Growing public pension deficits have plagued our nation for years, but in the midst of some of the harshest fiscal blows from the pandemic, this problem is something we can no longer ignore. While California champions itself as a leader of positive change in the United States, we also happen to be the leader in skyrocketing pension obligations. And there are no signs of this unsustainable pattern slowing down.
In 2018, Transparent California found that the average pension for city or county public safety employees was $108,000 a year. According to CalPERS, that retirement benefit of $108,000 at age 50 is worth $1,673,000 invested in a private single-life annuity, and somewhat higher with survivor benefits (which most safety workers choose). With this exorbitant retirement pay, it’s no wonder that each California household is on the hook for $81,634.
Although many tax measures for fire funding are successful, voters in some of the most liberal parts of the state have started to push back and vote against them.
To add to the enormity of this problem, consider that there are more retired firefighters than active firefighters in this state. Even slashing beneficial community programs is not enough to meet the union promises made to these workers. As a result, many unions have turned to tax increases as a potential solution. Although many tax measures for fire funding are successful, voters in some of the most liberal parts of the state have started to push back and vote against them. In fact, a ½ sales tax pushed by the fire unions, despite threats of extended response times, was recently voted down in Sonoma County.
In the face of this opposition, union leaders are finding other ways to drum up a steady cashflow, whether it’s through a first responder fee or taking over ambulance services from private industry veterans.
For years, California localities have relied on private emergency ambulance companies to provide quality, efficient emergency services. And to combat inequity in access to ambulance services, the state moved primarily to countywide-run ambulance systems overseen by the County EMS Agency. This mix of public and private collaboration has been conducted successfully for over 50 years, until now.
A recent study by Reason Foundation identified fire departments in California that have recently been pursuing, and in some regions established, what is called an “Alliance Model,” in which the fire department is given, “the decision-making power of a full EMS agency, but without the oversight of an EMS agency.” This means they are getting all of the responsibility without any accountability—and while the fire departments may reap a short-term windfall from collecting ambulance fees, they are only adding to their long-term pension obligation.
The bottom line is that fire departments have a huge problem on their hands when it comes to their pension obligations.
A proposed state law – Assembly Bill 389 – would codify the Alliance model and make all of its anti-competitive antics legal. Ultimately, the Alliance model puts the fire department’s interests before the taxpayer or patient. This backwards model came to fruition in Contra Costa County in 2016, and even after rejection from the Emergency Medical Services Authority (EMSA), the county still moved forward with implementation. Not only does this model result in reduced industry competition, but it also diminishes quality of care and response times for patients.
Despite these concerning outcomes, the cities of Chula Vista and Oxnard are now in the process of reviewing possible implementation in their own localities. Models like these are designed to cut corners to benefit the bottom line, not to prioritize the individual relying on emergency services for help. This is also reflected in fire departments that seek to take over ambulance services in what is called an “Ambulance Operator Programs.”
Because public agencies must provide the same expensive pension benefits and early retirements to their EMTs as they offer to other workers, in fire department run Ambulance Operator Program, EMT positions have to be filled with inexperienced workers at lower wages. Governments will have a monopoly, residents and their insurance companies will likely pay more for ambulance services, and our communities will be served by less senior EMTs and paramedics. All so that the public employees may continue padding their retirement funds.
The bottom line is that fire departments have a huge problem on their hands when it comes to their pension obligations, and the only solution their unions can seem to come up with is attacking the private ambulance providers who have loyally served Californians for generations. Contracting these services back to the government to clean up their own mess is just wrong. Taxpayers want the best services for the lowest cost, and it’s clear that private ambulance providers are the only option that satisfies that need. Californians deserve better.
Editor’s Note: Marcia Fritz is a retired CPA who spent 30 years serving public clients such as state agencies and local municipalities. She is the president and founding board member of California Foundation for Fiscal Responsibility.