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Pension Pilfery

Average "Full Career" CalPERS Retirement Package Worth $70,000 Per Year

“‘What makes the ‘$100,000 Club’ some magic number denoting abuse other than the claims of anti-pension zealots?’ said Dave Low, chairman of Californians for Retirement Security, a coalition of 1.6 million public workers and retirees.”

This quote from a government union spokesperson, and others, were dutifully collected as part of Orange County Register reporter Teri Sforza’s eminently balanced reporting on the latest pension data, in her August 8th article entitled “The ‘100K Club’ – public retirees with pensions over $100,000 – are a growing group.”

In the article, Sforza’s team evaluated data released by Transparent California on 2015 CalPERS pensions, and reported the number of pensioners receiving $100,000 or more per year was 3.5% of total retirees, up from 2.9% in 2013. That truly does seem like a low percentage, but it ignores two key factors, (1) the total retiree pool includes people who only worked a few years and barely vested a pension, and (2) the total retiree pool includes people who worked many decades, sometimes 30 or 40 years or more, but they only worked part-time during their lengthy careers.

So if you restrict your pool of participants to those who worked a full career, and retired within the last 10 years, what percentage of those retirees would belong to the $100,000 club? As it turns out, there are 75,279 CalPERS retirees who worked more than 25 years and less than 35 years, retiring after 2006. And as it turns out, 9,763 of them, or 13%, are receiving pensions in excess of $100,000 per year.

Moreover, CalPERS doesn’t report the value of retirement health benefits and other retirement benefits, which almost certainly exceed $10,000 per year. If you make this reasonable assumption, you now have 14,901 CalPERS retirees, or 19% of our 75,279 pool of full career retirees, receiving a retirement package worth over $100,000 per year. Worth noting – we didn’t have the data necessary to screen the part-timers out of this pool. If we did, the numbers would be higher.

So if you use the appropriate denominator, the “$100 Club” isn’t 3.5% of the pie, it’s 19%, but so what? It’s still not a very big slice. Here’s where the flip-side of “full career pension” comes into play. Most people don’t work 25-35 years in public service. But most of them do vest their pension benefits, which can be vested in as little as five years. What happens when someone quits after five years, and only goes on to collect, say, a $20,000 per year pension? Someone else is hired, they work five years, and they also qualify to eventually collect a $20,000 per year pension. Then someone else, and then someone else – until you have three or four (or more) people who are all going to receive a $20,000 per year pension – for a job that one person could have performed if they’d stayed with the agency for a full career.

This is a critical point to understand. The significance of “full career” pensions is this: The taxpayer will fund pensions at that level of generosity, even if the benefit is split among multiple partial career participants – people who presumably worked elsewhere (where they also saved for retirement) during the majority of their careers. Should you expect a $100,000 per year pension if you only worked for five years? Of course not. But that’s what taxpayers are funding – whether it goes to one person, or to five people who worked a few years each to collectively fill one person’s full-career position in government.

This is why, when you are considering whether or not pensions are fair and affordable, the full career average pension is the only relevant measure. So what is the full career average?

For CalPERS in 2015, participants with between 25 and 34 years of work who retired in the last ten years, on average, received a pension of $60,277.  Add to that the value of their retirement health benefits and other retirement benefits and the average was probably closer to $70,000 per year.

Just for comparison, for Orange County (OCERS) retirees in 2015, participants with between 25 and 34 years of work who retired in the last ten years, on average, received a pension of $73,628.  Add to that the value of their retirement health benefits and other retirement benefits – information which OCERS also refuses to provide – and the average was probably over $80,000 per year. As for the OCERS “$100,000 Club”? Within the pool of full career retirees as described, and accounting for retirement health benefits, 31% of them were members. Nearly one in three.

Public sector spokespersons frequently point out that public employees don’t get Social Security. Actually, about half of them do get Social Security, but never mind that detail. Because the maximum Social Security benefit, which one must wait until they are 68 years old to receive, is a whopping $31,668 per year.

Calling critics of this double standard “anti-pension zealots” is lazy rhetoric. The problem with defined benefits is not that they exist. The problem is that we have set up a system where public employees operate under a set of retirement benefit formulas and incentives that are roughly four times better than what private sector workers can expect. Yet these private sector workers pay the taxes to fund these pensions and bail them out when the investment returns falter.

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Ed Ring is the president of the California Policy Center.

Median Total Compensation for Redwood City Firefighters – At Least $226,365

Back in February 2014 the California Policy Center publicly announced the Transparent California website, developed in partnership with the Nevada Policy Research Institute. An article covering this announcement was posted on the Forbes Magazine website, entitled “Hundreds Of California Government Employees Are Paid Over $400,000 A Year,” which a review of 2013 Transparent California data (2014 data is still being assembled) easily confirms. As a matter of fact, in 2013, total compensation in excess of $400,000 was paid to 1,292 public servants in California. A staggering 2,818 of California’s public employees collected total compensation in excess of $300,000 in 2013.

Some have argued that it is misleading to claim people are making, for example, over $400,000 per year, when in fact the $400,000 being referenced is total compensation, not regular earnings. We reject this argument categorically. It is incumbent on anyone who assesses compensation to treat total compensation as the only valid measurement both for comparative purposes and, especially, when considering employer costs. Total compensation represents the actual cost to the employer, and it represents the actual value earned by the employee. Every penny of total compensation, whether it’s to fund future retirement benefits or to pay for current benefits such as health insurance, is something a worker will have to pay for themselves out of their regular earnings, unless it is instead paid for by the employer.

When talking about how much we pay our public servants, we contend that it is misleading to reference anything but total compensation.

The Forbes article published in Feb. 2014 also cited examples of excessive pay from Redwood City, which raises another issue, which is the reliability of the data gathered. As it turns out, and as the city acknowledged, the data provided to Transparent California by the city was not intentionally misleading, but easily misunderstood. This lead to the author of the Forbes article claiming that “nine employees made over $400,000 in total compensation with a total of 33, mostly police and fire department employees, making over $300,000 in total compensation in 2012.” The city’s response:  “No Redwood City employee earned more than $400K. Furthermore, the correct number of employees earning more than $300K is 28, not 33 as stated in the op ed.” The city had put “exit incentive” payments into two data columns instead of just one and they got double counted by Transparent California’s researchers during the formatting process.

