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Union challenges efforts to alter pension system

Original post made on Apr 15, 2010

The union that represents the city of Menlo Park's middle management employees is challenging the city and a group of residents, in the press and in the courts, over efforts to scale back pension plans for city employees.

Read the full story here Web Link posted Wednesday, April 14, 2010, 11:44 AM

Comments (45)

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Posted by Concerned Parent
a resident of Menlo Park: The Willows
on Apr 15, 2010 at 4:31 pm

Well the union seems to want it both ways: negotiations are conducted in private and then don't let voters present an initiative because they don't have "all the information". I say, put all the information out there because from what I can tell, there is a growing realization that small representative councils have set up huge guaranteed pensions, these pensions are set up to give a return which was reasonably generous in good times (8-10% annual return) and are completely unsustainable in zero growth times. The result of all of this is that people's taxes are going to fund pensions, not actual services. It also appears that laws have been set up so that a municipality can go bankrupt and cancel obligations to a private pension plan but not to a government union plan.

I can't help but wonder, are these the types of facts the union leader wants discussed in detail. I'm all ears, but based on local budgets, it is pretty clear that at some point, the entire municipal budget will need to go to support pensions, meaning you get to pay tax and get no services. The potential societal implications for this are huge and I would expect a rather unpleasant backlash against public unions from the people they arrogantly expect to pay for their guaranteed but unfunded retirements.


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Posted by just a thought
a resident of another community
on Apr 15, 2010 at 5:12 pm

In my opinion, conflict over this issue heralds the beginning of a coming war between our government and the private/non-government part of the electorate.

The utter outrage and unreasonableness of Government employees exploiting the surge in income during the bubble period to increase compensation, especially pension amounts and terms, by enormous percentages, based on the rationale that revenues will extrapolate without change, and then to refuse to even negotiate regarding reductions in times of privation is apparent to all, even them.

What would be so bad about having a Government employee strike? I personally think things would function fine. We need their services far less than people believe.

Roll backs to pre-bubble levels or lower as regards wages, benefits and pensions are reasonable and necessary.

This conflict will provide nothing less than the resolution of the relative merits of the best interest of the people versus government employees and will be expressed in the power struggle between the same in the coming years.

Reduction in the size of government and political empowerment of the private sector are the key elements in this conflict.

For the people to lose out in this process will ultimately result in unabashed totalitarian dominance and financial exploitation of the private sector by the government and its employees.

It may already be too late.

The key question that will be explored here, as well as in municipal, county, state and federal political environments, is whether the government can be held accountable to represent the interests of the people, or whether it is already powerful enough to represent itself in a conflict where those interests are clearly detrimental to public interest.

From my perspective, it doesn't look good.

JAT


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Posted by Concerned Parent
a resident of Menlo Park: The Willows
on Apr 15, 2010 at 5:57 pm

Just a thought,

I agree. Government unions appear to create an inherent conflict of interest since both management (elected officials) and workers don't necessarily need to take opposing positions, but neither has to worry about actually funding the comitments made. It is pretty clear that as people become more aware of how their representative governemnt has utterly failed them, we may see wholesale firings in governemnt as taxpayers will hit a limit. People are still furious about bank bailouts although much of the money is getting paid back. In this case, as with GM, its money down the drain with no hope of recovery. Keep in mind that in the conflict described by just a thought, it may be too late for government ot actually represent the interest of the people who elected it , but people can move. People may decide that as lovely as the geography of California is, the government is not sustainable. This may lead to a flight of people with no non-government base to pay for all of these unfunded liabilities. In that scenario, there is no real bail out and the only people left will be those who are too poor to move, not a great tax base and not likely to fund those generous pensions. As with the GM bondholders who took a major haircut while the UAW was given the company, pensioners who may be expecting to get $3 million in pension benefits from contributing $200K are going to need to get real. I agree it doesn't look good. Union leaders would do their groups some good to reset expectations rather than always asking for more, more, more. The government employees may have a monopoly, but they have priced themselves out of what the public can afford.


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Posted by tea baggers go home
a resident of Menlo Park: Belle Haven
on Apr 15, 2010 at 6:51 pm

Alabama is calling.


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Posted by Lee Weaver
a resident of Menlo Park: University Heights
on Apr 16, 2010 at 8:56 am

Ahh, it took until the 3rd post for the requisite Tea Party jibe. Let me finish the mandatory commentary by suggesting that anyone questioning public spending and union excesses is also a unwavering devotee of Glenn Beck, Fox News, and probably the Masons and NRA for good measure.

Now that we're done with the intentionally distracting labeling and name calling, let's move the debate back to the facts.


