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I got a chance to talk to Supervisor Dianne Jacob on Tuesday afternoon. Again, the message I and the other reporters received loud and clear Monday was that she and Supervisor Pam Slater-Price were taking a firm stance against using public money to pay for the health care of retired county employees, with the exception of some older pensioners.
The supervisors’ plan was somewhat simple: they were going to ask the retirement system to stop paying for the health care benefits of a mostly younger group of retirees. From now on, the county would be out of the health care funding business for retirees. If the retirement system refused, the county would cut off the health care benefits for everyone, including the oldest and most vulnerable of the county’s former employees.
“Over time this would be a decreasing liability to taxpayers that would eventually go down to zero,” Jacob said Monday.
This, as I thought I correctly labeled it, was a bold move.
So I was a bit stunned when I called the leader of the Deputy Sheriffs Association of San Diego County, Jim Duffy, and he claimed that he wasn’t too worried about it. He said that at the same time the supervisors were taking this stance, they were supporting a plan that would create a separate funding mechanism for retiree health care – a trust fund called a VEBA.
Duffy said that while there were some kinks to work out about who managed the VEBA and such, the county would end up using public money to fund it.
He was very confident that all the supervisors were on board with this plan.
“All the supervisors support it,” he said plainly.
Duffy said that in lieu of giving the employees, say, a 4-percent raise in negotiations, the supervisors would agree to give them a 3-percent raise and then put that other 1 percent into the VEBA.
They are still taxpayer dollars and Duffy recognized that.
Again, I was rather shocked. He appeared to have received assurances this was the case.
So I asked Jacob specifically whether she would rule out the possibility of using taxpayer dollars to set up this trust fund for retiree health care as she and the other supervisors oversee negotiations with workers like the deputy sheriffs.
“It’s all a part of negotiations and I have no comment on that at this point – we’ll see how the negotiations turn out,” she said. “You can’t say there won’t be any taxpayer money going to a VEBA but it’s too soon to tell.”
In other words, a day after saying she was planning on reducing the taxpayers’ liability for retiree health care down to “zero,” she didn’t refute Duffy’s contention that tax dollars would be used to fund this alternate route.
“I think the reason the labor groups are not having heartburn over this is the VEBA is not a new idea. They also see the writing on the wall. They’ve seen there’s absolutely no way the county can sustain the level of benefits it offers now,” Jacob said.
Let’s be clear: A VEBA offers a much better plan for paying for the health care of retired county employees than the old system. And it would protect the county from new accounting rules that will demand that all governments add up how much they owe in benefits like these and report the debts publicly.
It would also create a so-called defined contribution system of funding retiree health care – meaning that the county would perhaps set aside a certain amount of money it thought it could afford. If the money ran out, taxpayers wouldn’t be obligated to bail it out – like they are with the city and county’s troubled pension systems.
In other words, it is good reform.
But it’s not at all clear that Jacob is taking a stand against using taxpayer funds to pay for the health care of current county employees when they retire. And the interpretations earlier in the week – that if the plan was implemented, current employees would have to find their own way to pay for their health care when they retire – may have been exaggerated.
Of course, the negotiations are ongoing about the VEBA, and there’s still a strong possibility that Jacob and the other supervisors will stand tough against allowing taxpayer money to help capitalize this new trust fund for retiree health care.
Jacob, at least, just won’t commit to that yet.