To solve a looming pension crisis and budget gap, city officials here said, they needed to take drastic action. And everyone agrees on one thing: they did.
Nearly half of this city’s workers were told late last week that, come September, they would probably be out of a job. Nearly every city department will be eliminated. More than a dozen tasks will be outsourced, including graffiti removal, firefighting, building maintenance and street cleaning.
Unlike the drama that played out over the last two months in Madison, Wis., the battle over public workers in this bustling suburb and upscale shopping mecca in the heart of Orange County is happening at lightning speed.
Unfortunately, and as much as I’m concerned about the workers who are going to be affected by this action, this is going to continue to happen. Our state government offices in Sacramento need to be slashed as well.
I don’t think I’m alone in thinking that downsizing of government needs to be seriously; particularly our own state’s legislature and the departments and agencies created by them. The cost of their retirement benefits have bloated our state’s budget to the bursting point, and Governor Brown has begun slashing it to the bone. The number of state agencies…..some 400, I believe…..is staggering, and concomitant with that is the cost of retirement benefits for their employees. The people of this state can no longer afford it.
Cennydd,
You’re a California native, so perhaps you can confirm this. Whatever else may be said of Jerry Brown, he was always idiosyncratic when it came to funding his own executive office (not least in living modestly, whether for effect or just because it was in his nature).
I hope that those like the governor of Wisconsin who are proposing sweeping cutbacks in spending are leading by example in terms of personal salary cuts and staff layoffs in their own offices. At last report, the Republicans in Congress had yet to offer much in the way of reductions in their own offices and staffs (the Democrats haven’t either, of course).
The point is ultimately not whether such reductions make a dramatic difference in the various budget deficits, but whether those elected officials who are compensated out of the public purse and set their own salaries are willing to bear their share of the cost. Otherwise calls to the need for sacrifice ring a trifle hollow.
In Costa Mesa, 100 of those workers are firfighters who have been promised a job with the county firefighters.
It’s the costs of unions that are killing us: free benefits, pensions, accrued time off (vacation and sick leave). I believe this is true all over the country. I pay a great deal for my health care – why should union people be any different – why do I have to pay theirs too?
4. True. I also have a serious problem with our legislators being able to claim pensions after serving two or more terms in the legislature, and I believe in strict term limits of no more than two terms in office. I believe that since most legislators…..at least those in our state…..are members of one of the professions or are business people…..they really don’t need to feed out of the public trough by collecting pensions after they leave office, and therefore, those pensions should be eliminated over time. And public service employees’ pensions and perks should equal those of private industry. I further believe that the legislature should serve only on a part-time basis…..six months out of the year…..and should be constitutionally required to complete all of their business within that time frame.
And I’m a native of New York State.
http://www.pewcenteronthestates.org/report_detail.aspx?id=56695
I’d definately recommend taking a look at this Pew Foundation study on state benefits. It’s a mixed bag. Some states are fine; others have a serious problem largely because they have deferred making payments into the pension plans always kicking the can down the road. Retiree health insurance payments are far more of an issue. There is a great deal of misinformation out there for various political purposes on both sides. Unfortunately it is very easy to seize on some medical professoinal who is making some outrageous pension and make him a the poster boy for pension reform. Do we really think we can outsource medical specialties for less money? Meanwhile, we ignore the retired grade school teacher who is living on a modest pension after decades of faithful service. There are definately abuses and they need to be corrected.
7. deaconmark – “Meanwhile, we ignore the retired grade school teacher who is living on a modest pension after decades of faithful service.”
Is that an example of “…abuses and they need to be corrected.” ??
No, i just think we need to take a reasoned approach. Cashing in on huge amounts of sick leave and vacation leave to pump up final salary should be stopped. We should cap high end pensions by allowing a mixed system with 401 type opportunities for the high salary employee rather than having the state pick up the entire bill. But lets not punish the low paid worker for the abuses in some sectors.
Cennydd (#6)
My mistake 🙂
Decades of faithful service…… why does that always precede what I am obligated to pay for someone else’s benefit. I have been working since I was 15 years old, that would be many decades of my own faithful service.
We pay THOUSANDS per month for our family’s health insurance. What is there about teachers that precludes their THOUSANDS of dollars paid for THEIR OWN insurance?
By the way the teacher’s unions collect millions in dues each year … not 1 dollar from teacher’s union or United Auto Workers has ever been spent on a conservative republican candidate. NOT one dollar. Until we forbid public unions (perhaps private also) from contributing money to political campaigns, we will all be under the foot of a union member who elects his own official and which official provides all support for that union member.
Conservatives are not a part of this equation. Wake up America.
[blockquote] not 1 dollar from teacher’s union or United Auto Workers has ever been spent on a conservative republican candidate [/blockquote]
I guess it sounds so good it rings of truth, but it’s not true, perhaps mostly, but there are no few exceptions. The more recent example is the payoff in Wisconsin for police and firefighter unions supporting the current governor.
