In California, public sector unions pretty much run the state government. Government unions collect and spend over $800 million per year in California. There is no special interest in California both willing and able to mount a sustained challenge to public sector union power. They simply have too much money, too many people on their payroll, too many politicians they can make or break, and too much support from a biased and naive media.
The teachers strike in Los Angeles Unified School District cannot be fully appreciated outside of this overall context: Public sector unions are the most powerful political actor in California, at the state level, in the counties and cities, and on most school boards, certainly including the Los Angeles Unified School District. With all this control and influence, have these unions created the conditions that feed their current grievances?
The grievances leading the United Teachers of Los Angeles to strike center around salary, class sizes, and charter schools. But when the cost of benefits are taken into account, it is hard to argue that LAUSD teachers are underpaid.
According to the Los Angeles County Office of Education, the median salary of a LAUSD teacher is $75,000, but that’s just base pay. A statement by LAUSD in response to a 2014 report on LAUSD salaries challenged the $75,000 figure, claiming it was only around $70,000. They then acknowledged, however, that the district paid $16,432 for each employee’s healthcare in 2013-14, and paid 13.92 percent of each teachers salary to cover pension contributions, workers comp, and Medicare. That came up to $96,176 per year.
The Cost of Benefits is Breaking Education Budgets
This average total pay of nearly $100K per year back in 2013-14 is certainly higher today – even if salaries were not raised, payments for retirement benefits have grown. For their 35,000 employees, LAUSD now carries an unfunded pension liability of $6.8 billion, and their OPEB unfunded liability (OPEB stands for “other post employment benefits,” primarily retirement health insurance) has now reached a staggering $14.9 billion. CalSTRS, the pension system that collects and funds pension benefits for most LAUSD employees, receives funds directly from the state that, in a complete accounting, need to also count towards their total compensation. And CalSTRS, as of June 30, 2017 (the next update, through 6/30/2018, will be available May 2019), was only 62 percent funded. Sixty-two percent!
The reason to belabor these unfunded retirement benefits is to make it very clear: LAUSD paying an amount equivalent to 13.92 percent of each employee’s salary into the pension funds isn’t enough. What LAUSD teachers have been promised in terms of retirement pensions and health insurance benefits requires pre-funding far in excess of 13.92 percent. To accurately estimate how much they really make, you have to add the true amount necessary to pay for these pensions and OPEB. This real total compensation average is well over $100K per year.
To put LAUSD teacher compensation in even more accurate context, consider how many days per year they actually work. This isn’t to dispute or disparage the long hours many (but not all) teachers put in. A conscientious teacher’s work day doesn’t begin when the students arrive in the classroom, or end when they leave. They prepare lesson plans and grade homework, and many stay after regular school hours to assist individual students or coordinate extracurricular activities. But teachers working for LAUSD work just 182 days per year. The average private-sector professional, who also tends to put in long hours, assuming four weeks of either vacation or holidays, works 240 days per year – 32 percent more. The value of all this time off is incalculable, but simply normalizing pay for a 182 day year to a 240 day year yields an average annual pay of not $100K, but $132K. Taking into account the true cost of pensions and retirement healthcare benefits, that’s much more than $132K.
This is what the LAUSD teachers union considers inadequate. If that figure appears concocted, just become an independent contractor. Suddenly the value of employer-paid benefits becomes real, because you have to pay for them yourself.
California’s Ridiculously High Cost-of-Living
If a base salary of over $70,000 per year – plus benefits (far more time off each year, pensions far better than Social Security, and excellent health insurance) worth nearly as much – isn’t enough for someone to financially survive in Los Angeles, maybe the union should examine the role it played, along with other public sector unions, in raising the cost-of-living in California.
