How California’s State and Local Governments Can Save $50 Billion Per Year

Photo Courtesy of 401(K) 2013, Flickr

Photo Courtesy of 401(K) 2013, Flickr

Back in the early 2000s, in the aftermath of the internet bubble’s collapse, California’s state and local governments endured a period of austerity that resulted in “furloughs,” where, typically, employees would take Fridays off in exchange for a 20 percent cut in their pay. That is, they worked 20 percent less, and made 20 percent less in pay – but their rate of pay was not cut.

This display of “sacrifice” was an eye opener for private sector workers, especially salaried employees of small businesses, who endured cuts to their rates of pay at the same time as their hours of work increased. Most people in the private sector back in the early 2000s felt lucky to have a job, even if it meant working harder and making less.

There’s a lesson to be learned from the period of state and local government “furloughs” in California: California’s government functioned just fine with 20 percent fewer hours spent at the job, overall, and California’s government workers got by, overall, making 20 percent less money. So since we know these cuts are feasible, it is interesting to estimate just how much money Californians would save, if there were a 20 percent reduction to California’s state and local government workforce, and then there were a 20 percent reduction to the pay and benefits collected by those state and local government workers who remained employed.

Getting information on just how much California’s state and local workers make is notoriously difficult. California’s state controller’s Public Pay database collects the data, but presents “averages” that include part-time employees in the denominator, and do not consolidate the data. Transparent California, a public information project jointly produced by the California Policy Center and the Nevada Policy Research Institute, provides very good information on individual pay and benefits, but also does not consolidate the information.

A California Policy Center study, “How Much Do California’s State, City and County Workers Really Make?” uses 2012 raw data from the state controller that screens out part-time workers to develop averages for city, county and state workers.

California’s State and Local Government Employees
Average Compensation by Entity – 2012

20140131_CA-Gov-Pay_Table2-b

A recent UnionWatch analysis of Los Angeles Unified School District provided a baseline estimate for total teacher compensation – although in variance to the table, please note the same analysis adds an estimated value of $4,033 per teacher to take into account the state’s direct contribution to CalSTRS. As a representative example of total teacher pay, LAUSD is pretty good; the California Dept. of Education reports the Statewide Average Teacher base salary averaged $69,324 during 2014, nearly identical to the LAUSD analysis.

Los Angeles Unified School District
Average Compensation by Job Class – 2013

20150303-UW_Ring-LAUSD-Actual

Armed with this information, and cross-referencing with the U.S. Census Bureau’s estimate of current numbers of full time state and local government employees in California (ref. Government Employment & Payroll, and select “state” and “local,” in each case selecting “California”), we can make a reasonable estimate of how much our full time state/local workforce is currently costing taxpayers. We can also estimate how much a 20 percent reduction in workforce combined with a 20 percent reduction in total compensation would save taxpayers each year:

California State and Local Government Employees, Est. Total Cost per Year
Projected Annual Savings via 20% Reduction to Headcount and to Compensation

20150512-UW_20percent-solution

While this thought exercise may seem to be an exercise in futility, the fact is, we’ve tried it once already, and it worked. That is, during the furloughs of the early 2000s, California’s state and local government workers got by just fine with a 20 percent reduction in pay, and California’s state and local government services functioned adequately even though 20 percent of the workforce was absent (i.e., they were all taking Friday’s off).

It is fair to ask why the focus must always be on austerity. Why not pay everyone more in the private sector? That’s a good question and the answer is simple: It’s impossible. The average total compensation in California’s private sector is roughly half what public employees make. There isn’t enough money in the world to pay everyone this much money, and it is grossly unfair to taxpayers and private workers to treat public sector workers as a privileged class, exempt from the economic challenges facing everyone else.

The problem is even deeper than just one of inequity and insolvency. The problem with creating a privileged class of government workers is that they no longer make common cause with the people they serve. This consequence should trouble social liberals at least as much as it troubles fiscal conservatives, because the most powerful bloc of voters in California, unionized, politically active government workers, are putting their personal financial interests ahead of other worthy government projects. Imagine what $52.7 billion could buy.

The solution is to combine cutbacks in government employee compensation with investments in infrastructure and reductions in regulatory hurdles in order to reduce prices for goods and services. Government created artificial scarcity has raised the price of housing, energy, water and transportation to levels that only the elite can easily afford. If government workers were compelled to make common cause with other workers, instead of this elite, maybe they would finally support reforms to lower the cost of living.

Ed Ring is the executive director of the California Policy Center.

California Is Not Disneyland

At the Howard Jarvis Taxpayers Association, we have seen Proposition 13 blamed for just about everything. A national publication blamed the tax limiting measure for the not guilty verdict in the O.J. Simpson murder trial, while a high school physical education coach wrote in a community paper that the loss of shots by his track and field team was due to the lack of money to cut the grass, and this, of course, was due to Proposition 13.

Now we’re seeing attacks on HJTA sponsored Proposition 218, the Right to Vote on Taxes Act, which makes the taxing process more democratic by allowing voters to decide on local tax increases and to assure property owners that they would have a meaningful say on new assessments, fees and charges. One such attack was a recent opinion piece, calling for the repeal of Proposition 218, because it robs voters of their “democratic power.”

This critic argued that, because Proposition 218 guarantees the voters’ right to approve or reject new taxes, it prevents politicians from matching revenue to their spending: “ [L]ocal officials can give big pensions to cops, but don’t have the power to raise taxes to pay for those pensions.”

