Unions pushed heavily for the raises, saying public employees had been ignored during previous, leaner years.

In the city of Sacramento, the average pay of public safety employees grew 50% during that time frame, to $82,897, according to the city's latest valuation report. In Oakland, average pay for police and fire employees has tripled to $114,741 since 2000.

Combined with enhanced retirement plans, the salary jumps caused startling leaps in pension payouts.

Using the same cities for comparison, in Sacramento, the average annual benefit to former public safety employees who took a service retirement during the past five years was $64,521, up 58% from a decade ago, valuation reports show. In Oakland, the average annual benefit for recently retired public safety employees has more than tripled since 2000 to $83,946 today.

While payroll and benefits packages are largely within the control of city leaders, other influences on pension costs are not.

Roughly three-fourths of benefits are typically paid with returns on investments. Once the recession hit and dragged down the stock market, the burden fell to local governments to pick up the slack.

Local governments generally have counted on about an 8% annual return on their investments. Between 2007 and 2008, many instead saw declines of 15% or more.

In Stanislaus County, for example, officials watched their retirement portfolio lose more than $400 million -- 30% -- between early 2008 and mid-2009. About half of those losses have been erased by recent stock market gains.

On top of all this, many counties were getting bad advice about the costs of their pension plans -- advice that haunts them in today's budget talks.

Governments hire actuaries to make educated guesses about how much a plan will need to meet its obligation to retirees over two or three decades. Their assumptions are based on everything from when the average employee will retire to how long that person will live and how the market will perform.

In many cases, actuaries overestimated market returns and underestimated costs. They also told local governments during the boom years that they didn't need to put any money into the retirement system because the market was performing so well. That wasn't a mandate; local governments could still sock money away, but few did.

"Most of the cities took pension holidays," said Dave Low, chairman of Californians for Health Care and Retirement Security, which represents more than a million public employees on pension issues. "That is a pretty big reason for all this."

Search for solutions

At a glance, the city of Fresno looks to be in far better shape than Fresno County. Its pension plan is fully funded, and its annual contributions to that plan are relatively small.

Dig deeper, though, and some of that advantage is an illusion, conjured up by pension obligation bonds. One-third of pension plans are well-funded -- they can meet 90% of their future obligations -- but half of those well-funded plans are saddled with bonds.

They've borrowed to buy down debt, offloading the bill to future taxpayers.

Having already deeply cut services and being wary of raising taxes, many local governments hope to pass pension costs on to employees by making them pay a larger share of their pension contributions.

The most dramatic version of this approach follows Gov. Arnold Schwarzenegger's lead and tries to repeal many of the enhanced benefits approved during the Davis regime.

In Merced County, county executive officer Larry Combs and the board of supervisors favor a plan in which new employees would receive a scaled-back annual pension equal to 2% of their yearly salary multiplied by their years of employment. Merced's current plan is 3% at age 50 for safety workers, and 3% at age 60 for others.

Such shifts sound minuscule, but they would make a significant difference. A 55-year-old Merced County sheriff's deputy with a final annual salary of $75,000 and 30 years of service gets an annual pension of about $68,000 currently, but would get only $45,000 under the new plan.

"I have to believe everyone understands that pension costs are going to break all of the local governments in California," said Vito Chiesa, a supervisor in Stanislaus County, which soon will negotiate for similar reductions in benefits.

"I think everyone will see it is unsustainable."

Perhaps. But many continue to see county and city pension plans as powerful tools to recruit good workers.

Stanislaus County, for example, has closed its sheriff's deputy training academy for the coming year, saying the market is flooded with laid-off candidates. Yet the local union still argues that the benefits are essential for attracting and retaining employees.

"The retirement benefit is a huge hiring point," said Vince Bizzini, president of the Stanislaus Sworn Deputies Association.

This month, Stanislaus County leaders reversed the enhanced benefits they gave to workers in 2002, but only for workers hired after the end of this year and who aren't represented by unions. The county has 413 unrepresented workers, most of them managers and elected officials.

Low, the employee advocate, predicted that unions will bargain on pension issues in good faith. But, he said, it's unfair to view them as the linchpin for fixing local government finance problems.

In Fresno County, where employees contribute to the plan, officials are discussing ways to reduce pension obligations. In recent years, unions have agreed to lower benefit levels for new employees, but because not many people have been hired since, cost savings aren't expected for many years.

Regardless, asking employees to pay down a city's pension obligations is a little like trying to cut down a tree with a knife.

About one-third of the 80 cities and counties examined by The Bee -- including Merced, Orange and Fresno counties -- now have unfunded liabilities that equal or exceed the size of their annual payroll. So even if governments told their workers, "Sorry, but your entire salary will be diverted to pay off pension debt for the next year," there would be debt to spare.

That leaves taxpayers. The pension bill facing them likely will balloon in years to come.

Currently, 15% to 30% of local governments' annual payroll goes into their pension system -- a quarter or so for every dollar spent on paychecks.

That adds up. Together, all local governments in the state paid $11 billion into their pension plans during 2008, or about $900 per California household, according to U.S. Census Bureau data. Millions more went toward paying off pension bonds.

Dwight Stenbakken, deputy executive director of the League of California Cities, predicts that contribution rates will expand to about 30% or 40% of payroll in most places. CalPERS officials partially agree, saying that, due to retirement and market projections, contributions will rise for the next decade.

It's a hard sell -- cutting fat pension checks while cutting government services -- that has exhausted many local government leaders.

"We're trying to maintain credibility with taxpayers," Stenbakken said, "but, right now, I'm not sure this is defensible."