Where was the California Teachers Association when restrictive laws such as CEQA, AB 32, SB 375 were passed, making housing unaffordable by restricting supply? What was the California Teachers Association stance on health coverage for undocumented immigrants, or sanctuary state laws? What did they expect, if laws were passed to make California a magnet for the world’s poor? Don’t they see the connection between 2.6 million undocumented immigrants living in California, and a housing shortage or crowded classrooms? Don’t they see the connection between this migration of largely destitute immigrants who don’t speak English, and the burgeoning costs to LAUSD to provide special instruction and care to these students?
From a moral standpoint, how, exactly, does it make the world a better place when, for every high-needs immigrant student entering LAUSD schools, there are 10,000 high-needs children left behind in the countries they came from, as well as fewer resources for high-needs children whose parents, some of them Latino, may have lived in California for generations?
When you make it nearly impossible to build anything in California, from housing to energy and water infrastructure, and at the same time invite the world to move in, you create an unaffordable state. When California’s state legislature passed laws creating this situation, what was the position of California Teachers Association? Need we ask?
The Union War Against Education Reform
Charter schools, another primary grievance of the UTLA, is one of the few areas where politicians in California’s state legislature – nearly all of them Democrats by now – occasionally stand up to the teachers unions. But why are charter schools so popular? Could it be that the union-controlled traditional public schools are failing students, making charter schools a popular option for parents who want their children to have a better chance at a good education?
Maybe if traditional public schools weren’t held back by union work rules, they would deliver better educational results. The disappointing result in the 2014 Vergara vs. California case provides an example. The plaintiffs sued to modify three work rules, (1) a longer period before granting tenure, (2) changing layoff criteria from seniority to merit, and (3) streamlined dismissal policies for incompetent teachers. These plaintiffs argued the existing work rules had a disproportionately negative impact on minority communities, and proved it – view the closing arguments by the plaintiff’s attorney in this case to see for yourself. But California’s State Supreme Court did not agree, and California’s public schools continue to suffer as a result.
But instead of embracing reforms such as proposed in the Vergara case, which might reduce the demand by parents for charter schools, the teachers union is trying to unionize charter schools. And instead of agreeing to benefits reform – such as contributing more to the costs for their health insurance and retirement pensions – the teachers union has gone on strike.
Financial reality will eventually compel financial reform at LAUSD. But no amount of money will improve the quality of LAUSD’s K-12 education, if union work rules aren’t changed. The saddest thing in this whole imbroglio is the fate of the excellent teacher, who works hard and successfully instructs and inspires their students. Those teachers are not overpaid at all. But the system does not nurture such excellence. How on earth did it come to this, that unions would take over public education, along with virtually every other state and local government agency in California?
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Flawed reports aside, charters – schools of choice – are flourishing. As I wrote last week, too many government-run schools are failing and the future for them, collectively, is not rosy. But the monopolists running our traditional public schools (TPS), in addition to blaming lack of funding, have been busy lashing out at charter schools, which are decentralized and give parents a right to choose where to educate their kids.
California is not just any “blue state.” By many measures, California is a blue nation. It boasts the world’s sixth largest economy, isolated from the rest of the nation by mountains and deserts that were virtually impassable before modern times. It is blessed with diverse industries, abundant natural resources, and the most attractive weather in North America. California is nearly a nation unto itself.
And it is an occupied nation. California is ruled by a coalition of monopolistic businesses, public sector unions, and the environmentalist lobby. These Occupiers control a Democratic super-majority in the state legislature, as well as nearly all of California’s major cities, counties and school boards. To enrich and empower themselves, the Occupiers have oppressed California’s dwindling middle class and small business sectors, and condemned millions more to poverty and dependence.
For the average working family, no state in America is harder to live in than California. It has the highest cost-of-living, the highest taxes, the most onerous regulations, one of the worst systems of public education, congested freeways and failing infrastructure. It will take heroic efforts to turn this around. And heroic efforts require heroes.
In the face of this overwhelming power, this alliance of oligarchs and government bureaucrats that has conned voters into embracing their servitude, where do you begin? What steps can you take? How do you rescue education, cut taxes, encourage new homes and new infrastructure, and save small businesses from crippling regulations?
