Wednesday, June 14, 2006
Days go by and we hear nothing more about our city going bankrupt, and we begin to relax and trust that danger is past.
Instead, it's just that it's poison for politicians to talk about it. Perhaps no one wants to listen. But let's take just four minutes to update this sorry scene.
Each year from 1989 to 2003, with no fuss in the newspapers or other media, employee retirement benefits were increased for City of San Diego employees.
Those were the good old days when good old Judge Dick Murphy was taking care of things at City Hall and everyone, especially the good old Union Tribune appeared to just trust him to get it right.
We don't hear much from Judge Murphy any more.
But those were also the good old days when union labor was consolidating its strength at City Hall.
No one seemed to make much of those big retirement benefit increases. No one mentioned that they were completely unaffordable. No one except a very small band, led by Diann Shipione, a courageous investments counselor whose father drilled her in the importance of public service. Now, years later, The League of Women Voters has honored Ms. Shipione, along with the news Web site voiceofsandiego.org, as citizen whistle blowers.
But the latest view from Diann Shipione is that it's not over, not at all.
The city of San Diego is clearly insolvent, she says. Like someone who has written a bad check and just wants to forget it, we are trying to ignore the truth.
Ms. Shipione says the new city budget proposal won't do it. It is no comprehensive solution to the city's insolvency. There are no long-term financial projections that suggest the problem will be solved.
The desperate idea that the city might borrow money against the pay-offs of the tobacco industry is a joke, she says, like the idea of borrowing money from Indian tribes.
Even if city bonds are issued at seven percent, the so-called interest saved is only about $174,000 a year against an approximate $11 million annual loss for the next eighteen years.
Ms. Shipione says that as the city's credit rating agencies have already noted, Mayor Sanders' proposal has no substance.
But how about these attempts at high-wire borrowings and the secretly whispered plans by the city to sell public lands?
Even those cannot fix the pension problem. If a billion dollars were dumped into the retirement system, she says, the weight of ongoing pension obligations would still crush the city's day-to-day budget within a few years.
The only solution is one being faced privately, still, by government and industry across America: We have over-promised ourselves on pension benefits. Fixing them is going to be dreadfully unpolitical, but essential to our future.
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