PUBLIC PAYROLL SOARS (wealth transfer gone from citizens to people in Govt)

LA Daily News ^ | 3./22/04 | Troy Anderson

[Joe Hadenuf]

(I instructed the Admin Moderator to remove the other thread).

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Public payroll soars

Salaries move far ahead of inflation

From the city of Los Angeles to California state government, the cost of salaries and benefits for public employees has soared far faster than inflation in the last five years -- three times as fast in the case of the Los Angeles Unified School District, a Daily News analysis has found.

The study showed that spending for public employees' salaries and benefits at the state and local levels increased overall at more than twice the rate of inflation and grew faster than the per capita income of average Californians. The cost of pensions was excluded from the analysis because of the wide disparity between different levels of government.

The spending binge started at a time that tax revenues were soaring, at the peak of the 1990s dot-com boom. Now that the boom has gone bust and the economy remains weak, state and local officials are making deep cuts in public services and looking for ways to raise fees and taxes. The review covered the fiscal years from 1997-98 to 2002-03.

"At all levels of government, the rate of compensation has gone up much more rapidly than it has in the private sector and, most importantly, faster than the personal income of the people who pay for this," said Steven B. Frates, a senior fellow at the Rose Institute of State and Local Government at Claremont McKenna College.

"There has been a wealth transfer. It has gone from the citizens to the people in government".

"You often hear people in government cry that there are going to be cuts and we're hurting the poor and the little children. The fact of the matter is the citizens of the state, county and city are making life better, not necessarily for schoolchildren or people in need, but for government employees."

The review covered the state of California; the city of Los Angeles; Los Angeles County and three neighboring counties; the LAUSD; and the Metropolitan Transportation Authority. Overall salary and benefit expenditures increased between 18 percent at the MTA and 53 percent for San Bernardino County during the five-year period.

The portion for employee benefits alone jumped by 35 to 186 percent.

In comparison, the inflation rate in California rose 17 percent, and per capita income in the state increased 24 percent.

Pension costs varied widely and dropped at some public agencies like Los Angeles city government, which has its own pension fund that profited from the booming stock market, and skyrocketed by as much as 79 percent at other agencies. Many local governments now face huge pension bills largely because of expansion in pension benefits.

Workers' compensation costs rose between 29 and 141 percent, and overtime costs increased by 13 to 60 percent.

In the last five years, per capita income in California increased 24 percent, from $26,521 to $32,898. Nationally, employees in the private sector earn an average of $34,299 a year, plus $13,374 in benefits.

That compares to the $49,005 annual salaries local and state government employees enjoy, plus $21,528 in benefits, according to U.S. Department of Labor statistics.

The highest average salary and benefits package is in Los Angeles County, where compensation jumped from $59,126 to $79,057, although officials point out that many employees went without raises for several years in the mid-1990s.

Local and state government officials said they approved compensation increases for their employees to remain competitive with other government agencies and the private sector, and that some cost increases, such as health care and workers' compensation, were outside of their control.

Some union leaders questioned the figures.

"We represent over 50,000 county employees whose salaries increased 24 percent over 10 years, an average increase of 2.4 percent a year," said Bart Diener, assistant general manager of Service Employees International Union, Local 660, which represents Los Angeles County workers. "We believe this is appropriate and in line with the growth in the economy."

But H.D. Palmer, spokesman for the state Department of Finance under Gov. Arnold Schwarzenegger, said the 41 percent rise in state salary and benefits costs under former Gov. Gray Davis clearly exceeds similar increases in the private sector.

"Looking at that growth in the rearview mirror, it's clear that kind of growth is unsustainable over the long haul," Palmer said. "It's one of the reasons the governor has said he'd like to reopen a number of contracts with state employee unions."

With the state facing a massive shortfall even after voters approved a $15 billion bond issue mainly to refinance existing debt, state and local government agencies now face making steep cuts. Much of the problem was caused by a five-year state spending spree that raised expenditures 43 percent while revenue rose only 25 percent.

Los Angeles County faces making nearly $500 million in cuts, while the city of Los Angeles faces $250 million and the LAUSD $600 million.

County Supervisor Michael D. Antonovich said the biggest portion of the salary increases comes from often unnoticed 2.75 percent and 5.5 percent annual "step" increases, or merit raises, which local and state government workers get during their first five to 11 years of employment.

"And many times employees who reach the fifth step after five years will be reclassified for another five years," Antonovich said. "This is above any cost-of-living adjustments negotiated in labor contracts. That's why those numbers go up so much each year and services are cut.

