Thursday, October 25, 2012
Prop 32 Backgrounder
Old but still relevant:
How public-sector unions broke California
The camera focuses on an official of the Service Employees International Union (SEIU), California’s largest public-employee union, sitting in a legislative chamber and speaking into a microphone. “We helped to get you into office, and we got a good memory,” she says matter-of-factly to the elected officials outside the shot. “Come November, if you don’t back our program, we’ll get you out of office.’
My Favorite passage:
Perhaps the most costly was far-reaching 1999 legislation that wildly increased pension benefits for state employees. It included an unprecedented retroactive cost-of-living adjustment for the already retired and a phaseout of a cheaper pension plan that Governor Wilson had instituted in 1991. The deal also granted public-safety workers the right to retire at 50 with 90 percent of their salaries. To justify the incredible enhancements, Davis and the legislature turned to CalPERS, whose board was stocked with members who were either union reps or appointed by state officials who themselves were elected with union help. The CalPERS board, which had lobbied for the pension bill, issued a preposterous opinion that the state could provide the new benefits mostly out of the pension systems’ existing surplus and future stock-market gains. Most California municipalities soon followed the state enhancements for their own pension deals.
When the stock market slid in 2000, state and local governments got slammed with enormous bills for pension benefits. The state’s annual share, estimated by CalPERS back in 1999 to be only a few hundred million dollars, reached $3 billion by 2010.
How anyone can read this and not conclude there is a cancer is beyond me.