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Pension Costs Decreasing For Some Cities In San Diego County

Lani Lutar, president of the San Diego County Taxpayer Association, spoke with Joanne Faryon about a new study on cities' pension costs.

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Lani Lutar, President and CEO, San Diego Taxpayers Association

Alison St John, KPBS Senior Metro Reporter

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2012 Regional Pension Comparison

2012 Regional Pension Comparison

San Diego County Taxpayers Association's study on pension costs across the county.

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The taxpayer watchdog group San Diego County Taxpayers Association released a new study Tuesday comparing the pension costs in 17 cities in San Diego County.

It found 10 of those cities will see a reduction in pension costs in the upcoming fiscal year. Among the cities with the largest declines are Solana Beach (12 percent decline), Imperial Beach (11 percent decline) and Lemon Grove (7 percent decline).

Lani Lutar, SDCTA’s president and CEO, talked to KPBS about the study’s findings.

“What this means is that cities are going to have a little more money to spend for other things rather than just pension costs,” she said.

Lutar also said some cities will see increases in pension costs, including Del Mar (15 percent increase), San Marcos (5 percent increase), Encinitas (3 percent increase) and Carlsbad (3 percent increase).

Those cities that brought their pension costs down did it by asking city employees to contribute toward their own pensions and moving new employees to lower-cost pension plans, Lutar said.

“They asked employees to finally start paying a little toward their pension costs,” she said. “This is astonishing to many people in the private sector to learn that in these cities, their employees contribute nothing to their pension costs. That’s finally changing.”

This change results in immediate impacts to city budgets, Lutar said, while moving new employees into lower-cost pension plans does not result in immediate budget impacts.

San Diego, which was not included in the SDCTA study, spends 20 to 25 percent of its general revenue fund on its pension plan, according to UC San Diego Ph.D. candidate Vlad Kogan.

Lorena Gonzalez, the Secretary-Treasurer and CEO for the San Diego and Imperial Counties Labor Council, AFL-CIO, responded to the study in a statement.

"There's no question that it's important to budget responsibly and restrain runaway costs," she said. "And, we applaud cities that have addressed the situation at the bargaining table, where these negotiations belong.

"But let's not forget that unfunded liabilities are the self-fulfilling prophesy for corporate interest groups--like this so-called 'Taxpayers Association'-- devoted to reducing and eliminating revenue options. Instead of veiled attempts at forcing struggling San Diegans to accept below bottom dollar for their work, maybe we should talk about how to finally give all San Diegans a chance to earn a decent living."

SDCTA also helped craft the Comprehensive Pension Reform initiative that will likely appear on the June ballot.

Lutar said the plan is “comprehensive” because it not only changes the pension system for new employees, moving them to 401(k)-style plans, but also caps current employees’ pensions according to their base pay.

“Evening Edition” host Joanne Faryon asked Lutar why not move the pension debate in the opposite direction, making private sector employees’ benefits more like those of public sector employees.

Lutar said traditionally, public employees’ base pay was significantly less than that in the private sector.

“But now we’ve observed a significant shift,” Lutar said. She said public sector employees now receive more in base pay, salary and benefits than private sector employees.

If that continues, Lutar said, “we have a situation in which it’s simply unsustainable,” and that will mean less money for providing basic city services or more taxes.

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