Court Case Could Free Public Employees from Unions

Supreme CourtThe U.S. Supreme Court will hear arguments in the Janus v AFSCME case on February 26, with a decision scheduled to be announced in June. If successful, it would free public employees in 22 states from having to pay any money to a union as a condition of employment.

Many union leaders are beside themselves with the thought that their days of collecting forced dues payments may well be numbered. And in an attempt to convince anyone who will listen to them, the lies and whines are flowing like raw sewage. Perhaps Numero Uno on the BS meter is Mr. Eric Heins, president of the California Teachers Association. In the current issue of California Educator, the union’s magazine, Heins spews some whoppers that would make Richard Nixon and Bill Clinton blush.

“They want to use the Supreme Court to take away the freedom of working people to join in strong unions.” Blatant crock. The case is about giving working people a choice to be a part of a union.

“A decision in Janus to strip public employees of their collective bargaining rights in the workplace moves us further in the wrong direction.” Uh, nice bait and switch. The case has nothing to do with collective bargaining; it’s about the Constitutionally-guaranteed freedom of association for workers.

“No other organization exists to protect California’s children the way CTA does – in the classroom and beyond.” Okay, technically not a lie, but it’s a distinction without a difference. In his opinion, CTA, which has burdened the Golden State with tenure, seniority and dismissal statutes so onerous that firing a pedophile is almost impossible, is “protecting children.” No, the union is there to preserve teachers’ jobs at any cost…whether they deserve preservation or not. The children you pay lip service to – not to mention taxpayers you profess to champion – are hardly “protected” by your union.

Other unions have also ramped up their rhetoric as the oral argument date nears. The American Federation of Teachers, stressing precedent, is invoking the 1977 Abood ruling, which allows for forced dues. Using the stare decisis argument, the union adopted a resolution “urging the court to reaffirm its long-standing position rather than imposing a national ‘right to work’ landscape.” Surely the union would admit that using a prior ruling as the basis to justify a law is not always the right and just thing to do. For example, AFT wouldn’t have been caught dead using stare decisis to support Plessy v Ferguson, which advanced the “separate but equal” doctrine for public facilities, including schools, when  Brown v. Board of Education, which claimed that separate educational facilities are inherently unequal, challenged the 58 year old ruling in 1954.

In the “whine” category, one meme that keeps popping up is the unions’ insistence that they will become insolvent without compelled dues. AFSCME President Lee Saunders called Janus a political attack against union finances. To be sure the unions will take a financial hit, but if it doesn’t have anything to offer to a worker, it should lose business or even fold up. Think Edsel.

In the “misdirection” department, Slate writer Mark Joseph Stern deserves to be singled out for chutzpah. He asserts that the claim made by Janus that the First Amendment flatly prohibits the government from compelling Americans to subsidize speech with which they disagree is bogus. He writes, “… this happens all the time: Tax revenue, for instance, is frequently used to promote messages that a taxpayer does not endorse, yet nobody seriously believes that taxes are unconstitutional.”

What Stern conveniently omits is that the union is not a government entity, but rather a private corporation. For better or worse, making people pay for services they neither asked for nor want is a “privilege” we reserve for government. In other words, while I must pay state and federal taxes, I don’t have to pay the Auto Club a fee because they say they provide certain necessary services. I am not forced to fork over money to the NRA because the pro-Second Amendment group advocates for me. AAA and NRA are private entities but, unlike unions, are not allowed to coerce money from unwilling individuals.

Given the originalist majority on the Supreme Court, Mark Janus should be successful in his attempt to continue in his job as a child support specialist at the Illinois Department of Healthcare and Family Services without being made to pay one red cent to any union to keep his job. And a union will then have to convince him (and several million other government employees) that it’s in his best interest to join up. What a concept.

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. The views presented here are strictly his own.

Record number of San Francisco public employees strike it rich

sanfrancisco3As reported by the San Francisco Chronicle:

A record 23 city and county employees in San Francisco made it over the $300,000 mark in pay this past fiscal year — topped by someone who made more than half a million dollars.

And no, it wasn’t the mayor.

At the top of the pay heap was the chief investment officer for the city’s retirement system, William Coaker Jr., coming in at $512,485 …

Click here to read the full article

Who Funds CA’s Public Pension Systems?

