Despite Reforms, L.A. Pension Costs Reach New Heights
The Los Angeles Times has a stomach-churning report on the status of L.A.’s public employee pensions four years after what was once described as the nation’s most far-reaching pension overhaul. General fund payments for pensions and retiree healthcare amounted to $1.04 billion last year, consuming more than 20% of operating revenue, compared to less than 5% in 2002.
As the Times notes, there is a vast gulf between the political rhetoric and reality. Just this year, Mayor Eric Garcetti touted the city’s unrivaled efforts to reign in pension costs, but the fact remains that L.A. taxpayers are footing the bill for some of the most generous retirement benefits in the country. The reform effort adopted by the city council and Mayor Antonio Villaraigosa in 2012 didn’t touch existing employees. Needless to say, the savings have been minimal.
The dilemma is stark when you consider the kind of services that money could buy.
“With the money put into its pension funds over the last two years alone — nearly $2 billion — the city could have fixed every one of its broken sidewalks, built or leased housing for more than 25,000 homeless people or restored 11 miles of the concrete-clad Los Angeles River to a natural state,” the Times notes.
L.A. is not alone. Of the ten largest cities in the state, Los Angeles and five others—Bakersfield, Oakland, Sacramento, San Diego, and San Jose—committed more than 15% of their general fund budgets to pensions and retiree healthcare during the last fiscal year.
Read more about L.A.’s pension crisis here.