But this begs the obvious question: If officials are going to provide benefits to government employees that are unsustainable, wouldn’t it make more sense to limit spending rather than having an open season on taxpayers who are already among the most taxed in all 50 states?

Pundits who call for the repeal of Prop 218 are naïve. They see the state of our political environment as if it were from a sanitized civics textbook or perhaps like Disneyland, a well ordered theme park where fantasies can be made to come true.

DisneylandThe Magic Kingdom may seem genteel, filled with reasonable and well behaved people, when viewed from a tower in the Sleeping Beauty Castle, but outside the park in Realville, a battle is raging between those who work hard to support themselves and their families and those who believe politics is an extension of a grand spoils system where taxes are the preferred weapon to extract ever more money from those who earn it.

California politics is a bare knuckles contest where, by far, the largest and most powerful competitors are the government employee unions. Because of their ability to turn out members to vote for the union label and their ability to use mandatory union dues for any political purpose, they are able to elect a majority to the Legislature, a majority that owes them allegiance.  At the local level, they are just as influential, controlling a majority of votes on many city councils.

And the unions do not adhere to Marquis of Queensbury rules. In San Diego they sent out goon squads to intimidate signature gatherers for a reasonable ballot measure to reform pensions. And in Costa Mesa, they went so far as to hire private detectives to follow city council members, who refused to roll over under union pressure, in an effort to find incriminating information about them.

The result of this union power is evidenced by the recent bankruptcies of cities like Stockton and San Bernardino, where union-beholden council members voted increases in pay and benefits that were unsustainable.

Ironically, had officials been able to raise taxes without going to voters as required by Propositions 13 and 218, the communities would be worse off because California taxpayers and businesses have learned that they can vote with their feet by fleeing to more tax friendly communities or states.  Jurisdictions which lose their tax payers and are left with nothing but tax receivers don’t do very well.

In the real world of California politics, Propositions 13 and 218 are important checks against a corrupt political establishment that is beholden to special interests. So let’s not pretend that this is Fantasyland. The only thing that California politics has in common with Disneyland is that most of the laws enacted that hurt taxpayers are downright goofy.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This piece originally appeared at HTJA.org

Competition-Phobic Teachers Unions Still Trying to Decimate Charter Schools

school education studentsAs I wrote a couple of years ago, the teachers unions vacillate when it comes to charter schools. On odd days they try to organize them and on even ones they go all out to eviscerate them. But the organizing efforts haven’t gone too well. The Center for Education Reform reports that, nationwide, the percentage of unionized charter schools has dropped from 12 in 2009 to a paltry 7 in 2012. In California, there is a 15 percent unionization rate, but that number, from the 2009-2010 school year, is long overdue for an update.

So if you can’t join ‘em, you try to undermine ‘em. To that end, during National School Choice Week in January, the National Education Association claimed that charter schools are unaccountable and warned the public to be wary of them. Then last week, NEA posted “Federal funding of charter schools needs more oversight, accountability” on its website.

This is pure union obstructionism and especially laughable coming from an organization whose mantra is, “Let’s spend bushels more on public education … but don’t hold any unionized teachers accountable.” In fact, there is plenty of oversight and accountability for charters. As the California Charter School Association points out, unlike traditional public schools, charters “are academically accountable on two counts. They are held accountable by their authorizer (usually the local school district) and, most importantly, by the families they serve. When a team of school developers submit their charter petition, they must define their academic goals In order to be authorized, their goals must be rigorous. In order to stay open, they must meet or exceed those goals.” Additionally charters must abide by various state and federal laws, civil rights statutes, safety rules, standard financial practices, etc.

Perhaps most importantly, charter schools – schools of choice – have to please their customers: children and their parents. On that count, charters are doing quite well. Just about every study ever done on them shows that they outperform traditional schools, and Black and Hispanic kids benefit the most. Nationally, there are 6,440 schools serving 2,513,634 students, but the bad news is that there are over a million more kids on wait lists. And the situation is especially bad in areas that need charters the most: our big cities, which serve primarily poor and minority families. A new report by the National Alliance for Public Charter Schools points out that New York, Los Angeles, Houston, Boston, Atlanta, Baltimore, Chicago, Cleveland, Miami and Washington, D.C. fail to meet parental demand.

And then there is California.

The Golden State is the national leader in charters with 1,184, serving 547,800 students. But not surprisingly it also leads the country in kids who want to get in but can’t, and there are 158,000 of them. Of course the teachers unions are saying and doing what they can to deny parents – again mostly minorities and poor – the right to escape their unionized public schools. United Teachers of Los Angeles president Alex Caputo-Pearl recently stated that “a lot of charters don’t allow access for special-education students or English learners.” This of course is bilge; charter schools must serve all students. Lest his sentiments were not clear, he added, “The ascendant forces in California’s charter movement, I don’t see a lot of value in them.”

California Teachers Association president Dean Vogel recently opined. “There is a role for charter schools in California’s education system, and that role should be performed to the same high standards of integrity, transparency and openness required of traditional public schools.”

My goodness, no! I want charters to perform at way higher standards than traditional public schools … and thankfully most do.

