OC Pension Woes Worsen

A new study revealed that the County of Orange's unfunded employee pension liability is much higher than previously thought. The Orange County Employees Retirement System's liability is now pegged at $2.3 billion, a dramatic 57% jump from the $1.3 billion told to the Board of Supervisors. That liability was created largely by pension boosts approved in recent years by the Board.

That jump includes a 2.7% at 55 retirement plan, approved last August by a 3-2 majority. I opposed the plan because of its cost and it only encourages our most valuable employees to retire early, just as their services are most needed.

The pension system assumes a 7.5% annual return on investments, but has returned an average barely 5% for the past six years. Life expectancies for retired workers are also likely to get longer, adding to total payouts.

Ballooning public pension obligations are a national concern. While individual retirement accounts are fully self-funded, defined benefit systems common in government must guarantee fixed payouts during a retiree's entire lifetime. With people retiring earlier and living longer, many will be receive a pension for half of their adult lives.

The Board of Supervisors must put away more general fund money to cover these costs. With nearly 5% of the entire county budget now needed to fund pensions, there will be real cuts in public services. The Board must also look at switching to a defined contribution plan for new hires.

At our June 20 meeting, Chairman Bill Campbell labeled the bad news a "June Surprise" and called for new negotiations with union leaders to determine true costs. As expected, the proposal was immediately rejected by the employee associations, who value the new pension guaranteed for the next 30 years. The question is: Who will pay for it-- and how?

West Anaheim Upgrades

The Board approved $104,500 in improvements to La Colonia Independencia Community Center. The county-owned facility serves the unincorporated area of West Anaheim, especially the old "Colonia" originally established by farm workers in the 1920's.

The improvements include structural upgrades, replacing all windows to enhance energy efficiency and complete rehab of the basketball courts. Within a year, the Center will likely be taken over by the City of Anaheim, which is posed to annex the entire area of over 8,000 residents.

Board Sets Budget Priorities

Following two days of discussion, public hearings, staff presentations and preliminary votes the Board of Supervisors is set to approve the County's annual budget of $4.94 billion for Fiscal Year 2005-06. A final vote is scheduled for June 28.

I strongly supported a re-examination of funding for the Harbor Patrol. The $10 million annual operation by the Sheriff's Dept. takes over $5.6 million from the park fund. Yet two of the harbors are located totally within the Huntington Beach and Newport Beach.

If this is truly a county law enforcement function, the funds should come from the General Fund, not raid park funds that should be more equitably spent throughout the County. More specifically, it is the responsibility of the cities of Newport Beach and Huntington Beach to patrol their own harbors. The Board voted to re-examine Harbor Patrol funding sources in anticipation of future changes.

Delayed was a proposal by Tax Assessor Webster Guillory to hire 38 new field inspectors to locate unreported home improvements that could boost tax assessments. Board members requested more information before implementing the program to assure homeowners' privacy rights.

Split Court: Land Grabs Legal

In a 5-4 decision, the U.S. Supreme Court ruled that local governments can seize private property through eminent domain for the use and profit of other private parties. In Kelo vs. New London, a group of Connecticut homeowners had fought to keep their homes from being seized to make way for a private hotel development. In a stunning rebuke to property rights, the court ruled the local city council could seize the homes for "economic development" purpose (i.e.: favored developers, hotels and big box stores).

Under this ruling, churches, under-assessed homes and small businesses are all fair game for any politically-connected developer. Eminent domain for private gain.

This is bad law. Just as both rich and poor have equal rights to both freedom of religion and freedom of speech, they must also have equal rights to own and control property.

It is also bad economics. The "economic development" schemes brought on by eminent domain rarely fulfill their promised revenue projections. California is rife with half-empty auto malls and shopping centers built with eminent domain powers and public subsidies. A free-and successful-economy must be based on the free and voluntary exchange of goods and services among free people.

On the day of this misguided ruling, I responded the numerous press inquiries, including an on-air interview by KNX-Radio. I was called because of my long-standing opposition to redevelopment abuse, and authorship of "Redevelopment: The Unknown Government" (call 714-871-9756 for your copy).

In dissent, Justice Sandra Day O'Connor said: "government now has license to transfer property from those with few resources to those with more. The founders cannot have intended this perverse result."

Public reaction against this decision has been strong. An instant AOL poll showed 96% of subscribers opposed it. State Senator Tom McClintock yesterday introduced a constitutional amendment to strengthen California's property ownership protections. Just like the Dred Scott Decision 150 years ago, this decision is so extreme that the public and political reaction to it may bring on overdue reforms.