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S.D. County Cuts Retiree Health Benefits

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Aired 4/19/09

San Diego County Supervisors set a painful precedent yesterday. They voted to eliminate health care benefits for their future retirees. Local governments nationwide face similar difficult decisions as new federal laws go into effect next year. KPBS reporter Alison St John has more.

New federal accounting laws say governments have to include their future retiree medical costs in their budgets. In San Diego County that’s over $60 million a year.

Lani Lutar : That’s simply unsustainable, this will also affect your bond ratings.

Lani Lutar of the San Diego Taxpayers’ Association told supervisors at a packed board meeting yesterday that they’re doing the right thing.  Lutar knows the supervisors don’t want to end up like the city of San Diego, which has had its bond rating suspended.

However, County retirees like Pat Stalnaker feel betrayed.

Pat Stalnaker : Please don’t drop us on our head out of the blue like this. This is sort of like balancing the budget on the backs of your retirees. 

But supervisors pointed out retiree medical was never part of written labor agreements. Diane Jacob says this is the only way to keep the County’s vested pensions secure, and avoid drastic cuts in public services.

Diane Jacob: And we cannot plunge our government into debt by continuing to pay a benefit that we are under no obligation to fund.

Jacob says the supervisors will have their retiree health benefits eliminated like everyone else.  

As other local governments around the country come to the same conclusion, thousands of public employees who retire before 65 – and thought they’d be covered in the gap before Medicare kicks in – now won't be. Alison St John, KPBS News.

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