On April 30, the court chose not to hear an appeal of an appellate court ruling upholding the city of San Diego’s 2011 deal rolling back retirement health benefits for city workers. San Diego City Attorney Jan Goldsmith had argued that while pension benefits for public employees are constitutionally protected, retirement health benefits could be reduced or rescinded because they amounted to a bequest from an employer to an employee.

As Goldsmith noted, the state Supreme Court’s action locks in the appellate court’s decision as a precedent for California. The decision found that retirement health care amounted to “additional benefits that are provided at the option of the City.” It held that existing law “does not mandate that these benefits be included in the City’s retirement system.”

Retirement health care benefits can be provided to workers using language that makes them a vested (guaranteed) right. Last September, a Los Angeles Superior Court judge rejected a freeze on retirement health benefits for Los Angeles city attorneys. Doug Rose, president of the California State Association of County Retirement Systems, told Governing.com that the benefit was found to be vested “because of the way it was written. It stated the premium subsidy [OPEB benefit] ‘will’ be provided. So it was unequivocal.”

Most retiree health benefits can be reduced or rescinded

But in general, the retiree health benefits provided by local governments are of the sort adopted by San Diego, provided by the employer after collective bargaining without any explicit or implied promise of permanence.

San Diego’s 2011 deal is forecast to save the city $714 million over 25 years; it reduces but doesn’t end health care benefits for current city employees when they retire. Since virtually every local government doesn’t prefund retiree health benefits, all that have the typical contracts with their unions could reduce their unfunded liabilities with a San Diego-type deal or by dropping health care as a retirement benefit entirely.

Gov. Jerry Brown’s 2011 statement of his goals for what would become his 2012 pension reform legislation included a provision on retiree health benefits that appears to encourage the more drastic approach — including for the state government.

“Contrary to current practice, rules requiring all [state] retirees to look to Medicare to the fullest extent possible when they become eligible will be fully enforced,” Brown wrote. “Local governments should make similar changes.”

It’s unclear if the rules for state retirees are enforced more now than in 2011. The website for the California State Retirees organization gives no indication of significant change.

Still, it’s noteworthy that the Democratic governor doesn’t give any credence to the argument from public employee unions that ending or reducing their retiree health benefits is part of a greater scheme to harm government employees.

“SACRAMENTO — While lawmakers begin discussing ways to fix California’s cash-strapped teacher pension system, another long-term financial problem continues to fester.

“The cost of providing healthcare to retired state workers is $64.6 billion more than state leaders have set aside to pay, an increase of $730 million from the previous year.

“The new numbers, calculated as of last June, were released by state Controller John Chiang on Thursday. …

“State workers become eligible, after 10 years on the job, to receive taxpayer-funded healthcare for life. The state picks up an even bigger share of the cost after 20 years of employment. 

“California pays the cost of retiree healthcare directly out of the annual budget. That’s much different from how it handles state pensions, which are largely funded by investment returns on gigantic pension funds.”

New role for ‘watchdog’: civic arsonist

Now let’s revisit what Mac Taylor said last November: At a legislative hearing, he opened his analysis of the state’s fiscal picture by declaring there was a“strong possibility of multibillion-dollar operating surpluses within a few years.”

Yeah, if you ignore CalSTRS’ gigantic and growing shortfall, and unfunded retiree health care, than the state is doing just fine.

And if you leave out what happened that one summer in Hiroshima and Nagasaki, Japan didn’t suffer too much in World War II.

Incredible. How does Mac Taylor sleep at night? He’s a civic arsonist.

Today's San Francisco Chronicle offers a story that's a classic example of not just journalistic innumeracy but avoidance.

“San Francisco voters will be asked next month to approve a measure that seeks to eliminate a projected $4.4 billion shortfall in the city's retiree health care fund over the coming decades, all without increasing employee or taxpayer contributions.

“That lack of cost has resulted in widespread support from both labor and business groups for Proposition A, which was authored by Supervisor Mark Farrell, was placed on the ballot by the entire Board of Supervisors and is supported by Mayor Ed Lee.”

So what is this miracle solution that makes a $4.4 billion headache disappear “without increasing employee or taxpayer contributions”?

Reporter Marisa Lagos never explains beyond this:

“Just one city union opposes the measure, which would tackle the deficit by prohibiting the city from raiding a health care fund established in 2011. Prop. A effectively changes retiree health care from a pay-as-you-go model to a fully funded account by 2045.”

What San Francisco's elected leaders have come up with may in fact be a good long-term solution to a big problem. But who knows what the solution is? One can't tell from the Chronicle's account.