Public Employee Compensation Reform is Vital

Individuals who oppose comprehensive and fundamental reform of public employee compensation can only be considered to be in denial.

Almost every government agency in the country is going broke right now. Almost all are cutting back services and reducing staff. Government is diminishing at the state and local levels before our very eyes. Our streets aren’t being fixed. Parks and libraries are closed. Schools are cutting back programs. Inmates are being released from jails and prisons. Fire protection services are being diminished.

Those who say the problem is just the stock market or the state of the economy are wrong. To be sure, the stock market and larger economic forces have their influence. But the primary reason state and local governments are going broke is because the compensation packages that elected officials have negotiated with public employee unions are far too generous.

Critics of public employee compensation reform can decry advocates of fairer contracts for public employees until they are blue in the face, but this won’t change the essential reality: As a group, public employees work fewer hours in a week, fewer weeks in a year, and fewer years in a career, while receiving exceptional salaries and other benefits, and then retire at a younger age with incomparably better pensions than private-sector employees. That’s just the way it is. That’s why there are often hundreds of applicants for each position that opens up in the public sector.

Fortunately, reform is on the way. Last year, San Diego and San Jose enacted fundamental public employee pension reform in their cities – including for existing employees – with 66 percent and 69 percent of the vote respectively.

It is time for public employee compensation reform in the county of Santa Barbara, as well. No one questions – or should question – the value of the work that public employees do. Indeed, as I have consistently pointed out, it is precisely because the work that public employees do is so vital that it is essential there is reform of public employee compensation.

Perhaps the best approach would be an initiative signed by 12,500 county registered voters to place a measure on the June 2014 ballot that would: 1) prohibit COLAs for county employees for the next four years; 2) limit vacations; 3) limit sick leave; 4) limit holidays; 5) cap the actuarial assumption for the rate of investment earnings in the county retirement system pension fund at 6.25 percent; 6) require that county employees pay half the cost of their retirement premiums, including both funded and unfunded portions of retirement funds; and 7) require that county employees pay half the cost of their health benefits following retirement and before they are covered by Medicare.

There is no reason for public employees to continue to be a protected class in our society. It is time to reform public employee compensation now.

Lanny Ebenstein is president of the California Center for Public Policy.

7 replies
  1. eatingdogfood says:

    If The Democrats Didn’t Give ” Sweetheart Deals ” To Your Public Service Union.
    Goon Employees To Get Reelected; You Would Have Plenty Of Money and The.
    Taxpayer would have Some Spare Change in His Pockets! Democratic Hustler
    Politicians + Corrupt Union Goons = BANKRUPTCY BABY! Time To Bring.
    RICO Conspiracy Charges Against The Hustler Corrupt Democrats and the.
    Criminal Unions!

  2. Tough Love says:

    Your #s 5 and 6 taken together will save quite a few bucks. The key is that the workers pay HALF of a true (not a LOW) estimate of the full cost. Using the 6.25% interest assumption is MUCH better than the 7.5% CalPERS now uses, but the 5.5% that Moody’s will be using to evaluate the health of these Plan is MORE appropriate. The LOWER that interest rate, the HIGHER the total Plan costs and the higher the 50% that the workers pay.

    Also, why only end COLAs for 4 years. Private Sector Pension NEVER have automatic annual COLAs. What makes Public Sector workers deserving of a better deal than those (the Taxpayers) that pay their way ?

  3. Tough Love says:

    Follow-up …. I missed an important point.

    Quoting …”7) require that county employees pay half the cost of their health benefits following retirement and before they are covered by Medicare.”

    You also said …”There is no reason for public employees to continue to be a protected class in our society.”

    Well … it is a VERY rare Private Sector worker these days that gets ANY (yes ANY) retiree healthcare subsidy, let alone 50%. If we decide to continue to give Public Sector workers a retiree healthcare subsidy, it should max out at 50% of a MODEST healthcare Plan (not a “Cadillac” Plan with all the bells and whistles). In addition, the 50% subsidy should ONLY apply to those with FULL-TIME careers of 35 or more years. The 50% subsidy should be proportionally reduced for service years less than 35 (and years of “part time” service should not count in this calculation).

    And of course, these change MUST apply to all CURRENT and RETIRED (not just new) workers.

    The Taxpayers are fed-up with the financial rape being perpetrated upon them by the very greedy Public Sector Unions & workers and the self-serving, vote-selling, contribution-soliciting elected officials more than willing to approve such excesses in exchange for campaign contributions and election support.

  4. eatingdogfood says:

    Isn’t It Time For The Abused Taxpayers Of These Union Shop States To Leave In Masses In Order To End This Unholy Conspiracy Between The Totally Corrupt Democrats And The Equally Corrupt Public Service Unions ??? It Is Really The Only Way To Finally End This Criminal Activity !!! Did Anybody Ever Hear Of RICO ???

  5. doggoneit says:

    This is never going to happen. Too much too soon will just get people arguing and tie up any progress. Public employees do not get that many benefits. The problem is in the long term. But the 50% health payment and paying into an IRA for retirement are good starts. The biggest obstacle will be PD and Fire. No one wants them to shut down, so the City Councils will fold everytime.

  6. Robert T says:

    Public employee pensions suck the life out of taxpayers footing the bill. They don’t even get such outrageous benefits. It must STOP NOW.

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