Anyone with a basic understanding of economics knew long ago where the unsustainable public employee pension system was headed. And last year, City of Los Angeles Chief Administrative Officer Miguel Santana painted a frightening picture of the severe financial crisis facing the City as the cost of pensions and health care for retirees continue to rise. Despite that, public officials, who were too afraid of public employee union backlash, stuck their heads in the sand.
We all know the problem isn’t exclusive to Los Angeles — the State of California is in the same mess, and across the country cities and states have made headlines on drastic measures aimed at bringing some sanity back to the bargaining table.
No one begrudges public employees’ good health care and retirement benefits, but the crux of this problem lies in fairness. Working families struggle to fund their own retirements and pay their own health care costs, yet they are providing public employees and retirees with full pensions and almost 100 percent of their health benefits. Public employees are suffering as well, losing salary and jobs due to furloughs and layoffs. When government has to lay off employees, municipal services for the public also take a hit.
The problem is exacerbated when some public employees game the system to increase these benefits by accruing unused vacation and sick time to enhance their retirement package beyond their yearly salary. Others simply retire with their full benefits package on a Friday and come back to work on a Monday for the same organization and receive a full paycheck in addition to their full pension. Known as “pension spiking” and “double dipping,” these practices have created huge financial liabilities for the California taxpayer.
California Assembly Bill 340 (Furutani) aims to fix this loophole for County employees across the State. AB 340: Prohibiting “Spiking” in the ’37 Act Retirement Systems passed both committees in the Assembly and the Senate and will end such abusive practices. L.A. Area Chamber Board Chair Joseph Czyzyk, Mercury Air Group, Inc., testified in support of AB 340 in Sacramento this week.
We applaud Assemblymember Furutani for taking a stand against this kind of abuse and recognizing that the taxpayer will simply not tolerate these unfair practices that benefit a minority at the detriment to the majority.