Sadly CTA, now in eviscerate mode, is sponsoring four bills making the rounds in the California legislature. The union’s professed aim is regulation, but it appears to be a lot more likestrangulation. The bills, which you can read about here, are nothing more than ways to limit charter growth, harass them and take away any needed independence they now have. For example, Tony Mendoza’s SB 329 would allow a charter petition to be denied for “anticipated financial impact.” This is simply a way to deny a charter for any reason and use money as an excuse. (This bill is similar Mendoza’s AB 1172 which was vetoed by Governor Jerry Brown in 2012.) AB 787 would require that all charters be run as non-profits. The bill’s author, Roger Hernández, said it would also “establish charter schools as governmental entities and their employees as public employees, giving them an increased ability to unionize.” Pure nonsense. Charters are fully capable of organizing now and only 10 in the state (less than one percent) are currently for-profit schools.

What the unions will never admit is that charter schools are effective because they are independent and not bound by the union contact, and when they are unionized, they are no different from traditional public schools. Jay Greene, in The Wall Street Journal, cited a study conducted by Harvard economist Tom Kane which found that, comparing apples to apples,

… students accepted by lottery at independently operated charter schools significantly outperformed students who lost the lottery and returned to district schools. But students accepted by lottery at charters run by the school district with unionized teachers experienced no benefit. (Emphasis added.)

The war between teacher union leaders who insist on a one-size-fits-all cookie cutter education system run by them, and parents who want to get their kids out of failing schools and into charters rages on. In the meantime, there are thousands of kids in California whose futures are in jeopardy as the teachers unions direct their cronies in the legislature to do their bidding and decimate charter schools.

This piece was originally published by UnionWatch.org

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.

Pension Reformers are not “The Enemy” of Public Safety

“You will find that powerful financial and investment institutions are the ones promoting the attacks on your pensions. Firms like Berkshire-Hathaway and the Koch brothers are backing political candidates and causes all over the country in the hopes of making this issue relevant and in the mainstream media. Why? Because if they can crack your pension and turn it into a 401(k), they will make billions. Your pension is the golden egg that they are dying to get their hands upon. By the way, it was those same financial geniuses that brought about the Great Recession in the first place. After nearly collapsing the entire financial system of western civilization, they successfully managed to deflect the blame off of themselves and onto government employee pay/benefits.”

– Jim Foster, Vice President, Long Beach Police Officers Association, posted on PubSec Alliance website

These comments form the conclusion to a piece published by Foster entitled “What does “unfunded liability” mean?” published on PubSecAlliance.com, an online “community of law enforcement associations and unions.” If you review the “supporters” page, you can see that the website’s “founding members,” “affiliated organizations” and “other groups whose membership is pending” are all law enforcement unions.

In Foster’s discussion of what constitutes an unfunded pension liability, he compares the liability to a mortgage, correctly pointing out that like a mortgage, an unfunded pension liability can be paid down over many years. But Foster fails to take into account the fact that a mortgage can be negotiated at a fixed rate of interest, whereas a pension liability will grow whenever the rates earned by the pension system’s investments fall short of expectations. When the average taxpayer signs a 30 year fixed mortgage, they don’t expect to suddenly find out their payments have doubled, or tripled, or gone up by an order of magnitude. But that’s exactly what’s happened with pensions.

Apart from ignoring this crucial difference between mortgages and unfunded pension liabilities, Foster’s piece makes no mention of the other reason unfunded pension liabilities have grown to alarming levels, the retroactive enhancements to the pension benefit formula – enhancements gifted to public employees and imposed on taxpayers starting in 1999. These enhancements were made at precisely the same time as the market was delivering unsustainable gains engineered by, as Foster puts it, the “same financial geniuses that brought about the Great Recession in the first place,” and “nearly collapsing the entire financial system of western civilization.”

This is a huge failure of logic. Foster is suggesting that the Wall Street crowd is to blame for the unfunded liabilities of pensions, but ignoring the fact that these unfunded liabilities are caused by (1) accepting the impossible promises made by Wall Street investment firms during the stock market bubbles and using that to justify financially unsustainable (and retroactive) benefit formula enhancements, and (2) basing the entire funding analysis for pension systems on rates of return that can only be achieved by relying on stock market bubbles – i.e., doomed to crash.

You can’t blame “Wall Street” for the financial challenges facing pension funds, yet demand benefits based on financial assumptions that only those you taint as Wall Street charlatans are willing to promote.

Foster ignores the fact that the stock market bubbles (2000, 2008 and 2014) were inflated then reflated by lowering interest rates and accumulating debt to stimulate the economy. But interest rates cannot go any lower. When the market corrects, and pension funds start demanding even larger annual payments to fund pensions and OPEB that now average over $100,000 per year for California’s full-career public safety retirees, Foster and his ilk are going to have a lot of explaining to do.

There is a deeper, more ominous context to Foster’s remarks, however, which is the power that government unions, especially public safety unions, wield over politicians and over public perception. The navigation bar of the website that published his essay, PubSecAlliance, is but a mild reminder of the power police organizations now have over the political process. Items such as “Intel Report,” “Pay Wars,” “Tactics,” “Tales of Triumph” and “The Enemy” are examples of resources on this website.

When reviewing PubSecAlliance’s reports on “enemies,” notwithstanding the frightening reality of police organizations keeping lists of political enemies, were any of the people and organizations listed selected despite the fact that they were staunch supporters of law enforcement? Because pension reformers and government union reformers are not “enemies” of law enforcement, or government employees, or government programs in general. There is no connection.

Here are a few points for Jim Foster to consider, along with his leadership colleagues at the Long Beach Police Officers Association, and police union members everywhere.

TEN POINTS FOR MEMBERS OF PUBLIC SAFETY UNIONS TO CONSIDER

(1)  Not all pension reformers want to abolish the defined benefit. Restoring the more sustainable pension benefit formulas in use prior to 1999, and adopting conservative rate-of-return assumptions would make the defined benefit financially sustainable and fair to taxpayers.