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Posted by Concerned Parent
a resident of Menlo Park: The Willows
on Apr 16, 2010 at 10:17 am

Thank you Lee.
Tea Bagger may be a convenient way to dismiss criticism, but it might be more constructive to actually have a debate. As I understand it, Tea Baggers are criticized for being angry, white men who shout down opposition rather than discuss facts.
One can disagree about the correct role and size of government and how society is best structured to be "fair". These debates tend to be more philosophy and while interesting, don't necessarily present real-world solutions.
The reality is that if a pension system is set up to guarantee markedly more monetary benefits than are contributed, it will create a funding gap. That's not a matter of labels, philosophy, or anything else, but simple math. The impact of that is not hard to extrapolate either. For a certain pool of dollars to run a certain public service (could be school, could be a fire department, etc.), if people are being guaranteed payment (salary + pension) that is not funded, the result is that with generous pensions, more of the dollars go into paying pensions than paying salaries. Again, one can model these with a lot more accuracy, but the concept is not difficult. One can argue that just tax the rich more, but there aren't enough rich people to fund these gaps, independent of the issue of fairness. What has happened is that elected representatives have made essentially unlimited funding comitments without a whole lot of publicity about the real costs of government union contracts. Now that these deals are coming out, people are seeing what monopolistic government services cost and are not seeing the value.

Take an example of a government employee who starts work at 25 and works for 30 years, starting at a salary of $30K and works their way up to a salary of $90K, then retires at 90% of that (note there are some who are able to retire and draw a pension of over $100K/year for life). They have likely contributed something like $200K to their pension, yet if they live to 80, will be paid over $2 million in cash and this excludes medical coverage on retirement in addition to the ability to get a second job on retirement. These rules need to change and will create a two tiered system for public employees (Oh yeah, these are people who are supposed to work for us!).

I am certainly no fan of the Tea Party (however you define it), can only roll my eyes at Beck (at least the segments shown on Jon Stewart), but am genuinely concerned about multiple unsustainable trends, the consequences of which are likely to be disastrous and cannot be dealt with by just taxing people more. More likely will be the tax of inflation. If we have inflation of 10% a year, the promised return of 8%/year suddenly becomes sustainable. Get ready because that's where we're going.
If posters want to disagree, please at least skip the name calling and try to argue some facts and ideally even suggest a reality-based solution.


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Posted by Blue Collar Public Worker
a resident of another community
on Apr 16, 2010 at 12:48 pm

To the greedy,
The whole scenario reminds me of a time when I was a private business employee. We had stock options, stock purchase plan, 9% a year bonus, etc. Then in came the corporate raiders bought the company I worked for told us the economy was bad and business was poor and they could no longer carry the company. So they stopped all the perks laid everyone off and even raided our pension plan. Oh that can't happen you say but it did and here is how. The plan guaranteed upon retirement that per a formula an employee would get say $1,000 per month for every 10 years of employment at age 65. So if you had a lump sum pay out from the plan of say $50,000 after the buyout you only had $15,000 because the corporate raiders had a new plan. You would get the $1,000 per month at 65 but they had a new pension fund administrator who was a wizz and he could guarantee $1,000 with only $15,000 instead of $50,000 in the fund. So because the fund was an asset of the company the raiders took $35,000 of my share. Now will I get my $1,000 at 65 I don't know not there yet. But I know this those same Captains of Industry are the same sort of folks who are Pounding the Payment for Pension Reform. Lets face it this is Menlo Park and Atherton one of the most affluent communities in the world. When you have a fire you want service right now, when want police you want it right now, when you have your child in public school you want every service and the brightest teacher you can get. So you spared no expense to get all the goods and services. Except now when things are tough you want it all back and all the service. The word for this is GREED. What about the people who earned it are you just going to take it away, we earned these benefits. My advice to you is come and get it and bring a big stick.
Blue Collar Public Worker


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Posted by Common Sense?
a resident of Menlo Park: Felton Gables
on Apr 16, 2010 at 2:08 pm

Whatever happened to common sense? Seriously. A group of concerned citizens are trying to make the system FAIR, that system is funded by TAX dollars OUR dollars, not some company's product, or service. We have every right to make sure these dollars are spent wisely. If we believe we are paying an overinflated price for that service, we need to speak out and try to develop a fair system. No one is "greedy" here, it just makes common sense. Just because we are "one of the most affluent communities in the world" does not mean we need to continue to OVERPAY for a service that we could get at a MUCH cheaper price. It's done everyday in the private sector, the difference is it happens faster because people CAN get fired, salaries CAN be cut back, services CAN be cut. None of this has happened with Menlo Park, and I think this is the time we really need to evaluate what we are spending. I think these pensions are outrageous, and worst of all, they're guaranteed. I am sick and tired of the rhetoric of the defenders of this current compensation plan, saying that private industry has stock options, profit sharing, bla, bla, bla. This is NOT the norm, in fact I believe it's not even in the neighborhood of 25% of Americans. I have yet to hear of a good reason to not reform, other than "you guys are greedy", "you got yours, where is ours?" or "You teabagger You!" This is a common sense problem, and we need to fix it, it's not going to stop with just this pension reform referendum.


