CHP's financial sacrifice a model for cash-strapped safety agencies
Unless we do something now, California will be heading for another economic firestorm. Tens of thousands of baby boomers will soon be retiring from the state workforce and California is obligated to pay for their continuing health care.
The state won't be able to afford this expense because the commitment was funded on a "pay as you go" basis and there won't be enough money in the pot. We should have been pre-funding our health care commitments by setting aside monies in investment funds the same way we pre-fund state pensions. Unfortunately, the will to address retirement health care funding hasn't been strong enough for the legislature to make the tough decisions.
We can't avoid this issue any longer. California already owes over $48 billion in unfunded retiree health benefits and the government keeps pushing this liability on to future taxpayers. The health care cost for retirees will increase to over $71 billion in the next 10 years! It's clear that kicking the can down the road will soon not be an option.
It is not too late to avoid the crash. I have introduced legislation that can serve as a model for the pre-funding of all of California's retiree health care costs. My bill, SB 519, is an agreement between the governor's administration and one of the state's many employee groups, the California Highway Patrol. It is currently on the governor's desk awaiting his signature.
There are two advantages to this agreement. It will set aside a portion of CHP employee wages to be placed in a special investment fund, ensuring there will be money to cover their own retirement health care costs. Moreover, it will eliminate one more drain on the state's General Fund, saving millions of dollars. Under this agreement, the CHP will accept a pay cut and give up raises over the next two years to establish the fund. I applaud the CHP for their foresight and courage in adopting this plan.
While our state has made a promise to its employees to help cover health care upon retirement, it also has an obligation to protect future taxpayers from overwhelming debt. Both these goals can be accomplished if, like the CHP, the remainder of the public employee unions makes the tough choices to provide for and ensure the delivery of those benefits. I encourage both the unions and the state to recognize the necessity and begin the process of negotiating the pre-funding of retirement health care. My bill, SB 519, proves that compromise and a solution is possible.
Yes, adopting such plans will not be easy in this time of financial hardship, especially when our public employees have already given up so much. However, the future security it will afford to our employees and the benefits to all in the way of billions of dollars in savings over the coming years are well worth the sacrifice that will be required. I encourage the governor to sign this bill into law.
State Sen. Roy Ashburn represents the 18th Senate District, which includes portions of Tulare, Kern, Inyo and San Bernardino counties.
