Could you imagine retiring at 50 years old, collecting more in retirement than you ever did while working?
That scenario is a reality in the City of San Diego -- and many other cities throughout California -- but only for a few privileged public employees who enjoy unbelievable, and unsustainable, pension benefits. Unfortunately, the ramifications of gold-plated pensions are proving disastrous for the taxpayers who are left holding the bill.
As San Diego faces more than 10% unemployment, higher than the national average, inflation continues to drive the cost of living higher. Taxes and fees continue to increase while local infrastructure deteriorates to the point where San Diego is now ranked in the top-10 for worst road conditions in the country. Services are constantly being cut back. Libraries and fire stations have been closed, and even beach bonfire pits, those quintessential symbols of the carefree Southern California lifestyle, were nearly torn out this summer for a lack of funding.
So where is all the money going?
Last year the City's annual pension payment was $154 million -- a huge sum of money and a whopping 42% of the City's entire payroll. But it gets much worse over the next 15 years: By 2025 the city's pension payment will approach $500 million dollars per year and consume over 50% of payroll. You read that right, by 2025 taxpayers will be paying more each year for retired workers than those actually doing the work of the city. Common sense tells you that this system cannot possibly sustain itself.
Calls for reform were shot down for years. We were told that pension payments were untouchable and taxpayers would just have to deal with the consequences. We were told that pension reform wasn't legal and that the best we could hope for were minor changes to the plan for future employees, resulting in almost no immediate decrease to pension liabilities. We were told there was no hope.
But there is hope.