Two weeks ago the headlines in Los Angeles included a Department of Water & Power water line failure in West L.A. and a ruling by the Employee Relations Board to overturn the creation of a new pension tier for future city employees. The juxtaposition of these two stories points out the tug of war taking place in the City of Los Angeles today. With our limited tax dollars, do we prioritize salaries and pensions or maintenance and services?
Although some may wish to ignore this fact, the financial resources in government coffers are finite. Every dollar spent on pensions for retirees is a dollar that is not spent on streets, water and sewer line maintenance, sidewalks, parks, tree trimming, police services, fire services and the other public service that matter to each of us daily.
Our current pension liability costs 20 percent of our general fund budget (and rising). These numbers are unsustainable. There is no greater danger to the long-term fiscal stability of the City of Los Angeles than our rising liability for pension benefits.
Over a year ago the City Council and former Mayor Antonio Villaraigosa, on a unanimous vote, took the fiscally appropriate action to create a new civilian pension tier for future employees. This new pension tier still provides an outstanding retirement benefit that is significantly better than the retirement plan for almost everyone reading this, but it will save the City millions of dollars in the short term and billions over the next 30 years.
The employee relations board that overturned the City Council action includes the arbitrator that recommended a 24.5 percent wage increase for city employees seven years ago. The recourse for Mayor Eric Garcetti and the City Council is to go to court to overrule the board. The business community strongly recommends that our elected officials take the legal action necessary to appeal this ruling.
Mayor Garcetti, the City Council, businesses and residents of Los Angeles must stand together on this issue or we will be left with more busted water mains, bigger potholes, more broken sidewalks and untrimmed trees. The City of Los Angeles exists to provide quality services to its residents and businesses, not to provide overly generous pensions that we cannot afford.