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Last night, in his State of the City address, Mayor Bob Foster focused on what is now our city's greatest challenge: reforming public pension costs.
Mayor Foster said, "While we continue to manage our budgets well, we will have shortfalls for the foreseeable future. In my budget message this year I indicated that these deficits are being driven primarily by increased pension costs. The increases are a result of massive losses by the Public Employees Retirement system and the increased benefits given to employees in 2001."
Mayor Foster is right. Long Beach, like most California cities, negotiated pensions with city employees many years ago, believing our economy would continue growing and be able to support those pensions. Unfortunately, those decisions by former city councils, along with the losses of our California Public Employee Retirement system, have resulted in an unsustainable pension system.
Frankly, we are facing a pension crisis.
The City of Long Beach’s pension cost obligations are quickly climbing and within 30 years will grow to more than $1.5 billion, a number that we simply can't pay for. This challenge is complicated by the fact that our pension system, CALPERS, is run by the State of California, not locally. Therefore, changes to our pension system need to be addressed not only through collective bargaining with our employee unions, but also with the support of Sacramento lawmakers.
Governor Brown and the legislature need to address state-wide pension reform. However, we must also negotiate successfully with our local employee groups to reduce our pension costs. Moving forward, we will need work together as a team and agree that all sectors of our government must sacrifice some benefits in order to have a sustainable future for our city. I believe that our employee groups understand this.
I commend our Mayor for leading us on this difficult and complex challenge.
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