OPEB

In 2015 the City of Glendale took advantage of Obamacare to dramatically reduce its spending on health insurance for retired employees and free up funds for spending on active employees and public services.

Dear Legislators,

This week the Biden Administration announced that personal income rose 0.4% in April, consumers increased spending sharply, U.S. economic activity is at its highest pace in more than a year, and the unemployment rate is at an envious 3.4 percent.

Yesterday the Legislative Analyst’s Office (LAO) released its Multiyear Budget Outlook through fiscal year 2026-27, forecasting $52 billion of deficits over that period.

We couldn’t agree more with Legislative Analyst Gabe Petek that it’s best to solve the deficit without using reserves, which are already woefully short of the amounts needed to protect essential services in the event of a recession.

West Contra Costa County Unified School District has received a “lack of going concern” determination from its county board of education. That means the district is unable to meet its financial obligations. But 60 percent of its deficit is accounted for by spending on an unnecessary insurance subsidy for retired employees known as “OPEB” (Other Post-Employment Benefits) that drains classrooms of resources while federal subsidies go unused.

San Francisco Unified School District spends up to 250% more than the average CA school district on OPEB, which are insurance subsidies for retired employees.