Taxpayers going postal over public employee pensions, perks

June 4, 2010

By PETER SCHEER—For public employee unions–those representing police, firefighters, teachers, prison guards and agency workers of all kinds at the state and local level–these are the worst of times.

Despite record high membership and dues, and years of unparalleled clout in state capitols, public sector unions find themselves on the defensive, desperately trying to hold on to past gains in the face of a skeptical press and angry voters. So far has the zeitgeist shifted against them that, on one recent weekend, government employees were the butt of a Saturday Night Live skit, followed, the next day, by a New York Times magazine cover article proclaiming the “Teachers’ Unions’ Last Stand.”

Public unions’ traditional strength–the ability to finance their members’ rising pay and benefits through tax increases–has become a liability. Although private sector unions always have had to worry that consumers will resist rising prices for their goods, public sector unions have benefited from the fact that taxpayers can’t choose–they are, in effect, “captive consumers.”

At some point, however, voters turn resentful as they sense that: (1) they are underwriting, through their taxes, a level of salary and benefits for government employment that is better than what they and their families have; and (2) government services, from schools to the DMV, are not good enough—not for the citizen individually nor the public generally—to justify the high and escalating cost.

We are at that point.

In California, government sector unions, once among the most entrenched and powerful labor groups in the country, mainly have themselves to blame. For most of the post-war period, they were a force for progressive change, prospering by winning over public support for their agenda.

In the 1970s and 80s they backed laws like the Public Records Act and Brown Act to make state and local government more transparent. Because unions enjoyed broad-based political support, efforts to enhance government accountability and responsiveness to voters were seen–correctly–as benefiting the unions and their members.The public interest and public employees’ interests were aligned.

But the unions switched strategies. Although the change was gradual, by the 1990s California’s government unions had decided that, rather than cultivate voter support for their objectives, they could exert more influence in the Legislature, and in the political process generally, by lavishing campaign contributions on lawmakers. Adopting the tactics of other special interest groups, government unions paid lip service to democratic principles while excelling at the fundamentally anti-democratic strategy of writing checks to legislators, their election committees and PACs.

While not illegal (in fact, such contributions are constitutionally protected), the unions’ aggressive spending on candidates puts them on the same moral low ground as casino-owning tribes, insurance companies and other special interests that have concluded that the best way to influence the legislative process is to, well, buy it.

Public unions in California turned distrustful of voters and ambivalent about government transparency. In the mid-1990s unions backed improvements to the Brown Act, California’s open meeting law, but also inserted a provision assuring that the public would have no access to collective bargaining agreements negotiated by cities and counties—often representing 70 percent or more of their total operating budgets—until after the agreements are signed.

What happens when voters and the press have no opportunity to question elected officials about how they propose to pay for a lower retirement age, healthcare for retirees’ dependents, richer pension formulas and the like? The officials make contractual promises that are unaffordable, unsustainable (and, in general, don’t come due until after those elected officials have left office). In the case of Vallejo, in northern California, this veil of secrecy, and the symbiotic relationship it fosters, has led to municipal bankruptcy.

The biggest blow to unions’ public support has come from revelations about jaw-dropping compensation and pension benefits. Police have received unwelcome attention for budget-busting overtime and the manipulation of eligibility rules for “disability pensions,” which provide higher benefits and tax advantages. Other government employees, particularly managers, have been called out for “pension-spiking:” Using vacation time, sick pay and the like to boost income in the last years of employment, which are the basis for calculating retirement benefits.

Such gaming of the system boosts starting pensions to levels that can approach, and even exceed, employees’ salaries. Some examples from the reporting of the Contra Costa Times’ Daniel Borenstein: A retired northern California fire chief whose $185,000 salary morphed into a $241,000 annual pension; a county administrator whose $240,000 starting pension was 98 percent of final salary; and a sanitary district manager who qualified for a $217,000 pension on a salary of $234,000. At a time when most Californians anticipate an austere retirement (if they can afford to retire at all), government pensions are a source of real voter anger.

