San Francisco Mayor Ed Lee and other city officials today launched the Yes on Proposition A campaign in support of a November ballot measure that seeks to address the city’s unfunded $4.4 billion health care liability for retirees.
The measure, placed on the ballot by the Board of Supervisors in July, would protect the recently implemented Retiree Health Care Trust Fund from being used by the city for other budgetary needs.
The trust fund, approved by San Francisco voters in June 2008, was established to address the future expenses of providing city employees with retiree benefits, which cost $150 million now and are estimated to grow to $500 million in the next 20 years.
However, the proposal came with no spending restriction for the fund starting in 2020, requiring this November’s ballot measure.
“We want to make sure that the health care trust fund … gets protected,” Lee said.
The ballot measure is part of an effort by the city to switch from a pay-as-you-go model for retiree benefits costs to a fully pre-funding one, where funds are set aside in an account that earns interest.
Supervisor Mark Farrell, who authored the legislation, said the move allows San Francisco to fully fund its $4.4 billion liability in about 30 years and also will improve the city’s standing with bond rating agencies, providing further benefits to taxpayers.
Farrell said the measure, which will not require increased employee contributions or reduce benefits, is supported by both the business community and labor unions like the San Francisco Police Officers Association, whose headquarters hosted today’s launch of the campaign.
However, despite the broad support “we’re not going to take anything for granted,” said Farrell, who pledged a strong campaign in support of the measure.
Brenda Barros, president of the San Francisco General Hospital chapter of Service Employees International Union Local 1021, is among those opposing the proposal.
Barros said, “They say the money is locked up, but then they built into it rules that say as long as the mayor and supervisors agree, they can change the rules.”
She said, “People are voting for one thing that can end up as something absolutely different.”
She said, “If they truly wanted to lock it up, then they need to lock it up. There shouldn’t be any loopholes for people to go in and get the money.”
Dan McMenamin, Bay City News