Riordan drops L.A. pension reform
November 27, 2012
By John Seiler
It looks like only bankruptcy will bring pension reform to Los Angeles. Former Mayor Richard Riordan just dropped his efforts to put San Jose-San Diego-style pension reform before the city’s voters:
“The sudden retreat followed an attack by organized labor on a plan that Riordan said is vital to avoiding municipal bankruptcy. City leaders are coping with a financial crisis and will ask voters next spring for a sales tax increase to avert more cuts. Riordan argued that City Hall should reduce employee pension benefits instead.
“The failure of Riordan’s ballot drive could push the pension issue further into the background of the 2013 mayoral race. Three City Hall insiders in the contest have criticized the plan, while a Republican outsider has embraced it.”
The sales tax likely will pass. Combined with increases in federal and state taxes, the higher city taxes will kill businesses and jobs, in the end reducing revenue. The lower revenue will make it harder to make current pension payments. Then the city will follow Vallejo, San Bernardino, Stockton and Mammoth Lakes in declaring bankruptcy.
By then, Mayor Antonio Villaraigosa will have a cabinet job in the next Obama administration, and his successor will get the blame for the debacle.
Just this month, my colleague Brian Calle wrote on our Web site an article, “Los Angeles teetering on the brink of bankruptcy.” He interviewed Riordan.
The teetering now is even closer to the brink.