Public Perception

Our proposed salary reductions focus on two areas: COLAs (cost of living adjustments) and pension payments. When meeting with the Budget Advisory Committee early this year, these were the hot spots for the community. In a recessionary economy, most of the committee members found it unconscionable that we were raising our salaries at a time when revenues were taking double digits drops (percentage-wise) and our very generous pension plans were being paid for by the employer.

I've also been posting plenty of articles about the backlash that is spreading across the state regarding our pension benefits. While the hotbed for pension reform has been Orange and San Diego counties, these aren't the only locales seeing heated debate over our employee pensions. Here is an excerpt from an article (click here) out of Redding:

The rising costs and alleged abuses of California's public pension system sparked a lively debate Thursday at a Redding forum — with Redding City Manager Kurt Starman suggesting that major reforms may be achieved only through a statewide ballot initiative.

"If something needs to be done, it needs to be done on at a statewide level so we (cities and counties) can remain competitive" and attract qualified police, firefighters and other professionals, he said.

Such an initiative is in the offing, said Marcia Fritz, a certified public accountant and vice president of the California Foundation for Fiscal Responsibility. Her group advocates pushing back the age of full retirement to 57 for public safety workers and 65 for other employees covered by Calpers, the public employee retirement system. In Redding, police and firefighters can retire as early as age 50.

Pushing back retirement by five years would cut pension costs in half, she said. "People are living longer and should be working longer," she said.

Her group also recommends suspending cost-of-living increases for current retirees and making workers contribute more to their retirement fund. The city of Redding, for example, currently picks up employees' shares of pension costs.

The group mentioned above is just one of several groups gathering signatures for an anti-pension iniative for the 2010 election cycle. The momentum is building to go after our salaries and pension. All you need to do is check out the blogosphere.

While anonymous reader comments always need to be taken with a grain of salt, I think it is instructive when you see anti-labor comments in stories in the San Francisco Chronicle, which has one of the most pro-labor readerships of any paper in the state. For example, check out the comments in the following story regarding the Vallejo bankruptcy (click here). A couple of years ago, it would have been highly unlikely to see such a hostile tone towards public employees, but it is now the norm.

There is also a lot of research going into ways to get salaries back in alignment with city revenues. On June 10, I posted a San Mateo County grand jury report about employee salaries (click here). The report was in response to escalating employee compensation costs--which has put every city budget under stress. The report's recommendations were as follows:

-The escalating employee costs can and should be reversed so civic services and infrastructure improvements are not neglected.
-In addition to stop-gap measures, such as temporary wage freezes and furloughs, long- term solutions should be implemented.
-Labor union contracts for newly hired municipal employees should be introduced to reduce the cost to cities of both pension and post-retirement health care plans.\
-For current, as well as newly hired employees, salary increases, total days off, the ability to convert sick leave to cash, and vacation pay must be contained.
-The practice of narrowly basing salaries and compensation packages entirely on those of nearby cities should be reconsidered. Hiring practices should be expanded to include competition with the private sector.
-Where cost-efficiencies can be achieved, services should be contracted out to other cities or private sector firms.
-Cooperation between cities to reduce overlapping functions should be pursued.
-Political barriers to change exist because all those negotiating employee contracts--staff, unions and city council members--benefit when wage and compensation packages increase.
-Barriers to change should be neutralized by providing for increased public involvement and, possibly through ballot measures.

To read the entire report, click here.

The drums are beating on employee compensation. Most citizens are seeing their salaries cut, their pension contributions eliminated and their retirement funds shrinking. They aren't happy about public employee salaries and benefits heading in the opposite direction of economic reality.
The package proposed to staff is merely an attempt to stay ahead of the curve, and to continue to have a well-paid workforce that can provide the necessary services to the public. If we insist on increasing salaries which in turn reduces services to the public--we will be faced with ballot measures that will force dranconian cuts to our compensation.