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Posted by private sector peon
a resident of Menlo Park: Allied Arts/Stanford Park
on Apr 16, 2010 at 2:36 pm


I did work for several very good corporations in my time and I can say that the options and bonuses were insignificant. I was four years at a top computer company and my ESOP account had $400 worth of shares when I left. What I walked away with was what I put in my 401K plan. VERY VERY few of us in the private sector have anything remotely close to the crazy stories of fabulous wealth written about in the press. One more thing, my income peaked when I was forty and it has been downhill ever since. It seems in the public sector, incomes ONLY go up. Pensions and benefits ONLY go up and are protected by legislation.

Good people can disagree whether the proposed initiative is too much or not enough, but if not enough people sign the petition, then there will be nothing to vote on in November. These are the this weekend's signature gathering places and times.

Fremont Park (corner University and Santa Cruz—opposite Peets), Saturday 10-1
Café Zoes, Menalto Ave near Gilbert, Saturday 8-10 AM
Safeway, El Camino Real Saturday 10-12 pm
Farmers Market Sunday


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Posted by Concerned Parent
a resident of Menlo Park: The Willows
on Apr 16, 2010 at 6:33 pm

Blue Collar,

you appear to be talking to yourself. Benefits were earned? As far as I can tell, they are provided through a closed negotiation which has a built in conflict of interest. Greed is public (read that, public meaning the salary is paid for by the public) emplyees who have an attitude that they have a right to have a job from which they cannot be fired, without competition, with a guaranteed salary and exhorbitant pension. As I have said in prior posts, this is not sustainable and the result of the greed of public employee unions is that if people are paying taxes to support pensions rather than services, they will leave. THe very wealthy (think Atherton, etc.) will likely declare California a secondary residence and try to avoid taxes that way. The result will be no tax base from which to draw those guarnateed pensions plus lower property values for those who are left. But just for the sake of arguement blue collar, what would you consider a top tax rate to guarantee your pension? 50%, 60%, 90%. Greed indeed. It is quite a statement that government employees, who depend upon taxpayers (individual, small businesses, and yes, corporations) for their salaries, have developed a mentailty that says they are entitled to money that may not exist. Look at how Germany and Greece are getting along if you want a preview of where things are going next. The general (non-government) public is waking up to what really goes on in closed sessions and the status quo will no longer suffice.


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Posted by Blu Collar Public Worker
a resident of another community
on Apr 16, 2010 at 8:52 pm

To all,
Here are some facts yes it is ours we paid for it, do you know how PERS works? The goverment agency pays 7% to the fund and the employee pays 7% to the fund. Is that my money yes it is it came from my wadges and I earned it. Do private employers help fund 401K plans yes most match employee contribution. Did you know that in the late 90's until 2008 the PERS fund (investments did so well that goverment agencies did not have to fund the their 7%? We can't be fired no not true we can be fired for cause, laid off, down sized etc. Just ask all the teachers who got pink slips this month! So I ask is this just your tax dollars or is it our money we earned? Before you answer think and be fair.
BCPW


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Posted by Fairness
a resident of Menlo Park: Menlo Oaks
on Apr 16, 2010 at 9:36 pm

49.4% of private companies offer a 401K plan, or something similar, 39.2% of the employees in those companies, actually participate. How 'bout if we offer something similar to government employees, with the above type percentages? How 'bout if we don't guarantee the PERS fund, just like we do not guarantee 401K's etc.? How 'bout if we only contribute .50 on the dollar, as what is the average for 401K matches? THEN, it would be fair. How 'bout if we do these things Blue Collar Public Worker?? Oh, and how 'bout if we terminate, downsize, furlough, decrease wages etc., with similar percentages as the private sector? Example: Let's terminate 14% of the public employees right now, to equal the current unemployment ranks.
I think I just heard a pin drop................fairness Blue Collar Public Worker......fairness


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Posted by Blue Collar Public Worker
a resident of another community
on Apr 16, 2010 at 10:48 pm

