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Let It Bleed 

The city is awash in red ink, thanks to billion-dollar benefit giveaways and our politicians' lack of will.

Wednesday, Oct 20 2010

Page 4 of 5

It's astounding — but it shouldn't be. In San Francisco, when labor asks to change a twenty, it always gets back three fives and a ten. 

A funny thing happens when you confront San Francisco officials with these budget-destroying numbers and history of abuse. They don't offer a solution: Instead they point out, uniformly, that our system is presently doing better than a lot of systems in California.

They're right. San Francisco's retirement system is almost certainly the best in California. We can keep telling ourselves this, even after they come to repossess the doorknobs.

The problem isn't how bad things are now, though they're lousy. The problem is how bad things will be in just a few years. The universal excuse that we're better off than Detroit is not a solution — it's like the captain of the Titanic pointing out that the Lusitania sank faster.

But this assumes that elected officials want a solution. No evidence suggests they do. Vanquishing Prop. B, Adachi's benefits reform measure, is the rare cause that has united Mayor Newsom and Supervisor Chris Daly, along with every other elected official, and platoons of campaign staff paid with union money — and none of them has presented an alternative for even beginning to address the city's problems. Instead, they have a message: Won't somebody think of the children?

At a recent No on B rally, organizers said Adachi's real goal was to harm city employees' kids, and that he'd cleverly disguised a measure to do so as "pension reform." It's true that Prop. B will increase health care costs, especially for city employees with dependents. The measure's critics repeatedly cite that a single mom would be forced to bleed an extra $5,600 yearly, should Prop. B pass. That's accurate — but it applies to less than 1 percent of the city's workforce, who are on the costliest plan the city offers, and likely have the option of switching to less expensive plans. Even with new costs demanded by Prop. B, a city worker could insure herself plus a dependent for $249 a month through Kaiser, or $473 with Blue Cross. That's not astoundingly cheap, but it's significantly better than most plans in the private sector.

And isn't that the way it's supposed to be? Prop. B opponents are quick to point out that a strong benefits package is what attracts people to civil service in the first place. Government work can't compete with private sector on salary.

That was true when everyone liked Ike. But today's city employees significantly outearn most of San Francisco's private sector workers. According to the Bureau of Labor Statistics, the average private sector employee working in San Francisco earns $73,133. The average city employee now draws $91,500 — with fringe benefits valued at $38,000.

Okay, but that giant public sector salary comes by averaging Gavin Newsom ($247,825) with Larry the airport janitor ($56,454), right? Yes, but it's still representative. According to the fiscal 2009-10 payroll, 62 percent of San Francisco employees took home more than $75,000.

Their pensions can be even better. According to Civil Grand Jury analyses, 55 percent of firefighters and 60 percent of cops who retired between 1998 and 2008 now earn pensions higher than their final salaries. Thanks to Cost-of-Living Adjustments and other postretirement sweeteners, some retirees have been bumped into a higher tax bracket than when they were working.

In total, some 900 retirees earn yearly pensions of $100,000 or more, and nearly 2,400 receive $75,000. Payouts for these top earners exceeded $234 million last year (all told, 22,200 retirees cashed $744 million). Former Police Chief Heather Fong is the city's No. 1 pensioner at $265,558 a year — and she's only 54. So most public sector employees are doing pretty well for themselves, and some are doing spectacularly well — and on average, they're all doing significantly better than private sector workers.

Prop. B won't change that. It also won't solve the problem of pension-spiking. Prop. B won't solve the benefits-driven budget crisis, either. What it will do is shift 14 percent of the forthcoming massive benefits burden to workers, leaving the city with 86 percent of the anticipated load, starting in fiscal year 2013. That's $744 million still on the city's tab, per the Controller's office.

"It's not that city workers shouldn't have health care; of course they should have health care," Adachi says. "But, for God's sake, it's not something that shouldn't be subject to the realities of the economic recession we're facing."

That's still too much for the powers that be to countenance — and, even if approved, Prop. B faces an uphill battle to be implemented. Unions have promised to take it to court, and even if their lawsuit fails, it's all but certain to keep the city from putting the measure into effect for years to come — by which time San Francisco's benefit costs will require city actuaries to buy calculators with more digits on them.

Supervisors could always put another measure on the ballot to undermine Prop. B — and keep doing that every year until the voters roll over.

But perhaps the most insidious example of how the city is willing to sabotage pension reform is revealed by commentary from Newsom. Should voters approve Prop. B, the mayor told the editorial board of The Bay Citizen, the city would be forced to offer raises to its employees to make up for their increased benefits costs, deepening the city's pension chasm. Of course, his ploy would be a direct violation of the stated will of the people. To protect city workers from having to pay for retirement costs, whether you like it or not, is a statement of priorities. For city government, it seems, democracy is less important than preserving payouts.

When it comes to addressing the city's runaway benefits costs, elected officials are of two minds. Some don't know, and others go out of their way not to know.

About The Authors

Joe Eskenazi

Joe Eskenazi

Joe Eskenazi was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left. "Your humble narrator" was a staff writer and columnist for SF Weekly from 2007 to 2015. He resides in the Excelsior with his wife, 4.3 miles from his birthplace and 5,474 from hers.


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