A Message to the City of Los Angeles: Pension and Health Benefit Reform Now or Bust
|February 15, 2011|
|Last week, the City of Los Angeles received $50 million in bad news. No bidders are interested in leasing and operating nine city-owned parking garages. That lost revenue is in addition to an already $350-plus million dollar deficit in next year's budget. Despite two years of budget wrangling (with good progress in some areas) the fiscal elephant in the room remains — the unsustainable pension and health care benefits for municipal workers. |
Most residents and business taxpayers are surprised to find out that the City of Los Angeles offers 100 percent paid basic health care premiums for nearly all municipal workers, dependents, retirees and spouses or partners. For retirees alone, the cost to provide free, lifetime health insurance is $292 million a year and rising.
The issue is about employee benefits versus basic municipal services. It's also about fairness. Many city residents struggle to fund their own retirements and pay their own family's health care costs, yet they are providing city employees and retirees with a nearly 100 percent paid health insurance package. These benefits are fiscally unsustainable and blatantly unfair to millions of Angelenos.
Enacting reasonable reforms is not about punishing city workers nor is it union bashing. Far from it. It's about maintaining basic city services and bringing fiscal responsibility and equity to the entire city family — municipal workers, residents and businesses.
Greater cost-sharing for health care and pensions will save a large number of city jobs. While city employees will have to pay more for health care and retirement, this cost saving move will help bring an end to uncertainty around layoffs and furlough days. It's better to have a job with access to affordable health care than no job with zero health care coverage.
What's clear is that these reforms must take place at the bargaining table. Mayor Antonio Villaraigosa and City Council must collaborate on a strong push in negotiations with the Coalition of LA City Unions. This push is necessary to save city services and the employees we currently have. Without it, the mayor and City Council will have no choice but to lay off more employees, enact more furloughs and cut the basic services that the taxpayers of Los Angeles expect and are paying for. Everyone in our city of 4 million residents loses under that scenario.
And that's The Business Perspective.
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