And so-called Conservatives aren’t shy about putting their hands in the public’s pocket, either (and I’ve voted for and followed the actions of enough to call them out). Climbing up on a white steed and carrying the flag of “conservatism” doesn’t make one inherently good, nor does asking for a decent wage and benefits make one a raving socialist. Makes for good infotainment, though.
I’m interested in knowing in 10 years or so if the taxpayers in Orange County feel they are getting more bang for their buck in 2021 than they are (or are not) getting now. Perhaps this will be for the best, but outsourcing is oftentimes just putting someone else in the middle to handle the money and not any real savings. More often than not that middleman is sending 1 or 2 dollars of his take back to a politician to help their campaign. But perhaps that’s just a more subtle way to institute taxpayer-financed political campaigns. Such innovation. Is this a great country or what?
Public service employees indeed [i]should[/i] pay for their health insurance out of their [i]own[/i] pockets, and not ours. I am highly incensed that they [i]don’t![/i]
Compensation packages in many professions factor in benefits. Salaries are less than they otherwise would be because of the benefits that are included. The US military is a prime example of this.
I’m always so curious about why those “incensed” over the rich benefit packages and salaries of public employees have never sought public employment themselves. Those super high compensation packages would surely attact one, no?
OH and those in favor of equality of total benefit package for public employees and non governmental employees with comparable jobs…i’m all in favor of it. It would vary a great deal in differenct parts of the country. I figured at the per student hourly rate that i paid tutors for my daughter (this was a long time ago; she has a graduate degree now), a starting teacher’s pay here in No. California would be about $120,000 a year. I’m pretty sure that most teachers here would give up current packages for that. And it would be very fair because the more students the more money. As for me, i do basically the same thing as an indexer at Google or Ebay (but for a public library)..i’m more than happy to equalize our compensation packages. Hope that includes the three free gourmet meals per day in a beautiful cafe and the free onsite dry cleaning. Don’t they have personal concierge shoppers to do shopping for them? I cannot wait.
Mark what I said about drastically cutting the size of our state’s government as a cost-cutting measure; I meant it!
It is not uncommon for state legislatures to give “benefits” in lieu of salary. Salary has to be paid in current dollars, benefits are differed to a later date and a later legislature.
Also that state does not give benefits. Benefits and pensions are forms of differed compensation. Thus when you ask a state or government employee to “contribute” to a health plan or pension you are actually asking them to take a pay cut out of their current income.
I took a great deal of pride in my service as a government lawyer. I enjoyed comparing my 25 to 30 dollars an hour (I converted my yearly salary to billable hours once) to my private lawyer friends and opponents who billed out at 250 to 500 dollars an hour. Of course I didn’t add in the health care and future pension which had value.
State citizens always seemed to want state services and protection, but they never seemed to want to pay for them. Oh well.
I remember two things from the last Presidential election. One was that 250,000 dollars as an increased tax point was intolerable because, after all, 250,000 just reflected a “middle class” family’s salary. Then there was the AGI etc bail outs. There was screaming that we “had to honor contracts” for the huge bonuses — at public expense, of course.
This turning on the public sector is Marxism 101. Pure class warfare. Genuine middle class salaries in the private sector should have the public sector’s benefits, rather than pitting the middle class against one another.
Br. Michael, well said.
How is the public supposed to react when they discover that often, when a public servant retires from state service, his or her pension equals their salary? Believe me, it does happen.
Yes, #21 that is very true. When i retire i will get near to 81% of my salary plus social security. But, the public did not pay for all of that. 8% of my salary for 30 years was contributed (mandated, not elective) to my pension. In addition to that, i voluntarily contributed 3 full years of salary (over that period of time) to increase that pension (just like someone contributing to a 401K). Most years of my employment my employer contributed little or nothing to my pension because increases in investments covered their contribution. Yes, i’m saying the contributed ZERO. Only in years when the market was down did my employer contribute (and that amount did not come close to “matching”). But somehow in the press this gets interpreted that the public is paying an outrageous pension? Huh? So the public “discovering” some plot to take their tax money and enrich the public servant turns out to be not quite as it has been presented. Why then is the idea being put forward? I have to agree with #19 that this is about class warfare. I’m reminded of a “story” i was told. A CEO, a public employee and a small business owner walk into a bakery. The bakers sets down a plate of a dozen cookies. The CEO grabs 11 of them, and turns to the small business owner and say, “you better watch that public employee. He’s about to grab your cookie.”
Dir of Massport, the local airport authority just retired. He is now taking his unused sick time from 30 years of service at his highest pay rate in the amount of . ……….. $460,000. Yes, that’s right, unused sick time – all at the highest pay rate.
