California Policy Center

The Kids Most Definitely Are Not All Right

October 27, 2021 By Larry Sand 2 Comments

The latest NAEP scores indicate a very troubled education system, and eliminating standardized tests certainly won’t solve the problem.

On the most recent National Assessment of Educational Progress (NAEP), or “nation’s report card,” test scores in both reading and math declined for 13-year-old students, the first drop registered in 50 years. The test showed that the decline was concentrated among the lowest performing students. Peggy Carr, commissioner of the National Center for Education Statistics, who has been working with these data for 28 years, was shocked to see the decline. “I had to ask the question again of my staff. Are you sure?’ I asked them to go back and check,” she said.

It’s important to note that this test was given in early 2020, right before the pandemic-related shutdowns in the spring. At that point, then Secretary of Education Betsy DeVos granted a blanket, one-year “accountability waiver.” But in February 2021, with the Biden administration in place, new Education Secretary Miguel Cardona said he’d “require states to administer the federally mandated tests in the spring, with an asterisk: They had the option of giving shorter, remote, or delayed versions.”

Bad idea. Per researcher Dan Goldhaber, “Using different versions of tests makes the results less comparable across different years and school districts.” And shorter tests produce less “actionable” information about individual student achievement in the short term. Nevertheless, the trend to disparage, eviscerate and ultimately do away with standardized tests is all the rage these days.

It’s also happening on the college level. Brandon McCoy, education policy expert at the Manhattan Institute, reports that the standardized test “has slowly lost its pride of place in college admissions over the past decade. By 2019, the number of schools going test-optional had risen to 1,050. The pandemic has catalyzed this trend, with at least 1,400 colleges in 2021 making the move to test-optional. College systems around the country are now permanently eliminating the requirement for the SAT and ACT; the University of California system is doing away with the tests altogether.”

Of course, the education establishmentarians will do anything to discredit low test scores because it makes them look bad. In fact, the teachers unions are actively working to eliminate any kind of standardized assessments because they know that if they don’t, public fury – especially from parents – could lead to reforms that could hurt the unions’ bottom line. The unions invoke terms like “test and punish” and “high-stakes testing” to put a bad spin on the assessments. But this is like a fat person blaming the bathroom scale for his obesity. A good test is diagnostic, explains where things are amiss, and may show ways to make improvements. No matter, the unions don’t care. And these days they have a new weapon – tests are racist, they say. For example, the Massachusetts Teachers Association is speaking out against the state’s standardized test, insisting that it has “allowed white supremacy to flourish in public schools.” The teachers union is endorsing a bill that would eliminate getting a passing score on the test as a graduation requirement in the state.

In Canada, Teri Mooring, president of the British Columbia Teachers’ Federation, quipped that standardized testing is “hurtful” and blamed a “right-wing think tank” for misusing results to “inappropriately rank B.C. schools,” which contributes to “entrenching both real and perceived inequities.”

The National Education Association also makes the absolutely baseless claim that testing children is racist. “From grade school to college, students of color have suffered from the effects of biased testing.” The union goes on to say, “Since their inception a century ago, standardized tests have been instruments of racism and a biased system,” and that “students of color, particularly those from low-income families, have suffered the most from high-stakes testing in U.S. public schools.”

Instead, NEA wants to promote “authentic assessments that reflect the broad range of students’ learning and skills, including creativity, leadership, critical thinking, and collaboration.” In other words, they want the tests to use highly subjective assessments, which the union will have a heavy hand in controlling.

Click here to read the full article at the California Policy Center

Filed Under: Trending News Tagged With: California Policy Center, politics, School

Can Public Sector Union Power Ever Be Stopped?

November 21, 2018 By Edward Ring 4 Comments

Imagine you’re hoping to support a candidate for local office who will enact reforms that will improve your city, maybe even save it. Someone who will fight tirelessly to eliminate work rules that force agencies to hire more people than are actually necessary. Someone who will insist that incompetent public employees are fired. Someone who will finally do something about compensation and benefit packages that are threatening to bankrupt the city.

What do you say to them, when their response to your suggested reforms is this: “That’s all great, and I’d like to do it all, but who’s going to give me the million dollars for my campaign that I’m not going to get from the public employee unions if I actually try to do any of it?”

That is the sort of conversation that takes place, or would take place if anyone bothered to ask, multiplied by thousands, every election cycle in California.

Public employee unions run California. They exercise nearly absolute power in the state Legislature, and in nearly every city, county, school district and special district. Can public sector union power ever be stopped?

Earlier this year, a California Public Policy Center analysis estimated that for 2016, total membership in California’s public sector unions was 1.15 million, and total revenue was $812 million. This equates to a stupefying $1.6 billion that these unions collect and spend every election cycle.

California’s Public Sector Unions (including local affiliates)
Estimated Total Membership and Revenues

While the figure of $1.6 billion per election cycle is a credible estimate, attempts to come up with precise information on California’s public sector union dues is nearly impossible. In California there are many hundreds, if not thousands, of individual local public sector union affiliates. All of them file separate 990 forms, often including financial transfers between entities that have to be offset in any thorough analysis.

Determining how much of California’s public sector union revenue is spent on politics is also a nearly impossible task, despite several online “transparency” portals, including OpenSecrets, FollowTheMoney, VoteSmart, and the California Secretary of State’s Campaign Finance “Power Search.” These portals are primarily focused on national races, and in some cases, statewide races, but none of them descend to the thousands of California’s local races, where hundreds of millions of dollars are spent every election.

Moreover, the portals can only display the information they’re given. California’s government unions, like most sophisticated political players, mask their total spending through multiple committees and transfers.

An excellent analysis of how much of teachers union dues end up being spent on political campaigns was written in 2015 by RiShawn Biddle, editor and publisher of Dropout Nation – a leading commentary website on education reform. He writes: “The pro bono consultants who went through the unions’ published national, state, and local tax returns estimated based on their research, interviews, and sampling that roughly one third of the unions’ efforts went toward political advocacy.”

One-third. In California, that is equal to approximately $540 million per election cycle. That is, California’s public sector unions likely spend over a half-billion per election cycle. And this spending does not include other “non-political” spending. For example, not reportable as political spending can include massive public education campaigns that are designed to influence voters but aren’t engaging in explicit advocacy.

Also not considered political spending, but having immense political impact, is litigation. There are countless examples of how government union power is exercised in California’s courts. Pension reforms in San Jose and San Diego, approved by voters, were eviscerated through relentless court challenges. Statewide pension reform pushed by Gov. Brown and partially realized in the PEPRA legislation of 2012 was undermined, and continues to be undermined, beneath an ongoing avalanche of lawsuits. Charter schools are the targets of continuous litigation designed to wear them out. You can do this, when you have hundreds of millions of dollars pouring in every quarter, year after year.

