Costa Mesa, CA government to lay off half their workers due to pension costs
As pension bombs go, this one is not very big. But the portents contained in this news that Costa Mesa, CA is going to lay off half its workers because of pension costs are dire indeed.
Nearly half the city workers in Costa Mesa received layoff notices last week. Street sweepers. Firefighters. Mechanics. Payroll clerks. Animal control workers. In all, about 210 of the city's 472 employees, many of whom have worked there for decades. On Thursday, as the notices were being handed out, one maintenance worker committed suicide by jumping from the city hall roof.
"It's like they decided to blow up the city," said Billy Folsom, 58, a mechanic who got a pink slip. "It's devastating."
The cutbacks are necessary because the escalating costs of providing pensions for police, firefighters and other unionized employees are draining the city's revenue, city leaders say.
Within three years, city projections show, more than one of every five tax dollars will be spent on employees' retirement benefits, which were made far more generous in the years before the stock market crashed in 2008.
"Just do the math - this is unsustainable," said Jim Righeimer, the city's recently elected mayor pro tem. He campaigned on the pension issue, eliciting anger and a counter-campaign from the city's police and firefighters. "Under these kinds of burdens, we can't do everything the city needs to do."
Costa Mesa may turn out to be one of the lucky ones. Bankruptcy or massive tax increases are more likely to be the result for most other towns and cities that have this pension bomb just waiting to go off.
By facing the problem and getting on top of it, Costa Mesa may lose some city services, but at least they will come out of the crisis with their government largely intact.