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Public Employees — Ever More Untouchable
Steven Greenhut
by

One of the most obnoxious trends in the nation, and one that is particularly acute in California, is the continued push to enshrine public employees as a special, privileged caste of Americans, exempt from the rules and obligations that apply to the rest of us.

As I documented in my 2009 book, Plunder!, public employees often now receive the kind of pay, benefits, and protections more fitting for France, where civil service is the highest calling. In the United States, we traditionally valued entrepreneurship and freedom above pencil-pushing and bureaucracy. But times have changed.

In California, a raft of public-employee groups can retire at age 50 with nearly — and sometimes beyond — their final pay. They are basically immune from firing and often from prosecution, even for the most horrific behavior. Their unions rule our state Capitol with an iron fist. It’s no wonder the total average firefighter compensation here tops $175,000 a year — and public employees in California earn double their private-sector counterparts.

Try going to most City Halls on, say, a Friday afternoon to get a permit for some project you’re building with your own funds. Forget about it. It’s likely closed, given that the convenience and comfort of public-sector workers is more important than the convenience of the people they are supposed to serve. Do they work for us, or do we work for them? You know the answer.

We really aren’t in it together, despite the blather from public-employee unions. As liabilities for pensions and retiree medical-care soar — topping $1 trillion in California alone, according to some pretty reasonable estimates — the average working person will need to work longer to pay the tab, given these benefits are backed by the taxpayers.

As public workers go, school teachers are on the lower end of the pay scale and receive more modest (but still lucrative) pension promises, even if the latter are underfunded. But a new proposal by some Democratic senators is one of the most dangerous I’ve ever seen. Senate Bill 807 would exempt teachers from paying the state income tax after five years on the job. It is designed to deal with a supposed teacher shortage. It also gives credits for tuition and credentialing costs.

There are numerous problems with the plan. California never has enough cash to maintain its crumbling infrastructure, yet would somehow come up with hundreds of millions of dollars more (the Legislative Analyst has yet to figure the exact cost) each year to backfill this new exemption. That will drive tax increases. The state already earmarks 43 percent of the general-fund budget to public-school education, so this would crowd out everything else.

Furthermore, there are so many other sensible ways to deal with any teacher shortage. Teachers unions are busy harassing and hobbling charter schools, which manage to do a far better job in even impoverished areas than the traditional school systems. Policies that promoted charters and other forms of school choice would be more effective at filling the gap. Remember: The goal should be educational outcomes, not number of teachers on a payroll.

School administrations have become behemoths. “General fund spending by school districts on teacher salaries rose by 15 percent, or $3 billion, from the 2010-11 school year to 2015-16. During the same period, administrator pay grew by 27 percent, or $700 million,” according to a new analysis by the Sacramento Bee. How about first getting control of administrative budgets, thus leaving more dollars available for teacher pay? Never mind that teacher pay ought to be a matter for local districts, not the state Legislature.

And then there are all of those union restrictions. Ideas such as merit pay or eliminating the “last in, first out” system of layoffs would help stretch public-school budgets and assure that the best teachers get placed where they are needed most.

Public schools have become a laughingstock for their “rubber rooms,” where teachers deemed unfit for classroom work sit and collect their pay and benefits as their appeals wind through the system. How about reforming the layoff process?

Local school districts squander a large portion of their school-facilities bonds by passing Project Labor Agreements that hike spending costs (by around 30 percent) by earmarking all construction dollars to a smaller number of union contractors. In other words, there are myriad ways to meet the needs of current student populations, improve educational performance, and stretch public-school budgets without coming up with another publicly funded boondoggle.

But the worst part of the tax-exemption plan revolves around the point I made earlier: It promotes the idea that certain groups of public employees are special, and don’t need to shoulder their share of the state’s tax burden. How long before it spreads to police officers, firefighters, Department of Motor Vehicles workers, etc.?

If you listen to Democratic leaders and union officials, there are shortages of many types of public employee, and the “Teacher Recruitment and Retention Act of 2017” will be the model other groups follow. No one will ask the obvious questions: Aren’t there too many agencies already? Don’t we have too many public employees doing too little, or worse yet, doing too many things that shouldn’t be done in the first place?

California has the most steeply progressive tax system in the nation. A small percentage of entrepreneurs pays the bulk of its income taxes. There’s even a plan to exacerbate that problem, by imposing a state-based death tax if the Trump administration and Republican Congress succeed in ditching national estate taxes.

The result is a budget process defined by wild boom-and-bust cycles as revenues follow the fortunes of a relatively small number of high-tech companies. But such progressivity also propels an endless cycle of government growth. Because lower-income California residents pay so little, they have no real concern about new spending plans. Someone else will pay the cost. Exempting whole categories of public employees from the income tax will exacerbate this situation.

In 1999, legislators passed a massive, retroactive pension increase for the California Highway Patrol. They knew the “3 percent at 50” plan would spread across the state. It did, and now California taxpayers are facing enormous liabilities. The income-tax plan is unlikely to get past a budget-minded governor this year, but this idea also will spread. Its introduction showcases a sad truth: Public workers are no longer our servants, but our masters.

Steven Greenhut
Steven Greenhut
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Steven Greenhut is a senior fellow and Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.
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