Time to stop scapegoating retirees

In the May 21 edition of this paper, in this space, a guest commentary from Sonoma County Taxpayers Association executive director Dan Drummond, appeared under the heading, “Problems with Measure A.” The article took particular, and we feel excessive, aim at county retirees by stating, “Unchecked pensions remain the greatest concern,” basically blaming county obligations to retirees for the condition of the roads, specifically asking, “Is there really any doubt why funding for roads, parks and other services has not kept up with our needs?”
Well, yes Mr. Drummond, there is not only doubt but also facts to support an opposing view. First of all, the article claims that the county struggles under the weight of a “$900 million unfunded pension liability.” Per information from SCERA (Sonoma County Employee Retirement Association), which administers the retirement fund and issues retiree pension checks, the Unfunded Actuarial Accrued Liability as of 12/31/14 was $343 million; down from $449 million as of 12/31/13. Admittedly that is still a big number, but using inaccurate and inflated numbers to make your argument is a blatant attempt to fan the flames.
One explanation is that the author may have been including Pension Obligation Bonds (P.O.B.s) in his calculation. Even if this were true, the figure would be in the area of $800 million, not $900 million. However, from an accounting and government finance position, it is absurd to include bonded debt as unfunded liability. Once the bonds are sold it is a general obligation of the county and the bondholders can only look to the general fund for payment. This is a business choice. To put it in perspective, add up all the bonds for a given purpose, like sewer and water bonds, and the “balance” will make pensions look like a bargain. Those bonds are in the billions, so does that mean we stop spending money on roads because the roads “owe” unfunded liabilities? Same thing for fire protection, flood control, utilities, the water agency, you name it. So in our view adding them together is a red herring and makes no sense.
What is rarely mentioned is that county employees also pay into the pension fund, not just taxpayers. The majority of the money paid out in pensions comes from earnings on the fund, not taxpayers.
Blaming county retirees for the condition of the roads is ludicrous. Historically, the imposition of Proposition 13 severely limited county income. Even the Taxpayer Association now recommends ending Prop. 13 exemptions for large commercial properties. The stock market downturn of 2008 was a major factor in the decrease of actuarial assets available to pay pensions.
Meanwhile, county retirees have already been severely impacted by cuts in benefits, especially in the area of health care. It should be pointed out that during labor negotiation, compromise is often reached by deferring costs to the county, whereby workers forgo raises in favor of deferred benefits such as retirement health care. But Sonoma County, despite promising to cover most of the cost of retiree health insurance, has over the last several years cut its contribution for retiree health care to $500 regardless of family size. This has forced many retirees to change health plans or drop dependents from coverage in order to make ends meet. Even the Taxpayer Association website states that, “It’s not appropriate to reduce benefits promised to present retirees or to reduce earned benefits for prior service by current employees.” Yet that is exactly what county retirees have faced, in the substantially increased cost of their health insurance.
There seems to be the impression that county retirees pensions are excessive. In fact, 20 percent of retirees make less than $1,000/month, 46 percent make less than $2,000, and 67 percent make less than $3,000. Only 3.5% of retirees earn in excess of $100,000, yet those are the ones that are always highlighted in exposés of pension excesses. County retirees have not had a cost of living increase since 2008, and we are told it is unlikely there will be increases in the future.
Clearly, dedicated county public servants, and that is how we would describe those who serve the public in law enforcement, education, public works, social services and government administration, should be entitled to the benefits promised to them upon retirement. Furthermore, they should not be blamed for financial problems they did not create nor be made the scapegoats of a political campaign related to road repair and a decaying infrastructure.
Robert Bulwa is a retired Sonoma County Probation Officer, and a member of the Sonoma County Association of Retired Employees (S.C.A.R.E.) board of directors.