As it turns out, a lot has been done in select locales, where heroes stepped up and successfully fought for reforms. And if those reforms could be replicated in other cities and counties, things would begin to change. To borrow a quote from Winston Churchill, if small local reforms began to spread across this great state, it would “not be the beginning of the end, but it would be the end of the beginning.” Here are some examples:
(1) Turning failing schools into charter schools:
As recently reported by CPC general counsel Craig Alexander, in 2015 parents at the Palm Lane Elementary School of the Anaheim City School District turned in far more signatures than needed under the Parent Trigger Law. The goal of the law and the parents at Palm Lane was to convert a public school that had failed their children for over a decade into a charter school. But the district, as a pretext to denying the Parent’s Petitions, improperly disallowed many signatures. It took a few years for parent volunteers and pro-bono attorneys, all of them heroically volunteering their time, to fight in court. But on Friday, April 28, 2017, the Court of Appeals issued a 34-page opinion that upheld in full the trial court’s ruling in favor of the parents and against the Anaheim Elementary School District. The Appeals Court found the trial court’s initial ruling, including the court’s findings of the bad faith tactics of the district, was correct in all aspects. Palm Lane Elementary school will start the 2017-2018 school year as a charter school.
(2) Stopping secret negotiations between cities and counties and public sector unions:
It wasn’t easy, but a few years ago, heroic progress was made. Orange County, Costa Mesa, and Fullerton all adopted so called “COIN” ordinances. COIN stands for “civic openness in negotiations.” This prevented elected officials from approving sweetheart deals with the government unions whose campaign contributions got them elected, all behind closed doors with minimal opportunities for public review. And to explain what happened next, one may borrow a quote from Tolkien: “Sauron’s [the Occupiers] wrath will be terrible, his retribution swift.” California’s union-controlled legislature passed a law they termed “CRONEY” (Civic Reporting Openness in Negotiations Efficiency Act), which mandates government agencies with COIN ordinances make public all negotiations with private vendors involving contracts over $250,000. There’s no comparison, of course. Private vendors disclose proprietary cost information in negotiations, and public entities are already required to take multiple bids in a competitive process. By contrast, public sector compensation, benefits and work rules are by definition not proprietary, they are public. And public sector unions, regrettably, have no competitors.
(3) Reforming financially unsustainable pension benefits:
If someone told you that they were going to invest their money, but if that money didn’t earn enough interest, they were going to take your money to make up the difference, would you think that was fair? Of course not. But that’s how a couple of million unionized public sector workers are treating the rest of us. California’s annual pension costs have risen from 3% of all state and local government revenue (i.e., “taxes”) to nearly 10% today, and there is no end in sight. But heroes are out there. In June 2012 voters in San Diego and San Jose passed pension reform initiatives. In both cases, to borrow some Star Wars terminology, “The Empire [The Occupiers] Strikes Back.” After relentless attacks in court, San Diego’s reforms were left largely intact, and San Jose’s were severely undermined, although some important provisions were preserved.
The people who fought for these reforms are too numerous to mention. They are all heroes. Some of them, like San Jose mayor Chuck Reed, San Diego councilmember Carl DeMaio, Costa Mesa mayor Jim Righeimer, and California state senator Gloria Romero, were elected officials whose courage has earned them the permanent enmity of the Occupiers. Other heroes, far more numerous, were the citizens, parents, and activists who dedicated countless hours to these causes.
Turning California back into a place where ordinary citizens can afford homes and get quality public education is not going to be easy. But there is no chance unless heroic individuals band together and fight the Occupiers, one issue at a time, one city at a time, one school district at a time.
Over the next several months, the California Policy Center intends to find more examples of heroic local reforms. It is our intention to not only compile these stories, but for each of them, distill them to the essential steps that were taken, so that these winning formulas can serve as an example to others.
We are in search of heroes. Contact us. Tell us your story.
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Ed Ring can be reached at email@example.com.