As reported by the San Diego Union-Tribune:

The debate over public employee pensions often centers on funding — who’s paying the tab.

Taxpayer groups point to large public contributions to retirement funds. Public employees and pensioners point to their own contributions — and investment earnings by the pension fund itself — as significant contributors.

New data from the U.S. Census bureau sheds light on the balance among those three sources, when it comes to funding pensions.

The top contributor to state and local pensions in 2015 in California was investment earnings, at $28.2 billion or 45 percent of incoming revenue for pension systems.

Next was government contributions, generally borne by taxpayers, at $24.6 billion or 40 percent of funding. Public employee contributions totaled $9.4 billion, or 15 percent of revenue. …

Click here to read the full article

The Wonderful Life Of Being A Lifeguard In Newport Beach

As featured on

It’s a great town when the lifeguards make up to $211,912 in compensation with multi-million dollar lifetime pension payouts. Secretaries to the city bosses make nearly $100,000, refuse workers make three times the national median wage, and 31 city employees out-earn every governor of the fifty states.

We all missed the memo in high school – that job posting for the City of Newport Beach, California. If we had only known, many of us would have packed our bags and headed west for wealth and fortune on the California beach – as a lifeguard.

The lifeguards of Newport Beach have garnered Hollywood fame, pay exceeding six figures, and multi-million dollar (90 percent of salary) lifetime pensions kicking in as early as 50. It seems akin to winning the lottery against the pristine backdrop of bikinis, beautiful sunsets, and the Pacific Ocean sands. Their union negotiated perks include $400 per year in sunscreen allowance.

In 2007, the FOX prime-time hit program The O.C. frequently showcased the Newport Beach lifeguards.

Click here to read the full article

CA Dems Want State’s Overdrawn Pension Systems to Dump Fossil-Fuel Stocks

CalSTRS1California’s two mammoth public-pension funds — the California Public Employees Retirement System and the California State Teachers’ Retirement System — are short a shocking $225 billion that they’re going to need to pay for the retirements of government workers. But what is it about the two pension funds that worries the state’s Democratic Party? Their fossil-fuel investments.

Delegates to the state’s annual Democratic Party convention voted over Memorial Day weekend in favor of a resolution urging the funds to dump oil, natural gas, and coal stocks. The vote follows the introduction earlier this year of state legislation that would require the pension funds to sell all coal-related stocks and study the implications of dropping oil and natural gas stocks. With the resolution, local Democrats jumped on the divestment bandwagon, inspired by radical environmentalist Bill McKibben, which has so far persuaded the endowment funds of about two dozen universities to sell shares in fossil-fuel companies. Yet if CalPERS and CalSTRS’s past social-investing records are any indication, the real losers from divestment won’t be the energy companies, but California taxpayers.

“I’ve been involved in five divestments for our fund,” CalSTRS chief investment officer Chris Ailman told his board earlier this year. “All five of them we’ve lost money, and all five of them have not brought about social change.”

For several decades, California’s pension funds have been subjected to a dizzying array of social-investment prerogatives. A 2011 Mercer Consulting study found that CalPERS investment officials had to follow 111 different investment priorities relating to the environment, social conditions, and corporate governance. Many of these directives have proven calamitous to the two funds’ bottom lines. Eight years after CalSTRS and CalPERS divested their portfolios of tobacco stocks in 2000, a study found that the move cost CalSTRS $1 billion and CalPERS about $750 million in foregone profits. CalPERS also ditched investments in developing countries such as Thailand and India, because board members objected to labor standards in these countries. A 2007 report found that avoiding investments in developing counties cost CalPERS about $400 million.

Considering its investment track record, CalPERS can hardly afford to absorb such losses. A 2012 study ranked CalPERS in the bottom 1 percent among pension funds in rate of investment returns over the previous five years. Only recently has the fund’s investment performance started to improve.

Last year, CalPERS introduced a new policy discouraging divestment. “Fiduciary obligations generally forbid CalPERS from sacrificing investment performance for the purpose of achieving goals that do not directly relate to CalPERS operations or benefits,” the policy stated. “Divesting appears to almost invariably harm investment performance.” The pension fund also argued that divestment is a poor way of achieving social goals.

