Two weeks ago, the voters in San Diego and San Jose, the second and third largest cities in California, overwhelmingly passed measures to reform their pension plans for city employees.
On the heels of these two votes, Mayor Antonio Villaraigosa directed Chief Administrative Officer Miguel Santana to immediately begin discussions with the City Council on a series of pension reforms that the mayor proposed in April. Last week, at the U.S. Conference of Mayors in Orlando, Mayor Villaraigosa continued his push for pension reform, telling his fellow mayors that he was prepared to take his reform measures directly to the voters in spring 2013 during elections for mayor and City Council.
We enthusiastically support Mayor Villaraigosa’s leadership and encourage the L.A. City Council to immediately begin working with CAO Santana on the proposal by the mayor. We also suggest that the private sector be invited to engage in these conversations. Discussions in the past on pension reform have not included the private sector, i.e. the taxpayers of the City. That should change.
From the results of the elections in San Diego and San Jose, it is clear that the public understands that the more money tax payers pay for pensions and health care for retirees, the less money remains available for police, fire, parks and libraries. In the Resolution declaring a Fiscal Emergency in the City of Los Angeles, passed by the L.A. City Council on June 5 and approved by Mayor Villaraigosa on June 11, it was acknowledged that 32 percent of the City’s General Fund is currently being earmarked for pension contributions and health care expenditures. One dollar out of every three dollars collected from the taxpayers!
The City has made progress in pensions and health care expenditures over the last two years, but much more needs to be done. As Mayor Villaraigosa suggests in his proposal, the long-term cost of benefits for retirees is still unsustainable. Revenue is on the increase but expenditures are growing faster.
The choices are clear; catastrophic reductions in day-to-day services or insolvency. The citizens and taxpayers of Los Angeles are the losers in either scenario; and they will continue to be the losers until we reduce the percentage of the budget that is committed to pensions and health care contributions for retirees. The voters in San Diego and San Jose made that statement loud and clear two weeks ago. It is time for elected officials or the voters of Los Angeles to take action as well.