This Must Be What They Mean by "Shared Sacrifice"


Remember that Recession they keep telling you is over, and how we all suffered from a panic nobody could have predicted? While we were all sharing equally in the pain, nearly 200 California government agencies increased their employee benefits packages. 

This isn't new news; it's from the February Little Hoover Commission report Public Pensions for Retirement Security [pdf]. My next Reason print column will be on this report – which comes solidly from the Democratic Party consensus and yet is the most radical and sweeping set of recommendations for the pension crisis from any agency. On the front page of today's L.A. Times, Evan Halper and Catherin Saillant do some entertaining follow-ups on the commission's data

A state oversight panel has identified about 180 local governments that increased pension benefits at a time when the state's unemployment rate was rising, housing prices were falling and the nation's banking system was in crisis. The enhancements covered thousands of public employees, adding tens of millions of dollars of new debt to local governments, analysts say.

Cities are now paying the price.

Costa Mesa boosted the retirement benefits of 84 firefighters, at a cost of $694,000 per year. At the time, officials thought the deal made financial sense because the firefighters union agreed to forgo more raises in exchange for new pensions rules that would allow them to retire at age 50 with 85% of their salary if they'd been on the job 28 years.

And in a welcome bit of benefits fairness for my fellow lifeguards…

Officials in Newport Beach and Laguna Beach…recently awarded their lifeguards the same lucrative pension plans that had previously been reserved for police officers and firefighters. They defended the benefits as having been put in motion as part of an extensive contract negotiated before city revenues shrank with the economy. And despite big budget shortfalls, they say the lifeguards have earned the handsome retirement payouts.

"You should see them when there's a huge swell at the Wedge in Newport Beach," Newport Beach City Manager David Kiff said. "I wouldn't want to be risking my life like that."

How can this be, when you keep hearing about the major concessions public sector unions have made, totaling hundreds of millions, in a spirit of cooperation and shared sacrifice? Even better than the just-can't-cut-another-penny benefits giveaways are the dog-ate-my-homework excuses of local officials: 

"At that time, the unsustainability of pensions was not a front-burner item…"

"Other cities were doing it…"

"[E]xtra pensions were underway 'long before the economy went over a cliff…'" 

The whole article is well worth reading. And if you can't wait for the next issue of Reason, the Little Hoover report [pdf] is a real eyeball melter.