California’s political landscape over the past 20-30 years has been defined by public sector unions. While the recent Janus v AFSCME decision by the U.S. Supreme Court has taken away the ability of government unions to compel payment of fees, the unions are resorting to clever contractual gyrations to make it extremely difficult in practice for anyone to stop paying. That too, will have to sort itself out in court, where union money guarantees tenacious defense and endless appeals.

Even if public employees can easily withdraw from paying government unions, in many cases, why would they? These unions have made California’s public employees some of the highest paid public servants on earth. A California Policy Center study in 2017 concluded “The composite average total compensation (pay and benefits) for a full-time city, county or state worker in California during 2015 was $121,843; for the average full-time private sector worker in California, including benefits, it was 62,475, which is 51% of what the public sector worker earned.” As a result, it is no coincidence that California’s state and local governments confront over $1.0 trillion in debt and unfunded pension liabilities.

The political and financial power of public sector unions has transformed California politics. Their influence is felt everywhere; education, environmental policy, the business climate, important cultural issues. In every area, their primary agenda is to grow their membership and influence. The effect of this agenda is pernicious. If schools fail, spend more public money on schools. If crime increases, hire more police and build more prisons. Wherever society fails, grow unionized government.

Perhaps the next major U.S. Supreme Court case concerning government unions will abolish them due to this inherent conflict between their agenda and the public interest. Perhaps someday they will be outlawed entirely. That would be a happy, happy Thanksgiving indeed.

This article originally appeared on the website of the California Policy Center.

Filed Under: Top Stories Tagged With: California Policy Center, Edward Ring, Public Sector Unions, unions

California’s Legislators Lack Private Sector Experience

November 17, 2018 By Edward Ring 7 Comments

Back in the days of adding machines and manual ledgers, final election results in California were usually done by midnight on election day. Sometimes there would be a few precincts counting ballots into the wee hours of the morning, and you wouldn’t know a result till the next day. Fast forward to 2018, and the age of global interconnectedness, with instantaneous algorithmic management of everything from power grids to Facebook feeds, yet here in California the complete results of the 2018 midterms won’t be available until December 7th. Go figure.

While California’s ability to count ballots runs contrary to the otherwise dazzling march of progress, by now we have enough information to offer a pretty good look at California’s state Legislature for 2019-20. The Democratic supermajority has been re-established. With 28 confirmed seats in the Senate, and 56 in the Assembly, the Democrats hold 70 percent of the seats in both houses. Even if Republicans achieved the unlikely capture of all four Assembly seats that remain too close to call, nothing would change. Overall, so far there are 84 Democratic legislators, and only 32 Republicans.

How Many State Legislators Have Private Sector Experience?

Three election cycles ago, a California Policy Center analysis compared the biographies of California’s state legislators, asking how Republicans and Democrats differ in terms of what they did before they became politicians. To repeat this exercise, 2018 election results were obtained from the California Secretary of States “District Races” page for the Senate and the Assembly. For incumbents who were re-elected, biographies were obtained from the Senate and Assembly websites. For newcomers, a trip to Wikipedia, Ballotpedia, or their campaign websites was sufficient.

When one considers the professional background of California’s politicians, a clear pattern emerges. And while compiling this data requires some degree of subjective interpretation, no reasonable interpretation would fail to reveal dramatic differences in experience between Democrats and Republicans.

California State Legislature, 2019-2020 Membership
Business vs. Government Background

As seen on the above table, in California’s 2019-20 state senate, 79 percent of the Democrats have no private sector experience. On the other hand, 58 percent of the Republicans had no public sector experience prior to running for elected office, although most of them ran for local offices prior to running for state senate. The same story applies with California’s state assembly, where 73 percent of the Democrats have no private sector experience, and 55% of the Republicans have at least some private sector experience.

Before continuing, it’s interesting from this perspective to compare this 2019-20 state legislature to the 2013-2014 state legislature. Back then the proportions were generally the same, but there were almost no Democrats – only five in both houses – compared to 14 of them today. Conversely, back in 2013 there were 25 Republicans who had an exclusively business background prior to holding elected office, compared to only 15 today. Over the same period, the number of Republicans with only public sector experience prior to holding office has more than doubled, from four back in 2013 to 11 today. Overall there are now even fewer Republicans – down from a paltry 36/120 six years ago to a vanishing 32/120 today.

California State Legislature, 2013-2014 Membership
Business vs. Government Background

What might explain this tepid drift to the center, at least in terms of more Republican state legislators with public sector experience, and more Democratic state legislators with private sector experience?

One explanation could be the open primary, which makes it less likely an extreme candidate will survive the general election. Another could be the decision made around 2010 by California’s beleaguered business community to start supporting pro-business Democrats. Finally, as Republicans in California fade further into irrelevance, the alliances and allegiances formed in public sector work offer Republican candidates with that background a better chance of electoral success.

Public Sector Unions Pick Public Sector Careerists to Run for Public Office

Back in the 1950’s and 1960’s there were plenty of pro-business Democrats, so called “Pat Brown” Democrats, who worked with Gov. Brown Sr. to build freeways, bridges, power plants, and the finest system of water storage and conveyance the world had ever seen. Those same Democrats cooperated with Republican Governor Reagan a few years later to build the finest public university system in the world. The opportunities available to California’s middle class were unrivaled. What happened to these Democrats?

The problems began in the 1970’s when public sector unions were allowed to form. Steadily acquiring political power through automatic dues deductions, they used taxpayer’s money to lobby for the interests of government workers instead of the interests of the people they serve. Increasingly, business-backed candidates started losing races to candidates backed by government unions. Almost invariably, unions backed Democratic candidates. The more powerful these union-backed candidates became, the more laws they enacted to further consolidate their power. Today government union rule in California is absolute.

The tragedy of unionized government is not merely that they have taken over California’s state legislature and nearly every city, county and school board in the state in order to pursue their membership’s interest above the public interest. It is that most elected officials no longer understand business. These union anointed elected officials come from government agencies, union bureaucracies, nonprofits, activism, and public education. Most of California’s legislators have never had to balance a budget, make a payroll, or convince a customer to voluntarily purchase a product so they could earn a precarious profit in a competitive market.

California’s lawmakers, to the extent they are elected with the support of public sector unions and to the extent they lack business experience, not only face a conflict of interests every time they have to deal with a reform that threatens the power of the unions. They are also less qualified to understand the financial and operational realities that apply in any efficiently ran, productive organization, large or small. They are in over their heads.