(2)  Over the long term, the real, inflation-adjusted return on investments cannot be realistically expected to exceed the rate of national and global economic growth. You are being sold a 7 percent (or more) annual rate of return because it is an excuse to keep your normal contribution artificially low, and mislead politicians into thinking pension systems are financially sound.

(3)  As noted, you can’t blame “Wall Street” for the financial challenges facing pension funds, yet demand benefits based on financial assumptions that only those you taint as Wall Street charlatans are willing to promote.

(4)  If public safety employers didn’t have to pay 50 percent or more of payroll into the pension funds – normal and unfunded contributions combined – there would be money to hire more public safety employees, improving their own safety and better protecting the public.

(5)  Public safety personnel are eyewitnesses every day to the destructive effects of failed social welfare programs that destroy families, ineffective public schools with unaccountable unionized teachers, and a flawed immigration policy that prioritizes the admission of millions of unskilled immigrants over those with valuable skills. They ought to stick their necks out on these political issues, instead of invariably fighting exclusively to increase their pay and benefits.

(6)  The solution to the financial challenges facing all workers, public and private, is to lower the cost of living through competitive development of land, energy, water and transportation assets. Just two examples: rolling back CEQA hindrances to build a desalination plant in Huntington Beach, or construct indirect potable water reuse assets in San Jose. Where are the police and firefighters on these critical issues? Creating inexpensive abundance through competition and development helps all workers, instead of just the anointed unionized government elite.

(7)  If pension funds were calibrated to accept 5 percent annual returns, instead of 7 percent or more, they could be invested in revenue producing infrastructure such as dams, desalination plants, sewage distillation and reuse, bridges and port expansion, to name a few – all of which have the potential yield 5 percent per year to investors, but usually not 7 percent.

(8)  Government unions are partners with Wall Street and other crony capitalist interests. The idea that they are opposed to each other is one of the biggest frauds in American history. Government unions control local politicians, who award contracts, regulate and inspect businesses, float bond issues, and preserve financially unsustainable pension benefits. This is a gold mine to financial special interests, and to large corporate interests who know that the small businesses lack the resources to comply with excessive regulations or afford lobbyists.

(9)  Government unions elect their bosses, they wield the coercive power of the state, they favor expanded government and expanded compensation for government employees which is an intrinsic conflict of interest, and they protect incompetent (or worse) government employees. They should be abolished. Voluntary associations without collective bargaining rights would still have plenty of political influence.

(10)  Expectations of security have risen, the value of life has risen, the complexity of law enforcement challenges has risen, and the premium law enforcement officers should receive as a result has also risen. But unaffordable pensions, along with the consequent excessive payments of overtime, have priced public safety compensation well beyond what qualified people are willing to accept. Saying this does not make us “The Enemy.”

*   *   *

Ed Ring is the executive director of the California Policy Center.

Teachers’ Union Propaganda Is Creeping Into CA’s Public School Curricula

To say California’s teachers’ unions wield outsize influence over state education policy is hardly novel. From setting tenure rules to rewriting dismissal statutes and blocking pension reforms, the California Teachers Association and the California Federation of Teachers roam the halls of the legislature like varsity all-stars. But less well known are the unions’ efforts to remake curriculum — and thereby influence the next generation of citizens and voters.

According to labor expert Kevin Dayton, organized labor has been trying to get its collective hooks into classroom content since 1981, when the City University of New York developed the “American Social History Project.” The idea was to present the history of marginalized and oppressed groups — including labor unions — to a “broad popular audience.” In California, the project took a great leap forward in 2001, when Assembly Speaker Bob Hertzberg cooked up the Speaker’s Commission on Labor Education, which, as Dayton explains, was established “to address issues of labor education in California’s public school system.” At the commission’s behest, Governor Gray Davis signed a bill that encouraged school districts to set aside the first week in April as “Labor History Week” and “commemorate it with appropriate educational exercises to make pupils aware of the important role that the labor movement has played in shaping California and the United States.”

By 2012, labor’s “week” had morphed into “Labor History Month,” and California’s teachers’ unions began advancing their politicized agenda. The CFT’s elementary curriculum includes a story about a “mean farmer” and his ticked-off hens that organize against him. The CTA meantime offers up a passel of lessons with a heavy emphasis on issues such as “tax fairness.” The University of California’s Miguel Contreras Labor Program joined in, adding an anthology of stories promoting the IWW, a radical union noted for its ties to socialism and anarchism, as well as a biography of America’s singing Stalinist, Pete Seeger.

The unions were on the move again in 2014, as the California Department of Education began its periodic review of the state’s history framework. In November, the CFT sent a proposal to the Instructional Quality Commission, an advisory body to the state board of education on matters concerning curriculum, instructional materials, and content standards. The union’s suggestions included downplaying the Second Great Awakening—the eighteenth-century religious revival that had a profound effect on the temperance, abolition, and women’s rights movements—in favor of greater emphasis on anti-Muslim discrimination after the 9/11 attacks. The union also wants the United States described as an “empire” that regularly “dominate[s] other civilizations,” despite the nation’s record of rebuilding countries we have defeated in war, such as Germany and Japan after World War II.

