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Tuesday, November 15, 2011

Burlingame's Dilemma is a Microcosm of California

It would not be a stretch to point out that what happened in Burlingame Tuesday night was a microcosm of what bedevils the cash-strapped state of California. For nearly two hours, the City Council pondered the conundrum of finding fair and reasonable ways to cut its retirement costs, particularly its huge unfunded retiree health care guarantees. It was an illuminating session, held in a basement meeting room in the community's Main Library. In fact, at times, it resembled a contract negotiating session as public employee union members (all of them non-safety types) went back and forth with city officials, including City Manager Jim Nantell, who has been sounding the alarm about retiree benefits for more than a decade. For Burlingame, it turns out that there are as many retirees receiving guaranteed health care benefits as there are current workers. The unfunded liability for those perks is approaching $80 million and rising, according to Nantell. Councilman Jerry Deal noted that the city's annual operating revenues are about $41 million, roughly the same as they were a decade ago. The disconnect between what's owed public employees in the future and annual revenues is at the core of Burlingame's long-term fiscal problem which has been made worse by the ongoing economic downturn. And that's one of the main reasons the town's workers are balking at any agreements that would trim back those lucrative retirement benefits. If all of this sounds familiar, it should. The state is facing the same thing, only on a grand and highly disturbing scale.

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