These are innocent mistakes. It’s worth noting that even the State Controller issues this disclaimer on all of their downloadable raw data spreadsheets showing public employee compensation – “the information presented is posted as submitted by the reporting entity. The State Controller’s Office is not responsible for the accuracy of this information.”

The real question, the real issue that isn’t going to go away, is how much should we be paying our public servants? How much can we afford to pay, and how much is fair both to these employees but also to taxpayers? So let’s take a look at 2013 data for Redwood City’s firefighters. We choose firefighters because the fire department in Redwood City, just as in nearly every other city in California, has the highest average pay and benefits of any major department.

To make this assessment, we used data provided to the State Controller for three years, 2011, 2012, and 2013. Here are the results:

Redwood City Compensation Analysis  –  Full Time Firefighters
20150601-UW-Redwood

As can be seen, during 2012 these firefighters earned significantly more overtime pay, probably because in 2012 full-time staffing was down from 2011, but then recovered again in 2013. It’s important to observe that the median total compensation is higher than the average. This is common when evaluating public safety pay and benefits in California, and refutes the claim that highly compensated executives skew the averages.

When evaluating the median total compensation of Redwood City’s full-time firefighters in 2013 of $226,365, it is necessary to consider what primary variables are driving that amount. The issue of overtime, for example, can be quite misleading. If you read the MOU in effect between Redwood City and IAF Local 2400, you will see that the 56 hour (fire suppression personnel who work 24 hour shifts) employees are apparently paid overtime when they work on any of the 12 paid holidays (MOU page 22, section 8.1). This makes sense, but if you assume these firefighters are, on average, earning 224 hours of vacation per year (10 years service, ref. MOU page 25, section 9.3), then their estimated actual 24 hour shifts per week are 2.32, an amount that includes only 3.9 hours of overtime. Holiday coverage is a sacrifice, to be sure, but apart from holidays, it does not appear that Redwood City’s firefighters are working significant amounts of overtime. Yet their median total compensation was $226,365 in 2013. Making these estimates is admittedly a fairly complex exercise and readers are invited to review the calculations on the “notes” tab of the downloadable spreadsheet “Redwood City 2013 – Firefighter Pay Analysis.xlxs,” a document that also shows all original SCO compensation data and the median/average calculations.

Another important variable affecting total compensation are pension contributions made by the employer. It is necessary to make two points on this topic with respect to Redwood City’s firefighters:

(1)  The Firefighter MOU grants a raise to cover every increase to their payroll withholding for pensions:

To fully appreciate this, read page 33, section 17.3 of the MOU, which covers the calendar years 2013 through 2017. In year 1 (2013), the employees begin to pay 2% towards their pension costs via withholding, and their pay is increased by 2%. In year 2, another 2% is withheld, and another 2% raise is granted. In year 3, another 2% is withheld, and another 2% raise is granted, and in year 4, another 1% is withheld, and a 1% raise is granted. In all, by 2017, Redwood City firefighters will be paying 7% of their pay towards their pensions. As a percent of regular pay, the city (the taxpayers) in 2013 made a 40% pension contribution. That’s 7% (eventually) from the employees to pay for their pension, and 40% from the city. That’s a nearly six-to-one employer match for retirement.

(2)  The city’s required pension contribution is going up, way up, no matter what. In February 2015 the California Policy Center published a study entitled “California City Pension Burdens,” compiling data and projections provided by the various pension systems, including, in this case, CalPERS. Here are some pension facts that confront Redwood City: Their estimated pension contribution in 2015 will be 6.61% of total revenue (all taxes and fees). Their pension contribution between 2015 and 2020 is assumed – according to CalPERS own projections – to increase by 54%, which, barring significant increases to employee withholding, means that instead of paying, on average $47,191 per firefighter (that is the 2013 number, the 2015 number is almost certainly higher), they will be paying $72,674 per firefighter. Just to fund their pensions. And barring pay decreases, that will elevate the median total compensation per full-time firefighter to at least $251,848.

All of these numbers are conservative, because in reality the increases to required pension contributions for firefighters will be more than what CalPERS projects for all of Redwood City’s employees, because firefighter pensions are far more expensive than those offered to miscellaneous employees. These numbers are also conservative because Redwood City is almost certainly not adequately funding their “OPEB” benefit (other post employment benefits), in particular, retirement health insurance (MOU page 49, section 19.2). And, of course, these numbers are grossly understated if you have any doubts regarding CalPERS’ ability to earn 7.5% per year through 2020 and beyond.

Asking whether or not California’s taxpayers should be paying firefighters roughly $250,000 per year is a question fraught with controversy. Clearly firefighters deserve a pay premium for the risks they take in their job. But firefighter unions have exploited the well-deserved respect firefighters have earned, and used that in conjunction with their dues revenue, to exert almost irresistible pressure on local politicians.

The rates of total compensation currently earned by Redwood City’s firefighters are by no means unique. Comparable levels of pay and benefits for firefighters are in place throughout California’s cities. When firefighter jobs that pay a quarter-million a year in exchange for slightly over two 24 hour shifts per week open up, literally thousands of people apply for them. The goal of public safety would be enhanced if we could hire more public safety personnel, firefighters in particular, for less money. But today there is no viable political coalition, anywhere, with the power and will to make that happen.

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

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

Back in the early 2000’s, 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 Friday’s off in exchange for a 20% cut in their pay. That is, they worked 20% less, and made 20% 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 2000’s 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% fewer hours spent at the job, overall, and California’s government workers got by, overall, making 20% 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% reduction to California’s state and local government workforce, and then there were a 20% 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% reduction in workforce combined with a 20% 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 2000’s, California’s state and local government workers got by just fine with a 20% reduction in pay, and California’s state and local government services functioned adequately even though 20% 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.

