California Pension Costs are Increasing Faster Than Cities Can Predict.
Most residents of California cities go about their daily lives unaware of the looming pension crisis they face. I say they face because the only way to solve this crisis (according to politicians) is to raise taxes. The unaware voter has elected a never-ending stream of politicians that continue to ignore a huge problem. The day of reckoning is fast approaching.
San Diego already faces a budget deficit and must make hard decisions to balance the numbers. Adding a $10 million unexpected (I argue much expected) expense makes matters much worse. When you give employees raises, your pension load must increase, so how is this "unexpected?" - quote below:
But the city must pay $322.9 million instead, primarily because of a $40 million increase in liabilities from salaries growing faster than expected. The average salary of a city worker increased to $70,271 in the budget year that ended last June 30, up nearly 2 percent from $68,924 one year earlier.
What is the Answer?
The answer depends on whether you are a taxpayer or a politician. Taxpayers would say manage the pension properly, make sensible cuts to both salaries and benefits and reign in the costs. Politicians say "smooth" the payments over time. In other words, make many more smaller payments, thus increasing the ultimate amount paid, but do so over a longer amount of time so that I can keep my job.
It is easy to do this with other people's money. The problem is that as an elected official, you have a fiduciary duty to your electorate (taxpayers) not to the employees. Employee unions are very political and ensure that elected officials side with them. Unfortunately, the people paying the bills (voters, businesses, and residents) don't have the same political clout.
The answer is for voters to wake up, discuss the issue openly and plainly and NEVER vote for people who's only answer to fiscal problems is to raise taxes or come up with creative ways to pay.
Curated for #informationwar (by @openparadigm)
Relevance: Pension Crisis
Thank you! I appreciate the exposure. Keep up the fight.
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