UPDATE: The LACERS pension board delayed a vote today on the city's
planned early retirement program as union leaders stepped up their
campaign to derail a controversial proposal for making the city pay off
the program's cost 10 years sooner than expected, the TImes reports. LACERS will convene a three-member panel to discuss the
payment timeline for the early retirement initiative.
Publicly and privately, the mayor was saying not so long ago that the sweetened early retirement deal city unions wanted was unaffordable.
For once, he was right. Too bad, he lacked the courage of his convictions.
Even as the pay-to-play corruption of public policy reaches new heights, City Hall has stepped up its reliance on a play now, pay later philosophy of fiscal mismanagement.
For years, City Hall has carried forward a structural deficit -- it was committed to spending more money each year than it actually was expecting to take in -- so it begged, borrowed and stole a couple of hundred million dollars to cover its overspending. For most of two years now since the economy started to slide, it has stepped up its borrowing against the future while displaying its lack of political will in its inability to make substantive cuts and focus on basic services.
Facing a $530 million deficit going into this fiscal year -- and now a $200 million additional hit thanks to the gross dysfunction of the state government -- LA's elected leadership has chosen to juggle the books, reward 2,400 or so senior city workers with a lucrative buyout/pension deal and mortgage the city's future for years to come in a way that escalates the level of risk from high to catastrophic.
Even in the bureaucratic language of Sally Choi, head of LACERS, the underfunded pension fund that covers most city workers, the strategy of "smoothing" repayment of the cost of the early retirement package is not "fiscally prudent."
What the LACERS board is considering today is Choi's recommendation to reject the early retirement deal's provision that allows repayment over 15 years instead of five.
The difference is enormous.
In accepting the deal, city unions agreed to increase their members' contributions for pensions and lifetime health benefits from 6 to 6.75 percent of their salaries, still far below Social Security/Medicare.
But an actuarial study only coming out now -- long after the mayor and City Council cut this deal -- shows their contributions need to be between 8.86 and 10.7 percent to repay the pension fund within five years.
The unions, backed by the mayor, are as adamantly opposed to early repayment as they are for early retirement.
"The mayor continues to believe that an early retirement package is better than layoffs," mayoral spokesman Matt Szabo said told David Zahniser in the Times. "The question now is, how much will it cost and how much will we save?"
Having flip-flopped to please the unions, it's a little late for the mayor to be asking those questions.
Even some Council members are getting squeamish. Jan Perry is alarmed, Bernard Parks is having "grave difficulty" finalizing the deal and Dennis Zine says, "This is not good news for the unions. This is not good news for those who thought they had a deal for early retirement."
Not to worry.
The plan is already in the works to spare the city coming up with $1 billion next year and even more in the years ahead to keep the pension funds solvent as the cost to taxpayers rises to well above 40 cents for every dollar of payroll. Just as they proposed "smoothing" the costs of repaying the cost of the early retirement package, they are moving to "smooth" over a long period of time the cost of keeping the pension funds solvent.
In other words, they are hoping and praying that by burdening the city's future with heavy debts they can put off doomsday and an economic miracle will somehow save the day.
The trouble is it won't work and they know it.
The current budget is so fragile that the Council is re-budgeting on a weekly basis, preparing this week to steal money from the parks and libraries.
They are on the road to ruin. If there is any lesson to be learned from the nation's current economic crisis, it's that borrowing against the future at a level far beyond your means will lead to dire consequences.
It's too late for our elected officials to show a modicum of political courage and start facing the harsh reality that a lot of its social welfare programs have to go, that the city cannot afford more than basic services -- if it can afford even that.
They can play games with the public's money all they want but the bills are coming due and now is the time to pay them so that LA will actually have a future.
Publicly and privately, the mayor was saying not so long ago that the sweetened early retirement deal city unions wanted was unaffordable.
For once, he was right. Too bad, he lacked the courage of his convictions.
Even as the pay-to-play corruption of public policy reaches new heights, City Hall has stepped up its reliance on a play now, pay later philosophy of fiscal mismanagement.
For years, City Hall has carried forward a structural deficit -- it was committed to spending more money each year than it actually was expecting to take in -- so it begged, borrowed and stole a couple of hundred million dollars to cover its overspending. For most of two years now since the economy started to slide, it has stepped up its borrowing against the future while displaying its lack of political will in its inability to make substantive cuts and focus on basic services.
Facing a $530 million deficit going into this fiscal year -- and now a $200 million additional hit thanks to the gross dysfunction of the state government -- LA's elected leadership has chosen to juggle the books, reward 2,400 or so senior city workers with a lucrative buyout/pension deal and mortgage the city's future for years to come in a way that escalates the level of risk from high to catastrophic.