In addition, he rec’s his pension of $200,000 per year. He also rec’s his FREE health care insurance, all of which is transferrable to his wife upon his death. All of this in a job from almost no one is every fired. Top pay, top benefits, top retirement, cannot be fired. Wow.
Is this GREEN? Is this SUSTAINABLE? Oh, he also will take away the cash value of a life insurance policy they took out on him, which is somewhere in the vacinity of $45,000.
The real difference is that if your benefits are too expensive and the company you work for prices their goods too high then I can go to another purveyor of those goods. If my town government, or my county government or the state govt or the federal govt gives away too much (like the $14 Trillion we are now in the hole for while they spend like they can print it … oh never mind, they are printing it) then I have no where else to go to get those services, I must pay for them and can bancrupt me.
If GM cannot stay competitive because they gave too much to the unions, they will go out of business – unless the federal govt bails them out. Oh never mind, they did that didn’t they. Now I must pay for union contracts I don’t want to support. What should have happened was GM failure, then sell the assets, pay off as much as possible to creditors, new company forms, buys the assets remaining, sets up shop, builds cars, nothing wasted, new more efficient company. Now we are moving to the socialism/fascism stage where the govt chooses winners and losers, but in the end the taxpayer is the real loser. Consumers are supposed to pick the winners, the most efficient, least cost companies – and the consumers – win. Look out!
Lostdesert (#23), are you talking about Boston’s Logan International Airport – the 19th busiest airport in the US? If the position was privatized, how much do you think it would take to attract a properly qualified individual for the job? Do you have any knowledge of the compensation packages for equivalent positions at other airports? Given typical compensation rates in the private sector for positions with equivalent demands and responsibility, you may be getting a bargain.
#23
The average state worker makes $49,240. Of course, this includes the salaries of judges, governors and other high executives in the mix. Of course abuses must be stopped. But let’s not let the oddball outrage substitute for the real average.
http://www.ehow.com/info_7820407_average-state-employee-salary.html
Turns out he’s the executive director for the Massachusetts port Authority with oversight over Logan, Hanscomb, and Worcester airports, as well as the Port of Boston.
http://www.thebostonchannel.com/r/26884882/detail.html
WarrenS makes a good point: privatize Massport and see where the money goes. I’d suspect it’d cost more to employ managers, money that would be made up in other areas of service.
But, IMHO, the former director of Massport is ripping off the taxpayers. IMHO, Jack Walsh is ripping off the layed off workers and many others at GE. A better question for us would be, do we think the guys sweeping the floors at Logan or running the pilot boats in Boston Harbor are ripping off the taxpayer?
The thing that puzzles me is why the free market never seem to apply when it comes to the sacking of top executives in the private sector.
Bonuses for success are fair enough, but why do there never seem to be ‘penalties’ (i.e. nothing more – proportionately – than any other sacked worker would receive) for failure? One rarely – if ever hears of executives leaving with minimal severance pay only, even when they’ve run their company into the ground (perhaps they do, but only examples to the contrary get reported).
Drat. “seems” not “seem.”
Where on this planet does anyone get 30 years of unused sick time paid at the highest rate? Who can honestly claim that they have not used any sick time in 30 years?
If GE and other private firms overpay their executives and the products/services made by those firms are overpriced in the market, I can choose another supplier of said product or service. I have no such choice with the government. I am captive and I must pay for the fact that for every $1 they take in in taxes, they spend $1.41. My great grandchildren will be slaves to the excess spending of these fools.
BlueOntario,
Spot on. You bring up GE. Any idea what GE paid in Federal Income tax for 2010?
From abcnews:
“For those unaccustomed to the loopholes and shelters of the corporate tax code, GE’s success at avoiding taxes is nothing short of extraordinary. The company, led by Immelt, earned $14.2 billion in profits in 2010, but it paid not a penny in taxes because the bulk of those profits, some $9 billion, were offshore. In fact, GE got a $3.2 billion tax benefit.”
http://abcnews.go.com/Politics/general-electric-paid-federal-taxes-2010/story?id=13224558
Lostdesert, Keep your eye on the real ball. It’s the stuff above.
Well, 30 years of sick leave would be justifiable if it is deferred compensation.
Part of the problem in the government sector is that the legislature wants to play games. They like deferred compensation so they can give state employees a raise, but not pay for out of current tax dollars. The public is happy with this until someones saves up their sick leave and then cashes it out. Then they cry bloody murder.
Also you have to distinguish between career employes and senior management/political appointments. The career employes have certain protections that make it hard to fire them in order to protect them from exploitation and intimidation by their political bosses. Politicians are not above trying to influence career employees to make decisions that favor their cronies.