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

Unions in the News – Weekly Highlights

Exposed: Audit of DWP Non-Profit Trusts Produces Surprise Roadblocks to Transparency
By Paul Hatfield, May 5, 2015, CityWatchLA.com
By now, most of you are familiar with the audit report of the controversial non-profit trusts issued by City Controller Ron Galperin. If not, take the time to read it – at least the Executive Summary. The report clearly describes an organization with no effective internal or external oversight; glaring deficiencies in controls; indifferent management; incapable staff. (read article)

Teachers vs. Union Dues
May 4, 2015, Wall Street Journal
Teachers unions are the biggest political spenders in California, in part because teachers know they must ante up to receive substantial employment benefits. Some of the state’s teachers have filed a lawsuit to end the political extortion. Four teachers sued their unions in federal court last month for violating their First Amendment rights by requiring them to fund political advocacy they don’t support. The teachers argue that the union has unconstitutionally burdened their speech by conditioning significant benefits on their political contributions. In California all teachers must pay “agency fees” for collective bargaining regardless of whether they belong to the union. These fees typically constitute about 60% of the $1,000 in annual membership dues, which finance union political spending. (read article)

LAUSD chief wants more money, fewer restrictions in letter to governor
By Thomas Himes, May 4, 2015, Contra Costa Times
The chief of California’s largest school district urged Gov. Jerry Brown to spend more money on schools, as the state prepares to finalize budget figures. Los Angeles Unified could reap up to $253 million extra if the state’s revenue projections live up to expectations of being $2.3 billion more than previously estimated…..LAUSD’s contribution for teachers’ pensions will shoot up by 28 percent in the fiscal year that starts July 1. The contribution rate increased, because of state plans to make the system more financially sound. (read article)

California’s government pensions are a crippling burden
By Stephen Frank, May 4, 2015, Watchdog.org
California is a cautionary tale for taxpayers in the rest of the country. The people of California are being burdened by an unsustainable, unfunded liability–a trillion dollar government pension system. At the end of the day under California law, the taxpayers will subsidize the shortfall in the budget. Besides this debt, California has a debt of $340 billion–and that debt stands to be increased by some of the proposals within the state’s 2016 ballot measures. California is in economic collapse: while tax revenue increases, the policies to kill off the state are in place and beginning to take effect. (read article)

Rev. Jackson, labor union broaden Silicon Valley campaign at Broadcom
By Mike Snider, May 4, 2015, USA Today
Rev. Jesse Jackson’s campaign against the technology industry’s wage gap is getting personal. Jackson and the United Service Workers West union plan a rally Tuesday near the Santa Clara, Calif., offices of communications tech company Broadcom, which contracts with security company Universal Protection Service, protesting UPS’ treatment of employees who are seeking union representation. (read article)

Scott Walker Says He Would Crush What’s Left Of Unions If Elected President
By Alice Ollstein, May 4, 2015, ThinkProgress.org
Though he has yet to officially declare his bid for president, Wisconsin Governor Scott Walker is frequenting early primary states and hinting at what he would do if elected to the White House. In a recent interview with Radio Iowa, Walker said he would champion a federal version of the controversial ‘right-to-work’ law he signed earlier this year “As much as I think the federal government should get out of most of what it’s in right now, I think establishing fundamental freedoms for the American people is a legitimate thing and that would be something that would provide that opportunity in the other half of America to people who don’t have those opportunities today,” he said. (read article)

May Day march in San Jose comes as labor unions gain ground
By Vicki Thompson, May 4, 2015, Silicon Valley Business Journal
Activists rallied in East San Jose on Friday for a May Day march and protest, at a time when labor unions are energized in Silicon Valley and making inroads with workers who serve the tech sector. Participants called attention to the plight of the poor and the need for workers’ rights to be respected. The march occurred as some Silicon Valley cities have taken steps toward raising their minimum wage to $15 an hour by 2018, part of a national movement to boost wages. (read article)

Dale Francisco: With Santa Barbara District Elections Ahead, Beware the Pros — and Cons
By Dale Fransico, May 3, 2015, NoozHawk
Santa Barbara was recently sued by plaintiffs who accused the city of violating the California Voting Rights Act The law is a great example of how powerful interest groups have seized control of politics in California. While supposedly protecting the rights of minority voters, it in fact further empowers the Democratic Party and two of that party’s main allies: labor unions and attorneys. (read article)

Labor assists marijuana legalization effort in California
May 3, 2015, San Francisco Chronicle
Organized labor is assisting efforts to frame a California ballot measure to legalize recreational marijuana use in the state, sensing an opportunity to expand its presence in the workplace. The United Food and Commercial Workers’ Western States Council commissioned a series of focus groups, where likely voters across the state filed into rooms with one-way mirrors to share opinions, The Sacramento Bee reported. The research is aimed at shaping a legalization initiative for the 2016 ballot. (read article)

A window into the mindset of a public safety union
May 2, 2015, Press-Enterprise
It goes without saying that public employee unions dominate state and local political affairs in California. Pandering to public employee unions is a virtual requirement for electoral competitiveness and catering to their demands is essential to remain in office. There is no question that the voluntary association of employees can be critical for the fair treatment of employees. Public employee unions, however, are obviously unlike private-sector unions in that they represent employees paid by taxpayers to perform tasks on which governments generally have a monopoly. (read article)

G.O.P. Expands Labor Battle to Laws Setting State Construction Wages
By Monica Davey, May 2, 2015, New York Times
A bill that would end prescribed wages on public construction projects in Indiana awaits the signature of Gov. Mike Pence. And Henry Burks, a union electrician who lives near Indianapolis, is bracing. Mr. Burks, 57, is putting off plans to build a patio at his house. He is delaying painting and landscaping, too. And he said he is worried about how to continue helping his grown children with college costs if his income drops, as he firmly expects. (read article)

Transparent California reveals pensions of San Joaquin County’s former school superintendents
By Elizabeth Roberts, May 2, 2015, Lodi News-Sentinel
Former Superintendent Jack McLaughlin, whose chaotic two-year tenure at Stockton Unified School District remains one of the most contentious in recent history, topped the list of the biggest pension payouts in the Valley and Sacramento region, taking home $266,899 from CalSTRS in 2014, Transparent California reported Thursday. (read article)

Can LA Afford Its High Priced, Inefficient Workforce? Paid Much More Than Private Sector
By Stephen Frank, May 1, 2015, California Political Review
“Working” for the city of Los Angeles maybe one of the cushiest jobs in California. It is also one of the easiest and best paid—not only by government standards but by private industry levels. Even the Los Angeles Times is taking on this boondoggle. While Mayor Garcetti is crying and begging for more money, the unions running the city are making out like bandits. This is a city that proves hard work is stupid, honesty is foolishness and that theft by union is a way of life. (read article)

S.D. UNIFIED, UNION REACH TENTATIVE PACT AFTER YEAR OF NEGOTIATIONS
By Maureen Magee, May 1, 2015, U-T Dan Diego
The San Diego Unified School District and its teachers union reached a tentative labor pact after a year of negotiations that calls for a 5 percent raise over two years and lower class sizes in some grades, officials announced Thursday. The three-year agreement followed two days of deliberations with a state-appointed mediator, putting an end to an official labor impasse declared last month. (read article)

