Los Angeles' pension obligations, like those of many other cities in California and around the country, are also increasing at an alarming rate. A recent report by an independent watchdog, California Common Sense, said city pension costs have increased at a 25 percent average annual rate over the last decade. In fiscal year 2002-03, pensions consumed 3 percent of the city's budget. That is projected to jump to 18 percent, or $1.3 billion, this year, the report stated.

In happy economic times, low-content campaigns can be a sign of flush municipal coffers and, consequently, relatively few pivotal policy choices for candidates to debate. If that were the case, a mayor’s race like this would be just fine. But Los Angeles isn’t living in an era of economic happiness. It faces severe fiscal stresses that led it to cut its municipal workforce by more than 10 percent from 2009 to 2012. Pension costs have risen 25 percent a year for a decade; now, for every dollar the city spends on wages, it pays 32 cents into pension funds and its employees pay an additional 9 cents on top of that. Pensions are eating the city budget, forcing deterioration in everything from fire-response times to tree pruning.

Last week, in this forum, Lou Paulson argued that the pension debate in California should be more concerned with math and less with politics. I completely agree, which is why I was perplexed after reading his op-ed. Among other things, he argues that California’s state and local governments should not fully fund pension plans for their employees. When he actually uses math or data to justify his arguments, his conclusions are largely incorrect or misleading. For instance, Mr. Paulson is wrong when he simply equates funding a pension to paying a mortgage. He says that in both cases, “[the borrowers] finance the large amount, and pay it off over 30 years.” But because pension plans must generate sufficient investment returns on their assets to fill the gap between those assets and the total benefits promised to employees, funding a pension is inherently more complex than simply paying down a mortgage.

California’s balance sheet is mired in an unusual dilemma. While the criminal justice portion of the state budget has increased, the higher education portion has decreased. During recessions, higher education budgets typically experience significant state funding cuts (money for proposed construction projects, campus refurbishment, scholarships/grants), but the corrections budget remains about the same.

California Common Sense released a report this month showing a 45 percent increase in retiree health spending for state employees over the last five years, growth from $1.3 billion in 2008 to an estimated $1.8 billion in 2013. While funding for higher education, K-12, parks, courts, transportation and welfare have all suffered significant cuts, this part of the budget is rare for its consistent increase in funding. This is rapid growth for any budget area, especially when revenue grew only 4.5 percent over that same period. In the last half-decade, baby boomers have begun to retire en masse, health costs have risen and life spans have increased. Consequently, the costs of the state's retiree health benefits have risen dramatically. In coming years, those costs are expected to rise even faster as more retirees will be receiving health care at higher costs for longer periods of time.

California’s balance sheet is mired in an unusual dilemma: while the criminal justice portion of the state budget has shot up, the higher education portion has shot down. During recessions, higher education budgets typically experience significant state funding cuts (money for proposed construction projects, campus refurbishment, scholarships/grants) but the corrections budget remains about the same.

Annual healthcare benefit costs for retired state employees have risen 45% since 2008, outpacing overall state spending and revenue growth. Analysts to testify on options for managing costs.

When it comes to the rise in retiree benefit costs throughout California, many people tend to focus on unfunded public employee pension plans. But they often don’t realize that non-pension benefits account for a growing portion of the state’s unfunded retiree benefit obligations.