Every week, I use this space and time on Sunday to highlight a critical issue facing our community. This past week was a strange week with an odd combination of occurrences, Spring Break at UC Davis, week off for council, quiet week in the courts. I spent more time this week waiting around and trying to find a story than actually finding stories.
The biggest news is probably the water situation, but frankly that has been covered sufficiently for now. I remain disturbed by the Michael Artz situation and the role that government has taken into the private life of a citizen. And it is that thought that leads me finally to a third issue, the role of government and pension reform.
I believe in limited government. For most liberals, that means stay out of my bedroom, and protect me from government intrusion into our private lives. Liberals believe in the 1st, 4th, 5th, 6th, and 8th amendments, so the stereotype goes.
I agree with that, but at the same time I believe that Democrats made a huge error in allowing government to get too big. For sure, it was not done without help from their Republican friends.
In fact, on a national level the two parties have really conspired to grow the deficit. During Republican Presidents of Reagan and Bush II, we saw a huge expansion of the debt, a combination of more spending on the military and government as a whole, combined with a reduction in taxes. Under Democratic Presidents, suddenly the deficit becomes an important issue to the Republicans.
But the focus on this is not at the national level, but at the local and state levels. What has become clear to me is that we have finite resources at the local level and therefore we must prioritize our spending.
For me, I think the most important areas of government spending are first and foremost education, and second, social services provided at the local level – food aid, health care, mental health, and the like. I do not want to get into the nightmares we have had getting social services for our kids this time, but I will at some point.
To me there are two comments that kind of stick out this week on these subjects. First, yesterday from Biddlin, who stated, “I learned from this blog that the working class, hopeful, truly progressive Davis I had seen in the late 1960s and early 70s had been replaced by a smug, narcissistic doppelganger.”
I do not disagree with that point that much, in fact one of the reasons I started The Vanguard is that I believe that underneath the surface facade of progressive liberalism is the dark underbelly of reaction and intolerance. And little that I have seen since 2006 when I began The Vanguard changes my mind.
At the same time, Neutral remarks, “the short answer is that there’s simply no evidence that state pensions are the current burden to public finances that their critics claim. “
The issue of pensions, for many, is a way to attack unions and public employees. For me, I see it as two-fold. We have limited resources that are being eaten up at the local level increasingly, by compensation to city employees. At the same time, what has really happened is that the people at the top are causing a problem for the majority of people.
I very much support public employees, unions, and the pension system. Where I start differing is that I do not believe that the current system at the top is sustainable and I believe that the mentality that all pension receivers are in this together is going to result in, as Jerry Brown warned this week, a very draconian law.
The fact is, I agree with Neutral, I do not think state pensions for the most part are a huge fiscal problem. But I think that city and county pensions are.
The City of Davis may have to pay out $7 million in additional money to cover pension obligations, and that is a sizable chunk of our general fund, that will mean the cutback in services and employees to the public.
Moreover, all of that money means less money for the prioritized programs of education and social services.
The problem is not the average employee in Davis or the average state employee. There are two problem areas causing most of the problems. First the public safety enhancement is a two-fold disaster. It sets retirement way too early, meaning we have to pay for additional years for people who retire at 50 and live another 30 years on average. Think about that, we are paying for a longer period of retirement than people worked.
Second, it sets the rate at 3%, and generally three percent of a six-figure salary for each year of service. So a lot of people are getting 60 to 80 percent of their final salary.
Now you add in 2.5% or 2.7% for upper managers who sometimes are not just getting six figures, but six figures with a 2, 3, or even 4 at the beginning of that salary. So they end up with six-figure pensions.
Plus the system is ripe for abuse, with incentives to spike the final salary by adding in all sorts of extra things at the end of the cycle.
There are common sense reforms being proposed by Governor Brown and others that would protect pensions, while curbing the abuses.
The typical person who receives a pension is making less than $60,000 per year. And they get 2% at 60. For the people my wife represented, they were lucky if their salary cracked $30,000.
Liberals have made the mistake of conflating the principle of protecting the rights of workers with the blanket action protecting people making six figure salaries and pensions. That is not what this system was for and it will bankrupt the entire system.
Liberals need to reconcile the fact that we can no longer simply tax and spend. We need to figure out what are our spending priorities and find ways to cut things that are not.
Unfortunately, that means that when we look at three local governmental jurisdictions, the city, the county and the schools, we need to prioritize schools. Schools are our future. I become angry when policies by our city jeopardize that.
This week, the city council has a resolution that will back Measure A. That is great. But their own policies have made it less likely to pass, because people only have one pocketbook, and yet they are being asking to triple their water rates, and to continue to cover for the excesses of the last decade in terms of bloated salaries at the top and overly-generous benefits and pensions.
The county needs to get its priorities in order, as well. Recently, they have had to lay off ten Sheriff’s Deputies. They have had to cut back on the social services that people rely on – health care, food subsidies, and mental health services among others. At the same time, we continue to prosecute just about every case, no matter how minor the infraction. We are literally throwing away money on unwinnable prosecutions and impacted jail space.