California port truckers end strike after four days
By Steve Gorman, May 1, 2015, Reuters
Southern California port truckers seeking recognition as employees rather than contractors ended a strike of freight-hauling companies on Friday after four days of picketing that drew attention to their cause but did little to disrupt cargo shipments. Several hundred drivers, backed by the Teamsters union, struck four trucking firms they accuse of defying federal and state labor enforcement decisions and a court ruling that the truckers were victims of wage theft through misclassification. (read article)

Obama’s crusade for Big Labor continues
By Heather Greenaway, April 30, 2015, Washington Examiner
Over the past several decades, organized labor has been experiencing a crisis as membership rolls continue to decline to record lows. In 2014, the Labor Department reported that union membership fell again to 11.1 percent of workers, down from 11.3 percent the previous year. Today, it stands barely over six percent in the private sector, while government workers largely contributing to the ranks of union members. (read article)

Freedom’s just another word for mandatory dues, union says
By Jason Hart, April 30, 2015, WatchDog.org
Freedom means paying a union to keep your job? What sounds like a riff on a George Orwell story is actually the heart of an argument by one of America’s most powerful labor unions. American Federation of State, County and Municipal Employees recently equated forced dues with freedom in defense of an AFSCME video portraying nonmembers as deadbeats. (read article)

New Bill Would Ban Mandatory Project Labor Agreements
By Carl Horowitz, April 30, 2015, NLPC.org
In the construction industry, nothing exemplifies union monopoly, and its costs, quite like a Project Labor Agreement. A new proposal before Congress, the Government Neutrality in Contracting Act, would protect contractors from intrusion by organized labor upon contractual liberty. Sponsored by Rep. Mick Mulvaney, R-S.C., and Sen. David Vitter, R-La., (H.R. 1671, S. 71) the measure would bar the use of these agreements on federally-sponsored or subsidized public works. (read article)

Poll: Union Approval Remains Low
April 30, 2015, LaborPains.org
Unions trade on claims of their wide public support, but even those boasts are getting narrower and narrower. A few labor flacks touted the findings of a recently released Pew Research Center poll about Americans’ views on unions, but in truth it mostly bears bad news for the union movement. (read article)

Obama-Appointed NLRB Chairman Mark Pearce: A William Winpisinger For the 21st Century?
By Stan Greer, April 30, 2015, NILRR.org
As one of the leading spokesmen for Big Labor during the late 1970’s and the 1980’s, then-International Association of Machinists (IAM) union President William Winpisinger was extraordinary not so much because he was an unabashed socialist (after all, current AFL-CIO President Richard Trumka was once honored by the Democratic Socialists of America with its annual Eugene Debs award), but because of his unapologetic championing of criminal violence and other lawbreaking as tactics. (read article)

That Civic San Diego Fight Is About Unions
By Andrew Keatts, April 29, 2015, VoiceOfSan Diego.org
he fight over the future of Civic San Diego is also about labor unions. The city-owned nonprofit that used to run California’s tax-subsidized redevelopment program and regulates development downtown has been putting out fires left and right. Civic San Diego has been fighting against community groups who say the agency ignores them. One of the agency’s own board members filed a lawsuit to see if its role is even legal. And Assemblywoman Lorena Gonzalez wants to strip away Civic San Diego’s decision-making authority and hand it to the City Council. (read article)

Pension changers’ new term: “crowd-out”
By Jon Ortiz, April 29, 2015, Sacramento Bee
The next buzzword in California’s episodic public pension debate: “crowd-out.” As in, “California Crowd-Out: How Rising Retirement Benefit Costs Threaten Municipal Services.” It’s the title of a new report issued by the conservative Manhattan Institute. Leaders of the state pension-change movement, including former San Diego City Councilman Carl DeMaio and Dan Pellissier, president of California Pension Reform, earlier this month met at Sacramento’s Sterling Hotel for a presentation by the report’s author, Stephen Eide. DeMaio, a Republican, is teaming up with Chuck Reed, the Democratic former mayor of San Jose, on a yet-to-be-detailed pension overhaul for next year’s ballot. (read article)

AFL-CIO Delays CA Hospital Vote: What Happened to Employee Free Choice?
By Steve Early, April 28, 2015, Portside.org
When workers feel collectively trapped in poorly performing unions that do not properly represent them, the most union-minded among them often believe that changing unions is their only hope. If switching to another union is not a viable option because of AFL rules or incumbent union manipulation of Labor Board procedures, the result will be more workplace anger, frustration, and resentment. (read article)

Union clash prompts California bill
By Mike Hornick, April 28, 2015, The Packer
Inspired by the ongoing clash between Fresno, Calif.-based Gerawan Farming Inc. and United Farm Workers, a bill before the California legislature would stop the state Agricultural Labor Relations Board from enforcing a mediated contract without approval by a majority of employees. Jim Patterson, a Fresno Republican, introduced Assembly Bill 1389, the Fair Contracts for California Farmworkers Act. (read article)

Is Deficient Recruiting the Real Reason for Police Understaffing in San Diego?

Whenever there is a shortage of police personnel in a California city, a common reason cited is inadequate pay. When officers at a particular agency are paid less than their counterparts at some other agency, so the theory goes, they quit in order to start working where they can make more. This seems to be sound logic. But is it supported by facts?

According to a new study “Analysis of the Reasons for San Diego Police Department Employee Departures,” released last week by the California Policy Center, the answer to that question is a resounding “no.” Authored by Robert Fellner, research director for the Transparent California project, the study’s findings contradicted the conventional wisdom. They were:

  • Claims that SDPD officers were leaving to join other departments misrepresented the data on attrition, by focusing on the 10% who left to join other departments, instead of the 60% who retired.
  • These claims also misrepresented the overall data regarding staffing and recruitment, focusing on approximately 20 people leaving in a department of nearly 1,800 while ignoring the fact that there were 3,000 applicants for open 25 positions.
  • In support of these claims, a misleading study, funded by the city of San Diego, only analyzed base pay, the only category of pay San Diego didn’t boost in their 2014 pay raises for the SDPD.
  • This same study compared San Diego to one of the most expensive cities in the world – San Francisco and other totally different markets, instead of comparing SDPD pay to rates of pay in neighboring cities.

