Dave Low is the chairman of Californians for Retirement Security, a coalition of public employee unions that was founded about 15 years ago to defend workers against calls for pension cuts. Today, with retirement costs ballooning, the pressure is sure to rise.

While the California Legislature and leading candidates for governor have carefully avoided any substantive discussion on pensions, cities are struggling. Rising retiree costs have forced many cities and school districts to divert more of today’s budgets to cover the gap: In Los Angeles, retirement costs swallow about 20 percent of the city’s general fund budget, up from 5 percent in 2002.

We talked with Mr. Low about pensions and city workers, many of whom collect just a few thousand dollars a month in benefits and can’t collect Social Security.

Many cities and school districts say retirement benefits are swallowing more of today’s budget. Is this accurate?

I will concede the fact that pension costs are going up and have gone up. But, if you look at total compensation, including pension costs, in most school districts that has gone down. 

Doesn’t that mean, in effect, that today’s teachers are being paid less?

The reality is that pension funds are not busting most budgets and employees are going to the bargaining table to help employers ensure pensions are funded and stable and there for them when they retire. And if that means negotiating their salaries down, that’s a choice employees make. I don’t see these employees getting any credit for going to the table and eating those costs.

Do you think cities and states will eventually need to raise taxes to cover rising retirement costs?


Some cities, such as Palo Alto, have talked about opening up their labor negotiations so citizens have a better idea of what kinds of services they are paying for and how the costs break down. Thoughts?

I’m generally for transparency, but you have to be very careful because at some point if you bring the public in it changes the dynamic. And why just collective bargaining? In Orange County when they proposed this the union said, “O.K. if you want to make it public, let’s pass a law that says let’s make everything (including negotiations with city contractors) public.” And then all of a sudden the management said, “We no longer want it anymore.”

Source: The New York Times