Latest on Retiree Health

While pension reform is getting most of the press these days, retiree health care is the other huge financial obligation that could saddle local government in the future. Capitol Weekly's Ed Mendel (click here) recently reported on efforts by the City of San Diego to reduce their retiree health obligations:

San Diego officials think a federal court ruling will allow a cut in one of the biggest debts owed by California state and local governments — $118 billion or more promised public employees for retiree health care.

The federal court ruled that San Diego’s retiree health obligation is not a “vested right” like public employee pensions, which are widely believed to be protected by court rulings that allow cuts only if replaced by something of equal value.

San Diego officials think retiree health obligations can be reduced in negotiations with labor unions and, if there is no agreement, that a cut can be imposed through standard “impasse” procedures.