The term "must-win" gets thrown around a lot in a variety of different endeavors. Of course, athletic teams use the term for just about every game (the Eagles are 1-3, clearly this contest with the Redskins on Sunday is a "must-win"), political pundits have been using it for just about every candidate, and without much real meaning (Iowa is a "must-win" for Edwards or he'll be forced to drop out of the race). It's a phrase that, considering the way commentators an opinion-sharers abuse it so much, makes me think of the words of Inigo Montoya: "I do not think it means what you think it means."
"Must-win" is a two-word phrase that often represents a dire situation which could get far worse if certain actions aren't taken. If we think of it that way, then the solution arrived at to our city's employee health and pension benefit situation by the administration and those on the other side of the bargaining table is a "must-win" situation. Get it right now - figure out a way to keep promises already made to city employees while possibly subjecting us all to a little, temporary, present-day pain - and they spare us from a world of hurt in the not-too-distant future.
Earlier today I was on a conference call with the authors of a report - presented by the Pew Charitable Trusts and the Economy League of Greater Philadelphia - called: Philadelphia's Quite Crisis: The Rising Cost of Employee Benefits. (link to the full report here)
Of course, we've talked about this before, most notably when the Pennsylvania Intergovernmental Cooperation Authority (PICA) released their own series of reports about the rising costs of employee health benefits, pension benefits, and one that included those two issues along with a few others facing the new administration.
According to Donald Kimmelman, the Managing Director of Information and Civic Initiatives at Pew, this study seeks to bring these issues back onto the front burner and present them in a way that may a little more accessible to the public at large. Also, according to Kimmelman, the authors of the report provide a "perspective of folks from outside of the Philadelphia region who spent time studying other cities and the states."
I'll post more about the report later, including highlights of the report itself and some additional information that came up during the conference call with the authors and a follow-up call.
For now, I'll leave you with a couple numbers to consider and a couple quotes from the report. First a quote:
Misery loves company, and it might be tempting for Philadelphia citizens to jump to the conclusion that many cities and states share the problem it faces in dealing with its legacy of pension problems.
But this is not the case.
Compared to nine other cities of roughly similar size or geographic make-up (Atlanta, Baltimore, Boston, Chicago, Denver, Detroit, Phoenix, Pittsburgh and San Francisco), Philadelphia comes in second to last in terms of the percentage of its pension obligations that are currently funded - 52% as of latest available fiscal year. That means, if it had to pay out all of its obligations, it would only be able to cover a little more than half from its pension fund. The rest would have to come from you and me. Only Pittsburgh at 44% was worse. San Francisco, on the other hand, recently had 108% of its obligation in its pension fund.
And the other quote:
But the devil is in the details. Philadelphia's pension situation is in some ways worse than the funding ratio reveals.
What does it all mean for you and me?
If the mayor allows the pension fund to be managed in the way it has been for the past several years (decades really) and does nothing to try and rein in the cost of health benefits by figuring out a different benefits structure (with the cooperation of the unions during the upcoming contract negotiations), then by 2012, 28% of the city budget will go just to paying for pension costs and health benefit.
More soon.
Comments (11)
Is it really a "Quiet Crisis"?
I know that's the name of the Pew report, but discussion of this issue has been anything but quiet. In fact, I don't think any other issue related to contract negotiations has received as much attention as the pension fund. Columnists from both the Philadelphia Inquirer and Daily News have spent a lot of inches on this issue. It's quickly becoming conventional wisdom among the media that something has to be done about the benefits given to city workers.
I haven't read the Pew report, so I'm undecided about what the solution to this issue is. However, I am certain that the media and other players in the process have worked hard to bring this issue to the front burner.
Posted by Ben Waxman | January 24, 2008 10:30 AM
It's not a "Top Story" on philly.com, but it is a front page story, above the fold, in the print edition of the Inquirer. That's some major real estate.
Posted by Ben Waxman | January 24, 2008 2:50 PM
I'm with Dan- most Philadelphians are likely not too aware of the issues that arise from rising pension and healthcare benefits or aren't well versed on why it matters to them. When a private company's pension fund is in trouble, it hurts that firm's employees. Underfunding in Philadelphia's pension fund poses a threat to both city employees and all taxpayers. Failure to address rising costs in this area means that a shrinking share of the budget will be available for "louder" crises, like public safety and aging infrastructure.
Posted by Marisa Waxman | January 24, 2008 4:55 PM
I agree that this is a serious issue and needs to be addressed. And, yes, I agree that if you stopped a bunch of random Philadelphians on the street, most of them would have no idea what you were talking about.
On the other hand, this group of imaginary Philadelphians would be aware of the skyrocketing cost of healthcare. That is what is driving this issue in the first place. It's become a major issue in presidential election.
Among the groups and individuals that have a lot of influence over the budget process and contract negotiations, this is anything but a silent issue. Folks in the Nutter administration are clearly aware of what's going on, as is City Council, the media, and public policy groups. That's more the point I was trying to make.
Frankly, I don't think the solution to this problem can be found at the local level. Healthcare is national problem and we will eventually need federal action to control costs. Whatever happens with these benefits, it will be impossible to address the issue entirely.
Posted by Ben Waxman | January 25, 2008 9:53 AM
Do we really need another 'Waxman' comment?
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