San Rafael city officials aren’t happy that they were listed atop a state report on municipalities’ pension problems.
State Auditor Elaine Howell recently released a statewide tally comparing how much cities and towns are paying annually for their workers’ and retirees’ pensions and how much they owe.
San Rafael’s honchos are upset that their city wound up at the top of the list of cities’ long-term pension debt.
City officials are crying foul because they say the figures don’t tell the true story; that San Rafael and other members of the Marin Employees Retirement Association pension system, are paying more now in order to meet their long-term debt.
In addition, the city has worked to increase its payments about their minimum contribution to shorten the time and, in the future, reduce the cost of its obligation.
So, according to City Hall, they are listed atop of an ignominious ranking, because they are spending more to slow down and more quickly catch up with their rising pension debt.
They are not — and this is important — near the top of the report’s rankings of California’s 470 cities in terms of being fiscally at-risk. San Rafael placed No. 36, which is still high enough to raise concern.
According to City Hall, as of June 30, San Rafael’s net pension liability was $110.5 million. That it has the fiscal wherewithal to be more aggressive in paying down that long-term debt is a sign of good and strong budget management, which taxpayers deserve and should expect.
Still, Howell’s report serves an important public function, alerting residents in localities around the state and their own officials that pension obligations, most made at times when a steady stream of double-digit investment returns being raked in by pension funds covered much of the cost, have become a large and growing slice of cities’ budgets.
In addition, San Rafael and many municipalities, have more retirees on their pension books than current, paying workers.
All too often, they aren’t talking about details in a crystal-clear public dialogue, but their impact is clear. They are promises made that municipalities are contractually bound to keep. They are promises made that many municipalities can’t afford. They are promises that probably wouldn’t be made today. They are promises that have forced cities to get voters to approve special taxes or seeing services they rely on reduced or cost more.
San Rafael would rather have the focus on its long-term strategies to rein in that cost. Mayor Gary Phillips says the city has made progress toward that goal.
It needed to. Without local and state reforms to bring future pension promises into more fiscally reasonable levels, San Rafael and other municipalities are going to continue to struggle.
Despite Howell’s report, however, pension reform remains a nonstarter in Sacramento. Gov. Gavin Newsom has hardly mentioned it as he listed challenges facing the state.
He and other lawmakers know that to do so enrages public employee unions that have become powerful political forces across California.
That doesn’t mean Howell should shield the public from important fiscal details.
Maybe San Rafael deserves an asterisk or footnote on its listing, but the numbers still reflect an important issue that the taxpaying public and current and future pensioners should be aware of.
Those numbers come with a cost. While important to the recruitment and retention of talented workers; they also add up to higher local taxes, layoffs and more work for employees who don’t lose their jobs and often, reductions in services and increases in the costs municipalities offer their residents and businesses.