But no one wants to step forward and put a stop to this. We feel safer, for some reason, when a dysfunctional justice system overspends on imprisoning people, many of whom represent a threat to no one but themselves.
We have limited resources and we have choices. We can invest in the future through a strong educational system, or we can throw money down rat holes that have been proven not to work.
For some, they equate liberalism with waste. That does no one any good. I want a small and efficient government that attempts to address a few of the most important problems in a sufficient way, rather than trying to tackle all problems in a way that no one wins.
—David M. Greenwald reporting
[quote]The typical person who receives a pension is making less than $60,000 per year. And they get 2% at 60. [/quote]My understanding is that many State employees get pensions from both PERS & Social Security. What is the total cost to the State to fund this, and what is the total employee benefit?
Rich has advocated for upping the retirement age to 65+. Yet, the 2% @ 60 plan, if you retire at age 63 or later, is actually paid @ 2.418%. This is conveniently ignored by several contributors to the Vanguard.
What is the state contribution to social security?
Regardless, everything is on a base salary that is fairly modest.
dmg: “I believe in limited government. For most liberals, that means stay out of my bedroom, and protect me from government intrusion into our private lives.”
LOL Unless it is the gov’t telling us whether we can use plastic bags or not? Or if we can drive SUVs? Or some other environmental/pet liberal issue?
dmg: “Liberals need to reconcile the fact that we can no longer simply tax and spend.”
And conservatives need to reconcile the fact that we can no longer cut taxes and spend. Both parties have been fiscally irresponsible.
I would also argue that schools (both public and college level) have made their share of missteps. The closing of Valley Oak; the new UCD stadium would be two examples that come to mind. And we are pouring more money into schools than ever before, w no improvement. I listened to Michelle Rhee (and her husband Kevin Johnson) spout their vision for public schools. They unrealistically expect teachers to be available via telephone after school in the evenings and on weekends for any student that needs extra help. What, teachers aren’t supposed to have any life? Much of what they were touting was pie in the sky stuff, but very unrealistic – two people of privilege who frankly don’t know what they are talking about. Their primary answer to everything seemed to be charter schools, bc Rhee is starting one of her own… big whoop…
Ok… let me see if understand your “world-view” on public employees, David… two public employees: one barely graduates from high school, or has a GED. After 45 years of working for the state, he/she is entitled to [b]108.8%[/b] of their salary (as a semi-skilled employee), in retirement if they are the 2%@ 60 formula. The other goes to college to get a bachelors degree… now it takes ~ 5 years to get a degree. (S)he invested ~ $50 k in their degree. At age 63, they can retire @ 2.5 @ 55 at [b]100% [/b]of their salary. Perhaps the latter was a certified professional who actually makes sure that water arrives at your house at sufficient pressure, and/or makes sure your fecal matter leaves your premises and doesn’t kill the fish, etc., downstream. The latter employee may have made $110,000 per year. I think you are advocating that the latter should be limited to somewhat less than $110k per year. Perhaps no more than the $30 k employee (fairness).
Elaine,
I think there is plenty of laughter to go around on both sides.
For instance how about the “unfunded mandate” imposed by largely conservative backed government rules making it prohibitively difficult for women to obtain an abortion in many states ?
Or the very cost ineffective death penalty, again largely conservatively supported .
Or maybe the costs of incarcerating nonviolent drug offenders.
I suspect that my world view is considerably more liberal than yours. However, I would not support a mandated policy forbidding the use of plastic bags or SUVs because I do believe in the principle of individual rights, freedoms, and responsibility. Do you feel the same about the issues I raised ? If so we would have some room for common ground and wouldn’t that be more refreshing than the typical fingerpointing ?
“LOL Unless it is the gov’t telling us whether we can use plastic bags or not? Or if we can drive SUVs? Or some other environmental/pet liberal issue?”
Yes, the government has a legitimate role in regulating actions that harm the environment. Our economic system does not take into account external costs, therefore it falls to the government.
HPierce: I support caps on percentage of income a pension should yield. I would probably either attach a dollar figure or a percentage. I have not worked out the details of it however.
David: First, nicely done. Although you are reporting in an opinion space, the format reminded me of what I expect from a seasoned reporter tackling a more expansive viewpoint.
I am sitting here at my home office computer looking at some of my favorite books on the shelf:
-“A More Perfect Union”, by William Peters
-“The Servant”, by James Hunter
-“The Future and Its Enemies”, by Virginia Postrel
-“100 People Who Are Screwing Up America”, by Bernard Gloldberg
-“Why Boys Fail”, by Richard Whitmire
-“Atlas Shrugged”, by Ayn Rand
-“The Conscience of a Liberal”, by Paul Krugman
My sum consideration from this collection is an understanding that humans are prone to endless cycles of societal destruction because of two things: dishonesty and poor leadership. Strong leadership is necessary because the majority lacks the capacity for vision, long-term planning and effective execution – and has a tendency to feel empowered and entitled to pursue their own self-interest at the expense of others. One difference I see between liberals and conservatives is the level of understanding or honest acknowledgement of these things.
