What Sacramento Bee readers should be scared about is not the cost of providing retirement security to firefighters, police officers and other public employees, but headlines and editorials attempting to manufacture a “pension crisis” that doesn’t exist (“California cities and counties should act scared by pension payments,” Editorial, March 8).
Yes, the cost of pensions for public workers – many of whom do not receive any Social Security benefits – is increasing. Wall Street greed ravaged the California Public Employees’ Retirement System during the Great Recession; CalPERS lost $69 billion in the first year of the recession and over the next two years its funded status dropped by 40 percent. And while the big banks were bailed out, CalPERS has had no choice but to pass along some losses to local governments.
Fortunately, most planned accordingly in budgeting decisions while the improved economy helped fund core services. In fact, despite the Chicken Little claims of anti-union pension opponents, most California cities have added – not cut – personnel and services during the past five years. Sacramento, for example, added 15 police officers last year, five park rangers and more than $1.5 million for critical programs to address homelessness.
The claim that Senate Bill 400 (approved by a bipartisan majority of the Legislature) is the driving force behind the unfunded liability defies math. The one-year loss of $69 billion due to Wall Street abuses would have funded the SB 400 benefit for 138 years.
Hindsight is 20/20, but unions, employees, employers and pension administrators are working to sustain pension systems for generations to come. Hundreds of unions have negotiated agreements that include higher employee contributions and benefit adjustments.
Let’s also remember that public retirees are taxpayers, too. For example, CalSTRS generated $341.4 million in economic impact in Sacramento County, according to a University of the Pacific study. That helps sustain our local economy during economic downturns.
Local governments would be best served by budgeting for the pension promises they’ve made that are necessary to attract and retain quality public employees instead of threatening their retirement security.
Fabrizio Sasso is executive director of the Sacramento Labor Council. He can be contacted at email@example.com.