Time to Pay the Pension Piper

Pension board vote to trigger more layoffs, service cuts

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    NEWSLETTERS

    A cash-starved city just got hungrier.

    Widespread city workforce layoffs and service cuts are foreseen in the wake of the pension board's rejection of accounting changes that would have reduced the city's annual payment by $30 million.

    Hard financial times are about to get even harder for San Diego taxpayers, residents and city employees.

    A major pension fund decision made on Friday is expected to trigger widespread layoffs and service cuts in order to balance an already cash-starved municipal budget.

    Trustees of the San Diego City Employees Retirement System (SDCERS) voted 10 to 2 against accounting changes that would have reduced the city's next annual contribution to the pension fund by a projected $30 million. Now, the city is on the hook for $220 million-plus "going forward," versus its current annual pension contribution of $157 million toward the fund, which now is running a $2.4 billion deficit after huge investment losses over the past year.

    Time to Pay the Pension Piper

    [DGO] Time to Pay the Pension Piper
    Friday's retirement board decision could result in 300 to 400 more city positions being cut n top of 800 over the past three years.

    As a result, Mayor Jerry Sanders' budget team is crunching numbers that could mean San Diego's municipal workforce will lose more jobs in one fell swoop than have been eliminated over the last three budget cycles combined.

    "We could be looking at 300 to 400 positions as a result of [the SDCERS] decision -- on top of probably 500 to 600 positions just because of the [previously projected] budget," said Jay Goldstone, Sanders' chief operating officer, on Friday.

    "We'll be looking at all aspects of the organization," Goldstone also said. "Nothing will be off the table -- including police, fire, park and recreation, libraries, general adminisration. We'll be looking at every corner of the city to find ways that we can cut.... So we will most likely see less library hours, less park and recreation hours. It may increase [public safety] response times. The whole gamut."

    That grim forecast figures to run afoul of the city's labor unions.

    "We've already tightened our belts, taken pay cuts and reformed our pension benefits dramatically," said Joan Raymond, president of Local 127 of the American Federation of State, County and Municipal Employees.

    "There's still room to cut from the top," Raymond added. "The politicians are going to have to make some tough decisions when it comes to revenues as well."

    Meaning higher fees and new taxes -- at a time when taxpayers are in no mood to write bigger checks.

    "Now the City Council and mayor will have to bite the bullet and deal with the problem head-on," said City Councilman Carl DeMaio, a crusader for rolling back SDCERS' benefits granted in controversial wheeling and dealing in 1996 and 2002.

    "Instead of cooking the books, they need to focus on fundamental reform of the unsustainable pension benefits that have been rewarded over the years," DeMaio said.