One thing that is not in serious debate is the fact that the San Diego Police Department is understaffed, like many other police departments in California. But the reason they are understaffed is a result of poor recruitment efforts. Fellner writes:

“The City’s ability to recruit new candidates would be seriously compromised when budget decisions in FY 2009 and FY 2010 resulted in the City cutting its quarterly academy class sizes from 50 to 25. In FY 2011 the City cancelled all but one academy class, a decision that ‘resulted in a lost opportunity to add approximately 57 additional recruits.’

And what did happen after the hiring freeze of 2011 ended? The SDPD received over 3,000 applicants for just 25 positions in its first academy class of 2012, according to 10News. This is symptomatic of a larger trend – a tremendous, unmet demand to work in law enforcement in the San Diego area. For example, the following year the nearby San Diego County Sheriff’s Department received over 4,000 applicants for their 275 deputy positions.”

There is no shortage of people who want to work in law enforcement in San Diego. Surely a few hundred of these many thousands of applicants are qualified to do the work.

While the facts don’t support the assertion that San Diego is losing police officers to other departments, the facts do support an alarming loss of officers to retirement, a problem that is getting worse. But if recruitment isn’t a problem, what difference does it make if officers retire in great numbers?

The problem is the cost for these retirements take away funds that could be used to pay for more police academy classes, and more active officers on the force. To fund an adequately staffed police force, San Diego could have reduced retirement formulas to the levels they were back in the 1990’s – i.e., reducing them back to levels that are fair and financially sustainable. Instead, to induce veteran officers to delay retiring, San Diego joined several other California cities in implementing “DROP,” which stands for “Deferred Retirement Option Program.”

In general, the way DROP works is this:  A retirement eligible employee agrees to freeze their retirement benefit accrual and continue to work, usually for five more years. Then, while they continue to work for the city and get paid as an active employee, the pension they would be earning if they had retired is paid into an interest bearing account. When they retire, the entire amount accrued in that pension account is paid to them in a lump sum, and from then on they begin to directly collect their pension.

Take a look at Transparent California’s listing of San Diego’s pension payouts in 2013. Nearly all of the top pensions are police and fire personnel who received massive lump sum payments under the DROP program. This is a scandalous waste of money. The primary reason SDPD officers leave their department is to retire. So instead of investing in recruitment and training efforts to replace retirees, the San Diego implemented the DROP program, at staggering expense, to retain veterans a little longer.

As always, the power behind these distortions of logic and perversions of policy are the government unions. Unlike the police officers themselves, who almost invariably want to serve their communities and make a positive difference in people’s lives, government unions thrive on fomenting resentment and alienation. The more anger they can manipulate their members into feeling, the more righteous indignation those members will bring to city council meetings, and the more dues they will willingly pay to purchase candidates for local office. Ultimately, what government unions thrive on is the failure of government, because the worse things get, the more money they will demand to fix the problems.

Inadequate pay is not the reason SDPD has a staffing shortage. Excessive pensions, the staggering expense of DROP, and a failure to fund recruitment efforts are the reasons why. The unions would have you think otherwise.

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

The Poor Teacher Canard Redux – Part I

“Mid-and Late-Career Teachers Struggle With Paltry Incomes” is the latest flawed study to claim that American teachers are underpaid.

Leave it to the left-leaning teacher-union-friendly Center for American Progress to come out with a flatulent report lamenting the allegedly lousy state of teacher pay in the U.S. Even worse, much of the acolyte media dutifully bought the study hook, jive and half-truth. A writer for Huffington Post, tightly clutching a moist hanky, whimpered,

While the report recognizes that low teacher pay is not news – especially when it comes to low entry-level salaries – researchers were interested in seeing if the salaries of mid- and late-career teachers ‘were high enough to attract and keep the nation’s most talented individuals.’ However, in a profession where teacher turnover costs up to $2 billion annually, the results they found are quite depressing. 

Where to begin?!

Let’s start with Andrew Biggs, American Enterprise Institute researcher and scholar, and Jason Richwine, a senior policy analyst at the Heritage Foundation, who released a study in 2011 in which they found that teachers are actually overpaid. What their study includes – and the Center for American Progress’ conveniently omits – are the perks that teachers typically receive as part of their compensation package, like excellent healthcare and pension packages that aren’t counted as “income.” Armed with data, the authors make a solid case. They find,

Workers who switch from non-teaching jobs to teaching jobs receive a wage increase of roughly 9 percent, while teachers who change to non-teaching jobs see their wages decrease by approximately 3 percent.

When retiree health coverage for teachers is included, it is worth roughly an additional 10 percent of wages, whereas private sector employees often do not receive this benefit at all.

Teachers benefit strongly from job security benefits, which are worth about an extra 1 percent of wages, rising to 8.6 percent when considering that extra job security protects a premium paid in terms of salaries and benefits.

Taking all of this into account, teachers actually receive salary and benefits that are 52 percent greater than fair market levels. (Emphasis added.)

Needless to say, this was beyond the pale for American Federation of Teachers president Randi Weingarten. She promptly bashed the report, insisting that it’s full of “ridiculous assertions” and countered with half-truths and threw in a little class warfare as red meat for her members:

The AEI report concludes that America’s public school teachers are overpaid — something that defies common sense — and uses misleading statistics and questionable research to make its case.

If teachers are so overpaid, then why aren’t more 1 percenters banging down the doors to enter the teaching profession? Why do 50 percent of teachers leave the profession within three to five years, an attrition rate that costs our school districts $7 billion annually?

Kim Anderson, advocacy director at the National Education Association, ignored the data and went for the lachrymose,

Talented individuals turn away from this rewarding profession because they are forced to choose between making a difference in the lives of students and providing for their families.

Actually, the AEI report wasn’t the first to explode the “poor teacher” myth. Back in 2007, researchers Jay Greene and Marcus Winters, then with the Manhattan Institute, found:

Education policy discussions often assume that public school teachers are poorly paid. Typically absent in these discussions about teacher pay, however, is any reference to systematic data on how much public school teachers are actually paid, especially relative to other occupations. Because discussions about teacher pay rarely reference these data, the policy debate on education reform has proceeded without a clear understanding of these issues.

This report compiles information on the hourly pay of public school teachers nationally and in 66 metropolitan areas, as collected by the U.S. Bureau of Labor Statistics (BLS) in its annual National Compensation Survey. We also compare the reported hourly income of public school teachers with that of workers in similar professions, as defined by the BLS….