To exemplify this, consider how California’s democrats are crowing over a $6 billion budget surplus. Compare that $6 billion surplus to the nearly half-trillion in bond debt that California’s state and local governments have piled up, including another $23 billion on Nov. 6th. Compare that $6 billion surplus to, by most reasonable estimates, the more than half-trillion in unfunded retirement benefits that are going to blow sky high in the next market downturn.

Hint. A trillion is a thousand billion.

Filed Under: Top Stories Tagged With: California legislature, California Policy Center, Edward Ring, Legislature

Did CalPERS Use Accounting “Gimmicks” to Enable Financially Unsustainable Pensions?

January 25, 2018 By Ed Ring 2 Comments

Gimmick – a concealed, usually devious aspect or feature of something, as a plan or deal.
– Dictionary.com

In the past week, from Millbrae’s city hall to the inner sanctum of the CalPERS leviathan in Sacramento, defenders of pensions have been active. In particular, they have criticized the recent analysis, published by the California Policy Center, “How Much More Will Cities and Counties Pay CalPERS?” It would advance the ongoing debate over pensions to summarize the points of the CPC analysis, how CalPERS and their allies attacked those points, and how those attacks might be challenged.

On January 19th, in a report published online by Chief Investment Officer magazine entitled “CalPERS: Ring’s Flippant Claim of ‘Tricky Accounting Gimmicks’ Is False,” author Christine Giordano interviewed CalPERS spokesperson Amy Morgan. Tellingly, they did not discuss the substance of the CPC analysis, which specified, using CalPERS’ own data, how much more cities and counties are going to have to pay CalPERS. They focused instead on specific criticisms of CalPERS that followed those payment calculations.

As noted by the title of the report, CalPERS spokesperson Amy Morgan seemed to suggest the characterization of their accounting practices as employing “gimmicks” is not backed up by evidence. Morgan is invited to review the following evidence, after which she may join our readers in deciding whether or not “gimmicks” were employed.

GIMMICK #1 – THE CORRUPTION OF “ASSET SMOOTHING”

Asset smoothing is a practice whereby pension funds do not overestimate their assets after years of good returns, nor underestimate their assets after years of poor returns. It is a good way to avoid overreacting to market volatility. But in 2001, when the Dow Jones stock index had already been correcting for over a year and the Nasdaq was collapsing, CalPERS abdicated their responsibility to set the rules on smoothing.

When participating agencies in the CalPERS system were contemplating whether or not to follow the lead of the California Highway Patrol (SB 400, 1999) and retroactively increase pension benefits, CalPERS sent projections to these agencies in which a CalPERS actuary presented to elected officials three distinct values for the assets they had invested with CalPERS. Remarkably, that document gave these agency officials the liberty to choose which one they’d like to use – the higher the value they chose for their existing assets, the lower the cost from CalPERS to pay for the benefit enhancements they were contemplating. The usual disclaimers were present, but the mere fact that city officials were given three scenarios is suspect. Obviously these officials would be under pressure to pick the scenario that provided the biggest benefit enhancement for the lowest cost. Read “Did CalPERS Fail to Disclose Costs of Historic Bump in Pension Benefits?” for more details including several source documents.

One of the most revealing documents is exemplified by the “Contract Amendment Cost Analysis,” sent to Pacific Grove by CalPERS in July, 2001. Here is an excerpt from that document, showing the choices CalPERS offered Pacific Grove:

The available rate choices are offered under three different Alternatives:
Alternative 1 – No increase in Actuarial Value of Assets
Alternative 2 – Actuarial Value of Assets increased by twice the increase in the Present Value of Benefits due to the amendment, limited to 100% of Market Value of Assets
Alternative 3 – Actuarial Value of Assets increased by twice the increase in the Present Value of Benefits due to the amendment, limited to 110% of Market Value of Assets

To reiterate: CalPERS provided abundant disclaimers. They suggested that given recent “market volatility,” city officials “are strongly encouraged to have in-depth discussions with your CalPERS actuary about the financial consequences of any amendment.”

Now let’s get real: Further on in this same letter, CalPERS provides a breakdown of how much pension benefit enhancements will cost in terms of annual contributions as a percent of payroll under each of these three scenarios:

Alternative 1 – The actuarial value of the assets is not tampered with, the normal cost goes from 4.6% to 25.0%.
Alternative 2 – The actuarial value of the assets is lifted up to market value, the normal cost goes from 4.6% to 19.9%.
Alternative 3 – The actuarial value of assets goes up to 110% of the market value, the normal cost – to implement a massive, retroactive enhancement to pension benefits – goes from 4.6% to 6.2%.

What option would you choose, if you were a city manager whose own pension would be enhanced, or a city council member who has to answer to powerful unions whose members want more generous pension formulas?

The reason CalPERS was able to cram this through, in July 2001 as the market was cratering, was based on their decision to present various asset “smoothing” options to members. Why? Because the smoothing options they’d been using were understating the value of their assets because stock values had exploded in the final years of the 1990s. One can only speculate as to why they did this as late as July 2001 when it was obvious the internet stock bubble had popped. It’s possible CalPERS officials knew several agencies had already lobbied for pension benefit enhancements and the officials were under pressure to leave no agency behind. But to offer local bureaucrats and elected officials a choice of various asset smoothing methods was passing the buck.

Overnight, the CalPERS practice of asset smoothing went from being a prudent accounting guideline to a clever rationalization for disastrous policy decisions. If that’s not a gimmick, I don’t know what is.

GIMMICK #2 – CREATIVE AMORTIZATION OF UNFUNDED LIABILITY

When you talk about “tricky accounting gimmicks,” it’s hard to find one worse than the methods the participating agencies chose to amortize their unfunded liability. To be fair, final responsibility for these decisions usually rests with the cities and counties. But CalPERS should have tried to crack down on these practices a long time ago, and indeed, has recently become more aggressive in doing just that. The basic choice facing agencies with huge unfunded liabilities is whether they want to pay them off aggressively, or come up with creative accounting techniques that push the tough repayments into the future. For example, instead of using a “level payment” repayment calculation, many of them use a “percent of payroll” scheme which allows for graduated payments.

In practice, this means calculating a stream of payments that will pay off the liability in 30 years, but varying the payments so that as projected payroll increases, the payment increases. This allows agencies to make low payments in the early years of the amortization term, which frequently means the unfunded liability isn’t even being reduced in the early years of the amortization term. Then when the payments become burdensome, they refinance the new, larger unfunded liability, to get that unfunded payment down again, in a new tranche, again using the same “level percent of payroll method.”

