Time to fix employee benefits is now

A report by the City Controller’s office released this week details the skyrocketing costs associated with health and pension benefits paid to public employees and retired city workers.

It paints a grim picture of a ticking fiscal time bomb that threatens to devastate The City’s ability to fund needed services in coming years.

More than 28,000 public employees receive a generous benefits package that includes free health care along with pension benefits, with all retired employees and some dependents also receiving health care.

While city officials have known for years that the combination of a growing city workforce, rising health care costs and the increasing numbers of retired employees was an issue that would have to be dealt with sooner or later, the just-released controller’s study makes it clear that there is no more time to wait.

In the next fiscal year, The City will pay $771 million for public workers’ benefits — a 19 percent increase over the current year and a more than 100 percent increase from the 1999-2000 fiscal year.

The numbers are significant because the bulk of the money comes from The City’s operating budget, meaning public employees’ benefits compete for dollars with crucial public services including police, fire, health clinics, transportation, youth programs and more.

But with the rising costs for public employee benefits locked in by iron-clad union contracts, any budgetary shortfall is balanced by taking from public services.

The impact is already being felt — while a resurgent economy helped Mayor Gavin Newsom close a manageable $35 million budget deficit for next year, a $115 million deficit is projected for the 2007-08 fiscal year due to rising costs.

That number will only grow in the future, leading to the prospect of ugly budget battles in which city officials, having signed off on benefits packages in the past, will be forced to make cuts in other areas that will severely affect the quality of life for city residents.

Mayor Newsom recognizes the problem and intends to open talks with labor unions to renegotiate contracts. Any efforts by The City to scale back the current benefits of city workers, however, will present a challenge for the mayor, who will face well-organized, politically powerful unions that will likely be none too eager to take a step back from the generous benefits they have won for their unionized

employees.

But there seem to be no alternatives on the horizon. After years of ignoring the problem, employee benefits are the 800-pound gorilla in the room that City Hall must finally address.

Bay Area NewsLocal

Just Posted

San Francisco supervisors are considering plans to replace trash cans — a “Renaissance” garbage can is pictured on Market Street — with pricey, unnecessary upgrades. (Kevin N. Hume/The Examiner)
San Francisco must end ridiculous and expensive quest for ‘pretty’ trash cans

SF’s unique and pricey garbage bins a dream of disgraced former Public Works director

The Hotel Whitcomb on Market Street was one of many hotels that took in homeless people as part of The City’s shelter-in-place hotel program during the pandemic.<ins> (Kevin N. Hume/The Examiner)</ins>
Closing hotels could disconnect hundreds from critical health care services

‘That baseline of humanity and dignity goes a long way’

Pachama, a Bay Area startup, is using technology to study forests and harness the carbon-consuming power of trees. (Courtesy Agustina Perretta/Pachama)
Golden Gate Park visitors may take a survey about options regarding private car access on John F. Kennedy Drive, which has been the subject of controversy during the pandemic.<ins> (Kevin N. Hume/S.F. Examiner)</ins>
Your chance to weigh in: Should JFK remain closed to cars?

Host of mobility improvements for Golden Gate Park proposed

Dreamforce returned to San Francisco in person this week – but with a tiny sliver of past attendance. (Courtesy Salesforce)
Dreamforce returns with hundreds on hand, down from 170,000 in the past

High hopes for a larger Salesforce conference shriveled during the summer

Most Read