose salaries, by the and business projects to improve “economic way, are increasing from $71,850 to $91,915 a equity”—an issue that resurfaced after the police year) plan to hold their first public hearing on killing of Stephon Clark. the proposed budget on Tuesday, May 14 and But some council members say taking that approve it on June 11. This year, they need to money out of the general fund will make it be brutally honest with taxpayers about rising much more difficult to meet the city’s pension retiree costs and the difficult choices that lie obligations. The city’s payments to CalPERS ahead. Ω Photo by Foon Rhee
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