The tsunami of unfunded pension liabilities and health benefits is about to hit the shoreline for Los Angeles. And if Stanford University’s estimates are correct, Los Angeles is facing roughly $27 billion in unfunded pension liabilities. For a city whose annual budget is in the $7 billion range this year, that figure is daunting.
L.A.’s chief administrative officer, Miguel Santana, noted that the budget shortfall is likely to be much greater by 2014-15. “Every year it gets worse,” he said.[/quote]
Time for LA to rein in those retiree health benefits (which are NOT “guaranteed”). THAT is the the low-hanging fruit which would yield immediate results. A big part of this problem is that in recent years they likely coerced (thru “dangling carrots” and/or making their work lives miserable) their older workers to retire early, like so many other CA jurisdictions did … in order to replace them with young (cheaper) know-nothings. A huge retiree health-benefit liability is a direct function of having too many retirees ineligible for Medicare at one time. That’s p!ss-poor planning, IMO. Not only does LA no longer have the daily benefit of these retirees’ intellectual property, they (short-sightedly) “put out to pasture” hundreds, if not thousands of still-able-bodied workers in favor of 20-somethings.
Stupid is as stupid does. Now they are likely paying hundreds of 75-100% retirements whilst paying salaries to the same amount of replacements … this time with l-o-o-ong learning curves ahead of them and virtually no one with any institutional knowledge to speak of to train the new hires and “mind the store.”
