by Jeff Adachi
I had met with several members of the Civil Grand Jury who had authored a report entitled, “Pensions: Beyond Our Ability to Pay,” where they detailed how the City’s retiree pension liability had nearly tripled in the past five years. Even worse was the City’s growing health care liability, which had ballooned to $4 billion in unfunded health care costs for 26,000 City employees, 28,000 retirees and their 47,000 dependents. And these costs, according to the City Controller, would double in the next five years.
One year later, the pension and benefits tsunami continues to grow. We are spending nearly a billion dollars on pension and health care costs for our City’s employees. One out of every six dollars available to the City now goes solely to these costs. By this time next year, it will have grown another $50 million to $70 million.
The problem with pensions has grown so bad that the public employee union leaders opposing Prop B don’t even argue against the Prop B’s common-sense pension reforms. After all, an employee who pays 9-10 percent into their pension for a guaranteed lifetime pension upon retirement, which equals 75-90 percent of their last year’s income, is a deal that no one in the private sector would even dream of. In order to receive the pension that a public sector employee receives, private sector employees would have to save 65 percent of their paycheck.
Instead, opponents have focused on the health care component of Prop B, arguing that Prop B is “bad medicine” because it requires City employees to pay more for their health care.
But a close review of the facts shows that under Prop B, City employees will still receive health care premiums at rates unparalleled in the private sector.
Currently, most City employees do not contribute anything for their own healthcare. Taxpayers subsidize the entire cost: $2,890 to $5,560 per year for each employee.
Prop B would change this by requiring that an employee insured under the basic health plan pay just $96 a year ($8 a month) for their healthcare. Under Proposition B, City employees would still pay more than 22 times less than private sector employee, who, on average, pay $2,185 per year for their health insurance.
City employees with dependents currently pay $8 a month. Under Prop B, they would pay $2,988 per year. Private sector employees with dependents pay an average of $7,026 a year. And this does not include the 31 percent of San Franciscans who do not receive employer-paid health care and pay the entire cost themselves.
Opponents of Prop B claim that City workers cannot afford to pay the health benefits if Prop B passes. Their argument ignores the fact that the average San Francisco City employee earns $93,000 a year in salary alone, not including benefits, while the average private sector salary is $46,000.
They also argue that “a single mother will be forced to pay up to $5,600 per year for her child’s health care — in addition to the $8,154 she already pays.”
First, this is not true. A City employee with two dependents only pays a total of $448 a month for full health coverage. Only if the City employee chose the most expensive health plan, which costs $31,645, would the employee have to pay $19,561 a year under Prop B instead of the $16,922, which he or she now pays.
What the opponents conveniently fail to point out is that out of 26,000 City employees, there are only 91 employees who are enrolled in this “Rolls Royce” rate plan.
Even with contributions required by Prop B, City employees will receive a benefit package that is unparalleled in the private sector. More importantly, however, the City’s healthcare fund will be made more sustainable by ensuring that the funding for the City’s healthcare program doesn’t run dry when the City can no longer afford to pay these costs.
According to the Controller’s ballot statement, Proposition B would save the City $121 million annually. Some of these funds could be used to prevent the devastating cuts to the City’s mental health, substance abuse and other community health programs for poverty-stricken adults and children who do not have healthcare coverage. Next year’s deficit looks worse, and we won’t be able to count on federal stimulus funding to save us.
Voting Yes on Prop B is an antidote to continuing cuts to healthcare for the poorest San Franciscans.
Jeff Adachi is the proponent of Proposition B and the City’s Public Defender. He can be reached at (415) 553-9520 or mailtoLjeff.firstname.lastname@example.org.