Wednesday, 20 April 2011

Jerry Brown Helps His Public Employee Union Pals

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With the background of Governor Scott Walker in Wisconsin standing up to public employee unions and those unions, with lots of outside help, trying put an overtly favorable candidate into a theoretically nonpolitical Wisconsin Supreme Court election, one might think that state politicians would be cautious about rolling over and playing dead when public employees unions make outrageous demands.

Or maybe not … Governor Jerry Brown (left) is chief executive of a state more than just tottering on the brink of bankruptcy. Yet Brown is behaving very much in a “business as usual” approach to tax, spend, and regulate statism. While the most productive Californians are migrating out and becoming Nevadans, Arizonans, and Utahans (so that for the first time ever, California did not grow faster in the decennial census than the rest of America), and while businesses also were fleeing the state, Gov. Brown signed a bill to hike Californians' utility bills. This anti-growth measure will require that utilities in the state use so-called “renewable energy” for 33 percent of power generation by 2020. Energy costs, which are already 50 percent higher than the rest of the nation, will jump even more. Driving out more business and more taxpayers will make the state’s financial crisis even worse. 

The real hemorrhage in California state finances, as is true with many other state governments, however, is in state employee compensation, particularly those components which are not purely compensation but rather in benefits, such as calculation of vacation leave, and other contract areas harder for voters to understand. In 2011, Californians need a tough negotiator for their rights, rather like Gov. Christie in New Jersey. Gov. Jerry Brown is hardly the person to address problem with public employees’ unions. When he was Governor during the 1970s, he signed the law which gave public employee unions the right to collective bargaining, the Pandora’s Box of many state financial problems today. Los Angeles Mayor Antonia Villaraigosa was a union organizer before taking his present office.

Stephen Frank, a past president of the California Republican Assembly, sees Brown and California Democrats doing the bare minimum necessary in dealing with public employee union abuses. In comparing the situation in California to the courageous stance of Gov. Walker in Wisconsin, Frank notes: “Of course that won’t happen here. The unions already own the State Capitol here.” Last November, these public employees unions were not only among the largest contributors to Brown’s campaign but also gave lavishly to many prominent Democrats in the California Legislature. Which unions gave the most? The California Teachers Association was high on the list; so was the Service Employees International Union; and the California Correctional Peace Officers Association (which chipped in $2 million to Jerry Brown’s election campaign).

With that support, Gov. Brown could be expected to find ways to help his generous friends, all the while pretending to be tough with these unions. The 200-page contract which he approved for state prison guards shows just how this works. Under the new agreement, when prison guards leave state employment, they will be given cash for their accrued vacation pay at their final pay rate. That compensation rate is nearly always higher, sometimes significantly higher, than the pay rate for those prison guards when they actually earned the vacation days. More importantly, unlike in the past when guards could accrue only 80 days of vacation pay without losing it, that 80-day cap is lifted. Prison guards can be paid for all the vacation days they accrue up to the time that they leave state government. 

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Nick Schroeder of the Legislative Analyst’s Office, a nonpartisan organization, warns that this will create a “huge liability” for taxpayers. He calculates that the average member of the California Correctional Peace Officers Association has accumulated almost 19 weeks of vacation pay to date. That would be 95 days, or 15 days more than these guards could have received in compensation when they left government service under the old contract. That time, Schroeder says, has "a current cash value of over $600 million." (That would make the union’s $2 million campaign donation a very good investment!) Schroeder is not the only analyst who views the new contract proposal, which must be submitted also to the California Legislature, as a political payoff to Brown’s friends.  "Jerry Brown has totally caved to these guys," said Jon Coupal, President of the Howard Jarvis Taxpayers Association.

As bad as abolishing the limit on payable vacation days when leaving state service is, the contract terms actually get worse — assuming that Brown is working for the taxpayers and not the union members. Schroeder notes that this sweetheart deal also would give California state prison guards 18 more days off over the life of the standard two-year contract than these members currently have under the existing contract. So guards would get even more vacation time for which they could receive complete payout at their highest pay rate when they left state employment. The typical prison guard, according to Schroeder, gets more than eight weeks off in the first year of employment.

How much do California correctional officers already get, under the old contract, as payout of vacation pay?  In 2010, 80 members of the correctional officers union received payouts of more than $100,000 when they left state government.  One prison guard received a whopping $286,990. The average payout, under the existing contract with its 80-day cap, is $24,994. Those figures do not suggest that these union employees were being squeezed or exploited. 

The new contract proposal also removes the requirement that the guards actually be physically fit to receive a bonus of $130 per month under contract “fitness standards.” In the new negotiated contract, the guards would simply need to go to the doctor for an annual physical to get this bonus. The purpose of this extra pay was to make sure that prison guards were actually going to the gym and staying fit. There were a couple of reasons for this. First, the more physically fit state employees are, the lower the actuarial costs of group health insurance. Second, if prison guards are fit, the liability issues related to injury by inmates also drop, reducing workman’s compensation and related expenses. But those savings are possible only if the guards are actually in good shape. (One might also imagine that a union which actually cared about its members’ wellbeing would want assurances that the members were in fact healthy.)

Brown, of course, is not pretending in this political climate to be a doormat for public employee unions. What he is trying to do is to feign toughness, all the while yielding on contract points that are hard for ordinary folks to grasp. What is his game plan? Almost certainly, Brown wants to tell Californians that he has squeezed all the fat out of government that he can, and that the only “responsible” option left is higher taxes. The question is: Who is willing to be fooled — again — by shifty politicians beholden to special interests?