Anyone who lost their home because a “negative amortization” loan conned them into buying something they couldn’t afford would likely call that type of loan a “gimmick.” Similarly, negative amortization payment schedules on unfunded pension liabilities are also gimmicks. To their credit, CalPERS is now recommending 20-year straight line amortization. Which begs the question, why didn’t they do this all along?

GIMMICK #3 – OVERESTIMATING LONG-TERM RATE-OF-RETURN ASSUMPTIONS

CalPERS spokesperson Morgan correctly claims that CalPERS returns have averaged an 8.4% return over the past 30 years. But Morgan conveniently selects the 30 year timeframe to capture all of the pre-1999 run-up in stocks that began in the Reagan years as interest rates were reduced from inflation-fighting highs of 16% (30 year T-bill in the early 1980s) and American consumers began piling on debt. The 20-year return for CalPERS investments through June 30, 2017 is 6.58%. And these last 20 years of returns are far more relevant, because not quite 20 years ago is when CalPERS began to offer pension benefit enhancements that were sold as affordable when they clearly are not.

But if CalPERS is exceeding its projected rates of return over the past 30 years, why is it only 68% funded (ref. CalPERS 2016-17 CAFR, page 4, “Funding”)? At the end of a prolonged bull market, pension systems should be overfunded. Being 68% funded would not be terribly alarming if we were at the end of a prolonged bear market, but we’re in the opposite place. How can CalPERS possibly claim their actuaries are doing a competent job, if the system is this underfunded at this point in the market cycle? For more on this, read “If You Think the Bull Market Rescued Pensions, Think Again.”

It is important to emphasize that even if CalPERS can get a 7.0% return on investment – and there is some chance that they can – why did the agency wait until it was 68% funded to announce the drop in its projected returns from 7.5% to 7.0%? The United States economy is in the terminal phases of a more than 60 year long-term credit cycle, and one might argue there is a stronger case to be made that even 7.0% is highly optimistic. But we like optimism, so never mind that for now. Why wait until 2018 to phase in that half-point drop? The actuaries at CalPERS are well aware how sensitive their payment schedules are to even half-point drops in long-term rate-of-return assumptions. Overstating returns understates true cost. Is this an accounting gimmick? Only if you can prove intent. But read on.

GIMMICK #4 – QUIETLY ALLOWING THE UNFUNDED PAYMENT TO DWARF THE “NORMAL” PAYMENT

Every year, each active worker who gets CalPERS benefits vests another year of service. This means that in the future, during their retirement years, they will have an incrementally greater pension benefit in recognition of one more year of work. To pay for that incrementally greater pension benefit in the future, additional money must be invested today. That amount of money is called the “normal” contribution. But when the “normal” contribution isn’t enough, and it hasn’t been for years, the so-called unfunded liability grows. This unfunded liability represents the amount by which invested pension assets need to increase in order to earn enough to eventually pay for all the future pensions that have been promised.

This “unfunded liability” may seem theoretical when a pension system has hundreds of billions in assets. But it has to get paid down, because when there aren’t enough assets in the pension system earning interest, higher contributions are inevitably required from the participating agencies. If the unfunded liability isn’t reduced via catch-up payments, it will grow even if the normal contributions are adequate to cover newly earned benefits.

This reality is corroborated using CalPERS’ own data, which announces that payments required, as a percent of payroll, are set to increase by 50% (in some cases much more) over the next six years in nearly every agency it serves. And where are these projected increases most pronounced? In the unfunded contribution – that payment to reduce the unfunded liability.

And why does the unfunded liability grow in the first place? Because the normal contribution is too low. Why is the normal contribution too low? Could it be because public employees are only required to assist (via payroll withholding) to pay the normal contribution? Could that be the reason that lifespans were underestimated and returns were overestimated? The actuaries obviously got something wrong, because CalPERS is only around 68% funded. You can download the spreadsheet that shows the impact of this on California’s cities and counties here – CalPERS-Actuarial-Report-Data-Cities-and-Counties.xlsx.

In the original CPC report, along with the term “gimmick,” the term “outrageous” was used. If you don’t think sparing the beneficiaries of these pensions any responsibility to share in the costs to pay down the unfunded liability isn’t outrageous, you aren’t paying attention. For example, by 2024, using CalPERS own data, the City of Millbrae will be paying CalPERS a normal contribution of $1.0 million, and an unfunded, or “catch-up” contribution of $5.8 million – nearly six times as much! Is Millbrae just an isolated example? Not really.

Again, using CalPERS’ own data, in 2017-18, their 426 participating cities will contribute $3.1 billion to CalPERS, an amount equal to 32% of their cumulative payroll. In 2024-25, just six years from now, they are estimated to contribute 5.8 billion, 48% of payroll. And the normal vs unfunded contributions? This year in the cities in the CalPERS system, 13% of payroll constitutes the normal contribution and 19% of payroll constitutes the unfunded contribution – for which current employees and retirees have no responsibility to help pay down. In 2024-25? The normal contribution is estimated to increase to 16% of payroll, and the unfunded contribution, rising to $4.0 billion, is estimated to increase to 33% of payroll.

Put another way, today the unfunded “catch-up” pension contribution for California’s cities, cumulatively, is 140% of the normal contribution. By 2024-25, that “catch-up” contribution is going to be 210% of the normal contribution, more than twice as much! And participating individual employees and retirees have zero obligation to help pay it down, even though that payment is now twice as much as the normal payment.

But it’s not the fault of the individual beneficiaries. The responsibility lies with CalPERS and the politicians they reassured for all these years, using gimmicks.

Let’s review these practices: (1) Letting the agencies decide which type of asset smoothing they’d like to employ, (2) permitting the agencies to make minimal payments on the unfunded liability so the liability would actually increase despite the payments, (3) making overly optimistic actuarial assumptions, (4) not taking action sooner so the unfunded payment wouldn’t end up being more than twice as much as the normal payment.

“Gimmicks”? You decide.

THE CASE OF MILLBRAE

On January 22, the San Mateo Daily Journal published an article entitled “Millbrae officials question, criticize pension cost report.”

The paper’s Austin Walsh reports that Millbrae officials told him that using staffing projections to calculate Millbrae’s future pension burden won’t work because Millbrae has fewer employees than most municipalities. Here’s how Millbrae’s Finance Director DeAnna Hilbrants put it: To limit pension costs, Millbrae contracts for positions in police, fire and public works departments. Quote: “Most notably, Hillbrants pointed to Millbrae joining the Central County Fire Department with Burlingame and Hillsborough and contracting with the San Mateo County Sheriff’s Office for law enforcement.”

