Saturday, February 18, 2006

Govt. Employee Health Benefits to Retirees Out of Control

See Los Angeles Times February 18, 2006 article Benefits Tab Seen as Major Fiscal Drag by Evan Halper.

■ “Healthcare promised to retirees could create a crisis unless the state finds a way to pay for it, a new report says. It urges a reserve fund.”
■ “The cost to the state of providing these benefits has tripled in the last decade.”
■ “The [California] state government has guaranteed health benefits for tens of thousands of its current and future retirees without a plan to pay for them, and the liability threatens to return California to fiscal crisis”
■ “The nonpartisan legislative analyst's office reported that the bill for workers already promised lifetime health insurance by the state is $40 billion to $70 billion over the next 30 years. And that sum is rising rapidly as more state workers become eligible.”
■ “city and county governments are expected to face a similar tab”
■ "that state and local governments had no plan to cover their healthcare obligations prompted new federal regulations requiring them to project those costs.”
■ “government inaction on the issue will come at a huge cost to taxpayers”
■ “State workers have healthcare benefits that are becoming increasingly rare in the private sector. Only 32% of large California corporations offer their retirees health benefits.”
■ “The state would need to set aside an average of $6 billion a year for the next 30 years to cover the costs. That would amount to roughly 5% of all state spending”

The City of Laguna Beach has had out of control employee costs in recent years. Due to escalating home prices and sufficient turnover, the City’s property tax take has increased from $ 8,500,000 seven years ago to over $17,500,000. Thus City Council members have not had to make any tough decisions as most all this increased revenue have been spent funding employee pension, workman compensation, and health care cost increases.

The City of Laguna Beach has had out of control employee costs in recent years. Due to escalating home prices and sufficient turnover, the City’s property tax take has increased from $ 8,500,000 seven years ago to over $17,500,000. Thus City Council members have not had to make any tough decisions as most all this increased revenues have been spent funding employee pension, workman compensation, and health care costs.

Has the City prepared a report projecting City employee guaranteed health benefits?
What funds has the City set aside to meet these financial obligations?
What functions have been outsourced to private contractors in the last four years?

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