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Initiative responses to over-reaching by public employee unions

Original post made by Peter Carpenter, Atherton: Lindenwood, on Sep 29, 2011

Here are three initiatives being proposed for the consideration by California voters:

ELIMINATES COLLECTIVE BARGAINING RIGHTS FOR TEACHERS, NURSES, POLICE OFFICERS, FIREFIGHTERS, AND OTHER PUBLIC EMPLOYEES. INITIATIVE CONSTITUTIONAL AMENDMENT. Eliminates collective bargaining rights for teachers, nurses, police officers, firefighters, and other public employees. Prohibits state and local public agencies from recognizing any labor union or other employee association as a bargaining agent of any public employee. Prohibits state and local public agencies from collectively bargaining with public employee unions or employee associations. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Potential state and local government employee compensation savings. The amount of savings would depend on future compensation decisions by state and local governments. (11-0020.)

INCREASES INCOME TAXES ON TEACHERS, NURSES, POLICE OFFICERS, FIREFIGHTERS, AND OTHER PUBLIC EMPLOYEES FOR PENSION INCOME. INITIATIVE CONSTITUTIONAL AMENDMENT. Increases income tax rate by 15% for annual pension income between $100,000 and $149,999, and 25% for annual pension income over $150,000, on income received by teachers, nurses, police officers, firefighters, and other public employees from the California Public Employees' Retirement System and the California State Teachers' Retirement System. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Possible increase in state revenues from a new tax on certain public employee pensions. Over the long run, these revenue gains would be offset by decreases in other state and local revenues and increases in some state and local costs. (11-0021)

INCREASES RETIREMENT AGE FOR TEACHERS, PEACE OFFICERS, AND OTHER PUBLIC EMPLOYEES. INITIATIVE CONSTITUTIONAL AMENDMENT. Increases the minimum retirement age to 65 (or 58 for sworn public safety officers) for members of the California Public Employees' Retirement System and the California State Teachers' Retirement System, including for teachers, nurses, police officers, firefighters, and other public employees. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: In the long run, possible reductions in state and local pension and retiree health costs. The magnitude of the savings would depend on a variety of legal, implementation, and behavioral uncertainties and would be offset to an unknown extent by increases in other state and local employee compensation costs. (11-0022.)

Comments (22)

 +   Like this comment
Posted by Sung
a resident of Atherton: Lindenwood
on Sep 29, 2011 at 4:55 pm

Bad timing, being on the 2012 ballot.

Motivates Labor to hit the streets in a big election year.


 +   Like this comment
Posted by John P Johns
a resident of another community
on Sep 30, 2011 at 5:57 am

Peter Carpenter's characterization of collective bargaining as "over-reaching" is indicative of the plantation mentality of many who live in Atherton.

It's ok for folks like Peter Carpenter to make millions off of the government so long as they are "entrepreneurs".

God forbid those on the government payroll should earn a living wage or have a decent retirement.

Mr. Carpenter reminds me of the angry old miser who counts his coins every morning while begrudging the good fortune of others, especially those who choose government service as a way of life.

More likely than not Mr. Carpenter will respond with a post to the effect that the salaries and benefits of public servants is "unsustainable". This is utter nonsense.

Public payrolls and public employee compensation packages expand and contract with the general economic conditions. I know because it is my job to research this topic.


 +   Like this comment
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Sep 30, 2011 at 6:09 am

Facts are more useful than mindless allegations:

Calpers Chief Says 7.75% Return Tough to Meet

By Michael B. Marois and Scarlet Fu - Sep 28, 2011 1:50 PM PT
The California Public Employees' Retirement System will be hard-pressed to return 7.75 percent this year as Europe's debt crisis and the weak U.S. recovery continue to weigh on global stocks, its investment chief said.
"That's going to be tough this year and maybe for the next few years," Calpers Chief Investment Officer Joe Dear said in a Bloomberg Television interview today. "This low-return environment is structurally driven, and there's not a lot of policy to move it."


Even with gains in fiscal 2011, the pension fund has earned 3.41 percent annually on average in the past five years, 5.36 percent in the last 10 and 6.97 percent in the last 15. It has only beat its assumed rate of return with a 20-year average of 8.38 percent annually.

Nationwide, the median state pension fund will achieve an annual return of 6.5 percent in the next 15 years, according to a February study by Wilshire Associates, the Santa Monica, California, investment adviser.



Calpers in January said it had only about 70 percent of the money it needs to cover benefits promised to government workers when they retire. The pension was fully funded when the recession began in December 2007.

