October 21 2012

Public Sector Compensation Grew 3 Times Faster than the Private Sector in California

Vicki E. Alger

Solvent cities are dropping like the flies of summer in California. Stockton, the largest city to declare bankruptcy, San Bernardino, and Mammoth Lakes, all went belly up over the past year, and experts say they won’t be the last ones, either.

So state and local leaders are tightening up their belts and rolling up their sleeves to get their fiscal houses in order, right?

Wrong, according to a new report from the Howard Jarvis Taxpayers Association that looked at public sector compensation trends from 2005 to 2010:

The study, conducted by the Center for Government Analysis (CGA), found that total expenditures by the State of California to finance salaries and pension benefits for State workers grew three times as fast as the per capita personal income of all Californians.

Among other findings is the fact that estimated expenditures to pension systems have increased more than 4½ times. …

The research also revealed that had the state allowed State worker salaries and benefits to increase at the same rate as the general per capita income rate for the rest of Californians, the State could have saved more than $2.1 billion — enough to increase the number of California teachers by 8.2 percent, adding nearly 25,000 teachers. If the State had kept the State worker workforce from growing, they would have saved even more — nearly $3 billion.

In the end, if the state of California had been more sensible over the past five years—for example, not hiring more government employees—then it would have saved an additional $900 million. Taxpayer Carolyn Andal, who attended the study’s release event in Stockton, aptly summed up the problem—and the solution:

We’re not making sensible decisions…We are going on emotions. We are trying to please everybody. We need to get tough — say no when we have to.

Comments
blog comments powered by Disqus