Los Angeles Mayor Antonio Villaraigosa formally announces today that for the first time in the city a union of civilian city employees has agreed to share in the cost of their health care. He speaks at a press conference on Tuesday, Aug. 24, 2010.
Los Angeles Mayor Antonio Villaraigosa today unveiled a pension reform proposal that requires newly hired police officers and firefighters to work more years before they qualify for enhanced retirement benefits.
Under the plan, new police officers and firefighters could still retire after 20 years on the job. But they’d receive 40 percent of their salary instead of the 50 percent cops and firefighters get now.
The new hires also would have to work more years to receive the full 90 percent.
"This not only reduces the taxpayers’ obligation to fund the pension system, it also promotes a more stable and invested public safety force," Villaraigosa said.
He said his plan would save the city $173 million a year for every 1,000 new hires
Los Angeles faces its worst financial crisis in decades, in part cause by rising pensions costs.
Chief Administrative Officer Miguel Santana released a report that said L.A. has fallen into a $63-million deficit in the past three months. He also projects a more than $300 million deficit for the fiscal year that begin July 1 of next year.
“In order to be able to bring the city to financial sustainability, pension reform has to be part of that solution," Santana said.
Villaraigosa's plan, backed by City Controller Wendy Greuel, also for the first time would require public safety workers to pay part of their salaries into the retiree health care benefits plan.
“The era of free health care is over," Villaraigosa said.
The plan also seeks to reduce pension spiking. That's when a public employee uses overtime and other pay to boost his final year's salary — which is used to calculate pensions. This proposal would use an average of the final two years of employment.
The head of the firefighters’ union — aware of growing public anger over public employee pensions — signaled he’d support the plan.
The plan requires a change in the city charter, and the mayor hopes to place it on the March ballot.
City Council President Eric Garcetti also has proposed changing the retirement system for L.A.'s civilian workforce.
His plan would boost the retirement age from 55 to 60 and prohibit employees from double dipping by drawing a retirement pension from one city job while working another.
Garcetti's plan also calls for a study of whether employees should contribute 2 percent of their salaries into the retiree health care system.