Public Employee Strike Looms in Santa Clara County

With 2020 upon us, it appears likely that two unions representing Santa Clara County employees will be going on strike. Unless agreements can be reached, 3,000 members of the Registered Nurses Professional Association will strike, along with over 11,000 members of the SEIU.

When one considers the political leanings of the Santa Clara County Board of Supervisors, which tilt overwhelmingly pro-labor in one of the most liberal strongholds in the world, it seems inexplicable that negotiations have reached an impasse. Inexplicable, that is, until you review the financial situation confronting Santa Clara County.

To get started, have a look at the most recent publicly available consolidated balance sheet for Santa Clara County, showing the change in their assets and liabilities between their fiscal years ending 6/30/2017 and 6/30/2018.

As can be seen from this table (found on page 7 of Santa Clara County’s most recent CAFR), the county’s total assets increased by an impressive $891 million between 2017 and 2018. But the county’s total liabilities increased by an even more impressive $2.1 billion over the same period, nearly three times as much.

Digging in, it isn’t hard to see what happened. Santa Clara County’s finance department finally decided to accurately represent the size of their unfunded retirement obligations. They increased their net pension liability by $545 million, and they increased their OPEB (“other post employment benefits,” typically retirement health insurance coverage) liability by $1.0 billion.

Anyone whose dug around financials long enough knows that the […] Read More