Fairness,
OK sounds right, just like the 14 teachers at the Menlo Park School District who won't have a job next year. Not to mention the hundreds in other Districts! State workers who have been furloughed have been furloughed 15% thats right the average month has 20 days of work they are furloughed 3 days a month,is'nt that about 15%? OK 50 cents on the dollar you got it I put in 7% (wadges I earned) to PERS and the public agency puts in 7% (your tax dollars}. Thats right and next year if the state can't fund school districts they will have to cut again. I think thats fair any more sugestions Fairness? It was all good when the economy was good and private employees made way more than us, but now your not and now you want mine, they call that greed!
BCPW


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Posted by Fairness
a resident of Menlo Park: Menlo Oaks
on Apr 16, 2010 at 11:13 pm

You will never understand it BCPW, the union has melted your mind. These are OUR tax dollars, and we want to be the steward of OUR tax dollars, not the union and certainly not you. CEO's, CFO's, Board Members etc., are the stewards of their companies, they make decisions similar to this, they decrease salaries, terminate people etc. It is their every right, they own a stake in the company, or they are held accountable by their Board, or their shareholders. Guess what, the taxpayers ME, are the stake holders and we believe you are being over compensated, severley over compensated, to the point of great concern. You will see, the vast majority of tax payers, once they hear the issues, and the facts of the issues, there will be an adjustment, a fair adjustment. It is a fact that government pensions and benefits have ballooned to the point where they are responsible for most of the debt of this state. Again, as a tax paying citizen I will do everything I can to vote in new rules of providing a FAIR pension, and i will do everything I can to get these costs under control. Nothing personal, it's all about stewardship.


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Posted by Willy
a resident of Woodside: other
on Apr 17, 2010 at 11:13 am

Fairness:

"It is a fact that government pensions and benefits have ballooned to the point where they are responsible for most of the debt of this state."

I could use a link for that one, thanks.


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Posted by POGO
a resident of Woodside: other
on Apr 17, 2010 at 11:59 am

POGO is a registered user.

I'm not going to comment on the merits of the current pension system other than to say it is clearly unsustainable. If union members can't see that, they are blind.

It is quite apparent that the SEIU is going to do everything possible to resist reform, even changes that exempt their current workers. This resistance is so vehement that they don't even want voters to weigh-in in referendums (sounds anti-democratic to me). The SEIU should read history because they are sounding a lot like the auto worker unions of the 1980s and 1990s. That didn't work out so well for those retirees who now have no pensions or health benefits. It was entirely predictable and it didn't have to be this way.

The dramatic tax increases and draconian reduction in services that we are now seeing (in schools, police, fire, cities, and state offices) are JUST THE BEGINNING and the TIP OF THE ICEBERG.

I can't help but be reminded of the parable about the scorpion and frog.


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Posted by tax payer
a resident of Menlo Park: Park Forest
on Apr 17, 2010 at 12:43 pm

Maybe we should think about bringing the Police and Fire into pension reform...

The list below are the 16 ex-employees of the Menlo Park Fire Protection District collecting $100,000 or more from CALPERS. I suppose it would be somewhat understandable if they were the TOP exec running the organization, but pretty hard to believe that there could be 16 top execs in retirement today.

How is this sustainable? How is CALPERS going to pay out even $50,000 to ordinary workers thru out the state?

ALLORO-LICHENSTEIN, PAULA $102,332.88
AUGER, GREGORY $149,034.36
AUGER, RICHARD $147,953.64
DEMARTINI, DOUGLAS $106,610.76
EDENS, LEANNA $105,285.84
GIRAUDO, JOHN $113,986.92
GREENE, EDWARD $137,485.56
HALL, RICHARD $114,653.04
HITCHCOCK, DAVID $109,052.64
JULIHN, MILES $101,597.88
LICHTENSTEIN, JAMES $138,271.44
RICE, WAYDE $116,512.56
SHURSON, RANDAL $116,604.84
STURTEVANT, CHARLES $112,015.44
YOUNG, PAUL $100,138.92
ZAHND, CHRISTOPHER $113,909.28


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Posted by just a thought
a resident of another community
on Apr 17, 2010 at 7:21 pm

Frankly, I'm impressed by everyone's willingness to discuss this based on factual information and the amount of knowledge people have. You are more informed than I, generally speaking, and I feel no need to do other than let the merits of these presentations speak for themselves.

I can contribute this from the Mercury News a couple of weeks ago.

The County of SC is trying to deal with a deficit of $168M.

Of that, the pension fund is asking the taxpayers to pony up $38M to make the pension fund whole.