The harm to the credibility of public employee unions from these excesses is made far worse by the unions’ attempts to hide them. The revelations about pay and pension abuses have surfaced only as a result of lawsuits. (Disclosure: The First Amendment Coalition has been a plaintiff in several of these cases.) Public employee unions, rather than taking the lead to stop abusive compensation practices, have vigorously opposed disclosure of individual employees’ salaries and pension amounts.

Public employee unions need to reboot. The old strategy of cynically buying political influence and excluding the public from decision-making has run its course. Unions can rebuild public support by recommitting to an agenda of open government in the public interest. If they don’t, they will be further marginalized.

Peter Scheer, a lawyer and journalist, is executive director of the First Amendment Coalition.


Loading...
OceanOfStars

Myth: Pension Costs for the State of California have increased by 2000 percent in the last 10 years.


Fact:

This statement compares a time when the State paid little or NOTHING toward CalPERS retirement benefits during years of robust investment earnings, when the state basically took a pension “holiday”, to the recent market cycle extremes and current economic downturn.


Fact:

In 1981-82, pension contributions for the largest category of employees cost the State 19.6 percent of payroll. For the current 2009-10 fiscal year the state is paying 16.9 percent.


Fact:

The State of California pays less as a percentage of payroll today than in did in the early 1980s.


1981/82 2009/10


State Miscellaneous 19.563% 16.917%

State Safety 20.409 18.099

CHP 31.995 28.438

School Miscellaneous 13.020 9.428


Myth: Public pension benefits are excessive and a drain on the public.


Fact:

The average CalPERS pension is about $25,000 per year. Half of CalPERS retirees receive $16,000 per year or less in benefits. Unlike the private sector, many CalPERS members do not receive Social Security, making their CalPERS pension their sole source of pension income, other than savings.


Fact:

Seventy-eight percent of CalPERS retirees receive $36,000 per year or less. School pensioners in the CalPERS program receive on average $1,079.00 a month.


Fact:

Less than 1 percent of the nearly half million CalPERS retirees receive annual pensions of $100,000 or more. Many are retired non-unionized or specialized skilled employees or other high wage earners who worked 30 years or more. Many served in high-level management positions.


Myth: Pensions are among the highest costs of State government.


Fact:


Forty-one percent of the State general fund budget is earmarked for public education, 12 percent for higher education, and 10 percent for corrections. The cost of pensions is about 2.5 percent of total State spending.


Myth: CalPERS pensioners can “goose” their retirement benefit upward by manipulating the income that gets included in their final year of compensation.


Fact:


In 2003, SB 53 was adopted into law which greatly restricts the type of compensation allowable, and it reduces potential for enhancing final compensation in order to increase pensions. CalPERS has authority to investigate and prosecute pension fraud. Under state law, CalPERS investigative systems help protect against “pension spiking.”


Myth: The average CalPERS pensioner gets 80 percent of their pay.


Fact:


The average CalPERS member receives 50 percent or less of their pay in retirement.


Myth: Police and firefighters retire at age 50 with 90 percent of pay.


Fact:


Under “3% at 50” records indicate that over the last seven years, safety workers who retired at age 50 with 30 years of service represented less than 1 percent of all those retired. The reason very few ever would receive this level pension is that they would have had to start working age 20 to earn 30 years. Most start their safety careers at age 27, 28, or 29.


Twelve percent of all public safety members are subject to the 3 percent at age 55 formula. They would need 37.5 years of service at age 50 to get 90 percent, and would have had to start working at age 12.5 to earn 37.5 years. And 7 percent of all public agency safety members are subject to the 2 percent at age 50 formula. They would need to have 45 years of service at age 50 to get 90 percent, and would have had to start working at age 5 to earn 45 years.


Myth: Prior to SB 400, the State paid $400 million in contributions. Ten years later, the State is paying $3 billion due to benefit enhancements.

