Why government is so expensive in California
July 25, 2008
Michael Shires, professor of Public Policy at Pepperdine scratches the itch of why government is so expensive in California; including local county and municipal governments. Shires argues that it is just not a matter of increased taxes v. cutting services; this is how Democrats and Republicans in the California legislature paint the picture. Rather, revenue declines are only a small part of the problem. While services and their cost actually do not increase, the annual increase of secretly negotiated salary, benefits, and cost-of-living increases benefitting unionized public employees is killing budgets, savings, and family finances statewide.
Shires writes: “Most public employees automatically receive a three to five percent “step” increase each year. The raises we hear discussed in the limited public releases about these negotiations are increases on top of these basic increases — the so called COLA or cost of living adjustment.
“For example, in Vallejo, a city which recently filed for bankruptcy protection, some unions were scheduled for 21 percent COLA increases over three years — on top of their regular step increases of 3-5 percent.
“These kinds of increases are unheard of in the private sector (try asking your boss for a 12 percent guaranteed raise for each of the next three years), but have become ubiquitous in California?s state and local governments.
“And this is just the salary portion of the conversation. Add on top of it full medical benefits for the rest of their lives, extensive overtime and an amazingly generous retirement system and you have a public finance system that is destined for bankruptcy — a destination rapidly approaching for the state and many local communities.
“While the result is shocking, the real failure is the secretive process that lead to it. The total lack of public information about these negotiation processes prevents the public from holding their elected officials accountable. Add in the fact that many of these very officials are elected due to major investments by these very employee unions (a topic for a later day), and you have a recipe for fiscal disaster. And taxpayers across the state are about to taste the fruits of that recipe.”
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Tags: cola, contra costa county, contra costa politics, bankruptcy, contra costa news, vallejo, california politics, benefits, budget deficit, california politics blog, local government, california
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The legal right for unionization of public employees in California began with the Meyer-Milius-Brown Act of 1972. As a human resource professional at the time, I remember the predictions at the time that this inappropriate extension of a private sector right to the public sector would eventually bankrupt the state (after all, state “management” hasn’t the incentives to resists exorbitant union demands which private sector employers have; public employees, who are never laid off and who basically can’t be fired, don’t need the same level of “protection” private sector employees do).
After a 15 year absence from the state, I shocked to find upon my return that the premium payer in the county where the oil company for which I was HR Director was based was the county itself! There simply was no way we could justify matching the pay and benefits enjoyed by our public servants! On the happier (?) side is the fact that some of the people laid off during the oil industry downturn of the late 80’s and early 90’s were able to go to work for the city or the county or the state. There they enjoy the highest pay and benefits available in overstaffed organizations and look forward to retirement benefits which are almost criminal!