Not only that, but the committee which controls investment decisions for their pension system is made up of 7 people, all of whom are govt. employees, and only ONE of whom is required by mandate to have ANY financial experience whatever.

Not surprisingly, this committee has opted for High-yield, High-risk investments that have taken a pounding.
JAT


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Posted by Blue Collar Pubic Worker
a resident of another community
on Apr 18, 2010 at 6:16 am

JAT
Interesting thought so I guess we can bail out the mortage holders who took loans and blew the money on cars, trips and jewlery. But what about the people who risked their lives to put out fires and fight crime? No, just take what they worked for away right? Increadable, unbeleievable, GREED. Has anyone here looked down the barrel of a loaded gun with a wacked out doper behind it or lived with the fear of being shot some day? Has anyone here ever ran into a house on fire, did'nt think so, ever breath and toxic fumes from the fires chemicals? No, why am I not surprized. By the way every County in the nation has taken a beating even San Mateo. And it was'nt just bad investments all investments went down. Even Lee Buffington lost the Conties money. But of course you would not want to miss a chance to pick on a public employee.............


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Posted by Menlo Voter
a resident of Menlo Park: other
on Apr 18, 2010 at 9:04 am

Blue Collar:

yes, I have put myself in harms way as a police officer. I left that profession and do not have the retirement that I could have had. The bottom line in this situation is that no one is asking for take backs. No one is talking about cutting your pension. They are talking about resetting the system so it will remain affordable. As it is now it is simply unsustainable.

It used to be that civil service employees took less in salary in exchange for better benefits and good retirement. Civil servants are now paid comparably with the private sector and still recieve great benefits and retirement. In addition, the original assumptions that the final cost of those retirements were based on were flawed. People live longer than originally assumed and the returns on the investment of the retirement monies is no where near what was assumed. This has created a situation that is sumply untenable. If you run the numbers you will find the cost of these retirements creates a huge shortfall which will need to be made up. Where do you think that will come from? That's right the tax payers.

I am now a builder. My pay has been cut about 40% in the last year and a half. How about yours? I don't get 7.5 weeks paid time of either. How about you? Most everyone I know in private industry doesn't get the kind of percs civil service employees get. You pay 7% of your pay into the pension plan? You don't have to pay into social security like the rest of us, so its a wash. I have to pay into social security for a retirement benefit that won't be anywhere near 80% of my final pay. If I want that type of retirement benefit I have to contribute additional portions of my income into a retirement plan. Do you?

So Blue Collar, it seems to me the only greedy one here is you. When you give up your massive percs, take a pay cut comparable to mine and contribute in a comparable fashion to retirement account like I do, I will start taking what you have to say seriously.


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Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Apr 18, 2010 at 10:31 am

JAT asks:"Has anyone here ever ran into a house on fire, did'nt think so, ever breath and toxic fumes from the fires chemicals? No, why am I not surprized."

Well, you are wrong. I was both a urban firefighter and a Smokejumper - been there, done that. And I have deep respect for all of the firefighters I know. But deep respect and agreeing that they should be paid well above the community standard in terms of salary and retirement benefits are two very different things.

JAT states:" By the way every County in the nation has taken a beating even San Mateo."

However, because of a superb civil servant, Michelle Braucht, your Fire District avoided almost all of that loss because the Fire District pulled its funds out of the County investment pool before the big losses occurred - a superb example of good management. How many other cities or towns or special districts did the same - NONE.


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Posted by Concerned Parent
a resident of Menlo Park: The Willows
on Apr 19, 2010 at 5:00 am

POGO,
you make excellent points.

Here's a link to an interesting piece on how we got to this mess:

Web Link

Blue collar and other union apologists, the internet and associated transparency is not your friend. As people are waking up to find out how our public servants have become our masters, they can recognize the scam for what it is. With transparency and accountability taxpayers may actually get value for their taxes.


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Posted by Willy
a resident of Woodside: other
on Apr 19, 2010 at 10:59 am

Concerned Parent:

Fascinating link. I love the quote: ""We helped to get you into office, and we got a good memory," ... "Come November, if you don't back our program, we'll get you out of office.'"

Could just as easily come from corporate lobbyists.

Seems like unions are learning to play politicians much as corporations have been for years. If you look at the recent past with, for example, big oil donating $40Million in 2000 to get $13Billion in "subsidies" (our money!) it pales in comparison.

And with the Citizens United case from the Supreme Court, unions will get overrun in upcoming election cycles, anyway.

Get unions and corporations out of politics: public financing of elections. Works in both blue and red states, Arizona and Maine.


