California has asked Washington for $14 billion in Covid-related support, in addition to the $8 billion already provided by the CARES Act. But because the state, with an annual General Fund of $150 billion, incurs more than $24 billion of annual expenses for pensions and other post-employment benefits (OPEB)—including post-employment subsidies for health insurance—a big … Continue reading City Journal: California’s Debt Folly
Category: Budget
Kamala Harris Could Help Save California Programs From Budget Cuts
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 … Continue reading Kamala Harris Could Help Save California Programs From Budget Cuts
A Plan To Save San Francisco $120 Million Per Year And Eliminate $3 Billion of Debt
To assist deficit-reduction deliberations, Govern For California commissioned an actuarial analysis of an alternative plan design for the City and County of San Francisco Postretirement Health Plan, which is an other postemployment benefit (“OPEB”) for retired city employees. The alternative plan would reduce the city’s annual OPEB cash spending by $123 million and more in … Continue reading A Plan To Save San Francisco $120 Million Per Year And Eliminate $3 Billion of Debt
CalMatters: California should terminate unnecessary insurance subsidies for retired state workers
The California Legislature is considering $2.5 billion of cuts to child care, adult dental care, hospitals, parks, courts, social services and preschools. Instead, lawmakers should cut $2.5 billion of unnecessary insurance subsidies for retired state employees. California pays 100% of the health insurance premiums for retired state employees and 90% of the premiums for retirees’ … Continue reading CalMatters: California should terminate unnecessary insurance subsidies for retired state workers
How San Francisco Schools Can Raise Teacher Salaries
Teachers working for the San Francisco Unified School District could be paid more if the school district took advantage of federal and state subsidies. The district incurs annual expense of more than $70 million — more than $15,000 per active teacher — to provide unnecessary health insurance subsidies to retired employees. The district pays that expense with a combination … Continue reading How San Francisco Schools Can Raise Teacher Salaries
SacCity Unified Need Not Lay Off Teachers
Earlier this month Sacramento City Unified School District authorized 11 teacher layoffs to help address a $27 million deficit. But those layoffs are unnecessary. SCUSD should lay off an unnecessary expense instead. SCUSD incurs more than $50 million of expense every year to provide unnecessary health insurance subsidies to retired employees. The district pays that expense with a combination … Continue reading SacCity Unified Need Not Lay Off Teachers
Memo To CA State Legislators: Cost Savings From OPEB Reform In California
Some of you have asked for an estimate of the savings California could realize from reforming OPEB (Other Post-Employment Benefits) subsidies of retired employee health insurance. California pays 100% of the health insurance premium cost for retirees and 90% of the additional premium required for the enrollment of retirees’ family members. Colorado caps OPEB subsidies … Continue reading Memo To CA State Legislators: Cost Savings From OPEB Reform In California
An Urgent Memo To CA State Legislators
1. You have the power to change OPEB. See page 136 of the state’s Comprehensive Annual Financial Report: 2. The State incurs more than $7 billion of OPEB expense each year. To see for yourself, add together the “Service Cost + Interest” figures for each unit on pages 204–209 of the CAFR. 3. That huge expense relates to … Continue reading An Urgent Memo To CA State Legislators
San Francisco’s Incredible OPEB Spending
The City of San Francisco spends more than $400 million per year — 14x the city’s spending on Children, Youth and Their Families, 4x Recreation and Parks, and 2x Homelessness and Supportive Housing — to unnecessarily subsidize health insurance for retired city employees. Referred to as “OPEB” (“Other Post Employment Benefits”), SF’s OPEB subsidies are multiples of those provided … Continue reading San Francisco’s Incredible OPEB Spending
California Budget Do’s And Don’ts
Having served in California’s state government during two difficult budget periods (2003–4 and 2009–10) and on the Volcker-Ravitch State Budget Crisis Task Force in 2012, I have participated in and studied many bad and good state budget practices. Some takeaways: 1. Maintain Perspective. As Governor Newsom pointed out last week, the state’s expected shortfall this time is … Continue reading California Budget Do’s And Don’ts