Even in the bureaucratic language of Sally Choi, head of LACERS, the underfunded pension fund that covers most city workers, the strategy of "smoothing" repayment of the cost of the early retirement package is not "fiscally prudent."
What the LACERS board is considering today is Choi's recommendation to reject the early retirement deal's provision that allows repayment over 15 years instead of five.
The difference is enormous.
In accepting the deal, city unions agreed to increase their members' contributions for pensions and lifetime health benefits from 6 to 6.75 percent of their salaries, still far below Social Security/Medicare.
But an actuarial study only coming out now -- long after the mayor and City Council cut this deal -- shows their contributions need to be between 8.86 and 10.7 percent to repay the pension fund within five years.
The unions, backed by the mayor, are as adamantly opposed to early repayment as they are for early retirement.
"The mayor continues to believe that an early retirement package is better than layoffs," mayoral spokesman Matt Szabo said told David Zahniser in the Times. "The question now is, how much will it cost and how much will we save?"
Having flip-flopped to please the unions, it's a little late for the mayor to be asking those questions.
Even some Council members are getting squeamish. Jan Perry is alarmed, Bernard Parks is having "grave difficulty" finalizing the deal and Dennis Zine says, "This is not good news for the unions. This is not good news for those who thought they had a deal for early retirement."
Not to worry.
The plan is already in the works to spare the city coming up with $1 billion next year and even more in the years ahead to keep the pension funds solvent as the cost to taxpayers rises to well above 40 cents for every dollar of payroll. Just as they proposed "smoothing" the costs of repaying the cost of the early retirement package, they are moving to "smooth" over a long period of time the cost of keeping the pension funds solvent.
In other words, they are hoping and praying that by burdening the city's future with heavy debts they can put off doomsday and an economic miracle will somehow save the day.
The trouble is it won't work and they know it.
The current budget is so fragile that the Council is re-budgeting on a weekly basis, preparing this week to steal money from the parks and libraries.
They are on the road to ruin. If there is any lesson to be learned from the nation's current economic crisis, it's that borrowing against the future at a level far beyond your means will lead to dire consequences.
It's too late for our elected officials to show a modicum of political courage and start facing the harsh reality that a lot of its social welfare programs have to go, that the city cannot afford more than basic services -- if it can afford even that.
They can play games with the public's money all they want but the bills are coming due and now is the time to pay them so that LA will actually have a future.
Ron Kaye is the former editor of the Los Angeles Daily News where he spent 23 years helping to make the newspaper the voice of the San Fernando Valley and fighting for a city government that serves the people and not special interests.
Twice in recent years, Los Angeles Magazine listed Kaye among the city’s most influential people, specifically in the area of politics. Kaye has been variously described in the media as the “accidental anarchist,” “the Patrick Henry of the San Fernando Valley” and a “passionate populist.” He is now committed to
carrying on his crusade for a greater Los Angeles as an ordinary citizen. Previously, Ron worked at the Los Angeles Herald Examiner,
Associated Press, Cleveland Plain Dealer and The Australian as well as papers
in Fairbanks, Alaska and Yakima, Wash. He also wrote for Newsweek magazine, The Guardian in London and the National Enquirer.
The current compliment of City Council Members, Controller, and Mayor have already got this figured out. First, they will approve this abomination (ERIP, COCU deal) despite LACERS reservations and recommendations. Second, they will "cook the books" to balance the budget. Finally, when the lawsuits come rolling in (1-4 years), and the real financial numbers hit the budget, they will have "conveniently" moved on to other political offices and will not have to take the blame. THEY SHOULD BE HELD RESPONSIBLE FOR THE DECISIONS THEY ARE MAKING TODAY THAT HAVE SERIOUS RAMIFICATIONS FOR THE FINANCIAL HEALTH AND WELL BEING OF THIS CITY. What they are doing now is criminal and they should not be allowed to continue!!!!!
David Zahniser always quotes the usual suspects to arrive at his pre-ordained anti-Antonio conclusion, starting of course with Dennis Zine -- who was all over talk radio, YouTube, even Ch. 35 slandering the mayor's buddy Jack Weiss on behalf of Trutanich, and is now even calling the Mayor himself a liar (over the Lakers parade issue etc.) and suggesting fraud re: AEG to talk radio. So OF COURSE he's good for a critical quote -- and note how David Z has to throw in that the mayor appoints 4 of the 7 Pension Board members, to suggest alleged impropriety there for his like- minded readers and talk show people to pick up on.