Senior management and political appointees work at the pleasure of the politicians. They can be fired for any reason or replaced whenever the opposing political party comes to power. In Florida, for example, senior managers were civil service. They changed this to make them at-will employees subject to being replaced by political agency heads. In other words they lost civil service protection and became at-will employees. In exchange they were allowed to accrue up to 450 sick leave hours which they could cash in when they left state employment or were fired when a new administration came in and jobs had to be awarded to the incoming politician’s friends. Basically it was severance pay if the senior manager was smart enough to save it up.
Needless to say this lasted until the first manager was fired and claimed his 450 hours worth. Note that sick leave accrues at about 30 days a year so this is about 17 years worth to reach the Florida cap. Then they changed the rules, but the senior managers were still subject to the whims of their political masters.
Sorry cant do math. 30 days at 8 hour a day divided into 450 hours is about 2 years worth. Sorry can’t do simple math.
I know on the federal side sick days equal 4 hours per biweekly pay period – 26 days per year. There’s no limit on how much you can accrue and it does get figured into retirement. They’re also eligible for compensatory time and (occasionally) overtime. On the other hand, OPM puts strict limits on when and for what a person can use sick days for. If you and your family are reasonably healthy, you’re going to have a significant balance at retirement.
The avg state worker earning $49k is salary only. It’s the health insurance side of this that kills us all. We pay thousands every month for our family’s health care. The state workers’ is paid by me. Therefore their salary + benefits is probably significantly higher. And, the defined benefit plan often extends to spouses of retirees.
In Costa Mesa they just laid of a big number of employees, I think they said it was north of 200. The avg police wage is $105,000. Police can retire at 50 years old at 90% of salary. In a very few short years the City of Costa Mesa will be spending 20 % of the total city budget on retirement benefits. 20%, really? We are prisoners to the benefit plans these idiots have agreed to. If GE pays its employees or its senior management too much, then I can go to another electronics or jet engine maker. If I am unlucky enough to live in Costa Mesa, I am stuck, big time.
The $250,000 salary threshold was really meant as a view into small business income, not a middle class income level. Small business used to drive this economy. Of course, the more this administration drives its’ nose into every aspect of commerce, the less small business will thrive. Small business people are the real entrepreneurs. They hire the most people. They take the most risk. That was the point of protecting $250k. This administration despises business – except for the taxes it will pay, except for the business which it favors – and then they will be excused. BHO is fond of GE and so.
I think that the way things are going now, BHO will have to look for a new job at the end of this term.
The outrageous cost of healthcare is not a reason to turn on public sector employees. They do not create private insurance premiums. Nor can anyone seriously maintain that it is BHO or the Democrats who favor tax breaks for major corporations. This was the Republican’s first agenda item coming into office in the the most recent round of elections.
No one is arguing that the there are not public sector pay and benefit abuses. They are the exception, as the average State employee’s salary of 49,000 makes clear. For that “average” even includes the abuses cited as well as governors, judges, agency heads, etc.
Paying zero taxes on 15 billion dollars in profit like GE tells us where deficits really come from. And it’s a proven economic fact that “trickle down” doesn’t work as a tax strategy. We have to stop turning on one another and look at real solutions. Yes, some public sector reforms are needed. More reform is needed yet for the private sector tax codes.
250,000 as a “small business” argument would be more valid if the overwhelming number of those “small businesses” weren’t in fact Professional Corporations and LLCs that are no employers but merely lawyers, dentists, accountants, etc. You are, however, correct on reflection that the argument was made back then that 250,000 was a “small business” window even more than the comic “middle class” salary.
The Boston Herald publishes state salaries. On page 202 of names at 20 names per page one finds the last name earning $100,000 (salary as opposed to total earnings). That doesn’t include benefits. That’s 4,040 persons in the tiny state of Mass earning salaries of at lease $100,000, that’s $404,000,000 in salary alone annually.
If you look at annual earnings then you go to page 323 where the last name finally drops off. Annual earnings may represent reimbursed expenses, don’t know. But that means that the salary paid out is hundreds of millions of dollars per year for just those state workers. If the annual earnings includes expenses then one might question why an Asst Professor from UMass earned $60,586 (page 1 if sorted in order of annual earnings) but earned $388,600. What is this professor doing in travel or attending conferences that they earn 5 times their salary? Since when are we paying a state Univ prof $388,600, wasn’t the state Univ system supposed to be the low cost alternative?
When you add the pensions and sick time and health care cost the number is much larger. In the private sector we add between 30% and 45% burden for benefits.
Many of these positions are in quasi-governmental agencies. That means they are beyond the reach of the average citizen to control or shrink. We hear little about them, we just pay and pay and pay. I would guess that much of what they do could be done by private industry or not done at all and never missed.
Even when assisted by private citizens, the gov’t is clueless; just read about the Harry Markopolos letters to the SEC regarding Madoff, complete incompetence. What wonderful thing are these agencies doing for us? Nothing.