Monday, December 22, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Public pension reform unlikely, but problem isn’t going away

walters column sig

By
From page A8 | April 02, 2014 |

San Jose Mayor Chuck Reed’s chances of enacting a comprehensive public pension reform ballot measure were scant even before Attorney General Kamala Harris gave it an unfriendly official summary.

He faced the essential dilemma of all would-be pension reformers: They have no natural allies among the political interest groups that might put up the many millions of dollars a successful ballot measure drive would require, but must contend with public employee unions – foes with bottomless wells of campaign money.

When Harris’ office issued a summary that characterized the proposal in negative terms closely paralleling the unions’ position, and Reed couldn’t persuade a judge to alter it, he backed off.

While Reed says he may try again for 2016, there’s no reason to believe he would be any more successful then. Pension reform that substantially goes beyond the largely superficial changes made by Gov. Jerry Brown and the Legislature a couple of years ago is not doable anytime soon.

That doesn’t mean, of course, that the problem vanishes. But it’s mostly one affecting San Jose and other cities because they devote such large portions of their budgets to high-salaried police and firefighters with the highest pension benefits.

Cities are being forced to set aside ever-higher amounts for police and fire pensions in trust funds and since they have little ability to raise revenues, they must either cut other services or run deficits.

Three cities have already been driven into bankruptcy, in large measure because of their hefty pension payments, and several others are teetering on the brink of insolvency.

Moody’s Investors Services, a major credit-rating firm, says the suspension of Reed’s measure is a “credit negative” for California’s local governments due to rapidly growing retirement costs “with few tools to address them.”

In other words, even if local governments aren’t driven into bankruptcy by their escalating pension costs, they’ll likely face higher costs for borrowing as their credit ratings suffer.

The true costs of future retirement obligations have been masked by traditional government accounting, which doesn’t count them as bond-like debts.

However, Moody’s says they are, and the Governmental Accounting Standards Board last week refused to back down from its 2012 decree that they must be reported as debts on government balance sheets.

“Among other improvements, net pension liabilities will be reported on the balance sheet, providing citizens and other users of these financial reports with a clearer picture of the size and nature of the financial obligations to current and former employees for past services rendered,” former GASB Chairman Robert H. Attmore said when the decree was published in 2012.

Perhaps when voters see mounting pension debts in black and white, it will make a difference.

Dan Walters is a columnist for the Sacramento Bee. Reach him as dwalters@sacbee.com.

LEAVE A COMMENT

Discussion | 4 comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Tim DowlingApril 02, 2014 - 10:43 am

    This is a problem the City of Fairfield needs to address- City services have already been cutback dramatically- and the ongoing need to feed the pensions mean that the cuts are going to grow and grow-

    Reply | Report abusive comment
  • rlw895April 02, 2014 - 12:37 pm

    This is a more insightful article than many on the subject, because it distinguishes between police and fire pensions and other public pensions. Police and fire tend to retire earlier and have more generous formulas for calculating pensions, increasing the total obligation over other public employees.

    Reply | Report abusive comment
  • LWApril 02, 2014 - 2:19 pm

    It would be best to take the cap off payroll tax... and mandate all with an income to pay in, no exceptions. Then raise the min. SS check up to apprx 3k per month. It would also be a good thing to- Mandate all employers to provide a retirement. Quit taking away benefits, The middle class working people have paid to high a price already.

    Reply | Report abusive comment
  • Mr. PracticalApril 02, 2014 - 5:13 pm

    LW, how would you define the "retirement" that you want all employers to provide? Most employers due what they can within reason. Taking the cap off unemployment taxes would be disastrous. Since the benefit maxes out, why should employers contribute more that what it takes to fund that maximum? A better solution would be to have the employee pay half of the UT since they are the ones deriving the benefit. Just like we do with SSI.

    Reply | Report abusive comment
.