For far too long kids have been exploited as pawns in the games adults are playing to fulfill their own selfish interests. Now they are being used by the CA public employee unions and Democrats as a political wedge. Their strategy has always been to cause enough public anxiety and pain over school funding (and a few other social services) so the public votes to increase taxes on their wealthy neighbors. My biggest problem is the rampant dishonesty; “Republicans are out to hurt the kids!”, “Republicans are taking money away from the needy!”
If we are being honest, we would admit two significant problems related to raising taxes:
1)[b]We cannot afford to raise taxes[/b]: California is already a high-tax state. We compete for other states for businesses and high-wealth individuals to provide the bulk of our tax revenue, and the Laffer Curve is going to ensure for every dollar we increase taxes, we are likely to lose more than a dollar in tax revenue.
2)[b]We are getting dismal value for our existing tax dollars[/b]: There are no commitments from the public sector to make the significant improvements to streamline government and improve services. There are no commitments to significantly improve our public schools. The public employees are fighting to retain their status quo.
The only reasonable solution is to hold firm to not raise taxes and force government to become leaner and more efficient. The private sector has learned to do more with less for decades… it is why the US is the most productive country on the planet. Frankly, I don’t think the public-sector will be able to do this unless they shed much of the existing workforce, and replace it with less expensive, smarter-working, technology-savvy, employees. Over the coming years, I think we will be moving more services to the private sector to get better value for our tax dollars. I think public education will eventually go this way, and the kids will be much better off.
The most productive country on the planet: [url]http://247wallst.com/2010/06/28/72005/[/url]
I would really like to be able to vote on whether we raise taxes.
US led in gross worker productivity prior to the recession.
[url]”http://www.cbsnews.com/stories/2007/09/03/business/main3228735.shtml”[/url]
From the article:
[quote]Norway, which is not an EU member, generates the most output per working hour, $37.99, a figure inflated by the country’s billions of dollars in oil exports and high prices for goods at home. The U.S. is second at $35.63, about a half-dollar ahead of third-placed France[/quote]
[I]”I would really like to be able to vote on whether we raise taxes[/I]
Tyranny of the majority.
[url]http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html[/url]
I love how the reliable left NYT attempts to spin it their way.
“…I believe that underneath the surface facade of progressive liberalism is the dark underbelly of reaction and intolerance. And little that I have seen since 2006 when I began The Vanguard changes my mind.”
I think this is a very insightful comment explaining quite a bit of the political dialogue and actions/inactions in our community. Despite our progressive self-image, there is a tremendous resistance to change. The subject would make interesting fodder for a separate commentary.
Don: Interesting quote from the article you referenced that listed Norway as #1:
[quote]welfare capitalism, and a lightly regulated business environment.[/quote]
We might be on to the necessary compromise. Lessen the regulatory burden on business and tax it more.
As an aside, I do find it interesting that many liberals points to Norway as the model country, but ignoring the vast difference in population and population density… and the fact that few people seem to migrate from the US to Norway to take advantage of that supposedly fantastic lifestyle.
Climate probably trumps the other factors. There isn’t a lot of in-migration to North Dakota either, despite their very favorable business climate. I don’t even like rain, much less snow.
I am very surprised to see France at #3.
As to raising taxes: I think everyone should pay taxes, and that tax increases should be borne by everybody even with a progressive tax structure.
On the weather…
My wife and I have always like Seattle and over the last couple of years have been talking about it being a future retirement location. In making that known to people that live in Seattle or have lived in Seattle, I have been surprised at the consistency of the opinion that once having spent enough time in Seattle, most people are eager to leave for sunnier locations. So, I think you are correct that this has some influence. Bismarck North Dakota is a very beautiful place 5 months out of the year. I know people with summer vacation homes on the Missouri River in Bismarck.
With global warming, maybe a home in Bismarck is a great investment!
I am very surprised to see France #3 also. There was a great 60 Minutes show on “work” comparing the US and France. They interviewed some workers from both countries. The short of it, ambitious US employees working 70-hour-plus weeks but with flexible schedules were much happier than ambitious French employees getting 8 weeks of vacation and government mandated limit of 35 hours per week of work time.
[url]http://www.cbsnews.com/stories/2005/06/27/60II/main704571.shtml[/url]
dmg: “Yes, the government has a legitimate role in regulating actions that harm the environment. Our economic system does not take into account external costs, therefore it falls to the government.”
I rest my case! The gov’t has the right to regulate liberal causes according to liberals, but the gov’t does not have the right to support conservative causes…a disingenuous and hypocritical position at best…LOL…I say a pox on both houses…
medwoman: “Or the very cost ineffective death penalty, again largely conservatively supported.”
I would say CA as a whole has supported the death penalty, with both liberals and conservatives guilty on this one…