What Millbrae officials are saying is that because they contract out much if not most of their personnel costs, their pension contribution is a small percent of their total budget. What they neglect to acknowledge is the fact that the Central County Fire Department and the San Mateo Sheriff’s Office themselves have pension costs, which are passed on to Millbrae to the extent Millbrae uses their services. Millbrae may have made a financially beneficial decision to outsource its public safety requirements. But they did not escape the pension albatross.

CALPERS IS NOT UNIQUE

What has been described here does not just apply to CalPERS. It is the rule, not the exception, for every one of California’s pension systems to engage in the same gimmickry. The consequences for California’s cities, counties, agencies, and system of public education are just beginning to be felt.

Filed Under: Top Stories Tagged With: California Policy Center, CalPERS, Ed Ring, pensions

California Cuts Services, Staff to Pay Pension Costs

July 15, 2017 By David Schwartzman 11 Comments

POLICY – Across California, many local governments have raised taxes while cutting services. Local officials desperate for union support have made irresponsible deals with public employee unions, creating staggering employee costs. Taxpayer money meant to provide essential services to the least well-off instead goes directly to higher salaries and benefits.

In Santa Barbara County, the 2017-2018 budget calls for laying off nearly 70 employees while dipping into reserve funds. The biggest cuts are to the Department of Social Services, which works to aid low-income families and senior citizens. Meanwhile, $546 million of needed infrastructure improvements go unfunded as Santa Barbara County struggles to pay off $700 million in unfunded pension liabilities. County officials estimate that increasing pension costs may cause hundreds of future layoffs.

Unfortunately, Santa Barbara County is far from alone. Tuolumne County is issuing layoffs in the face of rising labor and pension costs from previous agreements. In Kern County, a budget shortfall spurred by increased pension costs has led to public safety layoffs, teacher shortages, budget cuts, and the elimination of the Parks and Recreation department, even as Kern County’s unfunded pension liability surpasses $2 billion. In the Santa Ana Unified School District, nearly 300 teachers have been laid off after years of receiving pay raises that made them unaffordable, including a 10% raise in 2015.

In Riverside County, non-union county employees took the blow for the county’s irresponsible pension deals, as all but one of the 32 employees the county laid off this June were non-union members. This came after contract negotiations granted union employees hundreds of millions of dollars in raises. The Riverside County DA said these raises caused public safety cuts. In addition, Riverside County imposed an extra 1% sales tax to pay for these benefits. Across California, citizens suffer as local governments give away their money while cutting their services.

Government projections continually underestimate pension costs. According to a new study by the Hoover Institution, pension liabilities are understated by trillions of dollars. This happens because governments assume unrealistic rates of return on pension investments. The California Public Employees’ Retirement System, the agency managing pension and health benefits for most California employees, will assume a rate of return of 7% starting in 2020 (the current assumption is 7.5%), however, last year, CalPERS earned a return of 0.6%. California’s defined benefit system for public employees means that governments must pay their employees a fixed amount regardless of how pension plans perform. Rosy estimates for future pension performance make government obligations look smaller than they are.

Unrealistic projections also allow government officials to award big pensions, as officials argue that the big future returns they have assumed can pay off the costs. When reality hits and pension returns fall short, taxpayers are left footing the bill. This year, Californians paid $5.4 billion because of this baseless confidence, more than the state spent on environmental protection, drought response, and fighting wildfires combined. Short-sighted government optimism has real consequences for citizens forced to live in the real world.

The future of government finance throughout California looks bleak due to government mismanagement of taxpayer funds. Local representatives grant unions generous terms, and those unions in turn donate to re-election campaigns. This vicious cycle costs Californians essential services. Agreements between government officials and union bosses allies harm taxpayers, service beneficiaries and even some union workers, who find their representatives complicit in laying them off.

Government does not exist to give taxpayer money to the politically connected. Because of their twisted incentives, California’s elected officials are directly responsible for the state having the highest poverty rate in the country, and the second most unfree economy. Instead of working to fix California’s challenges, many local officials create them by refusing to serve their constituents and instead forcing citizens serve the government. If public servants are serious about real improvements, they need to push for changes to the public pension system and for limitations in every interaction between lawmakers and public employee unions.

David Schwartzman is a Policy Research Fellow at the California Policy Center. He is a rising senior studying economics, mathematics, and finance at Hillsdale College.

This article was originally published by CityWatchLA.com

Filed Under: Top Stories Tagged With: California Policy Center, CalPERS, pensions

What if California’s Government Never Unionized?

March 30, 2017 By Ed Ring 3 Comments

A story that still makes the rounds in Sacramento is that Gov. Jerry Brown, speaking off-the-record to a group of business leaders back around 2009, admitted that the worst political decision of his life was signing legislation to permit public employees to form unions and engage in collective bargaining.

Whether or not Gov. Brown actually said this, it is tantalizing to wonder what California would be like if over 1 million state and local government workers did NOT belong to a labor union. How would things be different?

Perhaps the biggest casualties of public employee unionization are California’s public schools. In 1975 the California Teachers Association (thanks to Brown signing the Educational Employment Relations Act) transitioned from being a professional association into a labor union. The negative consequences are far reaching.

The obvious way that unionizing teachers harms public education are the many work rules that have been negotiated. It is nearly impossible to fire a teacher for poor performance, instead – as was argued in the Vergara case, bad teachers get transferred to schools in disadvantaged communities where competent teachers are most needed. When layoffs occur, seniority is prioritized over merit. And tenure, i.e., lifetime employment – a concept originally developed in universities to protect free scientific inquiry – is granted K-12 teachers after less than two full years of classroom evaluation. All of this guarantees that California’s public schools do NOT have the caliber of educators they could, and union work rules are the reason why.

The less obvious ways unionizing teachers have harmed public education are equally significant. The rhetorical focus of unions is inherently adversarial. Us vs. them. Worker vs. oppressor. In California this rhetoric has been politicized by the left-wing activists who dominate the positions of leadership in the teachers unions. From the top down, it permeates public education, indoctrinating teachers and students with a one-sided, confrontational world view. Students are taught that Western Civilization is the villain of history, that “people of color” are always discriminated against, that “gender” is arbitrary, and that authoritarian solutions are necessary to protect the environment. Almost none of this is true, but nearly two generations of Californian voters were immersed with this propaganda throughout their K-12 years.

