My article concerning the city pension crisis, “Smoke Gets in Your Eyes: the SEIU Version,” has been receiving skyrocketing views. Many referrals are coming from a union website and the Los Angeles Times on line edition. No doubt, this reflects the passions and importance associated with this very critical piece of the Los Angeles financial puzzle. It is a puzzle that has missing pieces and players in our government unwilling to find them, save one- Sally Choi, the General Manager of LACERS.
First of all, this should not be a union vs. non union philosophical conflict. It is not us against them. It is about sound fiscal policy, something our Mayor, City Council and Controller do not comprehend. Ms. Choi seems to be the only official who takes her fiduciary responsibility seriously by recommending a level of contributions that will reimburse the retirement fund in five years, vs. the fifteen suggested in the City Council’s Early Retirement proposal.
I do not want to see massive layoffs anymore than the unions, but everyone- taxpayers, union members and elected officials- need to recognize economic reality. Here are the possibilities we are facing:
- Federal debt that is skyrocketing into the trillions of dollars, with the possibility of a national health care program still in the wings.
- Increasing doubts as to whether China or Saudi Arabia will continue to finance our debt at sufficient levels.
- Inflationary pressures from the creation of money to support bailouts and other stimulus programs.
- A housing crisis that still has a long way to go before it recovers.
- Declining tax revenues at all levels of government.
These uncertainties make it imperative that the municipal pension plans use the most conservative assumptions for future rates of return. This will require even greater contributions than what are currently on the table. The General Fund (the taxpayers) can only do so much and are already tapped out.
We must unite and demand that all of our elected officials, including candidates for the open seat for Council District 2, come to grips with this pending disaster even at the risk of alienating their traditional bases of support.
Paul Hatfield
Suzanne Lauer
[...] forward my response to Citywatch next week. Acually, you can read it now in my blog: ” The City’s Pension Debacle: It is not us vs, them.” I actually wrote it before Ms. Butcher posted her article, but it makes a case for [...]
These are the shell games of politicians.
It is much easier to force bad budget ideas down the throats of taxpayers instead of cutting back on pet projects, some to the tune of billions of dollars.
No matter what the jurisdiction federal, state, or local Our tax money seems to be used in every way imaginable for programs we will never benefit from.
When every tree is trimmed and street is paved we can worry about giving money away for other projects these politicians just can’t say no to, until then servicing the taxpayer and not the tax leech should be the better approach.
Our pensions have been mismanaged and ignored for years now borrowing against them to add ridiculous sums of cash incentives for employees on there way out is a recipe for disaster.
Politicians never learn, neither do the voters who’s short memory and apathy allows them to shuffle from job to job on the tax payer dime.
[...] Citys pension debacle it is not us against them. [...]