Naturally, the CFT makes a case for a “Labor Studies” elective. California is considering a lesson that would let students “participate in a collective bargaining simulation to examine the struggles of workers to be paid for the value of their labor and to work under safe conditions. They can examine legislation that gave workers the right to organize into unions, to improve working conditions, and to prohibit discrimination.” The Speaker’s Commission on Labor Education co-chairs, Fred Glass and Kent Wong, weighed in with a letter of their own urging the Instructional Quality Commission to establish the labor studies elective.

Will the unions advocate a full and fair treatment of labor’s history, including routine episodes of union violence and intimidation? Can students expect thorough exploration of labor economics, including how collective bargaining lowers the pay of many workers due to wage compression? Probably not. It’s even less likely that students will hear anything about the teachers’ unions twenty-first century political ventures—such as how the CTA spent more than $26 million in 2000 to defeat a school-voucher initiative that would have let families escape failing schools, or how, in 2012, it successfully lobbied to defeat SB 1530, which would have simplified the process of firing pedophile teachers.

The teachers’ unions are clearly lobbying for changes to a curriculum they believe presents a sanitized version of U.S. history, but they would simply replace disfavored “myths” with their own versions. As an American history teacher for much of the last decade of my career, I was faithful to the state framework and taught extensively about slavery and other injustices in our collective past. Most other history instructors I knew did the same. We didn’t browbeat the kids, however, into believing that American history was riddled with treachery and malevolence. If parents and citizens don’t take action, a bundle of America-bashing lessons, distorted history, and indoctrination into the glories of collective bargaining may become a part of the Golden State’s curriculum.

Originally published by City Journal.

Hardball tactics pay off for L.A. teachers with 10% raise

Hardball paid off for the United Teachers Los Angeles late Friday when negotiators reached tentative agreement on a three-year deal that provides L.A. Unified teachers with a 10 percent pay raise in the first two years. That’s far more than other LAUSD unions got in collective bargaining.

The deal was sold as a win-win proposition by both LAUSD and UTLA leaders. But for nearly a year, LAUSD number-crunchers had fought for a much smaller raise in briefing L.A. school board members, citing the need to prepare for the pain of the phased-in 130 percent increase in district contributions to the California State Teachers’ Retirement System required by the 2014 CalSTRS bailout legislation.

The CalSTRS fix will cost LAUSD an extra $1 billion a year in fiscal 2020-21 when the phase-in is complete. That’s a giant burden for a district that this fiscal year has a $6.6 billion budget.

Nevertheless, school board members were ready for labor peace after the UTLA took serious steps toward a districtwide strike. They not only agreed to a 10 percent raise over two years, they dropped their hard line on making teachers pay more toward their health benefits.

Union ID’d funds for raises that were supposedly encumbered

The question of whether LAUSD had the legal authority to grant the raises never was seriously addressed. Early in negotiations, the UTLA sought a 17.6 percent immediate raise and cited the influx of funds the district had available because of the Local Control Funding Formula reform adopted by the Legislature in 2013.

That reform was supposed to earmark additional school funds for districts to specifically help troubled English-language learners and other struggling students. When the reform was adopted, Gov. Jerry Brown depicted it as a “revolutionary” step toward helping ensure California had a skilled workforce in coming generations. His aides downplayed the idea that the reform could be gamed at the local level by powerful local union chapters.

However, the Brown administration had no reaction to a Legislative Analyst’s Office report in January that none of 50 California school districts it surveyed, including the 11 largest, had adequate safeguards to make sure the funds were not diverted.

Another aspect of the labor talks also received little attention from the mainstream media. That was UTLA’s claim that members had not received a raise in eight years. In fact, in most California school districts, teachers receive automatic pay raises of 3.5 to 4 percent for 15 of their first 20 years on the job — “step” increases. They can also improve their pay classification by taking graduate coursework in any field — “column” increases.

In large school districts, this usually means at least 60 percent of teachers get pay-scale raises every year. The percentage is higher in districts with more turnover.

Originally published by CalWatchdog.com

New lawsuit challenges hegemony of CA teachers unions

For the third time in three years, a lawsuit has been filed in California that challenges the way the teachers unions do business. In May 2012, eight California public school children filed Vergara et al v. the State of California et al in an attempt to “strike down outdated state laws that prevent the recruitment, support and retention of effective teachers.” Realizing that some of their most cherished work rules were in jeopardy, the California Teachers Association and the California Federation of Teachers chose to join the case as defendants in May 2013.

But three days before they signed on to Vergara, the unions were targeted again. On April 29, 2013, the Center for Individual Rights filed suit on behalf of ten California teachers against CTA and the National Education Association. The Friedrichs case challenges the constitutionality of California’s agency shop law, which forces public school educators to pay dues to a teachers union whether they want to or not.

Now in April 2015, the teachers unions are facing yet another rebellion by some of its members. Bain et al v. CTA et al, a lawsuit brought by StudentsFirst, a Sacramento-based activist outfit founded by Michelle Rhee, was filed on behalf of four public school teachers in federal court in California. It challenges a union rule concerning members who refuse to pay the political portion of their dues. Contrary to what many believe, teachers are not forced to join a union as a condition of employment in California, but they are forced to pay dues. Most pay the full share, typically over $1,000 a year, but some opt out of paying the political or “non-chargeable” part, which brings their yearly outlay down to about $600. However, to become “agency fee payers,” those teachers must resign from the union and relinquish most perks they had by being full dues-paying members. And this is at the heart of Bain. As EdSource’s John Fensterwald writes:

Although paying this portion is optional, the teachers charge that the unions punish those who choose not to pay it by kicking them out of the union and denying them additional economic benefits, such as better disability and life insurance policies. The unions provide those benefits only to members. This coercion, the teachers argue, violates their constitutional right to free speech. About one in 10 teachers in California have opted out of paying the portion of dues supporting politicking and lobbying.