Union work rules haven’t just protected bad teachers while driving good ones out of the profession. This is true throughout the public sector, from teachers to public safety to bureaucrats. And thanks to unions, pay is not only disconnected from performance, but the rate of pay has gone out of control. California’s public servants, on average, now collect pay and benefits that are twice what a private sector worker earns for full time work.

Public sector benefits are even more out of control than public sector pay – a public sector retiree in California after a 30 year career can expect a pension that is 26 percent more than private sector workers still on the job; four-times what the average retiree can expect from Social Security.

Other than driving California’s cities, counties and state government to the brink of bankruptcy, and nearly destroying our system of public education, what are the other consequences of unionized government? That answer is simple – they have taken political control of every supposed democratic institution in the state. Their political spending – they collect and spend over $1 billion in dues every year – dwarfs that of any other special interest. Their financial clout over politicians, combined with their influence over thousands of career operatives throughout the state’s regulatory agencies, force all other special interests to go through them. If you want legislation passed, you have to make deals with the government unions.

The core moral principle of unions, collectively standing up to oppression, is perverted in the public sector. Government workers, if anything, are tools of oppression, not victims of it. As it is they have set up two classes of citizens in California. Unionized government workers have job security, health security, retirement security, and pay scales that help to exempt them from the consequences of a politically contrived, punitively high cost of living. And then there are private sector workers, who have none of these privileges, yet pay the taxes to support this.

Unionized government protects its own interests before the public interest. It destroys public financial health, it undermines democracy, but worst of all, it takes away the sense of shared fate that is perhaps the most essential precondition for good government.

Imagine California without government unions. Public education would work because teachers and administrators could be held accountable. Policies to create prosperity and abundance would be endorsed by all voters, because all voters would share in the benefits. Government agencies at all levels would be lean and efficient because a billion dollar per year lobby perpetually favoring bigger government would not exist. Oligarchs and authoritarians would not have access to an omnipotent broker controlling the levers of power, which they could cozy up to for the benefit of the few, to the detriment of the many.

Ed Ring is the vice president of policy research for the California Policy Center.

This piece was originally published by UnionWatch.org

Filed Under: Top Stories Tagged With: California Policy Center, Ed Ring, Jerry Brown, unions, Vergara

What Californians Could Build Using the $64 Billion Bullet Train Budget

March 23, 2017 By Ed Ring 16 Comments

California’s High-Speed Rail project fails to justify itself according to any set of rational criteria. Its ridership projections are absurdly inflated, its environmental benefits are overstated if not actually net detriments, and its cost, its staggering cost, $64 billion by the latest estimate, overwhelms anyone with even a remote sense of financial proportions. To make this final point clear, here is an assortment of California infrastructure projects that could be paid for with a $64 billion budget.

If these projects were built, instead of the bullet train, Californians would have abundant, cheap electricity, abundant fresh water, and upgraded roads and freeways capable of handling all the traffic a surging economy could possibly dish out.

What Californians Could Build on a $64 Billion Budget

(1) Build 10 natural gas power plants generating 6.2 gigawatts of electrical output for $5.7 billion.

According to the U.S. Energy Information Administration, a modern natural gas power plant generating 620 megawatts can be built at a capital cost of $568 million. Someday, when electricity storage technologies are inexpensive and safe, the solar age can ripen to maturity, but in the meantime, California’s private energy companies can tap abundant in-state natural gas reserves, enabling California’s public utilities to provide cheap electricity to the public.

Since California’s peak demand rarely exceeds 50 gigawatts, increasing capacity by 12 percent will drive the price for electricity way down, making California competitive again with other states. Cheap electricity will also obviate the need to force consumers to purchase extremely expensive “energy sipping” appliances that are internet enabled, monitor your behavior and penalize you if you run your dryer at the “wrong” time, break down a lot, are unnecessarily complex, and require ongoing warranty and software upgrade payments forever.

Who needs that? Build natural gas power plants and develop natural gas.

(2) Build plants to desalinate 1.0 million acre feet of seawater per year, supplying 1/3 of ALL California’s residential (indoor and outdoor) water requirements for $15 billion.

Desalination plants are being developed all over the world, and California, with only one major desalination plant operating (Carlsbad in San Diego), is way behind. Desalination requires no more energy today than the amount of energy already being used to transport water from California’s northern regions several hundred miles south (and over the Tehachapi mountains) to Southern California’s coastal cities. The California current, second in flow volume only to the legendary Gulf Stream, can easily disperse the brine left over after extracting fresh water. The energy and environmental issues surrounding desalination have been addressed, and nobody would ever build these plants more responsibly than Californians.

While desalinating water from the sea, at a capital cost of $15,000 per acre foot of annual output, is the most expensive means of increasing California’s water supply, it has the unique virtue of being the only way to actually create fresh water, as opposed to reuse or redistribution. It is a technology that has been proven at large scale for decades and is a necessary part of California’s strategy to increase water security as the state alternates between wet and dry multi-year weather cycles.

(3) Build plants to reclaim and reuse 2.0 million acre feet of sewage per year, supplying 2/3 of ALL California’s residential (indoor and outdoor) water requirements for $10 billion.

Californians produce about 3.0 million acre feet of sewage per year, and today only a small fraction of that sewage is treated to “potable” (drinkable) standards. In California’s huge coastal urban centers this sewage is treated sufficiently to be released into the environment where it wasted as outfall into the ocean. A recent installation in Orange County, the “Ground Water Replenishment System” (GWRS) plant, reclaims as indirect potable water 70,000 acre feet of sewage per year, at a capital cost of only $350 million (not much when compared to the bullet train budget). This equates to a capital cost of $5,000 per acre foot of annual output, which is one of the most cost-effective ways to increase the supply of fresh water for Californians.

Sewage reuse combined with desalination not only have the potential to fulfill 100 percent of California’s residential water requirements for a combined price of $25 billion, but the treated water can be injected into coastal aquifers, combating saltwater intrusion. Currently these aquifers are often replenished with water transported from rivers hundreds of miles to the north, at equal or greater cost.

(4) Build the Sites Reservoir for $4.4 billion.

Anyone who has taken a look recently at the San Luis Reservoir in Central California, now 100 percent full, can appreciate the beauty of off-stream storage. Fed by surplus run-off water that is delivered there by aqueduct, and available for farms and urban use, this reservoir minimizes environmental harm because it doesn’t block the flow of any river. Like San Luis and just as big, the proposed Sites Reservoir, with a planned capacity of 1.8 million acre feet, will be situated in the semi-arid foothills of California’s Central Valley. Unlike San Luis, the Sites Reservoir will require almost no aqueduct, because it will be up in the northern Central Valley, immediately west of the Sacramento River. If the Sites were available today, it would already be filled up with runoff from this year’s many storms, and filling it would have taken pressure off of levees from Sacramento all the way to the delta.