Dear said the fund will look beyond stocks to its other asset classes, such as private equity, hedge funds and infrastructure, to help boost returns.

Calpers has about 14 percent, or $33.6 billion as of June 30, invested in private equity, which returned 25.3 percent through the end of that month.

"We are in a low-return environment with a lot of downside risk right now," Dear said. "You need to be realistic about the prospects and you need to ask what are the alternatives that might produce a better return than a classic stock-bond portfolio."
**********
And guess who will have to pay for any shortfall? You got, the taxpayers.


 +   Like this comment
Posted by Richard W
a resident of Atherton: other
on Sep 30, 2011 at 9:20 am

Ronnie's rolling over in his grave.

Ronald Reagan signed the bill to grant municipal and county employees the right to collective bargaining when he was governor of California.

So some guy like Peter Carpenter can try to rescind it.

Uh-huh.

- - - - -

"They remind us that where free unions and collective bargaining are forbidden, freedom is lost. They remind us that freedom is never more than one generation away from extinction. You and I must protect and preserve freedom here or it will not be passed on to our children."

Ronald Reagan, at Liberty State Park, New Jersey, September 1, 1980

- - - - -

"... restoring one of the most elemental human rights—the right to belong to a free trade union."

Ronald Reagan, October, 1982


 +   Like this comment
Posted by fat cat
a resident of another community
on Sep 30, 2011 at 9:48 am

[Post removed. Personal attack.]


 +   Like this comment
Posted by John P Johns
a resident of another community
on Sep 30, 2011 at 10:06 am

Dear Mr. Carpenter:

[Portion removed; personal attack.]

My earlier post is not, as you would say a "mindless allegation".

I have first-hand experience with the "plantation mentality" I spoke of.

[Portion removed; personal attack]

I was born in an era where a sense of selflessness and social responsibility drew some of the best and brightest of my generation to government service.

Now at the latter part of the midpoint of my career I see bitter wizened old men such as yourself accuse public employee unions of "over-reaching".

In all of your posts criticizing the compensation practices of state and local government, you seem to overlook one simple fact. The number of people who go into public service for the money are but a tiny fraction of those called to serve.

The overwhelming majority of the public servants I've encountered are in it for the simple satisfaction of doing good work for good people.

[Portion removed; personal attack]

You want high quality services and you would rather not pay fair value for those serivces. Where I come from we have a word for it. We call it theft.


 +   Like this comment
Posted by LaDorris Cordell
a resident of another community
on Sep 30, 2011 at 10:59 am

[Post removed. Please stop the personal attacks, which violate terms of use.]


 +   Like this comment
Posted by linda
a resident of Atherton: Lindenwood
on Sep 30, 2011 at 11:35 am

[Post removed, personal attack. We are here to discuss issues, not the personalities of the posters. ]


 +   Like this comment
Posted by Sung
a resident of Atherton: Lindenwood
on Sep 30, 2011 at 11:47 am

Class warfare comments already?

Listen to what Warren Buffet said years ago - our class already won.

Without a fight. Even "Occupy Wall Street" will come of nothing.

Old news.


 +   Like this comment
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Sep 30, 2011 at 4:10 pm

Wow - lots of reaction to the simple fact that these three initiatives are being pursued.

Why not let the voters decide or is trusting the voters too scary?


 +   Like this comment
Posted by Menlo Voter
a resident of Menlo Park: other
on Sep 30, 2011 at 4:31 pm

"Why not let the voters decide or is trusting the voters too scary?"

For the public unions, yes


 +   Like this comment
Posted by Richard W
a resident of Atherton: other
on Sep 30, 2011 at 4:57 pm

"Why not let the voters decide or is trusting the voters too scary?"

Great idea.

Restoring the old cap gains rate to the nineties' rates, raising the top bracket to 39.6. Polls show 70% support for those actions to save the economy.

The will of the people.

They always know what is correct.

As late as the 1990's Mississippians thought interracial marriage should be illegal, but the will of the people speaks.


 +   Like this comment
Posted by POGO
a resident of Woodside: other
on Sep 30, 2011 at 7:56 pm

Richard W -

Can we also have those 3 to 1 off-shore tax shelters, restore deductions for all interest payments, remove thresholds for personal deductions and eliminate the AMT? All of those things were part of those higher tax rates.

Alternatively, how about eliminating ALL deductions and subsidies and LOWERING tax rates - something the President's debt commission recommended?