"So what they need to have is a two-tiered system. Labor laws need to be modified. You could develop a new classification that would allow step increases based upon merit and performance with a smaller increase. So what you would have is something similar to the private sector where promotions are based on merit and performance, not just showing up and having your eyes open."

Jon Coupal, president of the Howard Jarvis Taxpayers Association, said the figures confirm that the only "growth industry" in California is government.

"It's clear that the size of government and the slice it takes from the private sector continues to expand," Coupal said. "And while private sector businesses have suffered, it appears that local and state government believe they are beyond economic pressures."

Coupal said local and state officials should renegotiate contracts with employees unions, consider salary and benefit cuts, work furloughs and layoffs to reduce spending.

But Robert Stern, president of the Center for Governmental Studies, said government employee unions are powerful in California and he's not aware of any agencies cutting salaries and benefits since the Great Depression.

"These are pretty stout increases in both salaries and benefits," said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. "But the attitude in Sacramento was, 'Look at all this money coming in,' and they spent us into a massive budget deficit."

And, with the state plagued by a structural deficit of up to $10 billion a year, Kyser added: "We are either going to have to increase taxes or make painful cuts in spending. We are not out of the woods yet."

Frates of the Rose Institute said elected leaders bear the blame.

"They gave the farm away," Frates said. "California politicians need to be candid and open about what they are actually spending taxpayer money on.

"They frequently use the shorthand of, 'It's for public safety, education and public health,' when in fact it's for lavish salary and benefit increases for public employees at the expense of the general citizens of California. There are many public safety employees who now make more in retirement than they did when they were working and they get to retire at age 50."

Schwarzenegger is trying to renegotiate contracts. Los Angeles city officials have talked about renegotiations as well and County Chief Administrative Officer David Janssen has proposed a 1 percent salary cut for county employees and furloughs to save about $20 million.

"The question is do we make these necessary adjustments, or do we fire people?" Antonovich asked. "I'd rather make reductions and keep people employed. I believe you will find from workers a willingness to move forward and take reductions to retain their jobs and continue providing services to the public.

"The union leaders have traditionally opposed these reductions and would rather lay off people than have any reductions in compensation. To me, that is cruel and unnecessary. They don't want to jeopardize the benefits they have already gotten." l=8s=8 Troy Anderson, (213) 974-8985 troy.anderson@dailynews.com AT A GLANCE Here are highlights of the changes over the last five years based on figures from state and local governments, comparing fiscal year 1997-98 to fiscal year 2002-03. State:

Spending for salaries and benefits, excluding pensions, was up 41 percent, from $13.3 billion to $18.7 billion.

The number of full-time employees increased 10.5 percent, from 192,377 to 212,563.

The salary for correctional officers increased 25.4 percent, from $65,450 to $82,066 a year. City of Los Angeles (Not counting the departments of water and power, airports and harbor):

Spending for salaries and benefits, excluding pensions, rose 26 percent, from $1.8 billion to $2.2 billion.

The average salary of civilian workers rose 23 percent, from $45,534 to $55,919, while the average for police officers grew 28 percent, from $60,397 to $77,537.

Overtime costs increased by 61 percent, and workers' compensation costs went up 81 percent. Los Angeles schools:

In the Los Angeles Unified School District, expenditures for salaries and benefits rose 51 percent, from $3.6 billion to $5.4 billion.

The average salary and benefits package of an LAUSD employee grew by 27 percent, from $51,424 to $65,526.

The number of full-time employees expanded 18 percent, from 69,140 to 81,691. Los Angeles County:

Expenditures for salaries and benefits rose 39 percent, from $5.0 billion to $6.9 billion.

The average county employee's salary increased 31 percent, from $37,664 to $49,343.

Workers' compensation costs soared 96 percent, from $143.1 million to $281.0 million. Ventura County:

Salaries and benefits rose 22 percent, from $271.5 million to $330.9 million.

Overtime shot up 55 percent, from $1.9 million to $2.9 million.

Workers' compensation costs skyrocketed 141 percent, from $4.5 million to $10.7 million. MTA:

Salaries and benefits increased 18 percent, from $499 million to $589 million.

The number of full-time employees was up by 17.9 percent, from 7,576 to 8,930.

[Poohbah]

That's the problem. Even when we screw up, we look good.

[little jeremiah]

Another angle to the too many gov't workers is this: not only are there TOO MANY OF THEM, but WHAT THEY DO is often either damn useless or downright pernicious. Not only are staffs, departments and so on bloated like Shelob the giant spider, but WE are paying THEM to harass and torment us.

