Guy W. Farmer: Why California is going broke
September 30, 2012
On a recent trip over to the other side of the Sierra Nevada I discovered one of the major reasons why the state of California is going broke: State and local officials are spending more money than they’re taking in, especially on overly generous retirement packages for public employees. Sound familiar?
Sacramento Bee columnist Bruce Maiman drew attention to this problem last Tuesday when he wrote that “retirement is no longer a departure; it’s an incentive.” He used the sudden retirement of San Jose Police Chief Chris Moore to illustrate his point. “At his news conference, the 51-year-old Moore cited the challenges of fighting crime amid budget cuts, but his principal reason for retiring: ‘It’s about the right time for me,’ he said.”
“Well, sure,” Maiman continued. “Not counting $200,000 worth of accrued sick leave, his annual pension will be $155,000.” Nice work if you can get it. Maiman also mentioned retired San Ramon Fire Chief Craig Bowen, who retired at 51 with an annual pension of $284,000, retired Orinda Fire Chief Peter Nowicki, 50, whose $185,000 salary morphed into a $241,000 pension, and last but not least, retired Stockton Police Chief Tom Morris, who is drawing a $204,000 pension in a bankrupt city with a median household income of $45,700. And it’s all perfectly legal thanks to the sweetheart retirement packages they negotiated during the good times before the Obama Recession hit.
We have similar cases right here in Nevada. For example, as my friend Ty Cobb disclosed, many Reno firemen and policemen earn more in retirement than they did when they were on the job, not to mention House Speaker John Oceguera (D-North Las Vegas), a retired fireman who raked in $450,000 taxpayer dollars last year. He’s one of many “double-dippers” in the Legislature who receive at least two salaries and/or pensions from the taxpayers. How can states and cities balancing on the narrow edge of fiscal insolvency afford these kinds of entitlements at taxpayer expense? And what about Carson City, which faces a $3.6 million budget deficit.
Other examples abound. There was the city manager of impoverished Bell, CA, who was earning $850,000 per year before he was arrested for misappropriating public funds. And more recently, there was the depressing spectacle of the Chicago teachers’ strike. Kids learned about entitlements as they saw their well-paid teachers, who earn an average salary of $75,000 per year, walking the picket lines in a city with a median household income of $45,000.
So what’s the solution to these unaffordable public employee pensions? Columnist Maiman wrote that “unions should be fighting alongside voters to eliminate them (the overly generous pensions) instead of working with dimwitted politicians who lack the intellect, focus or concern to gauge the wide-ranging impacts of long-term contracts.” Ouch!
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Full disclosure: When I retired from the U.S. Foreign Service after 30 years of federal service (including Air Force time), I became eligible for a State Department annuity that pays me 60 percent of my “high three” salary. Therefore, I earn far less money in retirement than I did when I was on active duty.
• Guy W. Farmer, of Carson City, is a retired diplomat.