In addition to losing various types of insurance, the affected teachers also give up the right to vote for their union rep or their contract, the chance to sit on certain school committees, legal representation in cases of employment disputes, death and dismemberment compensation, disaster relief, representation at dismissal hearings and many other benefits.

The question becomes, “Why should a teacher lose a whole array of perks just because they refuse to pay the third or so (it varies by district) of their union dues that go to political causes?”

That very sensible question summons up a great number of erroneous statements, hysteria, lies and general panic among the mainstream media and unionistas alike. Let’s examine a few of them starting with a partial-truth from the estimable John Fensterwald. He wrote, “Both the CTA and CFT are obligated to negotiate contracts dealing with pay, benefits and working conditions on behalf of union and non-union teachers.” That’s true; all teachers do indeed become “bargaining unit members.” However, that is only because the unions insist on exclusive representation. The unions would have a case here if teachers were free to negotiate their own contracts, but they aren’t allowed to. (For more on this issue, see my back-and-forth with CFT VP Gary Ravani in the comments section of Fensterwald’s piece.)

A Los Angeles Times editorial claims that the case at its core is “an attack on the power of any public employee union to engage in politics.” How they came up with that assessment defies logic. If Bain is successful, unions will still be free to “engage in politics.” It is true that more teachers may opt out of the political part, thus leaving the union with fewer coerced dollars to spend. But to say it is an “attack” is a great exaggeration.

Alice O’Brien, general counsel for NEA, said in a statement, “The Bain lawsuit attacks (there’s that word again) the right of a membership organization to restrict the benefits of membership to those who actually pay dues.” What?! The teachers in question are all dues payers and will still be dues payers if their case is successful.

Never one to be subtle, American Federation of Teachers president Randi Weingarten claims that the lawsuit is “part of a siege against unions by StudentsFirst.” (Before starting StudentsFirst, Rhee – now departed – was Washington, D.C. school chancellor, where she and Weingarten tangled constantly.) In a statement Weingarten said, “This is the same group that has worked for five years to stifle the voices of teachers, and strip them of collective bargaining and other rights and tools to do their jobs.” Then as if to clarify this baseless statement, she added, “The suit cites political activity on issues it considers unrelated to education – like gun control, for example.”

The Friedrichs case, with a possible Supreme Court decision next year, is much further along than Bain. If the former case is successful, it will be interesting to see what becomes of the latter.Friedrichs claims that all union spending is political and therefore joining should be voluntary. If it flies, teachers will have an option to join the union or refrain from doing so. That could take the wind out of Bain’s sails as there will probably not be the two tiers or classes of membership that there are now. If all dues are political and you join the union, then all fees will be chargeable and teachers couldn’t then opt out of the political portion because all of it would be political. However, should Friedrichs fail, Bain will be all the more important.

Other scenarios are possible, with the courts, of course, having the final say on how it all gets sorted out.

In any event, the teachers unions’ heavy-handed political arm-twisting would seem to be in jeopardy and their days of unbridled power numbered. And that can only be good news for teachers, students, parents and taxpayers.

Originally published by UnionWatch.org

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.

Pension initiative may empower local reforms

The leaders of two local pension reforms, former San Jose Mayor Chuck Reed and former San Diego Councilman Carl DeMaio, are working with a coalition on a statewide initiative to help local governments make cost-cutting pension reforms.

DeMaio called the proposal a “tool kit” for local officials to “fix the problems in a manner that reflects their community’s ability.” Reed said the proposal would enable “measures that people can do to make their own decisions in their own communities.”

During a break at the Reason Foundation’s third annual Pension Summit in Sacramento last week, the two men said they are “on the same page” and working with a coalition on the details of a proposed initiative for the November 2016 state ballot.

DeMaio said the state constitutional amendment would apply to the state, cities, counties, other local governments, and the University of California — all the “instrumentalities” of California government.

DeMaio
“I’m very big on making certain that when we move ahead on reform that it’s unassailable in the courts,” said DeMaio.

The California Public Employees Retirement System, which opposed pension cuts in three recent city bankruptcies, and the state Public Employment Relations, which tried to block the San Diego and San Jose reforms, would be covered by the initiative.

“They will have no ability but to implement faithfully the voter’s initiative,” De Maio said.

A case in point for local empowerment: A drive led by David Grau and others gathered enough signatures to place an initiative on the ballot last fall to switch new Ventura County employees to a 401(k)-style plan.

But a superior court judge removed the initiative from the ballot, ruling that nothing in the 1937 act covering 20 county pension systems allows them to “opt out or terminate” through a countywide initiative or a vote of the county supervisors.

Empowering the reform process is a big change from past statewide proposals for a specific plan, such as former Gov. Arnold Schwarzenegger’s briefly backed 401(k)-style plan in 2005 or Reed’s lower-cost pension option in 2013. None made the ballot.

“One size doesn’t fit all,” said De Maio.

Reed
Reed said a statewide initiative should be “simple and easy to explain.” He said a “big omnibus” pension proposal is difficult to explain and easy for opponents to mischaracterize.

A structural initiative is common ground for a Democrat (Reed) and a Republican (DeMaio) who led the campaigns for two very different local pension reforms overwhelmingly approved by voters in June 2012.

The San Diego initiative, overcoming a PERB lawsuit to keep it off the ballot, switched all new hires except police from pensions to 401(k)-style individual investment plans now common in the private sector.