For instance, building code/permit departments. We pay them for the privilege of having them figure out how to screw us some more, and then we pay for getting screwed as well.

And I can personally attest to the fact that most of the people who work in in the building permit department act like miniature kings and queens.

I agree with one previous poster: we need fire departments, police departments, road guys, water department, and justice system (although most need radical overhauling). Other than that, most areas of life can be self-governed, or something like guilds. Private.

How much worse can it get before we fall before the government cart, like animals pulling a too-heavy load?

[little jeremiah]

I think you may be taking too personally the grievances of the posters here.

Looking at the situation objectively, you must agree that government, both federal and state (and often local as well):

1. Spends too much of OUR money.
2. Takes too much of OUR money.
3. Lavishes too much of OUR money on their own selves, staff, and perks.
4. Always increases the above, and never would think of downsizing the above.
5. Simultaneous to the above, increases the reach and power of government at all levels, with tentacles reaching into every nook and corner of the citizens' private lives and businesses - to the great detriment of said citizens.

[Poohbah]

Agreed on all points.

And it's done with the enthusiastic support--in each individual case--of at least 50% + 1 vote of the electorate.

[little jeremiah]

Amazing how non-property owners are allowed to vote for property tax increases.

People receiving public benefits should not be allowed to vote. IMHO.

Of course, IMHO public benefits should be reduced to nil starting tomorrow. Sink or swim. It would be tough for a while but people would figure it out, and with all the tax money that people would now keep in their pockets, donations to charity would increase, people could afford to lend a helping hand to friends and relatives, medical costs would decrease to a more rational level, people who are not inclined to work would be more inclined. With less restrictive laws regarding job environments and so on, people could hire more employees, or people could start their own businesses. Look at the self-employment taxes! Sick.

For instance, mr. little jeremiah used to have his own business - small, connected with the building trade. He hardly ever hired anyone, although he would have liked to. Too much hassle what with OSHA, insurance, complications from taxes and so on.

[Joe Hadenuf]

Yep, no doubt about it.

[Joe Hadenuf]

Tax payers fund your lunches, too.

Care to expand on that?

If you're going to trace someone's paycheck back to show that the money came from tax revenues, I'm sure a lot of the money you receive comes from tax revenues.

I must be a little tired. I am in the private sector, when I buy lunch, which I generally avoid at all cost, I use my money, the 50 percent of my pay check that is left that the government hasn't confiscated from me.

I have no clue how you make your living, but it must necessarily depend on money coming directly or indirectly from other people, some of whom are government employees, some of whom are welfare recipients, some of whom benefit from government contracts, some of who got tax refunds, etc.

Oh man. Your spin is making the rotation of the earth speed up.

If you think that there are too many government employees or that they're overpaid, hardly anyone here would disagree. But what they choose to DO with their paycheck is not the taxpayers' business.

Is it me, or is this some kind of code?

[Sloth]

when I buy lunch, which I generally avoid at all cost, I use my money, the 50 percent of my pay check that is left that the government hasn't confiscated from me.

And generally, when government employees buy lunch, they use their own money, whatever fraction of their paycheck is left that the government hasn't confiscated from them.

[Joe Hadenuf]

And generally, when government employees buy lunch, they use their own money, whatever fraction of their paycheck is left that the government hasn't confiscated from them.

What don't you get? 100 percent of their income is what they are taking from us in the private sector.

Read the article, it's happening everywhere. Government employee's incomes are going up, up, up, their benefits are *top shelf*, while those in the private sector are getting theirs slashed, reduced or eliminate, the government employee pensions are now some of the best, while pensions in the private sector are like their medical benefits, they too are being hacked up, reduced, cut, and some are even in jeopardy.

I always thought those government public civil servants were suppose to be civil servants, not the elite or our masters.

Did you read the article? You don't see a problem with this picture?

[Sloth]

You don't see a problem with this picture?

Of course. Government is drunk with power and money, and it wants more. It expands its size and payrolls, and public employee labor unions exploit the situation to the detriment of taxpayers.

But none of that has anything to do with silly, misleading comments about "yummy, tax payer paid lunches." And as far as the article's comment about wealth transfer from the private sector to government, what do you think government employees do with their taxpayer-funded paychecks? They spend them, just like anyone else. And they spend their take-home in the private sector, generating both 'velocity' for the U.S. dollar and tax revenue to help pay their own salaries, among other things. It's not as though gov't employees are somehow removing money from the economy and hoarding it somewhere. Even the pension funds, etc., are invested somewhere.

