California’s public employees receive incredibly generous pensions, which are based on formulas that often result in six-figure payouts for people at relatively young ages – 50 in public safety professions and 55 or 57 for other government workers. These benefit scales not only stress government budgets, but result in a growing level of public debt.
There’s another element of the pension system that has created financial burdens. Public employees often claim “disability” pensions, which allow them to retire early and shield their payments from taxes. Although many workers file legitimate claims, others make claims for common ailments tied more to the normal aging process than their job duties.
The Sacramento Bee coined the term “Chief’s Disease” to reflect the overwhelming majority of top-level police officials who retire with tax-shielded pensions. “Battling treacherous office chairs and aching backs, aging cops and firefighters miss years of work and collect twice the pay,” was the headline on an eye-opening 2018 Los Angeles Times investigation.
Some of California’s disabled workers have reportedly gone on to perform physically rigorous tasks such as running marathons or taking new, similar public-safety jobs in other agencies. State law has actually encouraged employees to view disability pensions as just another available benefit – rather than as something used only in the relatively rare event of a debilitating work-related injury.
For instance, California law creates a variety of disability “presumptions.” The government presumes that, say, a firefighter who contracts cancer contracted it on the job – even if it might be the result of a smoking habit. Agencies rarely succeed in challenging such claims, even though it imposes high costs on their budgets. Disability pensions have cost Los Angeles an extra $1.6 billion since the early 2000s.
New legislation is about to make the problem much worse. Assembly Bill 845 by Assemblyman Freddie Rodriguez, D-Chino, creates a temporary presumption (until January 2023) that would apply tax-free disability pensions to police officers, firefighters and healthcare workers who were infected with COVID-19 because of an outbreak at work.
The governor already signed an executive order creating similar presumptions for the workers’ compensation system, but this takes the concept further. The bill’s union supporters say that it only protects those employees who received the coronavirus during a significant outbreak at work and who suffer long-term health effects that make them unable to work.
Yet the bill has insufficient protections for taxpayers and public agencies. We suspect that it will encourage thousands of public employees who contracted COVID-19 but have recovered to file coronavirus-related disability claims given the large number of coronavirus outbreaks at hospitals, prisons and other government facilities.
“The bill would authorize the presumption to be rebutted by evidence to the contrary,” according to the bill language, but the agency will have to provide overwhelming evidence to the contrary. Many front-line workers in non-government jobs face similar exposure risks at work, but disabilities are far tougher to prove in the insurance-based private-sector workplace.
We support giving genuinely disabled public employees all the benefits they deserve, but believe that this type of legislation only encourages people to game a disability system that already is rife with abuse. It will exacerbate the state’s pension problems and breed more cynicism among California’s taxpayers, who always end up footing the bill.
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