Among the key findings of their report:

  • According to the BLS, the average public school teacher in the United States earned $34.06 per hour in 2005.
  • The average public school teacher was paid 36% more per hour than the average non-sales white-collar worker and 11% more than the average professional specialty and technical worker.
  • Full-time public school teachers work on average 36.5 hours per week during weeks that they are working. By comparison, white-collar workers (excluding sales) work 39.4 hours, and professional specialty and technical workers work 39.0 hours per week. Private school teachers work 38.3 hours per week
  • Compared with public school teachers, editors and reporters earn 24% less; architects, 11% less; psychologists, 9% less; chemists, 5% less; mechanical engineers, 6% less; and economists, 1% less.
  • Compared with public school teachers, airplane pilots earn 186% more; physicians, 80% more; lawyers, 49% more; nuclear engineers, 17% more; actuaries, 9% more; and physicists, 3% more.
  • Public school teachers are paid 61% more per hour than private school teachers, on average nationwide.
  • The Detroit metropolitan area has the highest average public school teacher pay among metropolitan areas for which data are available, at $47.28 per hour, followed by the San Francisco metropolitan area at $46.70 per hour, and the New York metropolitan area at $45.79 per hour. 

Of particular interest to Golden Staters, the California Policy Center (publishers of UnionWatch) has posted Transparent California, a valuable website which is “dedicated to providing accurate, comprehensive and easily searchable information on the compensation of public employees in California.” From it we learn that the average full-time teacher in California made $84,889 last year, and about 34,750 teachers were paid more than $100,000 in total compensation. It’s important to note that CPC includes all income in its reporting – base pay, overtime, health and pension benefits and other forms of compensation, while again, the CAP study misleadingly includes only base pay.

Despite unassailable research, the “poor teacher” myth is still widely believed, in large part due to those who benefit from spreading it. Most notably, the teachers unions exploit this falsehood as a tactic to con teachers into believing that the union is their only avenue for salary enhancement. The unfortunate truth for teachers is that unions actually prevent them from earning more money. Look for more on this in an upcoming post.

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.

Pasadena Unified Superintendent Promoted, $55,000 Raise, Despite District’s Failing Performance

Pasadena Unified School District (PUSD) superintendent Jon Gundry has just been tapped as the new superintendent for the Santa Clara County Office of Education (SCCOE), despite PUSD’s failing marks under his tenure from 2011 to 2014. His base salary will rise from $240,000 to $295,000 with the promotion effective August 1.

In 2013, the PUSD received a 751 score on California’s Academic Performance Index (API), down from 762 in 2012. API scores range from 200 to 1000, with 800 the targeted goal. Additionally PUSD received an “F” grade in a report card issued by State Sen. Carol Liu, which assessed the school’s performance in serving its low-income and minority students. Their overall grade of “D” was not much better.

When discussing the declining API scores, Gundry cited a decrease in district revenue as responsible for the poor scores.

Recently published compensation data for employees in California’s K-12 schools by TransparentCalifornia.com sheds light on this claim. The data reveals that Gundry earned substantially more than other superintendents in the area, despite overseeing a district with significantly lower performance marks. Further, the median compensation of the District’s teachers was rising, not falling, and remained consistent with the level of similar districts within Los Angeles County.

The payroll data reported by most schools does not distinguish between full and part-time employees. As such, this analysis considers teachers that received at least $25,000 in salary as full-time. The median compensation for a full-time teacher in PUSD in 2013 was $90,092, an approximately 2.7% increase from the 2012 median compensation of $87,226. At the same time he was bemoaning district funding levels, Gundry also saw a similar percentage increase in his compensation, which rose from $291,717 in 2012 to $301,081 in 2013.

Other districts though, produced greater student achievement with lower levels of teacher and administrator compensation:

Los Angeles County Schools’ 2013 API Test Scores and
Superintendent Compensation
20140730_Fellner-1

Liu’s report card cited nearby Baldwin Park Unified as an example for PUSD to look to and with good reason. In addition to earning a “B” grade from Liu, the district received an API score of 768 for 2013. The median compensation for a full-time teacher in the district was $88,861 in 2013. The district’s superintendent, Mark Skvarna, received $254,990 in 2013, which was actually a modest decrease from his 2012 compensation.

In the West Covina Unified School District, the 2013 median compensation for a full-time teacher was $84,374, with the superintendent receiving $266,281. The district’s 2013 API score is an impressive 831. Neighboring Burbank Unified earned an API score of 847 in 2013, while also having one of the lowest superintendent compensation packages in Los Angeles County. The median compensation for full-time teachers in the district was $91,401 in 2013, with the superintendent receiving $238,425.

So why is the highly compensated superintendent of a failing school district receiving a promotion and pay increase?

The SCCOE’s press release announcing the hire contained platitudes about Gundry’s experience and management style, but failed to mention PUSD’s recent academic decline.

Understanding the actions of a school board requires looking at the system itself. Beneath the seemingly straightforward goal of educating children lie competing political interests. Groups including the powerful teachers union, administrators and the school board are all competing for political power, money and control. Unfortunately it’s only rarely that the public education system rewards these groups for their ability to educate children.

School administrators then are often selected for their political skills and ability to manage or placate competing interests, as much as or more than for their education skills.

Based on Gundry’s promotion to become SCCOE’s new superintendent, it’s obvious his political skills are well-tuned. California’s students deserve a system that promotes education-based achievements, not political ones.

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Robert Fellner is a research fellow with the California Policy Center and a transparency researcher for TransparentCalifornia.com. For more visit http://californiapolicycenter.org/

Transparent California Releases 2013 Payroll and Pension Data

Today, the California Policy Center (CPC) released 2013 payroll and pension data (the most recent data available) on TransparentCalifornia.com, the largest ever online database of California state and local government employee pensions, salaries, and benefits. The data shows that public compensation in California is growing more out of control, threatening the solvency of the state and local governments.

This new 2013 data includes pension data from the big state pension systems and payroll data from state agencies, counties, the CalState system, and community colleges. It shows egregious examples of misplaced taxpayer funds. Most notably, one assistant fire chief with the Los Angeles Fire Department earned a pension payout of $998,456. On the payroll side, the Alameda County Administrator made $654,000 in total compensation in 2013, while her assistant made $338,000.