[Joe Hadenuf]

But none of that has anything to do with silly, misleading comments about "yummy, tax payer paid lunches."

Well, when they build this city hall, the biggest, most opulent, landscaped, guarded, secure building in the area, (even their employee parking is secured and guarded) and then they build the most expensive restaurant in the area, directly across the street from the new government facility, well yes, all those government employees are having yummy lunches at the tax payers expense! LOL! Are they not getting fat tax payer paid paychecks?

And as far as the article's comment about wealth transfer from the private sector to government, what do you think government employees do with their taxpayer-funded paychecks?

Big correction, you mean what are the government employees spending MY hard earned money on!!!!!

[Joe Hadenuf]

And as far as the article's comment about wealth transfer from the private sector to government, what do you think government employees do with their taxpayer-funded paychecks?

Most of they are buying is probably from Red China. Is that suppose to make those in the private sector feel better?

[Joe Hadenuf]

Er, *Most* of what they are buying is probably from Red China. Sorry, this doesn't make me feel better about government spending my money like drunken sailors on leave.

[Not A Snowbird]

Big correction, you mean what are the government employees spending MY hard earned money on!!!!!

You know what, Joe, I pay taxes too. At an extremely confiscatory rate. Therefore, I spend my own damn money on lunch.

Out.

[Joe Hadenuf]

You know what, Joe, I pay taxes too. At an extremely confiscatory rate. Therefore, I spend my own damn money on lunch.

I understood you to be a government employee.

Are you not compensated and paid money that is taken from the tax payers?

If so, the money your spending on lunch, was taken from the tax payers, to buy your lunch. It's a tax paid lunch! Do you not understand this?

[Not A Snowbird]

Dude. Let me slow this down for you.

I'm a taxpayer. I pay into the government kitty which provides services and pays the salaries of all government employees. A portion of the taxes I pay comes back to me in the form of my paycheck.

I am contributing, through taxes I pay, to my own compensation. I buy my lunch... paid for by tax revenue... that the government received from me.

[Joe Hadenuf]

I am contributing, through taxes I pay, to my own compensation. I buy my lunch... paid for by tax revenue... that the government received from me.

Your spin is speeding up the rotation of the earth, people are flying off.

Look, if you are a government employee, and are being compensated 100 percent by money confiscated from the private sector, you are living off, and eating off tax paid funds. I don't care what you pay in taxes, as they money you have left is still OUR money!

LOL!

[Not A Snowbird]

Your spin is speeding up the rotation of the earth, people are flying off.

DUCK! THERE GOES ANOTHER ONE!!!

Listen, I'm not the enemy. I'm sorry you think I am just because I happen to work for the government. I guess your solution would be to fire all government workers and let the masses fend for themselves? Or are there some of us you would keep around?

[Joe Hadenuf]

Listen, I'm not the enemy. I'm sorry you think I am just because I happen to work for the government.

Well, since the government that is taking about *50* percent of my income, right out of my hard earned pay check, no I don't considered government employees my good neighbor. You are joking right? Why don't they just take 70 percent? Or 90 percent?

I guess your solution would be to fire all government workers and let the masses fend for themselves?

Fend for themselves? Grrrr.

I am the one who fends for myself and my family, the government is like a hairy baboon on the bending backs of the peon tax payers. While I'm working my butt off, that hairy baboon is reaching into my pocket, taking money that was suppose to be for my family and I.

Which government agency fends for me on a daily basis? What are you talking about? I have nothing but contempt for most government agencies.

Or are there some of us you would keep around?

Outside of the military, I'd be firing *millions* of you folks, on the spot, and I would tell you to go make an honest living, learn something, produce something.

Look Sandy, there is now something like 23,000,000 people working for local, state and federal government. Forget the military, we are taking *millions upon millions* doing nothing but taking the private sectors money, and every year, they demand more and more and more.

The governments waste of tax payer money is *epic*, and grows worse by the day....Just read this very offensive article. It ought to be an eye opener to any private sector American. In a word, it's brutally outrageous!

[Not A Snowbird]

Okay. I understand your angst about the "system", but the system is not my fault.

You have issues, Joe, if you hate me because of my job. I'm not sitting behind a desk with my feet up handing out welfare checks, I work for Homeland Security. And I happen to believe that's a rather important job at the moment.

I won't bother you anymore, go ahead and have your little rant. I'm done.