Solano News

Christmas comes early to San Marco Street park

By Ryan McCarthy | From Page: A1, 2 Comments | Gallery

 
Travis squadron delivers Christmas gifts to East Tabor

By Ryan McCarthy | From Page: A1 | Gallery

 
 
Multiple car accident blocks I-80 in Vacaville

By Glen Faison | From Page: A3, 2 Comments | Gallery

 
 
 
Last-minute shopping at Vacaville Premium Outlets

By Daily Republic staff | From Page: A4, 1 Comment | Gallery

Kitchen fire dislocates family for Christmas

By Susan Hiland | From Page: A4, 1 Comment | Gallery

 
Famous Creations’ toy drive and cupcake sale

By Daily Republic staff | From Page: A4 | Gallery

Fairfield police log: Dec. 20, 2014

By Susan Hiland | From Page: A9

 
Suisun City police log: Dec. 20, 2014

By Susan Hiland | From Page: A9

Weather for Dec. 22, 2014

By Daily Republic | From Page: B10

 
.

US / World

Killer of 2 NYC officers had long criminal history

By The Associated Press | From Page: A1, 3 Comments

 
Killings of 2 New York officers trigger backlash

By The Associated Press | From Page: A1, 6 Comments

California puzzles over safety of driverless cars

By The Associated Press | From Page: A1, 1 Comment

 
Timeline of events before and after NY cop deaths

By The Associated Press | From Page: A1

A look at the 2 NYC officers killed in ambush

By The Associated Press | From Page: A1

 
Exit poll: Ex-regime official is Tunisia’s new president

By The Associated Press | From Page: A5

 
Pakistan makes arrests in Taliban school carnage

By The Associated Press | From Page: A5

 
Tent city sprouts in shadow of downtown Detroit

By The Associated Press | From Page: A5

US mulls putting NKorea on terrorism sponsor list

By The Associated Press | From Page: A5

 
Satanic Temple puts up display at Michigan Capitol

By The Associated Press | From Page: A5, 3 Comments

Australian woman charged with murder of 8 children

By The Associated Press | From Page: A5

 
.

Opinion

Faust and the 2015 federal budget

By Mike Kirchubel | From Page: A8, 13 Comments

 
Obama, surgeon general still losing to NRA

By Francis Wilkinson | From Page: A8, 3 Comments

Let the music begin

By Colleen Britton | From Page: A8, 1 Comment

 
Editorial Cartoon: Dec. 22, 2014

By Daily Republic Syndicated Content | From Page: A8

 
.

Living

Community Calendar: Dec. 22, 2014

By Susan Hiland | From Page: A2

 
Today in History: Dec. 22, 2014

By The Associated Press | From Page: A2

Horoscopes: Dec. 23, 2014

By Holiday Mathis | From Page: B5

 
Horoscopes: Dec. 22, 2014

By Holiday Mathis | From Page: A7

 
.

Entertainment

TVGrid Dec 22

By Daily Republic Syndicated Content | From Page: B6

 
‘Hobbit’ goes out on top with $90.6 million 5-day debut

By The Associated Press | From Page: B7

Good news from Tom Brokaw: His cancer is in remission

By The Associated Press | From Page: B7

 
Review: ‘The Interview’ deserves to be seen

By Jake Coyle | From Page: B7

Happy day: Elton John, David Furnish marry in England

By The Associated Press | From Page: B7

 
TVGrid Dec 23

By Daily Republic Syndicated Content | From Page: B7

.

Sports

Steelers, Packers win, move into playoffs

By The Associated Press | From Page: B1 | Gallery

 
Raiders knock Bills out of playoffs with 26-24 win

By The Associated Press | From Page: B1 | Gallery

Kings snap 5-game losing skid, beat Lakers 108-101

By The Associated Press | From Page: B1 | Gallery

 
Burns gives Sharks late-night win over Blues in OT

By The Associated Press | From Page: B1

The Week Ahead: Not much of a break for Christmas

By Paul Farmer | From Page: B1

 
Super-G crash makes Vonn wait in bid for record

By The Associated Press | From Page: B2

NFL Roundup: Cowboys end 4-year drought, make playoffs

By The Associated Press | From Page: B2 | Gallery

 
7 hurt when lightning strikes near Tampa Bay game

By The Associated Press | From Page: B2

India’s Arjun Atwal wins Dubai Open

By The Associated Press | From Page: B2

 
Documents: FSU QB Winston cleared in conduct hearing

By The Associated Press | From Page: B2

.

