Day of reckoning

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREWhicker: John Jackson greets a Christmas that he wasn’t sure he’d see160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! For years, governments throughout California have lived in a blissful state of denial about the long-term costs of giving “free” health care for life to public employees. Politicians have happily agreed to lifelong health benefits at the bargaining table because it was an expense they wouldn’t have to pay today. But now our day of reckoning is close at hand. Over the course of the next year, new accounting rules will require governments to project their long-term health costs. Denial will no longer be an option, and an honest accounting of what’s been going on all these years is sure to shock us all. According to the California Legislative Analyst’s Office, between 35 percent and 45 percent of the state’s employees will retire in the next 10 years. When they do, their medical care will be all of our responsibility for decades to come. A California Healthcare Foundation study predicts that the obligation will cost state and local governments $31.5 billion per year by 2019 — up from $4.5 billion a year now. The future liability is estimated to be as high as $10 billion for the Los Angeles Unified School District and $9 billion for the Los Angeles County. So you would think these government organizations would be banking the funds now to meet these foreseeable future expenses, right? Wrong. Local and state officials have made little or no effort to save, assuming someone else would solve their problems for them. “This is such a large problem, and it’s not limited to the L.A. Unified School District,” says David Holmquist, the LAUSD’s director of risk management and insurance. “Universal health care or some assistance from the state or federal government is really the way to go.” That’s nice. Since it’s Christmastime, maybe we can wish for a pony, too. Universal health care may be a worthy long-term public policy, but local officials can’t assume it will magically appear and correct for their decades of fiscal irresponsibility. Realistically, there will be no easy way to cover the liability. Governments will need to meet the costs either by cutting services to the public, raising taxes or both. There’s little that can be done now to reduce the problem. Employees have been promised lifelong benefits, and there’s no way to legally or morally take them back. But government can keep the crisis from growing worse by requiring that future public-employee contracts include terms more like those found in the private sector. It’s time for the giveaways to end — and fiscal responsibility to start.last_img read more