Advocates counter that the state shouldn’t put profits above people. The author of the Democratic Party fossil-fuel divestment resolution, R.L. Miller, who chairs the party’s environmental caucus, said that the declaration would send a “moral message that California will not invest in those businesses that burn our planet in the name of profit and this resolution is that message.” Delegates compared the action with worldwide divestment in South Africa’s economy beginning in the mid-1980s—a movement intended to isolate the country and persuade its government to dismantle Apartheid. In 2006, Wilshire Consulting estimated that divesting from South Africa had cost CalPERS about $1.9 billion.

The analogy between South Africa under Apartheid and fossil-fuel companies is strained, to say the least. The world was able to isolate South Africa because few major industrialized countries depended heavily on its economy. But fossil fuels are pervasive throughout the world, and the energy they produce drives the economies of most nations. More than 80 percent of the energy the world uses currently comes from fossil fuels, while only 9 percent comes from alternative energy sources (including nuclear). Even under the most optimistic scenarios, it will be decades before countries can end their reliance on fossil fuels, so the demand for them, and the profits they generate, will attract investors around the world, regardless of whether endowments and government-controlled funds divest of their shares in these firms.

More important in the coming years will be technological advances that allow cleaner energy from fossil fuels. The rapid shift in the United States to natural gas—which emits nearly 50 percent less carbon dioxide than coal when burned — has already helped the United States cut its greenhouse gas emissions by 10 percent since 2005. Meanwhile, some 1 billion poor around the world await electricity, and coal will likely fire their dreams.

None of this matters much to California’s advocate-legislators, who always have the state’s overburdened taxpayers to fall back on when their social-investing schemes backfire. California residents already face an enormous bill for unfunded pension liabilities. Last year, Governor Jerry Brown signed legislation more than doubling the annual amount that school districts must contribute to CalSTRS over the next five years. Meanwhile, local governments have been absorbing steep funding increases from CalPERS. An April Manhattan Institute report by senior fellow Stephen Eide found that 25 California municipalities saw their pension costs increase by between 47 percent (Garden Grove) and 537 percent (San Francisco) over the last decade. The report estimated that CalPERS’s bills would increase another 20 percent to 48 percent over the next five years for the largest municipal governments in the pension plan. CalSTRS and CalPERS, meanwhile, will have to take this new tax money and produce above-average investment returns to make up for big gaps in pension funding. If the funds miss their investment targets, taxpayers will be on the hook for additional money.

The proposed legislation mandating divestment offers insight into what California’s elected leaders think of their taxpayers. To assure pension-fund officers and board members that they won’t be blamed for any investment losses generated by divestment, the legislation says that these officials will be “held harmless and eligible for indemnification” in such cases. If only California’s taxpayers could be held harmless from their legislators.

Pay for Retiree Health Care by Putting California Government Workers in Obamacare

As I’ve stated here before, there is no reason for California governments to continue retiree health care benefits for those who aren’t already retired or vested. It’s costly as heck (and getting costlier), and money hasn’t been set aside to pay for the benefits. And this country has Obamacare and Medicare to cover government retirees.

But retiree health care seems here to stay – in fact, the Brown administration is widely reported to be coming up with a plan to provide more of a funding base for it. That’s essential — even if the state comes to its senses and ends retiree health care, there will be many decades of benefits to pay for those who already have earned them.

But how to provide funding? I’d suggest taking a hard line: no other program or part of the budget should suffer to pay for retiree health care (that could just as easily be provided by existing public programs). So how to pay for it? The most appropriate way would be to put today’s state and local government workers into the insurance markets created by Obamacare.

The money saved – a Stanford study estimated the annual savings to California would be $1.4 billion – would be significant, providing a base of funding for retiree health care.

There’d be other benefits to the shift – including building up the fledgling markets with new customers and giving powerful public employee unions a stake in making the markets work. (Do you think it would be so hard to get Covered California on the phone if SEIU members were its customers?) And it’d be more than fair, since unions are the most important backers of the party that gave us this new health insurance system.

Of course, the fairness of such a policy wouldn’t stop unions from opposing this . And that opposition represents an opportunity for both sides of the political spectrum. The right could point out that even Democratic interest groups don’t want to go on with Obamacare. Republicans in the legislature, if they’re going to use their newfound ability to block Democrats who lost their supermajorities, would be wise to seize on this issue; they should block measures that require two-thirds until they get the elimination of retiree health care going forward.