Business

Survey: US gas prices fall 25 cents per gallon

By The Associated Press | From Page: B6

 
US companies eager to embrace Cuba face hurdles

By The Associated Press | From Page: B6

.

Obituaries

Marian Kay Zutz

By Nancy Green | From Page: A4

 
Bart Ferro

By Nancy Green | From Page: A4

.

Comics

B.C. Dec 23

By Daily Republic Syndicated Content | From Page: B4

 
Wizard of Id Dec 23

By Daily Republic Syndicated Content | From Page: B4

Baby Blues Dec 23

By Daily Republic Syndicated Content | From Page: B4

 
Zits Dec 23

By Daily Republic Syndicated Content | From Page: B4

Get Fuzzy Dec 23

By Daily Republic Syndicated Content | From Page: B4

 
Pickles Dec 23

By Daily Republic Syndicated Content | From Page: B4

Rose is Rose Dec 23

By Daily Republic Syndicated Content | From Page: B4

 
Beetle Bailey Dec 23

By Daily Republic Syndicated Content | From Page: B4

Peanuts Dec 23

By Daily Republic Syndicated Content | From Page: B4

 
Garfield Dec 23

By Daily Republic Syndicated Content | From Page: B4

For Better or Worse Dec 23

By Daily Republic Syndicated Content | From Page: B4

 
Baldo Dec 23

By Daily Republic Syndicated Content | From Page: B4

Blondie Dec 23

By Daily Republic Syndicated Content | From Page: B4

 
Dilbert Dec 23

By Daily Republic Syndicated Content | From Page: B4

Frank and Ernest Dec 23

By Daily Republic Syndicated Content | From Page: B4

 
Sally Forth Dec 23

By Daily Republic Syndicated Content | From Page: B4

Bridge Dec 23

By Daily Republic Syndicated Content | From Page: B5

 
Word Sleuth Dec 23

By Daily Republic Syndicated Content | From Page: B5

Crossword Dec 23

By Daily Republic Syndicated Content | From Page: B5

 
Cryptoquote Dec 23

By Daily Republic Syndicated Content | From Page: B5

Sudoku Dec 23

By Daily Republic Syndicated Content | From Page: B5

 
Rose is Rose Dec 22

By Daily Republic Syndicated Content | From Page: A6

Frank and Ernest Dec 22

By Daily Republic Syndicated Content | From Page: A6

 
Blondie Dec 22

By Daily Republic Syndicated Content | From Page: A6

Beetle Bailey Dec 22

By Daily Republic Syndicated Content | From Page: A6

 
Garfield Dec 22

By Daily Republic Syndicated Content | From Page: A6

B.C. Dec 22

By Daily Republic Syndicated Content | From Page: A6

 
Wizard of Id Dec 22

By Daily Republic Syndicated Content | From Page: A6

For Better or Worse Dec 22

By Daily Republic Syndicated Content | From Page: A6

 
Get Fuzzy Dec 22

By Daily Republic Syndicated Content | From Page: A6

Baby Blues Dec 22

By Daily Republic Syndicated Content | From Page: A6

 
Baldo Dec 22

By Daily Republic Syndicated Content | From Page: A6

Zits Dec 22

By Daily Republic Syndicated Content | From Page: A6

 
Peanuts Dec 22

By Daily Republic Syndicated Content | From Page: A6

Dilbert Dec 22

By Daily Republic Syndicated Content | From Page: A6

 
Sally Forth Dec 22

By Daily Republic Syndicated Content | From Page: A6

Pickles Dec 22

By Daily Republic Syndicated Content | From Page: A6

 
Bridge Dec 22

By Daily Republic Syndicated Content | From Page: A7

Word Sleuth Dec 22

By Daily Republic Syndicated Content | From Page: A7

 
Crossword Dec 22

By Daily Republic Syndicated Content | From Page: A7

Sudoku Dec 22

By Daily Republic Syndicated Content | From Page: A7

 
Cryptoquote Dec 22

By Daily Republic Syndicated Content | From Page: A7