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
Category: OPEB
Other Post-Employment Benefits
How To Free California’s Hostages
Governor Newsom’s Revised Budget proposes cuts to programs in the event more federal COVID funds are not provided. We propose a solution that would free the 10 programs below and improve the state’s structural deficit without jeopardizing the financial security of retired state employees. The first eight programs would be funded by savings from substituting Oregon’s or Colorado’s … Continue reading How To Free California’s Hostages
California’s Request For Federal Funds
Many of you have asked for our view of Governor Newsom’s request for $14 billion of additional federal support. Even when added to the $8 billion already provided to California by the CARES Act, the total ($22 billion) would be less than half the $48 billion proposed for California under the HEROES Act passed by … Continue reading California’s Request For Federal Funds
California Isn’t Colorado
Recently California joined with Colorado in asking the federal government for more COVID-related financial support for states but the two states have very different needs for the money. California spends $120 per resident — nearly $5 billion per year — on insurance subsidies for retired state employees (known as “OPEB”) while Colorado spends only $5 per resident. Worse, … Continue reading California Isn’t Colorado
Legal and Moral Grounds For Pension And OPEB Changes In California
Some legislators inquired about the legal and moral grounds for making the changes to pension and OPEB obligations I set out here. Legal Grounds: OPEB: As the City of Glendale illustrates and the University of California reports, OPEB is frequently modifiable. This will generally be true in school districts, transit agencies, local governments and the state government. … Continue reading Legal and Moral Grounds For Pension And OPEB Changes In California
How The University of California Can Save $1 Billion
Last year the University of California spent $1.3 billion unnecessarily to subsidize health insurance for retired employees (dollars in millions): The subsidy redirects money from current UC services to retired UC employees who already have access to Medicare, Medicaid, the Affordable Care Act, a new state subsidy enacted into law last year, or employer insurance in the case of … Continue reading How The University of California Can Save $1 Billion
California School Finances
School budgets will be a big issue facing legislators upon their return to Sacramento. In 2012, voters passed a ballot measure entitled “Temporary Taxes to Fund Education” that, when combined with a rising stock market, sharply boosted school funding (“Proposition 98 Funding”): But even that sharp increase in revenue could not keep pace with the … Continue reading California School Finances
No Furloughs Before Reforms
Yesterday, Los Angeles Mayor Eric Garcetti warned of employee furloughs to help meet an anticipated $600 million revenue shortfall. Before LA furloughs workers providing important services, the city should save up to $300 million per year by emulating the City of Glendale in reforming and means-testing a subsidy currently provided to retired employees. LA provides … Continue reading No Furloughs Before Reforms
SFUSD’s Self-Inflicted Wound
San Francisco Unified School District’s revenues are 40 percent higher than five years ago yet the district just announced a $32 million deficit. That’s because spending on retirement costs went up more than 100 percent. $31 million of those retirement costs are unnecessary. That’s the amount being spent on insurance subsidies for retired employees already covered by or eligible … Continue reading SFUSD’s Self-Inflicted Wound
The Budget Is The Thing
Further to our recent opinion piece about state and local government accounting, a reader asked for an illustration of a state budget ignoring costs. California’s treatment of insurance subsidies provided to retired state employees (known as “Other Post-Employment Benefits,” or “OPEB”) provides one such illustration. In an obscure report required by the Governmental Accounting Standards Board (GASB) and read … Continue reading The Budget Is The Thing