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Posted by POGO
a resident of Woodside: other
on Apr 19, 2010 at 11:13 am

POGO is a registered user.

Concerned Parent -

Thank you for providing that link to an incredible expose.

This should be required reading for any voter who wants to know how California got into this mess, why the current pension system is unsustainable, and how bleak our future is without radical reform.

I wish the people who post comments stating no change is needed would read this article and comment.


Willy -

I'm not sure I agree with you that public financing is the answer, but I would like to see unions and corporations out of the picture.


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Posted by Willy
a resident of Woodside: other
on Apr 19, 2010 at 12:07 pm

Pogo:

Thanks. I agree, the direction of how election funding is headed scares many. Citizens United scares both sides, but our national level politicians, again both sides appear bought and paid for, are not going to do anything together to fight it. Nationally, unions will be toast, completely unable to fight chamber of commerce, corporate financed hit jobs.

And I'm not seeing alternatives to Public Financing (ignoring the nurses' negative impact on the 2006 ballot for now.)

Getting back to this thread, locally, unions have a tough fight on their hands. They were able to defend Arnold's attempt to raid the pension funds a few years ago, but they have to be unhappy about the writing on the wall.

Do I want my tax dollars spent wisely? Of course. Do I want to participate in a race to the bottom, a race that eventually negatively and broadly affects wages and middle class income? Especially during the worst economy since the first Great Depression?

Not so much.

re: the link you like - ehhh, ummm, honestly, I didn't read the whole thing, I'll catch up later. Wish it had links. And comments. Left or right, without either, it loses cred (yes, ihho!) without them.

have a good week!


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Posted by Interested
a resident of another community
on Apr 19, 2010 at 12:33 pm

Willys mention of the attempt to raid the pension fund brings up a good point.

It was actually Pete Wilson who attempted to raid the fund. He argued that given the surplus in the fund it should be available to the State for its use. The California Supreme Court decided against him and so the funds stayed where they were. In hindsight that was a good thing, though it sounded like a great idea at the time.....Had Wilson taken that money from the fund guess who would be paying for it now, yep that would be you and me.


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Posted by psp
a resident of Menlo Park: Allied Arts/Stanford Park
on Apr 20, 2010 at 10:49 am


willy,

so somehow, a reasonable rationalization of the pension formula is the first step towards a race to the bottom? are there no stops on the way to Bangladesh? If you're afraid of that direction, why don't we all together race in the other direction to the top? Let's award all public employees 3% at 50 (the police contract). Why stop there, let's award them 4% at 45, or better still, 5% at 40? Okay, I got it, if I simply hand over my paycheck to the public employees, it will ensure my own and my family's prosperity. got it.


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Posted by Willy
a resident of Woodside: other
on Apr 20, 2010 at 3:22 pm

psp:

Squeezing working folks IS part of the race to the bottom. It doesn't inherently make our towns, state or country stronger.

I like what other folks said on this (or other MP threads): Spend wisely, but it's time to BUILD revenues - attract business to the town, inhabit the vacant lots on ECR, etc..

At the state level, again, spend wisely, but a lot of folks suggest raising revenue by recouping what the state lost in COMMERCIAL property taxes with prop 13 (13 caused a flip of 60/40% commercial vs residential property tax collections to 40/60%!)

Nationally? Bring back manufacturing to our country. Let's get folks back to work, not just the unemployed, but the underemployed, so we can get folks spending money again.


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Posted by psp
a resident of Menlo Park: Allied Arts/Stanford Park
on Apr 21, 2010 at 11:09 am


willy,

so we don't do anything here in MP today? we wait until the cate reforms Prop 13? we wait until a new national industrial policy converts our economy from service based to manufacturing based? we wait until the local poohbahs fix it's business unfriendly ways and actually encourages businesses to locate in MP. etc etc?


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Posted by POGO
a resident of Woodside: other
on Apr 21, 2010 at 11:49 am

POGO is a registered user.

This isn't an "either or" solution. Both are needed.

California spending is completely out of control. We're now 50th out of 50 states (this was published last week).

Web Link

Personnel costs are, by far, the biggest part of this and they simply have to be reconciled. (Of course, you can choose to attack the authors instead of the data, which seems to be pretty well researched.)

But we also need to improve our economy in the long run. Willy, I'm not sure how we bring manufacturing (at least the way it was from post-World War II to about 1980) back to the United States. Face it, if you ran a manufacturing business and didn't take advantage of lower costs offshore, you simply couldn't compete. I honestly don't know how to reverse that trend. I'm not even sure we have to - but that's a far more provocative position.