Then David Z goes to Jan Perry that great financial and legal mind, who "expresses concern," just as she showed her ignorance over the DNA rape kit issue and billboards, but went along with Zine's spin there. Parks' concern as a budget hawk does seem legit, even if his defense of own huge pension calls his impartiality into question. (Meanwhile, Parks, Zine, Smith and Perry are ganging up on Chief Bratton again, this time over the movie cops, "to put his ego in its place," Smith admitted.0 If this is another matter they agree on, that's cause alone to look for more reliable sources.)
Wendy Greuel used to head the budget committee with Parks: who's in charge of that now? What does the new CAO say, and what about Gerry Miller? While we are all wise to "be concerned" who CARES what Zine and Perry "think?"
Zahniser, aside. The facts remain - the city will go bankrupt because of the pension system.
Too bad it's the taxpayers who are getting screwed while City Hall, the unions and elected officials keep twiddling while Rome burns.
Where is the solution?
Always raise a big red flag whenever someone attacks the messenger and not the merits of the message or the issues. David Zahniser's reporting in the LA Times was both a pleasant surprise and a breath of fresh air from a paper that used ignore any controversy at City Hall and was routinely beat to the punch by the Daily News and the former Herald Examiner. Late last year, Mr. Zahniser was the first to report on the attempted coverup with the City Council President and his colleagues railroading Measure B onto the ballot and covering up unflattering studies.
Ask yourself a simple question, why would someone be so concerned about an article in the paper? If they disagree with an article, argue the facts and omit the ad hominem attacks on a good journalist. Step up to the plate identify yourself and reference credible sources in your agrument.
Hear, Hear! Charlie. Excellent post.
Charlie, the obvious point is that when a reporter always cites the same "source," namely Zine, because he's invariably critical of and openly hostile to the mayor (plus a couple of other secondary characters), to skew towards a pre- conceived point, the article itself is so tainted you HAVE TO take the messenger into account. David Z is on a mission and you all love him for it. Stop being so disingenuous: you know perfectly well that's why there are so many comments on this blog and other anti-Antonio blogosphere blogs extolling "David Z is the only honest reporter at the Slimes!" In a pantheon which includes Jill Stewart and her minions.
If you want an objective, informed "source" go to the people who are informed on the subject, like maybe, the financial executives we pay like the Chief Financial Officer, Legislative Analyst, Controller... Even Parks as head of the Budget Committee but NOT Zine. The grandstanding buffoon who thinks AEG should make up the city's budget shortfalls and be sued retro-actively, while he himself was asleep at the switch during the planning of the Jackson events while he was in charge of the city with Perry. And not clueless Perry herself!
Only one problem, 1:22, Zine is NOT a source for the article in question. Go back and reread it--his quoted sources WERE informed financial executives like Sally Choi.
To By Anonymous on August 4, 2009 1:22 PM: Let me explain the ISSUES to you so that you can respond to them: This isn't rocket science, it has to do with the stability and funding of pensions, the costs and affect of some members of the fund taking early retirement, how the additional financial burden to the fund is made up and the further negative impact on the City's budget, and who is responsible for making up the shortfall (the already burden working class taxpayer who may be facing layoffs themselves).
The personal attack and focus on Mr. Zahniser and the out of the blue attacks on Jill Stewart of the LA Weekly expose a few things:
1. These reporters are doing a very good job exposing the truth that City Officials would like to hide.
2. Their facts are credible and cannot be challenged by you--your frustration is obvious.
3. They may be hitting a little to close to home, "Anonymous," you are taking this way to personally.
8/5/2009
There are those who believe that since it is our government, the government owes us a way of life.
Our bills should be paid, our children should be cared for, our bellies must be full and we must be
allowed to do whatever we want to do. OKAY. And where do you fit in those who work? They work
because it is their nature to work? OH. So it is ok to raise their taxes and steal their earnings because
after all they do have more money than you do!! What about their using the money they earn to pay
their own bills? What about their using their own money to care and feed their families? What about
their right "to do whatever they want to do"? I know that THEY DO NOT WANT TO BE YOUR SLAVES.
And slavery is what it amounts to. Think about it. What can you do for yourselves? Because if one group
in our country are slaves, what makes you think you have, by accepting promises from leaders to help you
live your own lives, avoided slavery? Your leaders will expect you to pay them back, after all they are paying
your bills, feeding your children and giving you what you want. Now, you owe them. Yes, now you are
also a slave.