Retiree Health Reform Won’t Happen Before Election

City of San Diego voters won’t know how much retiree health care reform will save the city before Election Day in November.

That’s important because it’s the single biggest reform that’s part of Proposition D, the November ballot measure that would allow the city to raise the sales tax if city officials complete 10 financial reforms.

The spectrum on the potential savings is vast. The city estimates it could save between $1 and $42 million annually.

City Council began discussing retiree health care Tuesday. KPBS reported the city and its unions don’t plan to complete labor negotiations on the benefit until April. That probably makes sense given how complex and contentious the negotiations will be, but puts proponents at a disadvantage before the November election.

Essentially, the city will ask voters to trust that substantial reforms will be made to retiree health care when negotiations are complete. Overall, the ballot measure could save the city between $626,000 to $85.5 million a year and the tax increase is expected to raise $102 million annually.

For now, the city’s stuck with a $1.4 billion liability for retiree health care.

A recent and long-awaited comprehensive study of the benefit showed various ways the city could cut down the amount it owes. One of the options presented in the study — freezing the city’s benefit at current rates for current employees — would knock $430 million off the liability. That’s the option the city used when it estimated the high-end savings for Prop. D.

KPBS said yesterday’s council debate boiled down to a dispute between City Attorney Jan Goldsmith and union attorney Ann Smith about whether retiree health care benefits were guaranteed like pension benefits.

The point is significant if the city wants to cut simply health care.

But arguments over whether health care benefits are guaranteed are immaterial outside of labor negotiations. As we’ve detailed, promises made to different city employees at different times make the question a legal nightmare that likely will spur lawsuits. One already has been filed after the city cut the benefit previously. At least in negotiations, both the city and unions could put their cards on the table.

Finally, Goldsmith and white-collar union head Mike Zucchet debated retiree health care on KPBS’ These Days Wednesday morning.

Please contact Liam Dillon directly at liam.dillon@voiceofsandiego.org or 619.550.5663 and follow him on Twitter: twitter.com/dillonliam.