Voters deserve the truth on pension-driven tax hikes

Grow up.  Government lies.  When your city asks for a sales tax increase, it is NOT to add to the police department or to add hours to the library.  The money is being used to pay off the debt to CalPERS.

“The latest example of this ruse is in Oakland, California, where voters are being asked to approve a property tax hike with the ostensible goal of raising an extra $20 million annually for the city’s parks department. A closer look at the city budget, however, makes it clear that exploding pension costs are the real reason the city needs more money.

Oakland’s retirement costs have more than tripled over the past 10 years and currently consume nearly $1 out of every $5 in general fund spending. Annual costs are projected to hit an all-time high of $235 million in 2024 — a $77 million increase from last year, which will easily consume the entire amount raised by the proposed tax hike and then some.”

The voters can say NO.  The voters can demand honesty from City Hall.  Failure to be honest should translate into failure of tax increases and bonds.  Would you give money to those you know are lying?  Will the people of Oakland?

Voters deserve the truth on pension-driven tax hikes

by Robert Fellner, Transparent California,  1/22/20 

Soaring public pension costs are driving a wave of tax hikes across California, but many officials are reluctant to admit it. Instead, voters are being told that higher taxes are needed to fund services like parks and public safety or other items that enjoy similarly positive poll-tested support.

The latest example of this ruse is in Oakland, California, where voters are being asked to approve a property tax hike with the ostensible goal of raising an extra $20 million annually for the city’s parks department. A closer look at the city budget, however, makes it clear that exploding pension costs are the real reason the city needs more money.

Oakland’s retirement costs have more than tripled over the past 10 years and currently consume nearly $1 out of every $5 in general fund spending. Annual costs are projected to hit an all-time high of $235 million in 2024 — a $77 million increase from last year, which will easily consume the entire amount raised by the proposed tax hike and then some.

Most of this cost provides no benefit to taxpayers or current city workers. It is spent instead on the benefits of those already retired — which explains why officials prefer not to mention rising pension costs when describing the alleged need for higher taxes.

Taxpayers aren’t just being misled about the role pensions play in the push for higher taxes. They are also being kept in the dark about how the system works, particularly when it comes to so-called disability pensions for police officers. In 2014, the San Jose Mercury News found that Oakland was awarding police disability pensions at a rate far higher than those of neighboring cities. Astonishingly, more than half of all retired Oakland police officers are receiving industrial disability pensions.

In addition to being tax-free, these benefits are especially lucrative and thus especially costly to taxpayers: They are payable immediately — at any age.

Take, for example, Aaron McFarlane, who worked as an Oakland police officer for four years before retiring under disability at age 31 in 2004. McFarlane has already collected nearly $800,000 in pension pay since then and is projected to receive almost $4 million in total lifetime payouts. But he also has another job.

Officers who are disabled in the line of duty deserve compensation, but McFarlane is not disabled — at least, not according to the FBI’s hiring standards. The Boston Globe in 2014 identified McFarlane as the FBI special agent who shot and killed an associate of the Boston Marathon bomber. As part of the application process, McFarlane even passed an FBI physical exam, which established that he was in “excellent physical condition with no disabilities” that would impede his ability to work in law enforcement, according to a CBS San Francisco report.

This revelation prompted Oakland officials to investigate what appeared to be an obvious violation of state law. Unfortunately, though, the issue would fade from public view in the three years it took for the city to reach a conclusion. The city ultimately affirmed the continued lifetime payment of a disability pension to McFarlane after an anonymous doctor in 2017 declared incredibly that he remained “substantially incapacitated from performing the work of a police officer.”

This is certainly good news for McFarlane, who will continue to supplement his FBI salary with a nearly $60,000 annual disability pension, paid for in part by Oakland taxpayers.

Most taxpayers, however, would be surprised to learn that they are required to fund disability pensions to those in “excellent physical condition” working in a similar job elsewhere — given that state law suggests the opposite.

It is unknown how many other cases like this are out there or how much they are costing taxpayers. Answering those questions would first require identifying all those who are drawing tax-funded disability pensions.

Unfortunately, the state retirement system refuses to disclose that information, which is why government watchdog Transparent California has filed a public records lawsuit against the agency.

The California Public Records Act declares that all citizens have “a fundamental and necessary right” to know what the government is doing with their money.

Nowhere is that right more important than in cases like these, where what the government says it is doing differs significantly, to put it mildly, from what it is actually doing.

Rising pension costs are behind Oakland’s alleged budget crunch and the accompanying push for higher taxes. Voters deserve complete and accurate information about those costs, including how much it costs to fund disability pensions for able-bodied employees who are simultaneously collecting full pay and benefits for performing the same job elsewhere.

Robert Fellner is executive director of Transparent California — a government watchdog dedicated to increasing transparency in government.

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.

Comments

  1. Here we go once again. The Government Trolls want more money and have the taxpayers pay for their unwillingness to be responsible for their own retirement.

    Must be nice to be so blinded by the welfare state that you cannot understand that the cost you are paying in your taxes is caused by YOU. Continue to vote for the big government political types and you are going to be taxed out of existence.

    Socialist’s = Democrats = Backbreaking Taxes

  2. A cap must be placed on retirees pension plans. Its insane to expect to be paid your full pay at retirement.
    You should never be over 30% if that.

    Its crazy to think your property tax will continue to increase every year.
    The same goes for your electric, gas , water the increases requested for each cannot be justified.

    Thus is UN-sustainable. Taxes are already forcing people out of the state along with companies.

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