Less-political people on the left could point out that having public employees getting platinum-coated health benefits means less money for vital public programs and investments. And they could make the most fundamental of progressive arguments: shouldn’t we all be in this together?

This article was originally published on Fox and Hounds Daily

Govt. Workers in CA Score Top Salaries

new survey by the U.S. Census Bureau found that California government workers pull down among the highest compensation in the nation. Here’s the map:

census compensation

Table 4 shows average earnings, for 2013, in California for a full-time state-and-local employee are $6,190. No other state even breaks the $6,000 barrier. Although Washington, D.C. — not a state, of course, but the recipient of our national tax dollars — came in at $6,391.

Even liberal states were lower:

  • Connecticut: $5,739
  • New York: $5,706
  • Illinois: $5,231
  • Massachusetts: $5,222

The national average was $4,603. That means California’s average earnings for state-and-local workers of $6,190 was 34 percent above the national average.

But doesn’t California have the highest median income per capita? No. It’s only 15th (for 2012), at $44,980. That’s just 5 percent above the national median income of $42,693.

To recapitulate: California’s state-and-local government workers make 34 percent more than the national average; while our people who pay the taxes for the government workers make just 5 percent above the national average.

Sure, the state is incredibly expensive. But it’s incredibly expensive for everybody. It’s just that one class, government functionaries, is living much better, in comparison to their fellow government workers in other states, than everybody else in this state.

And what do these highly paid bureaucrats do?

Mess up our lives.

This piece was originally published by

Even Federal Employees Less Happy Under Obama’s Second Term

report released Tuesday reveals that government employees are significantly less satisfied with their job in President Obama’s second term than his first.

Federal employees satisfaction fell for the fourth straight year, dropping to the lowest recorded since the group began performing these reports in 2003.

The report assigned a job satisfaction score peaking at 65 (out of 100) during his first term, but this year that score dropped to 56.9.

“The steady drop in employee satisfaction from 2011 to 2014 may be the result of a number of factors,” the report states. “These include the 2013 across-the-board budget cuts known as sequestration; three years of pay freezes; hiring slowdowns; numerous management missteps that garnered negative attention and criticism; and a partial government shutdown that resulted in the furlough of 850,000 employees.”

The study says that effective leadership is the most important factor in employee satisfaction.

The report ranked government agencies based on how much employees enjoyed working there. For comparison, the report separates out large agencies from smaller agencies.

Of the large agencies, NASA, the Department of Commerce, and the Department of State came in as the top three respectively.

The VA came in second to last place with the Department of Homeland Security in last, ranked 19th.

Meanwhile, private sector workers have significantly higher scores. They have a satisfaction score of 72 this year, the highest since the group began recording private sector scores in 2009.

This piece was originally published by the Daily Caller News Foundation. 

California’s New Coalitions Defy Conventional Definitions

The 2014 mid-term elections will be remembered for many things – pioneering use of information technology to comprehensively profile and micro-target voters, escalating use of polarizing rhetoric, historically low levels of voter turnout, and historic records in total spending. In California, in spite of all this money and technology – or perhaps because of it – the political landscape is probably not going to change very much this time around. But appearances can be deceiving. While Democrats will still control California’s state legislature and nearly all of California’s large cities and urban counties, new fault lines are forming within California’s electorate that defy conventional definitions of Republican and Democrat, or conservative and liberal.

Because as it is, California’s schools are failing, businesses and middle-income residents are fleeing, and the cost of living is the highest in America. Three powerful groups benefit from and perpetuate this arrangement with their money and their votes:  Wealthy individuals and crony capitalists, unionized public sector workers, and low-income residents who have become entirely dependent on government and are susceptible to their rhetoric. The terms of this alliance are financially unsustainable and even now, they harm low income residents more than they help them. It will crack as soon as a viable opposition coalesces. And that is happening.

Here are examples of how coalitions are forming that defy conventional definitions of Republican or Democrat, conservative or liberal:

(1)  Financial sustainability is a bipartisan issue.

California’s cities and counties, despite revenues from an unsustainable asset bubble that has bought them time, are on a collision course with financial insolvency. This reality has already confronted every big city mayor in California. Some, including Democrats like San Jose’s courageous mayor Chuck Reed, are trying to enact reforms to save their cities. Over 80% of the non-federal government spending in California is at the local level, and sooner or later, liberals and conservatives are going to join together to demand realistic financial reforms to restore financial health to California’s public institutions.

