Santa Clarita: Ground Zero for Preserving Retiree Benefits

New government accounting rules are being widely misused to justify slashing retiree health care and even pensions

Santa Clarita is ground zero in the fight to preserve retiree benefits in the face of widespread overreaction to new government accounting rules.

Santa Clarita city employees, including street and parks maintenance workers, building inspectors and code enforcers, recently rejected management's "last, best and final" offer, because it included a two-tier benefit proposal that would drastically cut management's contribution to retiree health care for their future co-workers. Santa Clarita is about to annex Castaic, Stevenson's Ranch and other neighboring communities, which would add up to 200 new city employees and union members.

Since the workers rejected management's offer, managment approached the bargaining team and the two sides are back at the bargaining table for further talks.

Proposals like Santa Clarita's are more common as city and county management increasingly use confusion over the meaning of retirement health cost estimates, required by the Governmental Accounting Standards Board (GASB), as an excuse to slash retiree health benefits and even pensions. The GASB rules require public agencies to report future benefits as "unfunded liabilities," though retirement benefits are paid out over long periods of time.

"We as a union know that united we stand, divided we fall, and we want to protect the next generation of workers by preserving their benefits now. There is no emergency in retirement," said Paul Jones, a Building Inspector and Santa Clarita Chapter President.

Throughout the state SEIU is working to push retirement solutions like that used by the City of Los Angeles, which established a trust fund that has allowed them to adequately fund retiree health care largely from investment returns--exactly as pensions are funded.