Author: Gary Toebben

It wasn’t an illusion. Last week, the presidents of the U.S. Chamber of Commerce and AFL-CIO appeared before Congress together — on the same side. U.S. Chamber President Tom Donahue and AFL-CIO President Richard Trumka became the "odd couple" at a Senate hearing on infrastructure. The two presidents jointly advocated for investment in "building roads, bridges, high-speed broadband, energy systems and schools." While they may differ on details, both leaders share the same goals — creating jobs and successfully competing in the global economy.

This week, the Los Angeles Area Chamber of Commerce and the L.A. County Federation of Labor testified before Congress toward the same goal. The same U.S. Senate committee held a field hearing in Los Angeles on Wednesday. We advocated for infrastructure funding to advance projects in L.A. County, especially the innovative 30/10 initiative. Our two organizations meet on a weekly basis with other stakeholders to push this transportation and jobs plan forward.

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.

Los Angeles and the state of California have never faced a more serious challenge regarding our education system. With our flat global economy, the success of our students has never been more important. Dramatic improvements to our education system must be made.

Last century, the United States had the highest college enrollment rate in the world, but by 2008 our standing had fallen to No. 16. Here in California, for the first time in our history, the current generation is expected to be less educated than its predecessor. Major cutbacks signaled this week in Gov. Jerry Brown’s budget add to the challenges local school officials face. This collection of issues calls for outstanding leadership. The Los Angeles Unified School District (LAUSD) Board of Education displayed that leadership this morning when it announced its decision to select John Deasy as the district’s next superintendent.

In a story that made headlines in every newspaper around the country, and perhaps around the world, Jerry Brown was sworn in to his third term as Governor of California this week. The eyes of our nation and the world are on Governor Brown and California because of our well publicized 12.4 percent unemployment rate and $28 billion budget deficit.

Governor Brown began his speech with the following statement:

“With so many people out of work and so many families losing their homes in foreclosure, it is not surprising that voters tell us they are worried and believe that California is on the wrong track. Yet, in the face of huge budget deficits year after year and the worst credit rating among the 50 states, our two political parties can’t come close to agreeing on the right path forward. They remain in their respective comfort zones, rehearsing and rehashing old political positions.”

In the coming days, the U.S. Senate will debate the DREAM (Development, Relief and Education for Alien Minors) Act, a bi-partisan piece of legislation that will make it possible for many young adults who are undocumented immigrants to start on the path to legalization.

The DREAM Act will provide a pathway to legal status for young people who are willing to work for a college degree or serve in our armed forces. For many of these young people, America is the only home they know, and English is their first language. They are young men and young women who are successful in school and committed to the kind of work ethic that has made America great.

The DREAM Act will enable undocumented students to apply for federal student loans, which must be paid back, and federal work-study programs, in which they must work for any benefit they receive. The students would not be eligible for federal grants, such as Pell Grants. DREAM-eligible youths would also not be eligible for health care subsidies, including Medicaid, or other federal means-tested benefits like food stamps.

Yesterday, State Senate and Assembly members were sworn into office including 29 freshman members of the Legislature. Governor-elect Jerry Brown and the new Legislature are immediately faced with a 12.4 percent unemployment rate and a $26 billion budget deficit. How lawmakers will meet the challenge of making additional cuts to key programs while finding acceptable ways to generating new revenue without hurting private sector job creation is the question that they and all Californians are asking.

The road to California’s economic and budget recovery is littered with roadblocks, including a partisan chasm between legislators in Sacramento. Despite their political leanings, politicians must contend with a public that chooses spending cuts over tax hikes, and at the same time opposes most of the specific cuts that could close the gap.

Last Spring, City of Los Angeles Chief Administrative Officer (CAO) Miguel Santana painted a vivid picture of the severe financial crisis facing the City as the cost of pensions and health care for retirees soar higher and higher each year. He pointed out that the growing annual contributions by the City, combined with the multi-billion dollar unfunded liability threatened to disrupt or dismantle every municipal service for years to come. The recently-released plan to create a new benefit tier for future City employees, presented by the CAO, Mayor Villaraigosa and a subcommittee of the City Council, shows promise to reduce pension obligations in the future. However, the new retirement age of 62 falls well short of real reform and what is fair and common practice in the private sector.

Under the current system, most L.A. City civilian employees can retire as early as 55 years old with up to 100 percent of their final year’s salary for life. This is not only unsustainable from a financial perspective, but also unfair to the millions of L.A. residents who are working much longer under Social Security and are watching basic City services be cut to the bone in order to pay the cost of pensions and lifetime health benefits to retirees. The promises made to current employees under this system are vested contracts that cannot be modified without the permission of the employees themselves – which leaves the City with the limited option of changing the pension plan for future hires and cutting basic city services.

Every night more than 48,000 people in Los Angeles County sleep on the streets because they do not have a place to call home. Los Angeles has the unfortunate distinction of being the epicenter of the nation’s homelessness crisis. That’s why the Chamber partnered with the United Way of Greater Los Angeles and last week launched Home For Good – a five-year strategic plan to end chronic and veteran homelessness in Los Angeles.

Home For Good is aimed at the 12,000 chronically homeless Angelenos who have been homeless for more than a year and have serious mental or physical health problems. This includes approximately 1,400 veterans – an increasing number of whom are soldiers returning from Iraq and Afghanistan. By implementing a new strategy, we can provide life-saving opportunities for the chronically homeless and at the same time free up resources for those in need of transitional services.

During the last six months, Governor-Elect and former Governor Jerry Brown pledged to voters and taxpayers throughout California that he had both the experience and the courage to lead California out of its economic malaise and financial doldrums. The voters endorsed his candidacy because they believe that California’s economy and budget deficit are fixable. His combination of experience and courage gave them hope. Now is the time for Governor-Elect Brown to build on that support and take immediate action.

The phrase “it’s the economy stupid” has been used by many elected officials, candidates and pundits over the years, but it has never had a greater ring of truth than today. Last Tuesday’s elections and exit interviews emphasized that Americans are frustrated by the lack of jobs and economic growth and they want their elected officials to respond. California voters also indicated support for efforts to improve their environment and opposition to tax increases.

Given this backdrop, a future of economic growth, new jobs, larger tax revenues and a cleaner environment will depend entirely on the ability and willingness of businesses to invest in California.