Los Angeles Considers Slashing Pensions, Doubling Tax on Property Sales
The Service Employees International Union (SEIU) Local 721 put its foot down, saying that workers have already done their part to reduce city costs, including previously agreeing to reductions in their own pensions.
But at City Hall yesterday, talk was of a whopping ...
... 67-year-old retirement age (versus today's 55), not to mention limiting pensions to 75 percent of a working employee's salary (some city workers get more than their average salary because, in part, pension is often based on their last year's income).
This under a proposal by Mayor Antonio Villaraigosa, who wants to base pensions on a five-year salary average instead of that last, pork-barrel year of employment.
He also wants to halve retirees' heath care costs for taxpayers, from $1,190 per month to $596.
The city is looking at ballooning pension payments that could take up a third of the budget. As it is, fire and police services take up more than 70 percent of L.A.'s cash. That leaves room for ... almost nothing else.
City News Service broke down the latest figures:
Taxpayers are expected to pay close to $843 million toward civilian and public safety workers' retirements during the current fiscal year. The contribution is expected to rise to $1.3 billion by 2016. The rising pension obligation means there will be less money the city can use for services like street repairs and public safety.
Making those cuts is still in "study" mode at the City Council, however.
At the same time, the City Council voted yesterday to (also) study putting a measure on the ballot that would ask voters to double the city's tax on property sales.
L.A. is facing a $200 million-plus deficit for the next fiscal year (which is, frankly, business as usual) and needs the $100 million the tax increase would bring. (Guess all the extra parking and speeding tickets being doled out by the LAPD these days aren't doing the trick.)
Meanwhile, in a statement to the Weekly and other outlets, the SEIU's Local 721 said employees have already given the city plenty of concessions and don't want a "two-tier" system where newer employees get radically fewer retirement benefits.
The SEIU's Art Sweatman:
... We have already sacrificed, in order to maintain vital public services. Last year, we agreed to raise our retirement fund contributions to 11 percent of our salaries. This saved the city $63 million in one year. It will save the city $810 million over five years. Any more pension 'reform' is out of the question for us.