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Why Russell Buckley Keeps Talking Pensions
By Chris Lavin, Editor
LA MESA – The City Council met again Tuesday and the proceedings moved along with an almost ritual-like familiarity. Praise for some programs, service recognitions (it was Art Madrid’s 30th anniversary in city government), pay the bills and listen to citizen comments.
And increasingly familiar these days is an appearance by Russell Buckley.
The retired school teacher impresses all with his civil, eloquent lectures delivered with professorial touches.
Despite the reasoned tone, however, Buckley’s message could be understood as this: THE FREAKING SKY IS FALLING!!!!!!
Buckley has clearly used many hours of his retirement researching and understanding the pension challenges that are facing local governments in the wake of the Great Recession.
“La Mesa has $32-million dollars in unfunded pension liabilities,’’ Buckley, pictured above, told the council again on Tuesday. “That represents more than two-thirds of your general fund. You are going to have to come up with a plan for handling this. I know you put aside $500,000 this year, but that’s not going to do it.’’
The council members thank Buckley for his direct and constructive tone, but they can say little more. The numbers are what they are and any plan to dig out of that big a hole will clearly take years and painful decisions that aren’t made in run-of-the-mill council meetings.
The council will hold a more exhaustive budget meeting on March 24th and Councilman Ernest Ewin is pushing to have the pension crisis take up a big part of that meeting (request for information document: Item7CCAgenda2-8%5B1%5D%5B1%5D.pdf).
In Buckley’s frequent comments on the issue, invariably the public employee unions play the heavy role. In the clear light of the post-recession day, it is union members who are receiving pensions that clearly outpace the sorts of pensions being earned in the private sector. Buckley will mention “retired firemen making $12,000 a month’’ from their pensions and rail against public officials – the Helix Water District is another favorite target – who haven’t even required that the employees contribute to their own retirement benefits. The La Mesa council members were among the first to do this, for which Buckley gives them credit.
But knowing who exactly to blame for this crisis is as hard as figuring out what to do with these enormous debts hanging over virtually all municipalities and the state.
If you talk to those who have watched elected officials deal with their unions over the years, it was clear that the politicians were consistently willing to exchange less visible, long-term retirement and health benefits against union’s willingness to accept lower, more visible and immediate salary increases.
And often, with the stock market booming and the economy expanding, experts would even recommend the elected officials pursue this route; the booming stock market could make up for the increased retirement costs and the taxpayers would never feel the pain.
So, when the housing market crashed and took the stock market with it, the public pension funds that were being counted on to cover these enriched public retirement benefits started looking as anemic as the bundles of toxic mortgages that drove all our home values so far downhill.
The big difference, of course, is that those stock funds can and have recovered somewhat with the rebounding stock market so figuring the size of the long-term problem and the immediate steps needed to begin addressing them are the quiet art of government finance – and politics – right now.
Everyone agrees that watching the state – and some local – governments these days is like watching a train wreck in slow motion. The only question is how much damage will be done.
In another view, the pain that the state, local and federal governments are experiencing are just the delayed version of what the rest of the U.S. economy experienced over the last few years.
Private companies throughout the country are operating with lower revenues and fewer employees than four years ago. In this view, government is just growing back to fit with the economy that now supports it. If that means fewer public employees and lower salaries – and fewer services supplied to the electorate – that isn’t anything different than most U.S. private sectors have been experiencing now for years.
However, it is easier for governments to reduce future spending (and services) than to deal with past obligations – like promised pensions – that continue to extract an increasingly large portion of the current general funds that fix our streets, run our parks and pay for our schools.
When the state makes its cuts and the local governments then get a better feel for their own future budget circumstances, it is clear the effects will be felt throughout the state and at all levels of government.
Higher tuitions, larger class sizes, increased fees, and reduced services will be a persistent part of life as government restructures in its own way.
And just as persistent, will be the on-going cost of pension and benefit deals hammered out in much better times.