Does the Bell Toll for Excessive Public Pay?

Increasingly, the public may be seeing that the problem isn’t a handful of officials who illegally gamed the system, but a system that allows a powerful minority to legally game the majority.

“The art of government is to make two-thirds of the nation pay all it possibly can pay for the benefit of the other third,” mused Voltaire. Even that cynical French Enlightenment writer couldn’t imagine what would transpire one day in California, where a portion of the mere 15.3 percent of the public that works for government has gotten the rest of the public to pay for an eye-popping level of compensation.

The latest data — revealed in a December update to the controller’s “Government Compensation in California” Web site — provides fodder for outrage. There’s a fire battalion chief in a small Bay Area suburb receiving a one-year total compensation package that costs $494,000 and city managers in modest-sized burbs (Temecula, Menifee, Carlsbad, Buena Park, Fountain Valley) receiving pay-and-benefit packages of nearly a half-million bucks and more in 2012.

We see a list of employees in fiscally troubled cities — Stockton, San Bernardino, Vallejo — with total earnings in the $200,000 to $300,000 range. The data shows public “servants” taking $230,000-plus cash-outs of leave, CEO-level salaries for employees in impoverished backwaters, and many employees receiving six-figure benefits in addition to their wages. Average pay levels for California public employees often soar above average earnings in their respective communities.

Coincidentally, the controller’s update was released just as Angela Spaccia, former administrator in the scandal-plagued Los Angeles County city of Bell, was found guilty on 11 corruption charges that included the misappropriation of public funds. She was accused of creating a secret pension fund for herself and then-city manager Robert Rizzo, who at one point “earned” a salary of $800,000 a year plus benefits.

Rizzo — the rotund racehorse-owning poster child for municipal greed — previously pled “no contest” to corruption charges. Five other Bell officials were convicted, also. The scandal, which erupted in 2010, sparked a widespread debate about public pay levels and oversight. Trial evidence included an email string where officials joked about getting “fat together” and “taking all of Bell’s money.”

In fact, Controller John Chiang created this statewide compensation Website, based on data provided by cities and agencies, in direct response to Bell. The database has been widely praised as thorough and easy to navigate. But as scary as the information it provides may be, it may even understate the problem.

Its municipality pay averages “are in orders of magnitude too low,” argued Steve Frates, director of research at Pepperdine University’s Davenport Institute. That’s because it includes part-time and occasional workers in the average. Furthermore, the database doesn’t include other benefits public employees receive. It only calculates the direct costs of pensions and medical-care benefits — not the tens of billions of dollars in unfunded liabilities.

Chiang says that public disclosure of compensation information is the first step toward reform. Critics complain, however, about a lack of follow-up steps from other state officials. “The illegality, the excesses of Bell, are an aberration of the real problem,” said Richard Rider, president of San Diego Tax Fighters. “The most powerful force in local politics are the public-sector unions. They elect people who are most compliant. The result is what you would expect.”

The public has seen only modest reform. Gov. Jerry Brown and legislative leaders were concerned last year that their tax-increasing ballot measure (Proposition 30) was in trouble because the public didn’t trust that they would spend new dollars wisely. So they cobbled together a tepid pension-reform measure that mostly pares back excesses for new employees. That was it from the state.

Some localities, including San Diego and San Jose, passed pension reform measures last year. Bankruptcy forced Stockton to pull its far-above-average compensation levels down to the state average. But nothing fundamental has changed in California.

Now that the Legislative Analyst’s Office is predicting years of budget surpluses (provided the economy recovers and legislators control their spending), any hope of compensation reform from the Capitol is dim. Reform efforts have thrived only when it seemed as if the state was running out of cash.

On the hopeful front, San Jose Mayor Chuck Reed, a Democrat, is championing a 2014 statewide initiative that would allow cities to cut future benefits for current employees. Union activists are portraying that as an attempt to “eliminate” pensions, which clearly isn’t the case. But that measure could spark the next public-employee compensation battle. Reed recently argued that union-driven overpayment for police leads to higher crime because cities don’t have money left to hire additional officers.

Supporters of Reed’s effort are bolstered by a new Field Poll that reveals plummeting public support for labor unions, as a plurality (45 percent) of Californians say they do more harm than good. And despite the “no reform” approach in Sacramento, more troubling numbers trickle out — even from unlikely sources.

Treasurer Bill Lockyer, a union ally, told a small group in Thousand Oaks this month that the California State Teachers' Retirement System (CalSTRS) is in “crisis mode” and that “there will be a ratcheting down of retirement promises and commitments.” He did, however, defend the condition of the larger California Public Employees' Retirement System (CalPERS).

Sound or not, the list of those who receive pensions of $100,000 or more from CalPERS now tops 12,000 and is growing by about 40 percent each year. There’s plenty of accessible information, from the controller and elsewhere, suggesting that the public-employee compensation system is unsustainable and unfair. Union Watch reports that in struggling Desert Hot Springs the average city worker actually receives an all-included package of $144,000 a year and the average police and fire employee receives $164,000.