In San Jose, the reform gave current workers the option, for pensions earned in the future, of paying more or receiving a lower pension. A superior court blocked the option. Reed said other parts of the initiative have saved $80 million to $100 million so far.

Another thing the two battle-tested reformers have in common is experience in laying the groundwork, moving in steps, and not trying to do everything at once, which seems to be the current strategy of the statewide initiative.

Before the big reform in 2012, Reed changed the San Jose pension boards, adding independence and expertise. He backed two successful ballot measures in 2010 limiting police and firefighter arbitration and allowing switches to lower pension plans.

DeMaio backed a ballot measure in 2006 requiring voter approval of pension increases, city council approval in 2008 of a “hybrid” combining a lower pension and 401(k)-style plan, and a 50-50 employer and employee split of pension costs in 2009.

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Dozens of government employees picketed the appearance of Reed and DeMaio at the Reason pension summit, an early warning from a coalition of public employee unions that a pension initiative may be opposed at every step, including the first one.

Schwarzenegger dropped his 401(k)-style plan in April 2005 after emotional union television ads contended death and disability would be eliminated for police and firefighters and their families, a claim the governor disputed.

After former Assemblyman Roger Niello, D-Sacramento, filed a pension reform initiative in 2011, the union coalition picketed a luxury auto dealership he partly owned, with one sign saying, “Pensions not Porsches.”

Major donors to a new initiative might face the same campaign tactics. The number of voter signatures needed to place a constitutional amendment on the ballot next year is 585,407, down sharply from 807,615 last year due to low voter turnout in November.

But several million dollars probably would be needed for a signature drive, particularly to screen for false signatures (opponents are sometimes accused of providing) and to gather a surplus as a safety cushion.

A news release from the union coalition, Californians for Retirement Security, said the new initiative is expected to be financed by “Texas billionaire John Arnold, a former Enron executive” who contributed to the Reed and Ventura County initiatives.

In San Diego, paid signature gatherers for the pension reform initiative posted at retail stores were often joined by “blockers,” union members and others who urged shoppers not to sign the petition.

Time and money may be needed for court battles after an initiative is filed. Reed dropped his initiative last year contending that Attorney General Kamala Harris gave the measure an “inaccurate and misleading” summary that made voter approval unlikely.

Dan Pellissier of California Pension Reform suspended a pension initiative drive in 2012 “after determining the attorney general’s false and misleading title and summary makes it nearly impossible to pass.”

Pension reform had strong support in a Public Policy Institute of California poll in January last year. Public pensions were “at least somewhat of a problem” for 85 percent of likely voters, and 73 percent supported switching new hires to 401(k)-style plans.

“Without serious pension reform in California, we face a future of cuts to important services and more tax revenues diverted to unsustainable pension payments,” Reed said in a news release last month.

“It is clear that politicians in Sacramento are not serious about reforming unsustainable pension benefits for government employees, so voters must take the matter into their own hands and impose reform at the ballot box,” DeMaio said.

Dave Low, chairman of Californians for Retirement Security, had a different view in a news release issued by the union coalition last week.

“This new effort is likely to eliminate retirement security for millions of more Californians, worsen economic inequality in our state, and undermine the ability to attract and retain quality firefighters, teachers, police and other public servants,” Low said. “We are confident we can defeat it.”

Originally published by Calpensions.com

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at Calpensions.com.

Obamacare Funds Allegedly Used For Union Recruitment

According to a letter made public Saturday, federal investigators are looking into whether Obamacare funds were misused to benefit a union.

The letter, which was obtained by The Daily Caller News Foundation, says the Office of Inspector General has been investigating whether Southern United Neighborhoods and its sub grantee, United Labor Unions Local 100, purposely misused federal funds from the Obamacare Navigator program to recruit members. The program was designed to help people enroll in Obamacare.

“Your request as to the disposition of your complaint poses a question, which is outside the scope of the Freedom of Information Act, through which individuals may request records,” the letter noted. “However, we conducted a search for records relative to your request and were informed there was an open and ongoing investigation concerning this matter.”

Back in September, after conducting its own research, the group Cause of Action wrote to the OIG asking to investigate whether SUN and Local 100 misused the federal funds. CoA took notice after a court case involving an individual who claimed he was owed overtime by SUN and ULU.

“On June 16, 2014, plaintiffs Cedric Anthony (‘Anthony’) filed a class action lawsuit seeking damages for unpaid overtime against SUN and ULU under the Fair Labor Standards Act,” a letter from CoA detailed.

“Anthony alleges he was initially employed by SUN as an ACA federal navigator, visiting community events and enrolling individuals in healthcare,” the letter continued. “In addition to these duties at SUN, Anthony alleges that he was directed to recruit members for the ULU by visiting schools to register cafeteria workers for the union.”

“SUN and ULU admit that Anthony was employed by ULU,” the letter added. “They deny, however, that Anthony was employed by SUN.”

On Nov. 6, 2014, the parties filed a Joint Stipulation of Dismissal with Prejudice which effectively closed the case. The Joint Stipulation meant questions raised in the case in regards to misuse of funds were not answered, prompting the need for a federal investigation.

“Cause of Action uncovered that ObamaCare navigator funds were not only funneled to an ACORN-related entity, but were potentially misused to support union activities at the behest of ACORN founder Wade Rathke,” CoA President Dan Epstein told TheDCNF.