The vast, 100% full San Luis reservoir, 84 square miles, holding 2.0 MAF.

(5) Build the Temperance Flats Reservoir for $3.3 billion.

While this proposed reservoir is in-stream, and would dam the San Joaquin River, it nonetheless has virtues that make a strong argument for its construction. First of all, there are already dams on the San Joaquin River, which would be submerged beneath the larger Temperance Flat dam. With planned storage of 1.3 million acre feet, the Temperance Flat reservoir would guarantee more water to farmers in the dryer reaches of the San Joaquin Valley even during droughts. It would also ensure a reliable flow into the San Joaquin river, to protect its riparian habitats during droughts.

(6) Widen and resurface every major interstate (and then some) in the entire state.

Are you tired of risking your life on Interstate 5 when it’s only two lanes in each direction, and trucks clog the slow lane and speeding tailgaters own the fast lane? Then spend $15.4 billion to add lanes and resurface the entire length of Highway 101 (807 miles), Interstate 5 (796 miles), Route 99 (415 miles), Interstate 15 (294 miles), Interstate 10 (243 miles), Interstate 80 (204 miles), and Interstate 8 (172 miles). According to the American Road and Transportation Builders Association, this will cost $5.25 million per mile, and the freeways just listed total 2,931 miles.

(7) Fix the Potholes.

With everything noted so far, we have only used up $53.8 billion. That is, for only 84 percent of the bullet train budget, we have delivered to Californians cheap, abundant energy, abundant water, and unclogged our major freeways. But we still have $10.2 billion left. What to do? Why not fix the potholes? For $10.2 billion, we can resurface 8,160 miles of 4-lane roads, or, presumably, an even greater length of 2-lane roads. Isn’t that the first thing that goes when governments go astray, and prioritize pet (and useless) environmentalist mega-projects ahead of serving the public? Potholes?

Apart from the fact that a few farms have been purchased in Fresno County, and a few pylons have been stuck in the ground, and a handful of extremely well-paid bureaucrats are doing everything they can to preserve their jobs, why is high-speed rail still being pushed? The reasons are a disappointing example of our dysfunctional democracy here in California. Because you could accuse every project on the above list of being susceptible to cronyism and cost-overruns, and you’d be right. Just as the Bullet Train will never get built for a mere $64 billion, it is likely these projects will also, in aggregate cost more than $64 billion. But we’d have abundant energy, abundant water, and a 21st century network of wide, upgraded freeways. If you’re going to play the innately corrupt game of public works, build things that help people live better, more prosperous lives!

Instead, California contends with an alliance of financial oligarchs whose pecuniary interests depend on Californians paying punitive prices for energy and water. Their green energy and high-tech ventures depend on forcing Californians to completely retool their homes with new, upgraded appliances (all of them – washer, dryer, dishwasher, air-conditioner, furnace, refrigerator) that are efficient to the point of diminishing returns. As mentioned, these appliances now double as surveillance devices that will force us to live our lives according to utility company algorithms. Utility companies, of course, no longer make profits based on the quantities of energy or water they deliver, but rather on fixed percentages over cost, which means to please their shareholders, units of energy and water have to cost more. Much more. And manufacturers are thrilled to design all this frippery into their appliances so they can sell them as a service requiring perpetual payments, instead of a durable good.

Our household has a washer that we bought, already used, for $25 in 1999. It has never broken down. No ongoing warranty payments. No ongoing “software update” payments. Do you think you’ll be able to say any of that about any appliance purchased in the last few years?

For anyone who wants this lucrative, exploitative party for the oligarchs to continue, high speed rail is a good place to put what remains of California’s public financing capacity. The environmentalist lobby, firmly in the pocket of these oligarchs, offers up high speed rail to private construction unions, who lack the clout or the vision to demand something that might actually adhere to their ideals – i.e., the projects listed above, that would help ordinary working families in California.

Ed Ring is the vice president of policy research for the California Policy Center.

REFERENCES

(1-a) Cost for modern natural gas power plant generating 620 megawatts
Source: U.S. Energy Information Administration
https://www.eia.gov/outlooks/capitalcost/

(1-b) Peak megawatt demand in California (July 24, 2006) just over 50 gigawatts
Source: California ISO, California Peak Load History 1998 through 2016
https://en.wikipedia.org/wiki/Energy_in_California

(2) Cost for desalination plants – global comparisons:
Source: California Policy Center, Rebuilding California’s Infrastructure – Desalination
http://californiapolicycenter.org/rebuilding-californias-infrastructure-desalination-part-4-of-6/

Recently constructed desalination plants in Israel, rest-of-world, and California:

(2-b) Annual water consumption in California (million acre feet):

Source: Public Policy Institute of California – Uses and Value of Water, Table 2.2
http://www.ppic.org/content/pubs/report/R_211EHChapter2R.pdf

(3) Cost for sewage reuse plants:
Orange County GWRS IPR Project (2008) Fountain Valley
Source: California Policy Center, Rebuilding California’s Infrastructure – Water Reuse
http://californiapolicycenter.org/rebuilding-californias-infrastructure-water-reuse-part-2-of-6/

(4) Most recent and highest cost-estimate for Sites Reservoir:
Source: KCRA News
http://www.kcra.com/article/5-things-to-know-about-the-proposed-sites-reservoir/8593792

(5) Highest cost-estimate for Temperance Flat Reservoir (estimates range from $1.2 billion to $3.3 billion):
Source: U.S. Bureau of Reclamation
https://web.archive.org/web/20120316022146/http://www.valleyvoicenewspaper.com/vv/stories/2009/vv_temperanceflat_0164.htm

(6 and 7 – a) Cost to add lanes and resurface freeways:
Source: America Road & Transportation Builders Association
http://www.artba.org/about/faq/

(6 and 7 – b) Length of California’s principal highways and freeways:
Source: CaHighways.org
http://www.cahighways.org/itypes.html

Filed Under: Top Stories Tagged With: California Policy Center, Ed Ring, high speed rail

Ex-Government Workers in California Make More Than Those Still Working in the Private Sector

March 16, 2017 By Ed Ring 6 Comments

Last week the California Policy Center released a new study that compared the average full-career government pension to the average annual earnings of a full-time private sector worker. Not surprisingly, at least for anyone paying attention, ex-government workers make 26 percent more than people make in the private sector who are still working. The average government pension after 30 years work? $68,673. The average private sector pay? $54,326.

