Letter: Time to limit county payroll costs

EDITOR,
The current county budget negotiations offer an important opportunity for the county leaders to tackle the continuing deficit problem, which next fiscal year is estimated at $17 million. The proposed approach again is to extend furloughs for county staff and close county offices for more days. But, this will only save only about $1.1 million net, and the employee union wants the county to help pay for some of the additional health care costs.
It has been obvious for some time that the current method of hiring and paying employee wages and pensions is not sustainable. Now that employee contracts are up for renewal is the opportune time for some basic reforms in calculating pension benefits and delivering services.
The county already faces tens of millions in unfunded liabilities for pensions and even more for retiree health costs according to the most recent Comprehensive Annual Financial Report prepared by the county auditor-controller. Of course, this is not just a local problem but exists nationwide at the local and state government levels. Cities and counties all across California have similar problems, some even more severe than Santa Cruz County. A recent survey of 80 cities and counties in California by the Sacramento Bee found that one third had unfunded liabilities that equaled or exceeded their annual payroll.
Even San Francisco has recognized the problem. Voters recently approved a measure to increase employee contributions for both pension and health care and to base monthly retirement benefits on the last two years of service, instead of the last year, which is often inflated by adding in accumulated but unused vacation and sick leave. The measure passed with 78 percent. It will save the city hundreds of millions over the next 25 years. Currently, Santa Cruz pays the employees’ pension and health care benefits that can equal 40 percent of salary. Surely, Santa Cruz can do at least the same. But thus far, we have not heard of any such moves.
If the same marginal approach is taken, the long-term deficit will only continue to escalate. Time to stand up, folks!
Joseph D. Panaro, Santa Cruz