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.

Budgeting, at least at the local and state level, where spending plans have to be balanced, is literally a zero-sum game. Yet it is inexplicably rare for a California journalist to note that political influence is driving compensation and regulatory decisions and to then link these decisions to this result: that there is less money available for the broader good or for the needy.

In Saturday’s Los Angeles Times, liberal pundit Steve Lopez offered strong proof that he had been mugged by reality and had figured out this dynamic. The topic: the city’s Department of Water and Power, which is every bit as out of control as the Metropolitan Water District of Southern California with its employee-first priorities.

Lopez notes that Angelenos’ water and power …

“… rates wouldn’t be going up as much if DWP employees joined the rest of the world and contributed, out of pocket, toward their healthcare premiums. The new deal does not require that for current or future employees. They’ll pay more toward their retiree healthcare costs, and 2% of the savings generated from a delay in pay hikes will go toward healthcare.

“But there will be no reduction in an employee’s paycheck.

“With healthcare costs rising, he said, and private sector employees bearing more of the burden, it was all the more reason to bring public employees on board. And what better time to extract such a concession than the year in which IBEW spent a fortune backing Wendy Greuel for mayor, only to see her crushed by Eric Garcetti.

“With other city employees set to negotiate new contracts soon, what incentive is there for them to pay for healthcare now that DWP employees have been spared? None.”

Now, after that display of common sense, Lopez has what amounts to an epiphany: linking compensation decisions driven by political clout to headaches for the general public caused by inadequate government funding.

” … you can look for the mayor and council members to go hat in hand to the public next November with a bond measure to pay for street repairs, if not sidewalk repairs. This despite Garcetti saying during his campaign that he didn’t think we needed a sales tax increase.

“But we need a $3 billion bond, or bigger?   

“The ‘back to basics’ mayor, as Garcetti calls himself, apparently has no other way to pay for streets and sidewalks without that bond measure.

“Will you be inclined to vote yes while your water and power rates are going up in a city that doesn’t require DWP employees to contribute to healthcare premiums? A city in  which 70% of all employees pay nothing for healthcare premiums?”

For good measure, Lopez also refers to another stress factor on DWP rate payers: the city’s “increasingly expensive mandate on securing renewable energy,” environmental trendiness that may thrill Westside enviros but that does nothing for most L.A. residents but reduce the money they have to spend on their families.

The travails of San Jose, Stockton and other troubled cities in California have kept the spotlight off Los Angeles. But it is headed into decades of budget pain because of its generosity to unions. As I noted in a post earlier this year, more than one-third of the city’s budget goes to pay for retirees’ pension and health care — and that percentage is going up, not down.

At least with the election of Garcetti as mayor, L.A. voters have chosen someone who grasps this is a problem. Greuel, the loon Garcetti defeated, wanted to add 2,000 police and 800 firefighters to the payroll — a 20 percent increase even though L.A.s crime and fire problems are near historic lows. Why? To win the support of the police and fire unions.

But Greuel’s defeat will only buy L.A. a little extra time in staving off its decline. It’s not just the city’s permanent budget nightmare. L.A.’s private-sector economy is also in the middle of a broad, long-term decline that only occasionally gets the attention of its large daily newspaper.

But when it comes to public employee benefits and the damage they wreak on local governments, scoundrels have another refuge: blaming racism for concerns about lavish, unaffordable benefits and broken governments.

We are seeing one version of this in some pontificating about Detroit’s bankruptcy. Now it could be coming to Sacramento, courtesy of Democratic consigliere Steve Maviglio.

Government workers ‘disproportionately black’

Tuesday on Twitter, Steve linked to a Bloomberg column that tried as hard as it could to reframe the pension debate in racial terms.

 “Public-sector workers are disproportionately black. In 2011, about 19 percent of black workers were employed by the government, compared with 14 percent of whites and 10 percent of Hispanics.  …

“The share of blacks in the public sector coincides with worrisome economic figures for blacks overall. Just 52 percent of blacks 16 or older were employed in 2011, compared with 59 percent for whites and Hispanics. Median net wealth for black households was $4,900 in 2010 — about 5 percent that of white households. …

“The upshot is pretty clear: Reducing the value of public pensions and other benefits wouldn’t just hurt blacks disproportionately; it would do so at a time when other economic trends have already hurt them more than most. So the question isn’t whether race is part of the debate over public pensions, but how to address it.”

Groan. The racial makeup of the public sector work force should not be a factor in deciding whether public employees’ retirement benefits are unaffordable and must be scaled back. Math and public policy priorities should be what drives the debate.

But in Sacramento, which didn’t even blink in 2009 when an Assembly speaker likened opponents of tax hikes to terrorists in an interview with the state’s largest newspaper, we can expect cries of racism to be a new blunt-force tool of Maviglio and Maviglian lovers of the pension status quo.

Great. Just great.

By Chris Reed

In the sci-fi satire “Robocop,” we were treated to a glimpse of a future Detroit in which mechanized police ran amok. As my colleague John Seiler noted the other day, in modern-day Detroit, we’re being treated to a glimpse of a future California in which promised-but-unaffordable retirement benefits for public employees aren’t paid. They’re scaled back in bankruptcy court or by “czars” named to oversee the restructuring of the finances of insolvent cities.

This is from a Bloomberg News story outlining Emergency Manager Kevyn Orr’s 128-page plan to deal with the city’s default on its debt:

“Active and retired workers would see their pensions reduced under the plan, and the city wants to replace its retiree health-care plan with one relying on federal insurance exchanges under Obama’s Patient Protection and Affordable Care Act or Medicare with city supplements, according to the report.”

Post-retirement benefits to consume 65% of budget without changes

Here’s more from Bloomberg about why these benefits have to be Orr’s focus — because they’re about half Detroit’s unsecured debt, and even more than that if you count pension obligation bonds:

“According to Orr’s proposal, the $11.5 billion in unsecured claims include $5.7 billion in post-retirement benefits, $1.43 billion in pension-obligation certificates and $530 million in general-obligation bonds.”

The Detroit Free Press explains what that translates into:

“The emergency management team said legacy retirement costs are cutting deeply into city services.

“The report to creditors noted that total legacy expenditures are nearly 43% of total revenues in 2013, according to the preliminary forecast. That would grow to nearly 65% by 2017 without any action.”

A state law that California sure could use

As has much of the coverage of insolvent governments, the Bloomberg story notes the claim of public employee unions that pensions are inviolate contracts — although federal bankruptcy courts, thankfully, don’t always agree. But Orr has a tool in his work kit that makes him particularly cocky — one that is badly needed in California. The Free Press says a 2012 state law gives him authority to unilaterally reduce spending and services, and to impose new terms for employee contracts, both wages and benefits.

Why am I confident that Detroit-style radical cuts in benefits are coming to California?

Because, to paraphrase Instapundit, what can’t continue indefinitely doesn’t. There is no way that voters and thus politicians will tolerate a local government status quo in which more than one-third of the budget goes to pay for the benefits of retired employees.

Lots of cities are on track for just such spending in coming years, and the backlash will be huge. All the Maviglian whining and spin about evil hedge funds, the Koch brothers and pension envy can’t make this coming revolt go away.