Tiny California City’s Firefighting Reform Could Be Model for Others: New at Reason

The small California town of Calimesa is trying to get a handle on the pension crisis.

Steven Greenhut writes:

California's cities are running out of cash, as pension expenses gobble up growing portions of their budgets. They've cut services, raised taxes and come to Sacramento to implore the pension funds and the legislature to help out, but city governments don't have the muscle of the state's public-sector unions, which fight reform.

Here's more of a reality check: These fiscal problems are becoming dire even though the stock market is at record levels, and the state's two massive pension funds enjoyed stellar gains last year. Healthy investment returns keep the pension systems funded, but what happens if there's another downturn?

What to do? The union-controlled California Public Employees' Retirement System assures us that everything will be fine. The stock market, apparently, will take care of things. But the fund is mulling yet another fee hike for hard-pressed cities, so this do-nothing approach isn't a good option.

Pension reformers have tried legislative fixes and initiative campaigns, but have been thwarted because of the "California Rule," which bans the reduction of pension accruals unless public employees are given something of equal value. Reformers are waiting for the California Supreme Court, which this year may decide whether or not to amend that rule. But who knows what the court will do?h

Yet there is a third option, which is being pioneered in the small Riverside County city of Calimesa. Frankly, I'm surprised that it hasn't gotten more attention—or more push back from the state's firefighter and police unions. Such "public safety" spending is eating up 60 percent of the city's general-fund budget. Instead of waiting for a crisis, or hammering taxpayers with tax hikes or service cuts, the city implemented a plan that will cut back the cost of firefighting services.

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