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Posted by Willy
a resident of Woodside: other
on Apr 21, 2010 at 2:38 pm

Pogo:

Bingo. Both revenue and spending.

And yeah, agreed, discussing post-1980 manufacturing would go wildly off topic: Reaganism, free-marketers, Clinton supporting Nafta, labor tariffs, etc..

And methinks we aren't going to see eye-to-eye. ;-)

But this can't be a sustainable country if we don't make things. A service economy doesn't work. As they say, loosely remembered from years ago: ...if I wash your car, and you mow my lawn, it exchanges value, but doesn't create value.

---

Sorry, but a cursory glance at your link didn't say anything about 50 of 50 in spending, did I miss it?

And anyway, as a "wealthy" state with a formerly top rate educational system and accompanying intellectual capital that almost created entire industries (grant me some some exaggeration for Silicon Valley and biotech <grin>) , AND being the most populous state, shouldn't we be in the top five or so in spending? Even the top?

We ain't exactly Wyoming. Stunningly, it isn't even close.

Calif: 37 mill
Texas 24 mill
New York 19
Florida 18
Illinois 12
Pennsylvania 12
Ohio 11
Michigan 10


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Posted by agent provocateur
a resident of Menlo Park: Fair Oaks
on Apr 23, 2010 at 8:40 pm

Well, this thread died. let's see if we can re-animate it!

SEIU Threat
Web Link

Public employee pensions under pressure
Web Link


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Posted by Willy
a resident of Woodside: other
on Apr 25, 2010 at 11:09 am

agent provocateur:

Is the woman's threat ("we helped you get in, we can help get you out of office") really any different from any other group?

Is it any different from what the tea-baggers will say/do to Scott Brown as he goes from right wing nut favorite to Republican moderate, so he can get re-elected in 2012 in a blue state?

Is it any different from what CEO's from Wall Street say to the politicians they bought and paid for? (see Mitch McConnell's holy pilgrimages to Wall Street in the last couple weeks to pick up big cash.)

Or the lobbyists representing Pharma, the health insurance companies or big oil?

At least she is representing working folk. That's a good thing, isn't it? Or should only lobbyists and CEO's be allowed to threaten lawmakers?


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Posted by POGO
a resident of Woodside: other
on Apr 25, 2010 at 12:09 pm

I think it's a bit more provocative when an employee (SEIU) threatens their employer (elected officials). Our officials are supposed to represent all citizens in these negotiations.

But maybe that's just me.

Willy -

The spending was calculated either PER CAPITA or as a function of the state's output of goods and services. Yes, larger states spend more, but California was ranked 47th in government spending as a share of GSP (Gross State Product) and 45th in tax structure (all taxes). To quote the authors, "California has the highest sales tax rate and poorest designed personal income taxes in the nation." And for all of that spending, I don't know anyone who thinks our schools, police, prisons, roads, infrastructure, etc. are getting much in the way of value.


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Posted by Willy
a resident of Woodside: other
on Apr 25, 2010 at 1:14 pm

A Chamber oriented think tank or otherwise affiliated "study" that opines on income and sales taxes, but doesn't even relate how the burden is being moved to tax-paying citizens from corporations?

See the facts on that shift as it relates to property taxes post Prop 13 (60-40 to 40-60, part of another Almanac thread, of course.)

Going considerably off-thread, let's add a couple things.

You brought up prisons: the prison industrial complex in this state is absolutely out of control. I'd like to find an analysis of what our costs for prisons (and yes, particularly the guards union,) are costing us above and beyond other states.

"I think it's a bit more provocative when an employee (SEIU) threatens their employer (elected officials). Our officials are supposed to represent all citizens in these negotiations." Again, do you support big oil, pharma, Wall Street CEO's, etc.., to make threats, but not working folks?

So....

You are for Prop 15, to allow public financing of elections to remove special interests from the campaign money cycle?


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Posted by POGO
a resident of Woodside: other
on Apr 25, 2010 at 4:35 pm

POGO is a registered user.

Well, I predicted that you would attack the source instead of the data. I suppose if this report came from researchers at a major university, you would accept it more easily. So there's good news for you, the two researchers have impeccable economic credentials from major universities.

Regarding prisons, I actually did see some data that California's per-prisoner cost was about 50% more than the next nearest state... but you are clearly as capable of googling it as I am.

I've said this before - I don't support any constituent group making threats - be they unions or big business. I think it's a very different kettle of fish when an employee threatens the people on the other side of the negotiation table. It's not all that different from a criminal defendant threatening their jury.

