Santa Barbara County has it all. Beautiful weather. Some of the most stunning coastal vistas on Earth. A glimmering Pacific Ocean with a dramatic backdrop of mountains.
But like most every beautiful place, a closer examination reveals a few flaws.
For one thing, our county is divided both geographically and ideologically, so much so that the notion of splitting the county into two counties has come up more than once. Folks living in North County generally do not think the way people in South County think.
That situation goes back generations, but a fairly recent development suggests that north and south have more in common than we may realize. Governments at both ends of Santa Barbara County share many of the same goals, and a singular problem — budgets that don’t balance, with the heaviest weight falling on the deficit side.
Lompoc Mayor Jenelle Osborne offered a snapshot of the issue at her recent State of the City speech. It wasn’t exactly a doom-and-gloom presentation, as the mayor pointed out to her audience, but it was a sobering sketch of everyday life in a 21st-century city.
The crux of the problem is money, more specifically the lack of government revenue compared to expenditures. In Lompoc’s case, that includes the city’s unfunded liability to public pensions, which can be measured in the millions.
Just about every government jurisdiction in California and elsewhere is facing the same problem, an obligation to pay retirees what has been promised vs. the funds necessary to carry through on such a promise.
A Santa Barbara County Grand Jury investigation and report last year made it evident that many local governments are at risk of insolvency due to pension liabilities, for which little or no money is available.
The grand jury’s report came on the heels of a 2018 League of California Cities study finding that several of this area’s government pension systems have among the highest employer contributions in the state that “may not be sustainable without new revenue or changes in benefit structures.”
It’s a bet that when government and elected officials go searching for additional revenue, usually the first place they look is directly at you, the taxpayer. That inclination could be especially important with regard to what most experts recognize as unsustainable pension costs.
Another compelling fact is that, according to a survey by Northwestern Mutual within the past few months, a third of the nation’s Baby Boomers have less than $25,000 in retirement savings. That puts a lot of pressure on retirees — unless they are among the public employees who have been promised set amounts and benefits upon retirement.
Making matters worse for private-sector workers looking at public pension retirement plans from the outside, California has more than 40,000 public-employee retirees in the so-called “$100K Club,” those whose pensions exceed $100,000 a year. While $100K Club members represent only 4.8 percent of state retirees, their pensions represent more than 15 percent of total public pension spending. The state Supreme Court rolled back the “airtime” component of the state pension system, so public employees can no longer collect bigger pensions by inflating their years of service.
But that’s a drop in the fiscal bucket, compared to the unfunded liabilities totaling nearly $140 billion at CalPERS, and another $107 billion at the California State Teachers’ Retirement System.
That’s a major problem, and only two ways to fix it — raise taxes or eliminate some existing services. Neither option has much public appeal, nor are they embraced by elected leaders facing re-election.
Meanwhile, the meter continues to run.