Increasingly, the public may be seeing that the problem isn’t a handful of officials who illegally gamed the system, but a system that — as Voltaire understood — allows a powerful minority to legally game the majority.

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  • Raston Bot||

    Our council hired our city manager at $245K to head a small workforce which is highway robbery. I can't wait for some California muni to recruit him at double the pay. Morons.

  • sarcasmic||

    At least we don't have to worry about excessive alt-text.

  • Free Society||

    Why does every article's commentary include one or more references to alt-text? Paint me a square, but I don't get the meme-ness of it. hellllppppp meeee

  • sarcasmic||

    It's a techie thing.

  • Free Society||

    I'm in the techie club too and I just don't see the joke. I guess I haven't been lurking on the Reason boards long enough...

  • Free Society||

    but thank you for the insight

  • sarcasmic||

    Either you get it or you don't. If it has to be explained then it isn't fun anymore.

  • UnCivilServant||

    We're addicted to the little jokes and one-liners that show up from time to time there.

  • Sevo||

    When the issue shows up in the Chron, the (obviously union-driven) comments are along th4e lines of 'private sector pay is too low!'
    The econ-ignorance is easily supported by a cheer-leading section of 'free-shit' voters; this *is* the SF bay area.
    Market clearing pay is anathema to pub-sec unions; they want what is "fair".

  • Free Society||

    Its municipality pay averages “are in orders of magnitude too low,” argued Steve Frates, director of research at Pepperdine University’s Davenport Institute.

    Oh no! The arbitrarily created government jobs pay a rate that we've arbitrarily decided is too low. Which as you might have guessed is a direct result of the conservative war on women/cripples/ blacks/jews/asians/workers/unions/ grandma/poor people.

  • ||

    I think Steve Frates is referring to the data that is being reported. He is pointing out the fact that part time workers are being included in the average to make it appear that the public sector workers are only robbing us blind, rather than robbery, rape and blindness.

  • ExNuke||

    Actually, what he is saying is that the cities figure the average number (that they like to publish) to include part time workers and short term temp help to give them an "average" number that is way less than realistic. Figures don't lie but liars figure. If you average 10 millionaires with 100 Walmart workers you get an average but it isn't representative of much.

  • JJEE||

    I don't know if the pay averages are actually "orders of magnitude too low", but they are certainly low. I looked at the data for Santa Cruz and did a quick analysis to determine the average pay for full-time employees only. With the simple assumption that anyone making less that 16,000/yr (minimum wage in CA), is part time, I came up with an average wage+compensation of $94,766/yr! The average, with all employees (of which they include 8 unpaid positions!), is $83,394. Not quite an order of magnitude, but still a significant amount.

    My number is likely still underestimating the average for full time workers since many of those positions I include are obviously part-time (since it includes many nurses earning $18k/yr, Sheriffs earning $19k/yr, etc. which are much too low for those job titles).

  • CE||

    “The art of government is to make two-thirds of the nation pay all it possibly can pay for the benefit of the other third,”

    Voltaire wasn't creative enough. The art of government now is to make 45% of the nation pay for the 20% who run everything and the 35% they hand out freebies to, and combine with to outvote the productive class, 55-45%.

  • CE||

    Which leaves the obvious solution: only net tax payers should get to vote. That's the way it works in any voluntary association or corporation. You don't let the customers pick the CEO, or the employees. The shareholders get to, because it's their money on the line.

  • BonitaDave||

    That's essentially how our original Constitution worked. Only land owners could vote. Would be so different if only those who had skin in the game got to choose the direction of our country. Our founding fathers knew the danger of unimpeded democracy. They would be so disappointed on how we screwed it up.

  • optimusratiostultum||

    though they did expect it

  • CE||

    And what's wrong with owning race horses?

  • G3||

    Try living in NJ, where the Dem party bosses pretty much run the state. We've got public officials and their cronies who have 2, 3, 4+ F/T jobs...each with its own lifetime pension and benefits. Impossible to try voting them out - hell, we got stuck with Menendez and now Booker. Nice, huh.

  • Miley||

    my best friend's half-sister got paid $13253 a week ago. she is making money on the computer and moved in a $315200 house. All she did was get blessed and apply the information explained on this web page

    JUMP26.COM

  • freeAgent||

    That's nothing compared to what she could be making as an employee of the State of California. You can find out more on the following web page:

    http://www.ca.gov/

  • Eric Bana||

    Thank god these public servants are sacrificing themselves for our benefit. How noble.

  • Sevo||

    And the TEACHERS! Who can be more angelic than teachers?!

  • Don'tTreadOnMe||

    The cost of living in CA is ridiculous. These public servants are barely making ends meet….and they have dedicated their lives to SERVING the public. Bend over BIIIIOOOTCH!

  • SueNichollsera||


    my roomate's half-sister makes 74 dollars an hour on the laptop. She has been without a job for 7 months but last month her check was 19922 dollars just working on the laptop for a few hours. published here

    http://www.tec30.com

  • kenezen||

    Federal Employee Income and pension per year average:
    From "USA Today" in 2009 was $123.049.

    Private employee Income and pension per year average was $61,051.

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