(2)  Quality public schools is a bipartisan issue.

California’s public schools will not be improved by spending more money, they will be improved by making fundamental reforms to how schools and school districts are managed. The Vergara lawsuit, funded almost entirely by conscientious Democrats, proves how committed everyone is to restoring accountability to public education. The success of charter schools proves that superior educational outcomes can be had for less money than is currently made available to public schools.

(3)  The mission of public sector unions is inherently in conflict with the public interest.

Both of the examples just mentioned – quality education and financial health – are the priority of any civic minded private citizen, but are not the priority of the public sector unions who control California politics. The reason California’s schools are failing is because of union work rules that prevent innovation and accountability. The reason California’s government finances are perennially challenged is because for decades, public sector unions have pressured politicians to grant pay and benefit increases that have become unfair and unaffordable.

(4)  Private sector unions are fundamentally different from public sector unions.

The growing rift within Democrats, and the growing consensus among all California voters, is based on a fundamental fact: Criticizing, or even abolishing, public sector unions does NOT represent an attempt at a broader war on labor, working people, or private sector unions. There are serious issues relating to the role and optimal regulations for private sector unions, but they play a legitimate, vital part in American society. Public sector unions, on the other hand, should be abolished.

(5)  No party, platform, or person has all the answers.

This is not a new reality, but today in California it is being increasingly recognized by reformers across the political spectrum. And there is a new, unifying theme – the need for public sector union reform, fostered through education reform and fiscal reform. While politicians and citizens may disagree over the size of government and the role of government, they are agreeing, more than ever, that government unions have skewed this debate and taken options away. Can we improve and enhance government services, or invest in ambitious new infrastructure projects? No, because tax revenue must pay over-market compensation to government workers. Can we streamline and modernize a government agency or effectively manage a school? No, because of union work rules.

New coalitions are forming that will not accept failing schools, or cities and counties in a perpetual state of financial crisis. They will fight together for educational excellence and fiscal health. And because nothing matters more than our children and our ability to earn a living, they will recognize the unpleasant truth – to restore public education and public finance requires fighting public sector unions.

In California, the outcome of the 2014 election is sadly predictable. But change is coming.

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

2013 CalPERS Payouts Online at Transparent California

CalPERS financial struggles are draining state taxpayers. The ever-increasing contribution rates it demands from state and local governments have already bankrupted several cities. Even for more financially stable agencies, increased CalPERS contributions have crowded out other spending priorities or tax relief.

While discussions about unfunded liabilities and projected rates of return are necessary and important, the average member of the public is too busy to dive into the details.

That’s why the recent release of CalPERS’ 2013 base payouts, including retiree names, on is so important.

For the first time, average Californians can quickly and easily see how much CalPERS paid out to retirees in 2013. The names and payouts are available here.

Even a casual glance at the data shows the root cause of CalPERS’ financial struggles: It’s paying tens of thousands of its government retirees pensions that dwarf what private-sector households make while working full-time.

The U.S. Census reports that the median household income in California is $61,400. This includes households where two adults are working full-time. The data on Transparent California though shows that the average 2013 pension for those who worked 30 years or more and received a full year’s pension was $64,448 for the year.

For those who retired in 2000 or later, the average pension was $68,403.

And whose taxes are going to increase to ensure that the retiree making over $64,400 a year receives a generous cost of living adjustment next year and every year thereafter? The working couple, despite making less in salary than the public servant receives in retirement. No wonder so many people have a hard time saving for their own retirement — they’re already subsidizing the retirement of California’s government employees.

Unfortunately, Social Security isn’t going to provide these private-sector families with equity. While the average 30-year government employee will collect an average payout of over $64,400, that’s more than twice the maximum Social Security benefit of $31,704 that a private sector retiree could receive after working for 35 years and retiring at the age of 66. In contrast, some government workers retire as early as 50.

These high pension payouts are actually understating the compensation received by CalPERS retirees. These payout amounts do not include health benefits received by retirees that are worth up to $18,000 a year.

Just a glance at the list of highest paid retirees shows why taxpayers should be so outraged.

Mark Bucher is the president of the California Policy Center.