Do I support public financing? If we could get all "organized" money out of it - big business, trade associations and unions alike - yes. Unfortunately, it would appear that it's against that pesky first amendment of the Constitution. And that opinion appears to be shared by more than the conservative wing of the Supreme Court.


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Posted by Willy
a resident of Woodside: other
on Apr 25, 2010 at 5:51 pm

"Unfortunately, it would appear that it's against that pesky first amendment of the Constitution."

Au contraire, both Maine and Arizona have well established public financing of their elections, and it's passed the court challenges.

It generally finds strong support from the minority party (R's in Maine, D's in Arizona,) and I've always wondered why the right in California hasn't been more interested. It must be quite the challenge for a republican to fund raise for a race in blue-ish districts.

Even with term limits, it's the incumbents who have a lot to lose with public financing. As a sitting member, while still an inordinate amount of work, the money comes to them a lot easier than to challengers.


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Posted by Willy
a resident of Woodside: other
on Apr 25, 2010 at 5:55 pm

Here's the show that I saw 4-ish years ago that turned me around. It follows a Republican candidate (and winner, if I recall) for state office in Arizona, under public financing.

Web Link


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Posted by POGO
a resident of Woodside: other
on Apr 25, 2010 at 7:13 pm

POGO is a registered user.

Earth to Willy. I think you've gone WAY off topic (pension reform) with your points about public financing of elections. I will only say that both of the states you noted are voluntary systems and do not apply to federal office elections. And I doubt Meg Whitman or John Corzine would comply.

This thread is about personnel costs, the ever increasing and unsustainable level of pensions in our state and a bonafide attempt to remedy it. The point of the link in my earlier post (which you conveniently ignored in your last post) was to show you that California's problem isn't too little taxes. We're already among the highest (5th) taxed states (and have the worst and most regressive income tax structure) and state spending as a percent of our GSP is also among the highest (3rd).

So the next time you find yourself complaining about teacher layoffs, traffic jams, poor roads, and cut backs in our government services (like closing state offices on Fridays), you can thank the highest paid prison guards in the country, our per prisoner cost that's 50% higher than any other state and, of course, the Calpers system that pays inordinately rich pensions to our retired government workers.

California: The Golden State!


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Posted by POGO
a resident of Woodside: other
on Apr 25, 2010 at 7:20 pm

POGO is a registered user.

Oh, and here's the link about the cost of California prisoners of $47,100 per year. It's from the State of California's Legislative Analyst Office (LAO) and it's current.

Web Link

The national average is about half that number.


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Posted by POGO
a resident of Woodside: other
on Apr 26, 2010 at 9:29 am

POGO is a registered user.

From today's San Francisco Chronicle: 1 out of 3 city workers makes more than $100,000.

Web Link

Unsustainable.


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Posted by psp
a resident of Menlo Park: Linfield Oaks
on Apr 26, 2010 at 10:12 am


select "Menlo Park"
Web Link

71 out of about 240 full time equivalents make 100K or more. looks like Menlo Park has kept up with SF's pay scales.


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Posted by Concerned Parent
a resident of Menlo Park: The Willows
on Apr 26, 2010 at 2:32 pm

Yeah, but the issue is not so much salary as much as how that plays out in pension liabilities. Not only do 1/3rd of SF employees make over $100K, but if these salaries then become the basis for future pension payments, the liabiltiies just add up.


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Posted by POGO
a resident of Woodside: other
on Apr 26, 2010 at 2:59 pm

That's the point...


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Posted by Willy
a resident of Woodside: other
on Apr 26, 2010 at 4:12 pm

Earth to Pogo:

Of course WE veered off topic, to see how, reread BOTH our posts in this thread.

And you participated further, in after highlighting our "veer" you stayed to add more on the guards (which I believe I acknowledged was a mess, hence the "prison industrial complex" reference.") Yes, the guards union is usually near the top of the "good union ideas gone bad" list.

I agree with you, a public finance system doesn't, and shouldn't, prohibit Meg or Corzine from spending their own money. But it would be lovely to have had in place for guys like Arnold who promised they were rich enough to not need special interest money, and then set a record for TAKING special interest money, though none from unions, of course. ;-)

re: your CALPERS comment, yes they technically "pay" pensions for participants, but it is elected officials that decide worker plans, and of course pensions, that CALPERS "pays." As I understand it, unless I've got that all turned around.

re: the Chron article - Kind of surprised it took as long as it did for that to make it's way into the thread (10am.) Saw that headline above the fold while bringing the paper in this morn, and my first thought was "that's getting posted on this thread!" ;-)

Pretty incredible stats.


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