For anyone who wants to view – and download – information from the most comprehensive collection of pay, benefit, and pension data ever compiled for California’s state and local government workers, here are some key links:

All Data: http://transparentcalifornia.com

Payroll Data – by Agency: http://transparentcalifornia.com/agencies/salaries/

Pension Data – by Pension System: http://transparentcalifornia.com/agencies/pensions/

CalSTRS Pension Data – by Employer: http://transparentcalifornia.com/pensions/calstrs/employers/

CalPERS Pension Data – by Employer: http://transparentcalifornia.com/pensions/calpers/employers/

And here are some highlights of inflated 2013 payroll and pensions data compiled using data from Transparent California:

PAYROLL

  • Alameda County Administrator made $654,000 in total compensation.
  • San Bernardino and Los Angeles County CEOs made $500,000 in total compensation.
  • Sacramento and San Diego County CEOs made $370,000 and $394,000 respectively in total compensation.

PENSIONS – CalSTRS

  • 8,437 retirees took home six-figure pension payouts.
  • 730 collected at least $150,000.
  • 54 made more than $200,000.
  • One recipient collected $240,900, while another had a total pension payout of over $215,000.

PENSIONS – Los Angeles Fire and Policy Protection System

  • An Assistant Chief received a total pension payout of $998,456, which includes benefits and a lump sum DROP payment of $839,345.
  • Including DROP payouts, 85 retirees received total pensions exceeding a half-million dollars, while 12 of those retirees took home over $700,000 each.

PENSIONS – San Diego City Employees’ Retirement System (SDCERS)

  • A Police Captain received a total pension of $785,679 (this probably includes a DROP payout, but the data is not broken out).
  • 5 retirees in San Diego City Pension system received over $700,000 in 2013. 8 total over $600K and 13 total over $500K. 40 over $300K. (This probably include DROP payments, but thay are not broken out.

PENSIONS – Orange County

  • 13 retirees collected pensions valued at over $200,000 per year.
  • 148 retirees have a pension of 100% or more of their final salary.
  • 821 have a pension of 90% or more of their final salary.

These so-called “DROP” payments are lump sums paid when employees retire. This benefit is frequently offered to public safety retirees, although not all jurisdictions make it available. Where available, it is granted when a government employee who is, say, 50 years old and eligible to retire, instead opts to continue working. While continuing to work – and getting paid – because they had already become eligible to collect a pension, the amount they would have gotten as a pension is paid into a savings account on their behalf, bearing 5% per year interest. When they retire, they begin collecting an ongoing pension but also get paid 100% of the proceeds of these accumulated DROP savings. “DROP” stands for “deferred retirement option plan,” but in plain English it might be called “double dipping.” The taxpayer pays for all of this, of course.

Million dollar pensions are just the latest example of California’s lavish pension system paid for by overburdened California taxpayers. Meanwhile, essential services are squeezed, civic bankruptcies continue, and income inequality increases.

Due in large part to these exorbitant pensions, California state and local governments are facing an estimated $655 billion in unfunded pension and healthcare liabilities. This shortfall in contrast to the number of state employees and pensioners receiving half million dollar payouts or more from the taxpayer highlights the need for public sector compensation reform. This shortfall also puts the recent declarations of “budget surpluses” by many of our state legislators into proper perspective.

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Mark Bucher is the president of the California Policy Center

Fire Chief of 17 person District takes home $395K; District seeks property tax increase

The Rodeo-Hercules Fire District is located roughly 30 minutes north of San Francisco. The District provides fire protection and emergency services to the City of Hercules and the Rodeo area and had 17 full-time employees on staff in 2013. The District serves approximately 33,000 people over roughly 23 square miles.

Recently, the District held a meeting to discuss and vote on a property tax increase that would cost residential homeowners an additional $47 – $82 per year and commercial property owners $60 per fifth of an acre. The District will announce results of that vote on June 11.

The District puts a tremendous amount of budget information on their web site for public display, which is commendable. According to the District’s Fiscal Year 2014 Budget, employee salaries and benefits comprise over 78 percent of the Rodeo-Hercules Fire District’s entire budget. Hence, any need to increase taxes is primarily a result of employee compensation. The District’s website, however, provides only limited information concerning employee compensation.

Additional employee salary information is on the California State Controller’s Office’s (SCO) Government Compensation in California website. Unfortunately, this data does not include the cost of employer-paid health benefits for Rodeo-Hercules Fire District employees.

Through a public records request, however, TransparentCalifornia.com obtained complete information on Rodeo-Hercules Fire District employee compensation, including the cost of health benefits.

This 2013 data reveals that the median compensation package for a full-time employee of the District is $262,941.

The highest paid employee of the District was the Fire Chief, who pocketed $395,635 in total compensation. Of the nearly $400k in compensation received, a substantial $128,168 was designated for the Chief’s future pension.

For 2012, the U.S. Census Bureau estimates the median household income in the City of Hercules is $92,140, and the average earnings of a full-time worker are $71,748.

Fire and emergency services are a specialized skill set that are likely to require above average levels of compensation. However, when the level of compensation for a tiny fire department rises to nearly triple the combined household income of those whom they serve, this enormous disparity in compensation cannot be attributed to merely the premium that fire/medical services command.

Rather this is an extreme case of a broader trend seen in public agencies — public employees receiving pay and benefits that dramatically exceed what comparable workers make in the private sector.

Moreover, no individual can be truly objective and impartial when making budget decisions that affect their own salary. This is one reason why it is critically important for taxpayers to have accurate information regarding the salaries of the public employees they fund. Any public agency facing budget cuts will have a natural bias against cutting their own compensation.

An attractive feature of California’s Special District model of government is the localized, agency-specific functions allows for a greater level of control and oversight by the taxpayers they serve. However, the degree and accuracy to which taxpayers can serve as an effective overseer is directly proportional to the amount of information they have on the government’s operations.

In order for residents of the Rodeo-Hercules area to be to able to assess whether or not the District’s current levels of employee compensation are appropriate, especially when accompanied by a request for higher taxes, residents need to know what its employees currently receive in compensation.

TransparentCalifornia.com provides public employee compensation data as a public service precisely for situations such as these. Would you support raising your taxes for a fire chief of a 17 person department that is already receiving $395,635 a year in compensation?

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Robert Fellner is a researcher at the Nevada Policy Research Institute (NPRI) and joined the Institute in December 2013. Robert is currently working on the largest privately funded state and local government payroll and pensions records project in California history, TransparentCalifornia, a joint venture of the California Public Policy Center and NPRI. Robert has lived in Las Vegas since 2005 when he moved to Nevada to become a professional poker player. Robert has had a remarkably successfully poker career including two top 10 World Series of Poker finishes. Additionally, his economic analysis on the minimum wage law won first place in a 2011 essay contest hosted by the George Mason University.