September 23, 2009


Fact:

The $400 million paid in 1999 was the lowest the State had paid in generations and it was due to the fact that the investment returns in the mid-1990s were so high, little was needed from the State to cover the plans. Some years, the State paid zero contributions for schools. This was due to higher than normal investment returns. Using a starting point of $400 million is misleading, because the late 90s was an atypical period for investment returns. As of June 30, 2000, the State plan had $69.3 billion in assets, and liabilities of $55.5 billion. The State plan surplus at that time was $13.8 billion. The surplus used to fund SB 400 was $4.2 billion, leaving a remaining surplus of $9.6 billion. The $9.6 billion was used in subsequent years to make up for the effect of investment losses in 2001-02. Today, the State pays $3 billion in contributions. Compared to 10 years ago, half of that amount is due to payroll growth and pay raises, not benefit improvements. In fact, only one quarter of the $3 billion is due to benefit changes


Myth: CalPERS is unsustainable.


Fact:


As a percentage of payroll, employer contribution rates are returning to the levels of the 1980s. In fiscal years 1979-80, 1980-81, 1981-82, for example, pensions as a percent of payroll for miscellaneous State workers were 19 percent of payroll. View details of State Miscellaneous Tier 1 Rates.


Fact:


Employer contribution rates have been very stable over the past six years, changing by less than 1 percent of payroll during the past six years, thanks to our rate-smoothing policy. The expected increase in employer rates due to the downturn will increase employer contributions by an average of 1 to 3.7 percent of payroll in 2011-12.


OceanOfStars

Ahh yes. The “journalist”, like the politicians, vilifies public employees without getting their facts straight.


FACTS: A study of 20 years of data from the U.S. Bureau of Labor Statistics finds that:


Employees of state & local government earn an average of 11% and 12% LESS, respectively, than comparable private sector employees. An analysis spanning two decades shows the pay gap between public and private sector employees has widened in recent years.


Jobs in the public sector typically require more education than private sector positions. Thus, state and local employees are twice as likely to hold a college degree or higher as compared to private sector employees. Only 23% of private sector employees have completed college as compared to about 48% in the public sector


Wages and salaries of state and local employees are lower than those for private sector employees with comparable earnings determinants such as education and work experience. State workers typically earn 11% less and local workers 12% less.


During the last 15 years, the pay gap has grown – earnings for state and local workers have generally declined relative to comparable private sector employees.


Benefits make up a slightly larger share of compensation for the state and local sector. But even after accounting for the value of retirement, healthcare, and other benefits, state and local employees earn LESS than private sector counterparts. On average, total compensation is 6.8% lower for state employees and 7.4% lower for local employees than for comparable private sector employees.


Source: The study, “Out of Balance? Comparing Public and Private Sector Compensation Over 20 Years” commissioned by the Center for State and Local Government Excellence (Center) and the National Institute on Retirement Security (NIRS). The co-authors are Dr. Keith Bender, Associate Professor, Dept. of Economics, University of Wisconsin-Milwaukee and Dr. John Heywood, Distinguished Professor, Dept. of Economics, University of Wisconsin-Milwaukee.

http://www.nirsonline.org/storage/nirs/documents/final_out_of_balance_report_april_2010.pdf


A CNN analysis of the report titled “Government jobs not so cushy” can be found here: http://money.cnn.com/2010/04/28/news/economy/public_workers_earn_less/index.htm


slomike

Been away working my retirement job. I see nothing has been resolved. Look. We are in a pickle. We are in a large vat with other like pickles. Singling out blame won’t fix things. I tried that while “W” was in over his head. Life and governments steer like battleships. Make that oil tankers. Little things might ding their hulls. But only mis-steering or 100 years events can throw them off course. We have had both, repeatedly. Back on topic, state employee wages increased relatively because private wages slipped. It has been rectified in government somewhat by newer workers making less in government employee. Unfortunately, the non-union capitalist workers must lick the boot heel of their masters to get a raise. I’m sure having a Reagan Holiday will be with pay for private industry.


muddywood

All government unions should be abolished.

You government union workers are going to have to make a decision about the country you want to leave for you children and grandchildren.

Will you leave them freedom and the opportunity to work towards the American dream?

Or will you riot in the streets and then leave them as serfs with no choice and no freedom?


