How LA Could Save $398 Million

Yesterday, LA’s City Administrative Officer announced the city’s budget deficit could reach $400 million to $600 million by the end of the current fiscal year.

According to page 201 of LA’s Comprehensive Annual Financial Report, LA spends $398 million per year supplying health insurance subsidies to retirees under the city’s other post-employment benefits (OPEB) program. LA could eliminate nearly all that spending by adopting Glendale’s 2015 OPEB reform, which took full advantage of subsidies provided by the federal government. Elimination of OPEB got even easier after the state government launched a Middle Class Subsidy Program in 2019. All the information is at Covered California, the state’s easy-to-use exchange.

There is no reason for LA to cut programs in order to fund redundant subsidies for retired city employees.

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