Before running for office, US Senator Kamala Harris was employed for 13 years as an attorney by the counties of Alameda and San Francisco, which provide expensive insurance subsidies to retired employees such as herself. In the case of San Francisco during the years Ms. Harris worked there, those lifetime benefits extend to employees who worked only five years. Known as OPEB (Other Post Employment Benefits), the subsidies were rendered largely redundant after enactment of the Affordable Care Act and middle class subsidies by the State of California yet San Francisco continues to run an OPEB program that costs a fortune — SF spent $180 million last year — and the most expensive beneficiaries of which are public safety employees who can retire at age 50 with pensions equal to 90 percent of their final compensation.
To address its budget deficit, San Francisco is planning to cut programs. Seeking a less destructive path, GFC commissioned an actuarial analysis of an alternative OPEB plan that would reduce the city’s annual OPEB cash spend by $123 million, eliminate $3.03 billion in OPEB debt, still grant subsidies to retirees, and provide an opportunity to boost current employee pay by 1–2 percent. As an elected official and OPEB beneficiary, Senator Harris could help by expressing support for OPEB reform.
She could also weigh in on the state’s OPEB program, of which the most expensive beneficiaries are public safety employees and to which the application of a similar reform could save at least $1 billion in annual cash and eliminate $60 billion of debt. Because Senator Harris has a history of support from public safety and other government employee unions, it would be all the more powerful if she spoke up for OPEB reforms.
Even before COVID, the Sacramento school district was laying off teachers because of OPEB spending. Reform could eliminate $500 million of OPEB debt at San Francisco’s school district, $7 billion at LA’s. Senator Harris should call for OPEB reform to save teachers’ jobs.
Senator Harris has encouraged more federal COVID funding for California but unlike that temporary support that upon expiration would exacerbate the state’s structural budget deficit, OPEB reforms would translate into permanent savings.
Budget deadlines are fast approaching. Governments and school districts in California are about to make terrible cuts while sustaining rich and unnecessary subsidies for special interests. OPEB reforms could make a big difference. Senator Harris could make a big difference too. If you know her, tell her to speak up.
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