There are forces at work that are using the unions to force the fundamental transformation of this country.


parkie

The same thing is happening in Illinois. The public unions have been controling the elected officials for years and the results are the same. One example is the size of the vehicles that staff are driving, especially the executives-mostly fully loaded SUV’s like the Ford Exibition $50-60,000.00 each. All with the ability to have personal use attached, what a perk! Even division exec’s are driving Explorers with personal use attached. If they truely need a vehicle, why not down grade to a Focus or something comperable. For a power standpoint the municipal unions make the AFL-CIO look like children by comparison.

Wonder how much tax money could be saved if benefits were modified to the national average of wage and benefits of the private sector???


PJ

The union’s tactics did not “gradually” change to supporting Dems with cash–this started immediately after Jerry Brown, past and perhaps future governor, signed a bill allowing the union to collect dues from everyone, member or not. Fees were $1 less for non-members than members, so most people signed up.


These public unions are funnels for taxpayer cash: the legislature gives employees raises, which gives the unions higher fees, which gives the Dems higher campaign contributions.


I was a state employee, and most employees are good, but with the mandatory fees the UNIONS RULE. End the contributions, and you end their power.


connielu

I make 50k + a year as a mechanic foreman. I have a high school education and am self taught. Iworked up from a lube rack at a car dealership to what I do today. I have applied for a few gov. jobs and made to the last five applicants several times, I THERE IS cronyism. They protect and promote their own. A friend that works for the county had to have “special” ink pens that cost $10 each! She bought them with the county credit card she was issued. (she empties the garbage and cleans the bathrooms at a local reservoir) $48,000 a year plus benefits!


Spectator

Pretty soon, here come da judge! A Federal Bankruptcy judge, and this ONE person will undo all the legislative excesses that have occurred during the years. Pensions will be cut along with salaries and dues. And then will come the public employee riots: just like Greece!


Mr. Holly

I wish it could be that easy.


BeenThereDoneThat

For ThomasPaine, Slomike and Flipside, that think the Cops and Firefighters jobs are working wonderfully and the Gov’t sector of Union jobs is working wonderfully I have two words for you………Vallejo, California.


I await your spin.


slojo

We are not Vallejo.


BeenThereDoneThat

I’m not saying here on the central coast we are, the STATE OF CALIFORNIA IS!!!


Flipside

I always love hearing people complain about what other people make. Especially jobs that are open for all to apply. If you wish to become a teacher, fire fighter or any other state worker then do it. State workers as a whole (with some exceptions) make less then comparable industry standards as a whole. Compare California’s pay for a state Physician to a doctor that works in the private sector. The Doctor for the state can only make what the top level of pay that the state board dictates. The private has the opportunity to make far more based on their private practice. Benefits are used to “sweeten” the deal so that qualified candidates apply and are hopefully retained.

California also has one of the lowest amount of workers compared to the population of our state. I am also assuming all these employees are paying taxes as well and helping pay for things?

So when times are tough it is very easy to point fingers at an easy target. However, people still want their kids taught, bad guys kept in prison, public safety to be ready when needed and roads to be maintained.

The problem with California are not the employees. The problem with California is how it is run.


Mr. Holly

Flipside

What state job do you have? Are you enjoying one of those great state retirements? Or are you taking your 2-3 month vacation from school and taking time off to tell us working folks how bad you have it?


Flipside

Actually a Fire Captain for the State of California. Had the opportunity to do anything I wanted after college and chose to work for the state.


CalpersisAScam

Actually a Fire Captain for the State of California. Had the opportunity to do anything I wanted after college and chose to work for the state.

===============

That explains it.


Which family member gifted you your job?


Flipside

Sorry to disappoint you but nobody gifted my job. Started as a volunteer and worked my way up. Knew what i wanted to do and pursued it.


CalpersisAScam

Sorry to disappoint you but nobody gifted my job. Started as a volunteer and worked my way up. Knew what i wanted to do and pursued it.

========

They all say that, but if it is true, then that good for you.


You prevailed where tens of thosands of others failed……..probably through no fault of their own.


CalpersisAScam

I always love hearing people complain about what other people make. Especially jobs that are open for all to apply. If you wish to become a teacher, fire fighter or any other state worker then do it.


=================

OMG, nbow I have heard it all.