Comparing compensation information on Transparent California and State Controller’s site

Two is usually better than one, and that’s certainly true when it comes to databases of government employee compensation.

In the case of California, there are two main searchable statewide databases.

Those sites are TransparentCalifornia.com, which provides information on government payrolls and pensions, and the State Controller’s Office (SCO) Government Compensation website. The main advantage of Transparent California is that it includes employee names, while the main identifier on the SCO site is job title.

Providing names allows anyone — reporters, for instance — to easily find out what specific employees are precisely making. In a recent CBS Los Angeles report, for example, a reporter accessed Transparent California and called attention to former LA County Assessor, John Noguez, who despite being indicted on 24 charges of fraud and corruption charges, is still compensated to a tune of over $288,000 a year.

Having two datasets available also allows researchers to compare the information on the sites and find errors — unintentional or otherwise. Here are several errors on the SCO site, that are obvious when compared to information now available on Transparent California.

Data from the City of Waterford contains a significant error on the SCO website. It underreports the Waterford’s employee retirement contributions by up to 90 percent. For the City Manager, the City’s retirement contribution of nearly $23,000 is reported as only $2,480 on the SCO site. Records for all City of Waterford employees have a similar pattern.

As Transparent California compiles this data based on employee name, which is how compensation is processed and identified, the accuracy of the data reported is going to be significantly higher than reporting by job title. As payments are made by employee name, it is rather straight forward to confirm the accuracy of the pay for a “John Smith – Director” as compared to confirming the accuracy of compensation data associated with merely “Director.” In the former, you are able to access the actual payroll documents that can verify the information reported, in the latter, no such process is available and one must rely on the accuracy of the preparer of the report who originally transcribed this data from an employee’s payroll record, before later removing that employee’s name.

A second, more innocuous error is the pension formula reported for the Bard Water District’s employees — 7 percent at 55. The correct formula is likely 2.5 percent at 55 or possibly as high as 3 percent. Also the $0 in employer-paid retirement contributions for the District’s General Manager is unlikely, but Transparent California has not yet received a response from the Bard Water District seeking confirmation of this information.

Third, data from the City of Beverly Hills, which comes from a report on the city’s own website, also contains an error. Transparent California questioned a whopping $58,581.66 annual health insurance premium for one employee! The City confirmed that this value was indeed an error and provided TransparentCalifornia.com with the corrected amount of $20,916.50, which is still incredibly high. Both the SCO and Beverly Hills itself still display the erroneous value of $58,599 on their sites.

Sacramento County’s 2012 data contains a fourth error. The SCO identifies the District Attorney as having total pay and benefits of $253,199. This particular example emphasizes just how important including employee names are. As Sacramento County only has one employee with the job title of District Attorney, it is clear Jan Scully Royse occupies this position. The accurate data on Transparent California, however, shows her 2012 compensation was $285,252. Unfortunately spot checking for errors like this one isn’t possible for the overwhelming majority of cases where government employees share identical job titles.

A fifth, rather dramatic error is found with the Fire Chief of Julian-Cuyamaca Fire Protection District. While the SCO lists the Chief as earning $2,769 in total wages for 2012, the recently acquired data (yet to be uploaded) from the District puts the total wages received for the District’s Fire Chief at over $80,000 for 2012.

There is no evidence any of these errors are deliberate. Honest mistakes happen, especially when working with several million records.

What Transparent California allows the public and policymakers to find, however, is accurate and searchable data that in important ways is more complete than the SCO’s site. Transparent California looks forward to the day when the SCO data also includes names so that citizens can use the sites to fully spot check each other.

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Robert Fellner is a researcher at the Nevada Policy Research Institute (NPRI) and joined the Institute in December 2013. Robert is currently working on the largest privately funded state and local government payroll and pensions records project in California history, TransparentCalifornia, a joint venture of the California Public Policy Center and NPRI. Robert has lived in Las Vegas since 2005 when he moved to Nevada to become a professional poker player. Robert has had a remarkably successfully poker career including two top 10 World Series of Poker finishes. Additionally, his economic analysis on the minimum wage law won first place in a 2011 essay contest hosted by the George Mason University.

The Unintended Consequences of High-Cost Health Plans for Public Employees

One of the more alarming data points I have come across while compiling the necessary records for the TransparentCalifornia website has been the large sums of money spent on health insurance for public employees. As our site does not provide individual breakdowns of benefits in an effort to present the information in a uniform and comprehensible manner, the cost of individual health plans was not something we were particularly focusing on.

However, in the course of formatting and uploading the necessary records to TransparentCalifornia.com, several agencies jumped out at me as a result of their alarmingly expensive health insurance plans. First it was the $20k+ plans in Corte Madera, CA and the Contra Costa Community College District. Then I saw the $30k+ plans in Beverly Hills. Finally, I came across what remains the most expensive plan I have seen to date – a $37,815 health insurance plan for the Water Superintendent of Sierra Madre, CA.

I suspected this was not a problem isolated to the handful of agencies whose numbers happened to catch my attention but, rather, indicative of a systemic problem likely to be found in many other public agencies. Operating on this assumption, I wrote about the way in which taxpayers would effectively be taxed twice for these plans – initially, to fund the public employee’s compensation itself and, again, when they find themselves paying an artificially inflated premium for their own health insurance.

Unfortunately, Pew Research has confirmed my suspicions. In 2012, State and Local government spending on health care increased by 8%; double the amount total U.S. healthcare spending grew during that same time period. The larger trend is terrifying – state and local government spending on health insurance premiums has increased an inflation-adjusted 444% from 1987 to 2012. It would appear that the agencies above are merely symptoms of a much larger problem.

The farther the distance between consumer and provider, the less reason either has to economize, which results in the out of control prices we see nationwide in the health care sector. Where an insurance plan can cost $37,815, the costs being insured against must be staggering. While there are a plethora of factors responsible for the current health care crisis in this country, the third party payer system, especially when that third party is using other people’s money (government agencies), is one of the core issues that demand immediate attention.

Robert Fellner is a researcher at the Nevada Policy Research Institute (NPRI), currently working on the largest privately funded state and local government payroll and pensions records project in California history, TransparentCalifornia.com, a joint venture of the California Public Policy Center and NPRI.