The Real Problem Remains Hidden

Michael Shires
Associate Professor of Public Policy, Pepperdine University

To say the current California budget is irresponsible is an understatement at best. It relies wholesale on accounting gimmicks and borrowing to create the illusion of a budget in place. Some key components, like the $1.2 billion in corrections savings—are not even specified, just targeted.
It sells off precious, long-term assets in the worst real estate market ever to pay for current operations. It even sells a financial services operation at a time when everyone is suspicious of their value. Clearly prudence and wisdom flew out the window.

It cuts higher education, welfare, health and K-12 education, and leaves almost no one happy. But it misses the real problem facing the state—the irresponsible way in which public employee salaries and benefits are set.

For decades, city councils, county boards of supervisors, school district boards and the state have cut deals for public employees dramatically expanding their benefits and salaries while limiting their work responsibilities (the so-called “work rules”). When the governor allowed the pension rules to be removed from the table, he gave away the one positive development of the last round of negotiations.

Unions circled the wagons when this massive perk was placed on the table and legislators suddenly were very amenable to ideas that had previously been completely impossible—things like eliminating parts of the CalWorks welfare program.

It is important to point out that this is not about teachers, police, firefighters, or any of the other state workers who put their hearts, families and lives on the line in state service each day. Rather it is about a public governance system that allows unions to invest in friendly candidates on elected boards and then to reap the benefits of that investment with almost no accountability or public review.

Especially in local board races, the money and manpower that unions bring almost always sway the election. Look back at your local school races and the union-endorsed candidates always have the biggest campaign war-chest and almost always win. Sometimes this is because they are the best, most experienced candidates, but money matters today—especially in today’s mailer-driven local elections.

Then we turn to a collective bargaining process that is held in “closed session” where the public sees none of the negotiation process and tentative agreements are almost impossible to view before the board votes. Once ratified, the public is stuck paying for them. And yet this is how tens of billions in taxpayer dollars are spent—with little oversight and no accountability.

It is these very costs that are weighing the state down at the exact time its finances need to be agile. As we tinker with calls for a constitutional convention, this is one area that clearly needs reform. And the one area that has been completely unaddressed in the state’s budget processes.

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