The cost of retirement benefits for Los Angeles city employees will grow by $800 million over the next five years, dramatically eroding the amount of money available for public services to taxpayers, reports the city’s Times. In a bleak assessment delivered to members of the City Council, City Administrative Officer Miguel Santana said pensions and health benefits for current and future retirees would jump from $1.4 billion next year to at least $2.2 billion in 2015.
Those costs remain a fraction of the city’s overall annual budget, which is currently $18.8 billion. But more troubling is the fact that retirement costs are consuming an increasingly large portion of the general fund, which pays for basic services such as parks and public safety. By 2015, nearly 20% of the city’s general fund budget is expected to go toward the retirement costs of police officers and firefighters, who now have an average retirement age of 51. The figure was 8% last year. Once civilian employees are factored in, nearly a third of the city’s general fund could be consumed by retirement costs by 2015, Santana said.