The pension crisis is
affecting budgets in city after city and in ever
increasing amounts. Please consider the latest
in San Diego:
Millions needed for city pensions.
Just
when San Diego city officials thought they had
closed a $179 million budget gap, another has
opened up because more money will be needed to
pay for employee pensions.
The city will have to contribute $231.7
million to the retirement fund in the fiscal
year that starts in July. That’s up $19
million from the forecast used when the last
budget gap was closed in December.
The increase is a result of the fund’s
investment losses and more employees signing
up for pension benefits because of fears they
will be cut.
The higher payment most likely will be funded
by cutting more services in the next few
months, as opposed to the 18-month balanced
budget promised when a deal was reached to
reduce library hours, lay off 200 workers and
end public-safety programs such as
horse-mounted patrols.
“This cutting and reducing is going to go on
until somebody takes seriously the solutions
for solving the city’s pension mess,”
Councilwoman Donna Frye said yesterday.
A new
report from the city’s pension system
indicates that the city has 66.5 percent of
the money it needs to cover promised pensions
— the lowest level since 2004. The amount the
city lacks to meet its long-term pension
liability is $2.1 billion as of June 30, up
from $1.3 billion in June 2008.
Frye said
she sees a trend of pension obligations
gobbling up more of the city’s general fund,
which pays for fire, police, parks, libraries
and recreation centers. Unless labor unions
and the city come together to find solutions,
“I believe the city will someday go into
bankruptcy,” she said.
Mayor Jerry Sanders has resisted any such
suggestion.
San Diego
Already Bankrupt
San Diego is already bankrupt, they just don't
know it yet. There is no way it can fund its
pension liabilities.
I commend Councilwoman Donna Frye. She should
run for mayor.
Tax hikes and fees are not the answer. The core
issue is unsustainable pension benefits. The
system is broke. Toying around with little cuts
here and there will not help. And as bad as
things look now, they will look even worse after
another stock market plunge.
Unions in general are attempting to hold the
status quo as the day of reckoning rapidly
approaches. The realization phase for unions
will be brutal.
