Taxpayers in San Mateo County owe the county’s civil grand jury a hearty thank-you for its latest report on the ever-increasing impact of public employee pensions on municipal budgets throughout the Peninsula.
According to the report issued last week, on average, nearly 14 percent of the general fund budgets of the county’s 20 cities goes toward financing pensions of current and retired workers. That represents about $1 of every $7 spent by those towns.
But it gets worse as we head into the future. The report notes that those pension responsibilities will double within seven years unless steps are taken to address this. In other words, $2 of every $7 spent will be allocated to pensions, crowding out spending on such basics as street repairs, parks, recreation programs, public safety, etc.
The grand jury’s analysis provides a detailed look at the budgets of several cities, including Redwood City, which is facing what has been termed an “unsustainable” fiscal future without fresh dollars or major program reductions (even in pension payouts) or a combination of the two to stabilize the situation.
This is occurring even as the community experiences a much-ballyhooed boom in economic (revenue-rich) development and recent healthy budget surpluses.
The report notes that, in the prior fiscal year, Redwood City spent 26 percent of its nonsafety employee payroll on pension costs. Without significant changes, that figure will rise to 42 percent within eight years, the document ominously predicts.
But that’s just for starters. The payroll share of public safety employee pension costs is expected to rise from 43 percent to 66 percent during that same period. Something has to give — and soon. No wonder there are worries aplenty in Redwood City.
Not surprisingly, Redwood City officials are looking to their taxpayers for relief.
In the past, the Grand Jury points out, cities have been less than up-front and clear about the lurking budgetary dangers of rising (and under-funded) pension requirements. And asking voters to approve a tax increase to bail out a pension funding problem is seen as a formula likely to induce failure at the ballot box.
Typically, the standard yes-vote line in such matters is to stress the need to preserve important city functions and services. The underlying issue of under-financed and mandated pensions is rarely, if ever, mentioned in any specific way and, if it is, it’s noted in passing.
Redwood City voters will be asked to boost their sales tax on the November ballot. Let’s see how straightforward the language on that ballot measure will be.
July 27, 2018
The Mercury News
By John Horgan
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