How is it possible to pay government workers more when they’re retired than the rest of us make while we work? How can we afford this? When you try to answer this question, you begin to see just how misguided the left in California has gotten – at least the “left” as it is conventionally understood.

Because the left wants everything. And the government unions who control the “left” in California, along with the state Legislature and nearly every major city and county, promise everything. If any politician or public speaker stands up to them, they help organize demonstrations by left-wing activists, where, when they aren’t breaking windows and spraying innocent people with mace, they chant silly little phrases.

For example, they want to turn California into a “sanctuary” and invite millions of destitute immigrants to join the millions who are already here. But at the same time, they want to block development of land, energy, water and transportation assets, because that might harm the earth.

Please come on in, we welcome millions more
but building homes is sinful, so go sleep on the floor

The reason leftists are dupes is because despite all their resentment of “privilege,” they ignore the agenda of the most privileged special interest that has ever existed, which are the government unions in the state of California. They’re so busy insisting that California’s government invite the entire world’s destitute population – while simultaneously doing nothing to make room for them – that they’ve failed to realize that it is the government unions who are the only winners in this miserable equation.

Neglect the roads, let dams give way
but increase public servant pay

Every era has had its dupes, but the reason California’s leftists are the biggest dupes in the history of the world is because they haven’t figured out that their supposed friends are actually sleeping with the enemy. The left demonizes the wealthy, they demonize the banks, they demonize “Wall Street,” but fail to realize that their own state government – leftist to the core – is partnering with these corrupt financial special interests.

Who do they think invests nearly $800 billion of pension fund assets, collecting billions in fees? Who do they think lends billions to cash-strapped state and local governments that have gone broke paying government workers twice what ordinary citizens make? Who do you think benefits when restrictions on land and energy development cause asset bubbles at the same time as they drive the cost of living through the roof?

We hate wealth, we hate greed
but we are Wall Street’s friend in need

Invest your savings in the market, and lose it in the crash
but we’ll increase your taxes, so pension funds have cash

No expose of California’s left is complete without mentioning how they have corrupted environmentalism. In a practical world, we would strike a reasonable balance between development and preservation, so prosperity might lift billions out of poverty, empower women who actually need empowerment, and stabilize those burgeoning populations who eye the developed nations with understandable envy. Instead, California’s leftist oligarchs, supported by millions of leftist dupes, have decided to encourage immigration while actually curtailing our supplies of energy, water and land.

If this were all based on pure and naive idealism, one might forgive it. But these Malthusian, misanthropic masochists have embraced rationing as a substitute for development, abetted by surveillance systems that would make George Orwell blush, to make sure nobody uses a single kilowatt-hour or gallon of water more than they’re allotted. Want to plant a hedge, a lawn, or a “water guzzling” tree? Do you love to nurture living things on a lot bigger than a postage stamp? Not in California. Meanwhile, wealthy Silicon Valley “entrepreneurs” develop the mandatory sensors that will let your appliances monitor your behavior, at the same time as wealthy corporate interests plant vast new orchards of thirsty nut trees on the arid western acreage of the Central Valley.

Take short showers, pay excessive fees
so corporations can plant Walnut trees

California’s leftists aren’t helping themselves, the rest of humanity or the earth. They are dupes of the oligarchy. They have been duped into ignoring a profound, counter-intuitive, and very nonpartisan political reality: Government unions and wealthy elites are working together to undermine our liberty and our prosperity. At best, California’s leftists are blinded by their ideals and biases. At worst, they are seditious traitors to the people and the culture that gave them the time and the freedom to crowd our public spaces with their vandalism and their vacuous rhymes.

Ed Ring is the vice president of policy research for the California Policy Center.

Filed Under: Top Stories Tagged With: California Policy Center, Ed Ring, pensions

Hefty Paychecks for Police Officers and Firefighters in California

March 3, 2017 By Mike McPhate 13 Comments

In 2015, five San Jose police officers each made more than $400,000.

A payroll error? In fact, they earned every penny by the book.

Hefty compensation, it turns out — including regular pay, overtime and benefits — is not unusual for public safety employees in California.

“It is routine now for firefighters to be up over $200,000, $300,000,” said Mark Bucher, chief executive officer of the California Policy Center, a public policy think tank. “Look at just about any city and you’ll see the same thing.”

Take, for example, the San Ramon Valley Fire Protection District, which covers a portion of southern Contra Costa County.

The county’s median household income is roughly $80,000.

One reason for the high compensation: It can be cheaper for jurisdictions to pay big overtime — at 1.5 times or double regular pay — than it would be to add staff because of the pension liabilities attached to each new hire.

For San Ramon firefighters, every dollar of salary means roughly one more dollar in pension contributions, said Paige Meyer, the fire chief. “When I’m paying over $2 for a full-time employee and I can pay a dollar and a half for overtime,” he said, “I’ve got a substantial savings.”

As a result, a firefighter paramedic with a salary of $87,700 who puts in long overtime hours can end the year with total compensation well above a quarter-million dollars.

Pensions guaranteed to California police and fire personnel allow them to retire in their 50s and draw 70 percent or more of their peak pay as long as they live. Most private sector employees have no pensions.

Public safety unions say the pay packages ensure a well-earned retirement for workers in bruising jobs. Mike Mohun, president of the San Ramon firefighters union, said the focus should be on lifting other occupations to the same standard.

“When I see someone attacking the benefits the Fire Department receives or the Police Department receives, my concern is: Why wouldn’t you expect the same for yourself?” he said. “We should act as a beacon.”

Public policy experts, however, say safety workers’ pensions are playing a part in pushing a number of California cities toward bankruptcy.

“We already have a crisis,” said Joe Nation, a professor of public policy at Stanford University. “How does it end? It will be a political fix. Or, you’ll have lots of cities that just say, ‘Uncle. We can’t do this.’”

For financially troubled cities, that could mean sharp cuts to basic services, he said.

This piece was originally published by the New York Times.

Filed Under: Top Stories Tagged With: California Policy Center, Contra Costa County, Firefighters, Mark Bucher, Transparent California

Can Public Sector Union Power Ever Be Stopped?

California’s Legislators Lack Private Sector Experience

Did CalPERS Use Accounting “Gimmicks” to Enable Financially Unsustainable Pensions?

California Cuts Services, Staff to Pay Pension Costs

What if California’s Government Never Unionized?

What Californians Could Build Using the $64 Billion Bullet Train Budget

Ex-Government Workers in California Make More Than Those Still Working in the Private Sector

Hefty Paychecks for Police Officers and Firefighters in California

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