Jan 21, 2011

Facing $1.6 Billion shortfall San Francisco pays out 170 Million in bonuses

As San Francisco struggles under ballooning pension and health care costs, the city’s retirees will receive unexpected cost-of-living bonuses totaling $170 million!

A political battle has raged over the city’s growing retirement obligations. In November, Proposition B, which would have required city workers to contribute more toward their pensions and benefits, was soundly defeated. The measure’s opponents — every major elected official and energetic public-employee unions — said fears about the pension fund were overblown.

Meanwhile, the fund’s fundamentals deteriorated as it gradually accounted for its huge losses in the stock market crash.

It took in $414 million in contributions in 2010 but paid out $819 million!

The leftist city on the left coast may be in dire need of Economics 101.