“On the basis of Cause of Action’s request for an investigation, the Inspector General for the Department of Health and Human Services disclosed that there is ‘an open and ongoing investigation’ concerning the use of the navigator funds,” he continued. “It’s encouraging to hear that HHS is conducting a probe to ensure taxpayer dollars are used appropriately, and not to enrich ACORN’s political interests.”

Republican Senate Finance Committee Chairman Orrin Hatch recently estimated the administration spent over $120 million on the Navigator program for the 2014 and 2015 open enrollment periods.

SUN and Local 100 did not respond to requests for comment from TheDCNF.

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Originally published by the Daily Caller News Foundation

CA GOP Introduces Bills to Overhaul Teacher Hiring, Firing, Evaluation

Last year, Los Angeles Superior Court Judge Rolf Treu ruled that California’s archaic seniority, tenure, and dismissal statutes were unconstitutional, adding that the evidence submitted by the plaintiffs “shocks the conscience.” The state and two teachers unions, the California Teachers Association and the California Federation of Teachers, are appealing Treu’s decision in Vergara v. California. Should the judgment survive the appeals process, legislators would need to pass new laws to fill the void. But Republican lawmakers aren’t waiting for a decision, which won’t come down for months—or possibly years.

On March 4, the 28-member Assembly Republican Caucus introduced a half-dozen bills to overhaul the way California’s teachers are hired, assessed, and dismissed. Assembly Bill 1047 by minority leader and Modesto Republican Kristin Olsen, for example, would update the Stull Act, California’s four-decade-old teacher evaluation law that school districts have largely ignored. Olsen’s bill would require that teachers have annual evaluations, replacing an antiquated pass-fail system with four new categories: highly effective, effective, minimally effective, and ineffective. AB 1248 by Oceanside Republican Rocky Chavez would extend a teacher’s probationary period from two years to three before awarding permanent status, and would make tenure contingent upon positive evaluations. Other bills would repeal the “last in, first out” system that puts seniority before teacher effectiveness and require school districts to submit detailed reports on teacher training and local school expenditures.

The Republican bills are in line with a set of “policy pillars” by Students Matter, the group behind the Vergara lawsuit. Most of the suggestions are vast improvements over the laws currently on the books. The tenure pillar, for example, says, “Permanent status should be able to be rescinded if a teacher receives multiple evaluations showing an ineffective rating.” That’s a sound idea—though if permanence can be rescinded, why call it permanence at all? As for the state’s onerous dismissal statutes, the legislature took a positive first step last year with AB 215, which expedites the process of firing a teacher found guilty of “egregious and immoral conduct.” Students Matter recommends “explicitly including ineffectiveness as grounds for dismissal and mirroring for teachers the same dismissal process established for classified employees.” The teachers unions steadfastly oppose the idea, but it’s past time for public education to join the rest of the civilized working world, weeding out not only criminals but also employees who don’t get the job done. As Hoover Institution scholar Eric Hanushek points out, if schools cut the bottom-performing 5 percent to 7 percent of teachers—a common practice in the private sector—our education system could rival that of highly ranked Finland. If California adopted Hanushek’s idea, about 18,000 teachers in California would be let go. But they’re not going anywhere any time soon, which means about 450,000 kids are getting an inferior education year after year.

When it comes to seniority, Students Matter suggests, “student learning [should] be the preponderant criterion in layoff decisions.” The current “last in, first out” system of picking winners and losers is an awful way to run a school system. Length of time on the job should never be the sole determinant for keeping that job. Nobody in his right mind would choose a surgeon who has been maiming his patients for 20 years over a gifted surgeon with ten years’ experience. In the real world, Dr. Quack’s clientele would dry up, his medical license would be revoked, and he would be looking for a new line of work. Why should teachers be treated any differently?

The answer, of course, is that the teachers unions say so. The unions stopped using “permanence” not long ago and now employ the more reasonable-sounding “due process” in defense of their most inept members. California’s existing dismissal statutes are weighted so heavily in favor of the unions that just two “permanent” teachers per year on average lose their jobs due to incompetence. That’s two teachers out of roughly 300,000 public school teachers statewide. In my nearly 30 years in the classroom, there were always at least two teachers at my school alone who deserved to be shown the door. Even to attempt to fire a teacher is an expensive proposition. Between 2000 and 2010, the Los Angeles Unified School District spent $3.5 million trying to pink-slip seven teachers (out of more than 30,000) for poor classroom performance. Of those, only four were let go.

The challenge for Republican legislators is they are currently a virtually powerless minority in a body dominated by Democrats and their union patrons. The CTA wasted no time denouncing the proposed legislation. “These bills are ill-conceived and premature,” said union spokesman Frank Wells. Republicans believe, however, that time is of the essence and that they can attract at least a few Democratic votes for their reforms. As Olsen explained to an interviewer, “We have seen throughout history that cases can take years to resolve in courts. Systemic problems have been failing kids for years. We need to take action now and hope Democrats will become partners.” But as former state senator Gloria Romero told me, “Ultimately, the resolution of the Vergara case will rest with the same body that enacted these unconstitutional statutes. It is not only unlikely, but extremely improbable that legislators dependent on CTA money to fuel their reelection campaigns will enact comprehensive reforms.”

So what will it take? Perhaps hordes of angry parents descending on the capital, brandishing lanterns and pitchforks. Short of that, how about a flood of letters and e-mails to lawmakers, imploring them to do right by the children of California? Only when enough good people get involved and fight the destructive agenda of the teachers unions will public education make a great leap forward in the Golden State.