As if the county needed more problems. The Harvey Rose audit and actuarial firm sent a disturbing report this month to county Supervisor Joe Simitian, who was interested in knowing how the unfunded liability to cover retiree health care benefits compared with his last tour of duty as a county supervisor, back in the late ’90s.
The bad news: it’s up from $69 million in 2000 to $1.68 billion as of last summer. http://sanjoseinside.com/images/uploads/harvey_rose_retiree_memo_1998.pdf”>View the 1998 Harvey Rose memo.
According to Rose’s audit, the county did not make the required contributions into its retiree health care fund in five of the last 11 years, and between 2001 and 2003, the unfunded liability figure ballooned from $105 million to $425 million. Making matters worse, the county stopped making the recommended contributions to its plan in the 2003-04 and 2004-05 fiscal years.
When the “great recession” hit in 2008-09, the county stopped making the required contributions altogether, dropping as low as 42 percent of what’s required in 2010-11, the audit notes. Contributions have increased since, but they’re still not enough to make a dent in the damage that’s already been done.
The audit provides the county with options to cover the unfunded liability, such as redirecting property tax revenues or dipping into the general fund. Of course, that probably won’t happen this year considering the county is trying to balance the budget in the face of a $90 million shortfall projected for 2013-14.
Read the Harvey Rose audit of Santa Clara County’s $1.68 billion unfunded liability.
Maybe we’ll vote for another sales tax increase.
The fact that the last one passed just illustrates how gullible the county’s voters are.
The City of San Jose did the same thing. It is called “pension holidays” , where the fund operators allow the cities/counties to forgo their contribution when the fund outperforms its projected gains. Instead of allowing that extra money to augment the investment and continue to gain or cover losses, they cities/counties take their payments and instead waste it on frivolous items of spending. While the county did it for only 5 years, SJ did it for much longer. Ironically just about the same amount of time that they cry the budget was in the red. (10 years. Sound familiar)
Cry all you want. You voted for them.
This under funding strategy used by the County is cookie cutter for government in the last decade- both for health care and pension funds. Following the example of big business throughout the 90’s and early 2000’s, it wasn’t unusual for car companies and airlines to purposely promise workers benefits and then intentionally default. Strategic bankruptcy was the solution for the 1% to make contracts null and void- basically screw the workers.
Chuck Reed is one of the first to incorporate this plan for government workers. He travels to preach the “pension reform” mantra across the Country in fact.
I would have hoped that government employee organizations wouldn’t fall into the same trap, but of course when offered good benefits in lieu of pay raises they took the bait. In hindsight, it was a ruse- just waiting for the economy to falter and pull the “shortfall” trigger.
In other words, the same county that’s opted to pay the health care tab for every foreigner willing to cross the border illegally—a sum certainly in the billions by now, has also opted to skip making payments on the tab for its own employees.
Let’s start the countdown to the “reform” campaign to lower the quality of employee insurance coverage while at the same time increasing employee contributions.
> In other words, the same county that’s opted to pay the health care tab for every foreigner willing to cross the border illegally—a sum certainly in the billions by now, has also opted to skip making payments on the tab for its own employees.
Allow me a moment of partisan schadenfreude.
I will bet that the overwhelming majority of county employees voted for the progressive populists in charge of the county government, undoubtedly because employees believed the progressives really loved them and would dish out more free goodies.
SUCKERS!!!