Leaders failed to be good stewards
The grim word of the summer of 2009 is "unsustainable." As in, the pension benefits that Bakersfield and Kern County elected officials doled out to their public employees are "unsustainable."
What was viewed in economically booming years as a "good deal" has turned sour as the economy has tanked and returns on public pension investment funds have fallen short.
Let no one forget how Bakersfield, Kern County and countless other public agencies in California and other states got into this mess. Leaders failed to be good stewards of tax dollars.
Instead, in boom years, they traded public employees pay raises for enhanced retirement benefits. Public safety employees (law enforcement and fire) in some years received no or small pay raises. Instead, they were given the generous 3 percent at 50 retirement benefit. Blue collar, or miscellaneous public employees were asked to forgo big raises in exchange for the less lucrative 3 percent at 60.
In theory, taxpayers picked up the tab for these enhanced benefits. But in reality, no one paid. In those boom years, the city and county contributed nothing -- zip. The return on investments in the public pension funds was so great during these boom years that these returns covered the cost of the enhanced benefit.
So, think about it. With no pay raises to pay and with no retirement contributions to contribute, that left more for the politicians to spend on say, oh, aquatic centers, ice skating rinks and sports arenas.
And as a special treat, the politicians received support (spell that campaign contributions) from the public employee unions for doling out generous pension benefits.
Now, some of the very same politicians who signed off on these deals are professing ignorance. The truth is that the consequences of approving these plans were spelled out. They were warned that the city or county would have to contribute more to "sustain" the benefits in lean years.
But today is today. Worry about tomorrow when -- if you're lucky -- you will no longer be on the city council or board of supervisors.
Some cities -- regrettably few -- actually set aside money to smooth out the ups and downs of contributing to pension funds. But, of course, that would have left fewer tax dollars for our local politicians to play with.
But now what do we do? Clearly, the unions must be open to changing these plans for new hires. Courts already have ruled that existing or retired employees are entitled to the benefits that have been agreed upon.
Benefits must be revised to make them "sustainable" in boom and bust years. And elected officials must be good stewards. Contribute a consistent amount into employee retirement plans every year -- boom or bust -- to cover losses in bad years, like this one.