Yeah everyone, have fun getting a $200K per year comped GED, no prior experience necessary, FF or cop job, there are only 1,000 qualified applicants for every one job opening.


And after all the connected people are plugged in your chances of being hired are going to be about 100,00 to 1.


No one is getting a FF job, or even a cop job, unless they’re connected in. That is why virtually every single major metro FD and PD in this state has been sued at one time or another during the last 35 years for nepotism/cronyism hiring. And guess what, all those muni FD’s and PD’s lost and were placed under lawsuit consent decees, many still are, including the LASD which has been under a consent decree for the last 30+ years. LAPD just had their 20 year decree lifted last year.

The high paying gov jobs, like FF jobs, and to a lesser extent the PD jobs, are all “gifted” out to;


1- Family (Hi LAPD Chief Charlie Beck and 5 family members!!),


2- Friends,


3- Military workfare (mostly law enforcement) and


4- Civil rights lawsuit consent decree hires for engaging in 1 & 2 above. (Hi LASD, and your female hiring requirement under the Bouman v. Baca Consent Decree!!!).


Flipside

While what you are saying is historically true, it is no longer that way. Show up with a GED you won’t get a job. At least in CALFIRE. The reason there are so many applicants is because its a great job. Do you really think all the new fire fighters are as jaded as some of you all appear to be? Or maybe its the desire to help others and have an exciting career that drive people and not the opportunistic leaches you make all state workers to be.


PaulJones

Applying for one of these jobs and getting it are two different worlds apart. You have to know someone to get these jobs. The hiring practice is about nepotism and cronyism, this is a known fact as in “common knowledge”.


PaulJones

Forgot to add that the reason applicants possessing a limited GED education are allowed to apply is because they don’t want exclude their family and friends.


Flipside

Calling BS here. Most entities have eliminated the GED as a requirement and have minimum standards that people must possess for the selection process. You would be amazed at the amount of people who would not be able to pass a simple civil service test, let alone an oral interview. The background investigation would eliminate a considerable portion as well. If you are interested apply and see how far you get.


CalpersisAScam

Calling BS here. Most entities have eliminated the GED as a requirement and have minimum standards that people must possess for the selection process

================

And the gov employee hits just keep on coming!


FF, Cop and prison guard are ALL GED jobs, and EVERY major metro agency in the states requires just that a GED. Small SMALLER agencies, usually less than 100 sworn, MAY require 2 years of college, of which the applicant can WAIVE 1 full semester b/c academy training counts……..


Please prove me wrong, post up a job posting for any cop job in a major metro city in this state.


I won’t hold my breath!


CalpersisAScam

The background investigation would eliminate a considerable portion as we

==============

Wrong once again.


70% of the applicants that pass the first two tests, a basic physical agility test and a 10th grade level reading test, are knocked out in a 10 minute- highly subjective- “oral interview”.


Very few applicants fail any of the other tests (background, psych etc) compared to the oral interview-which is just a tool to hire family, friends etc…


Nice try- but that is strike 3, you’re out!


Flipside

Here is a link to LA’s entry level fire fighter.

http://per.lacity.org/lafd.htm

Once again showing your ignorance. And before you bring the GED thing up again, it is an entry level position so a GED has to be the standard as its a civil service exam.


Flipside

Here is a job posting for a fire chief.


Fire Chief : Houston, TX. City of Houston. Requirements: US Citizen; College degree; VDL; A combination of education, experience and training which clearly demonstrates the applicant has the ability to perform the essential functions of the position. Apply to: All materials are available for download at http://www.esci.us (Always contact or see website for additional information.) Also online at: http://www.esci.us Deadline: 6/28/2010


Here is another for an entry level position. You might have heard of them.

To become an FBI Special Agent you must be a U.S. citizen or a citizen of the Northern Mariana Islands. You must be at least 23 years of age, but younger than 37 upon your appointment as a Special Agent. Age waivers may be granted to preference eligible veterans who have surpassed their 37th birthday. You must possess a four-year degree from a college or university accredited by one of the regional or national institutional associations recognized by the United States Secretary of Education. You must have at least three years of professional work experience. You must also possess a valid driver’s license and be completely available for assignment anywhere in the FBI’s jurisdiction.


