At his latest state budget press conference, Gov. Jerry Brown made it clear there will be no state cavalry riding to the rescue of local governments battling the pension monsters local officials created. Therefore, taxpayers will have to be on guard against a potential avalanche of tax measures that could appear to deal with the problem.
“A lot of cities signed up for pensions they can’t afford,” Brown told reporters and said the state wasn’t in position to help. The League of Cities acknowledged the growing pension problem releasing a study in February that declared the pension situation “unsustainable.”
The study reported that an average of 11% of city budgets go to pension costs today headed to close to 16% by 2024. Add healthcare costs to the mix and cities are already well beyond those percentages. Los Angeles currently sees 20% of its General Fund set aside for retirement benefits. The city of Richmond is looking at 41% of its general fund dedicated for employee retirement costs by 2021.
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