S.F. Mayor Unveils Plan To Curb City Costs for Pensions, Health Care
On Tuesday, San Francisco Mayor Ed Lee (D) released a proposal designed to reduce the city'sÂ health care and pension costs by as much as $1 billion over 10 years, the San Francisco Business Times reports.
Lee said his plan has support from at least six of the 11 members of the city's Board of Supervisors. The mayor's proposal is expected to go before voters on a November 2011 ballot (Young, San Francisco Business Times, 5/24).
According to data from the city controller's office, Lee's plan could reduce the city's pension costs by between $800 million and $1 billion over the next 10 years. During that time, the city is expected to be on the hook for about $7.6 billion in pension payments (Knight, San Francisco Chronicle, 5/25).
The mayor's plan aims to achieve the cost reductions by:
- Capping pension benefits;
- Prohibiting pension spiking;
- Raising retirement ages; and
- Requiring workers to contribute more to their pensions and health benefits (San Francisco Business Times, 5/24).
Lee's proposal would require current city employees to pay a quarter-percentage point of their salaries into a retiree health care trust fund, beginning in 2016. The employee contributions would increase to 1% by 2020, which could bring in about $30 million annually for the trust fund.
San Francisco currently faces about $4.36 billion in health care obligations for current employees and retirees (Knight, San Francisco Chronicle, 5/25).
According to a San Francisco Chronicle editorial, Lee's proposal "will not cure the city's daunting long-term obligations for pensions and retiree health care." However, the editorial states that if the plan receives support from the Board of Supervisors and voters, it would "represent a decent down payment against retirement benefits that have become a serious strain on the city's general fund" (San Francisco Chronicle, 5/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.