Here is San Jose’s

POLICE OFFICERS WITHIN CALIFORNIA:


* Must be currently employed as a California Law Enforcement Officer.

* Must possess a California Basic P.O.S.T. Certificate

* Must successfully pass the Work Sample Test Battery (WSTB) also known as the physical agility test with a “T-score” of 384 or higher within the last year http://www.theacademy.ca.gov/

* Successfully passed the 1.5 mile run

* Must be 21 years old and not older than age 70

* Must possess a valid California driver’s license

* Must have completed a field training program from a California law enforcement agency and have one (1) year of field patrol experience

* Must possess a U.S. high school diploma or general education diploma (GED)

* Must have completed at least 60 semester college credits or 90 quarter college credits from an accredited college or university

* Must possess U.S. Citizenship or permanent resident alien who has applied for citizenship

* Must have at least 20/40 vision uncorrected

* Cannot have any felony, domestic violence, misdemeanor assault convictions or currently be on parole or probation.


BeenThereDoneThat

You missed the point. Most everyone is not complaining about what people in private business make. We are complaining about what workers who WE pay make!!!


Companies keep things lean and mean by answering to share holders. In this case Gov’t. workers are like private workers and we the tax payers are the share holders, who finance this, so you bet we have a right to speak up.


Flipside

California has one of the lowest ratios of workers in the US per 10,000. How about organizing our state government to run smarter and clean up the levels of bureaucracy that are in place. After its all said and done you will still need workers to do the job.


http://docs.google.com/viewer?a=v&q=cache:EHqfqTQ_4toJ:www.ccsce.com/pdf/Numbers-mar07-govt-employees.pdf+state+workers+per+capita&hl=en&gl=us&pid=bl&srcid=ADGEESiYRkJK6lp7XHJyZAYB6-_-AiM2IwknlubmBZ_4GFW5AiqWSei_0BPM_uzVVIS1Lk26m00MVxSgfsuCS-BYwajYt1UZgjCn9b49QU57xX58JyWva4ceToz4T0QSNBMPJK80kiP-&sig=AHIEtbQqSU9pwqTjGDZVRKGmPxFOOBkN5Q


CalpersisAScam

State workers as a whole (with some exceptions) make less then comparable industry standards as a whole

===================

Oh brother, now I have heard it all.


Please show me ANYWHERE in the real worldwhere someone with NO JOB experience and JUST A GED can get comped $200K per year like the PD/FD/prison guards do.


I’ll be waiting for you to post up that link, in the meantime let me educate you on comp between the government and the real world.


California state employees’ “average”, or “mean”, base pay in 2008 was $63,815, according to an analysis of state wage data that excluded the university systems. Benefits pushed that to $100,727. THE AVERAGE COMP FOR A STATE EMPLOYEE IS OVER $100K!


The “median”, the point at which half earn more and half earn less, was $66,006. Benefits pushed that to $104,289.


Meanwhile, federal statistics show that the average mean wage among all Californians last year was $48,090 and the median was $36,441.


Try to spin that fact gov employee.


And this time you might want to include SOME facts backing up your perposterous claims that the gov pays less than the real world.


Flipside

Here is a survey (take it for what its worth) showing salaries of federal government vs. private sector. Seems to be fairly recent and it shows that there are differences both positive and negative. I could not find the one regarding our state, but looking at the numbers of the federal poll it shows that federal and private sector wages are within the amount of 10%. Very similar to what is being deducted from current state wages in the state of California. What I found more interesting were the comments at he bottom stating that the stated wages for individuals were higher then actual wages.


http://www.usatoday.com/news/nation/2010-03-04-federal-pay_N.htm


PaulJones

When it comes to local gov employees, physicians are perhaps the exception. Physicians can surely earn far more in the private sector. Doctors who work for the gov are either benevolent humanitarians or they are bad doctors that can’t make it in private practice. We have all heard the horror stories.


It is the opposite for the majority of gov jobs outside of physicians. These employees would never make it in the private sector where they have to be held accountable. We need reform now. No more earning more or better benefits than the average median private industry taxpayer.