 +   Like this comment
Posted by Ronstadt's Lover
a resident of another community
on Sep 30, 2011 at 8:03 pm

If you take collective bargaining away, does that mean the cops then regain the right to strike? The current "arrangement" makes it illegal. But, if we're going to change the rules, it seems only fair to really change them!


 +   Like this comment
Posted by Blue Collar Public Worker
a resident of another community
on Sep 30, 2011 at 9:04 pm

John,
Oh no Peter lives on 50 K a year check his post on the string from a year ago when I confronted him about his $. You are correct Atherton/Menlo Park is the Plantation mentality. A side from postponing a few improvements what has it cost this community. Oh course Peter will again respond with "it's unsustainable" well I challenge that it's been several years now and the City is still solvent?
BCPW


 +   Like this comment
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Oct 1, 2011 at 5:14 am

BCPW states:'the City is still solvent?"

The Town still is running a deficit - the problem has not been solved but Danielson is well on the way to closing the budget gap. Most of the saving so far have come from outsourcing which enabled the Town to truly pay market prices for the services that it requires - with no unfunded pension liabilities either.


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Posted by Ronstadt's Lover
a resident of another community
on Oct 1, 2011 at 6:35 am

Apparently, for $200 you can get your initiative qualified for signature gathering. Lanny Ebenstein ponied up $600. That was the easy part. Now he needs to get 875,000 signatures for each proposition to get them on the ballot.

Web Link

Inevitably, we turn to the credibility issue of the author. He's a Professor at UCSB and a unapologetic libertarian. Indeed, he's authored a biography of Milton Friedman. In a liberal (left) state, the guy's a little to the right of conservative. That's going to make for an up-hill battle.

Then there's the unfortunate problem he has with his land-lord business. Apparently, he's inclined to let people grow pot in his apartments. The neighbors got pissed, landing Ebenstein on the losing end of a civil suit. Apparently, it's OK to let your tenants grow dope ... consistent with Friedman's thoughts on legalizing the stuff.

Web Link

Assuming the propositions get on the ballot, I think the left leaning and rational voters would see them for what they are - knee jerk reactions to the improperly perceived fat public employees. Instead, the evil doers are really the elected officials who approved the compensation.

If by some remote chance these do get qualified and ultimately passed into law, expect not only a lengthy court battle, but also turmoil including strikes by the public employees who heretofore have been prevented from taking such labor actions.


 +   Like this comment
Posted by Richard W
a resident of Atherton: other
on Oct 1, 2011 at 11:33 am

The initiative guy is this economics "professor"?

"A total of 14 neighbors ... sued Alan Oliver Ebenstein, of Santa Barbara, ... claiming that a marijuana growing operation in one of Ebenstein's rental properties posed a nuisance that he failed to abate."

He lost and is now appealing?

Strange bedfellows. I'll go with this one instead.

"They remind us that where free unions and collective bargaining are forbidden, freedom is lost. They remind us that freedom is never more than one generation away from extinction. You and I must protect and preserve freedom here or it will not be passed on to our children."

Ronald Reagan


 +   Like this comment
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Oct 1, 2011 at 12:18 pm

RL states:"Inevitably, we turn to the credibility issue of the author."

No, any argument or proposal should be judged by its content. Judging the value of a proposal by its authorship rather than careful evaluating actual proposal is lazy scholarship.

I posted the three proposed initiatives here so that we might have the benefit of this 'thoughtful gathering place'. I await such discussion of these proposals.


 +   Like this comment
Posted by Richard W
a resident of Atherton: other
on Oct 1, 2011 at 1:05 pm

"'thoughtful gathering place'" which must mean, is his mind, '...a gathering place of Peter-like thoughts.'

Sorry to disappoint. When you are more anti-worker than Ronald Reagan, one imagines the 'like thoughts' will be limited to a small set on one extreme, though they are over represented on these threads by a group of conservatives that do not seem to have political representation in their area.

"They remind us that where free unions and collective bargaining are forbidden, freedom is lost."


 +   Like this comment
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Oct 1, 2011 at 1:16 pm

Richard claims that I am "anti-worker".

On what exact basis do you make that claim?

Are taxpayers not workers?

Is demanding fair work for fair pair different than fair pay for fair work?

Why are almost all new manufacturing jobs not unionized?


 +   Like this comment
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Oct 1, 2011 at 1:18 pm

Perhaps Richard would be thoughtful enough to intelligently speak to the three proposed initiatives.


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