CoCoTAX UPDATE
February 18, 2010: TEARS NOT RAIN
IT SEEMS LIKELY CONTRA COSTA COUNTY WILL BE TRADING SERVICES FOR PENSION PAYMENTS:
County Administrator David Twa recently made a special presentation (slide show
attached) to the Board of Supervisors in an untelevised, offsite meeting. I
attended along with at least 33 firefighters. The slides are well worth a quick
review but here is the gist:
· CCCounty is facing reduced revenue and increased costs. The assessed
value of property will continue downward. (Slide 5) Beacon Economics does not
predict a modest recovery until 2012/13.
· Pension costs will increase 45% by 2015/16. Here is the money quote:
“Absent new revenues or significant changes in pension benefits, we would
need to eliminate 25% of our employees.” (slide 17). To give you the magnitude
of the projected pension cost growth: Fiscal Year 2009/10 = $201,595,000. Fiscal
Year 2015/16 = $292,516,000. Supervisor Gioia has pointed out that CCC pays
75% of the pension cost of most regular employees.
· As for those 33-plus firefighters – they were interested in the
slide on page 48 showing Con Fire will be out of funds by the end of FY2010/11
unless action is taken.
· Once again the idea of a Utility Users tax was mentioned. Highly unlikely
in this environment.
There are solutions to be had including more efficient operations and the inevitable
personnel cost reductions. Twa mentioned consolidating the County’s 19
different payroll systems – an excellent idea that seems long past due.
The Board of Supervisors has already commissioned a study of the sustainability
of the Contra Costa Regional Medical Center and Clinics. That is an opportunity
for major cost savings.
HANK PLANTE OF CBS INTERVIEWED SUPERVISOR JOHN GIOIA AND KRIS HUNT ON THE STATE
OF CALIFORNIA’S $51.8 BILLION UNFUNDED RETIREE HEALTH LIABILITY: http://cbs5.com/video/?id=61837@kpix.dayport.com
Retiree health is the dirty little secret because there are no requirements
to fund the liability, just to report it. As a reminder, while Contra Costa
County has made improvements in their liability, the County still owes over
a billion.
THE PEW CENTER HAS JUST ISSUED A REPORT REVEALING THERE IS A $1 TRILLION GAP
AT THE END OF FISCAL YEAR 2008 BETWEEN WHAT THE STATES HAVE SET ASIDE FOR EMPLOYEE
RETIREMENT BENEFITS AND THE $3.35 TRILLION PROMISED: That means $1 trillion
that will not be spent on schools, roads, etc. See the study at http://www.pewcenteronthestates.org/report_detail.aspx?id=56695
IF YOU THINK THE PROBLEMS THROUGHOUT THE STATE ARE NOT CRITICAL - FROM THE WALL
STREET JOURNAL: "It now costs more to insure Californian municipal debt
against default than it does bonds issued by the government of Kazakhstan, the
central Asian country satirized in "Borat." That is neither a joke
nor hyperbole." Brett Arends WSJ.com
Compiled by Kris Hunt, Executive Director, Contra Costa Taxpayers Association
CONTRA COSTA TAXPAYERS ASSOCIATION
P.O. Box 27, Martinez, CA 94553 · 925-228-5610 · krishunt@cocotax.org
· www.cocotax.org