The city is chin-deep in California's trickle-down misery, and last week Richard Riordan, who was L.A. mayor from 1993 to 2001, coauthored with Alexander Rubalcava—an investment adviser—a Wall Street Journal column declaring the city's fiscal crisis "terminal." They say (Current mayor) Villaraigosa should "face the fact" that "between now and 2014 the city will likely declare bankruptcy." Villaraigosa says that will not happen. But look what has happened….
Riordan and Rubalcava say two numbers—8 percent and 5,000—define the city's crisis. L.A. has conveniently but unrealistically assumed 8 percent annual growth of the assets of the city's pension funds. The two main funds' actual growth over the last decade have been 3.5 percent and 2.8 percent. And Villaraigosa added 5,000 people to the city's payroll in his first term….
Riordan and Rubalcava suggest replacing defined-benefit pensions with 401(k) accounts for new public employees. But when another product of America's immigrant culture, Gov. Arnold Schwarzenegger, tried to do that, public employees' unions squashed the idea. Riordan and Rubalcava say the retirement age for public employees should be raised from 55 to 65, employees should pay more than the maximum of 9 percent of their salaries for pensions, and the city should end subsidies of up to $1,200 a month for health insurance for those who retire before becoming eligible for Medicare. But even his ideas for nibbling at the edges of the fiscal problem by privatizing the zoo, the convention center, and city parking lots are opposed by the unions….
A few years ago before Arnold went over the deep end he tries to rein in state spending and the unions spent millions in dues to defeat all four ballet measures. The union leadership will demand more and more until the second largest city in the county is in Chapter 11 Bankruptcy and then be the first to demand the scraps from the court.
No comments:
Post a Comment