In what was billed as a major policy speech on pension reform Thursday, Los Angeles City Councilwoman and mayoral candidate Jan Perry said city workers must pay more into their pension and healthcare plans.
“This has to begin with an honest conversation with our city employees about our finances and the hard choices that we have to make to solve our budget crisis,” Perry said to supporters and journalists at the Japanese American National Museum in downtown L.A.
Los Angeles faces an estimated $1 billion dollar deficit over the next five years, she said. Employee wages and benefits comprise the biggest portion of the city budget.
Perry said city analysts project a $73 million increase in revenue next year. But employee costs will jump $208 million – mostly because of the rising costs of healthcare and pensions.
The councilwoman, who represents downtown and parts of South L.A., said all city workers should contribute 10% of their salaries for healthcare and 11% toward their pensions.
According to Perry, no city worker pays more than 5% for their healthcare right now, and only police officers and firefighters pay 11% toward their pensions.
By Perry’s own estimate, her ideas would raise about $44 million a year – far short of what’s needed to cover the deficit. She’d also like to privatize more city services, like the zoo and convention center. Perry said she’s looking for other money-saving ideas.
One idea comes from former Mayor Richard Riordan. He wants to place on the ballot a measure that would freeze retirement benefits for current city employees and place new hires into private 401 (k)-style plans. Riordan has said his plan would save hundreds of millions of dollars a year.
Whether or not Perry endorses Riordan’s plan, she’ll likely face opposition from city labor unions in her quest to succeed Mayor Antonio Villaraigosa. She is a regular critic of labor and her latest proposals won’t help what’s sometimes been a strained relationship.
In her speech, Perry touted agreements she helped negotiate that included union workers on downtown developments, like a proposed football stadium.
Two other mayoral candidates – City Controller Wendy Greuel and City Councilman Eric Garcetti – are assiduously courting unions. They and Perry are Democrats. Radio talk show host and attorney Kevin James is the only Republican in the race.
As she proposed deeper cuts to employee benefits, Perry said she opposed a proposal to raise the sales tax and documentary transfer tax on property sales. She called them temporary fixes. City budget officials have said the tax increases could raise more than $100 million a year. L.A.’s total budget is $7.2 billion.
Perry’s positions place her in line with business interests and conservatives in the Western San Fernando Valley who are highly likely to vote in a mayoral election.
She also took a shot at the Department of Water and Power and its powerful labor union, the International Brotherhood of Electrical Workers, Local 11.
“The most recent ratepayer advocate report reveals that DWP salaries are 26% higher than similar utility workers in Southern California,” Perry said. “The pay disparity, in my opinion, is just plain wrong.”
Garcetti and Greuel each have raised $2.8 million in the race for mayor. Perry has raised $1.2 million.
“I think my chances are very good,” she said. Citing an internal poll by her campaign, Perry, who is African-American, said her support goes beyond the black community.
“When it was explained that I was also Jewish, my numbers also went way up in the Jewish community,” she said.
The mayoral primary election is March 5th. If no candidate wins a majority of votes, the top two finishers will advance to a May 21st runoff.