Sunday, January 13, 2013

Craziness in California ... Both Public Sector Pensions and Public Sector Unions are Totally Out of Control

There's a great deal of public sector craziness and taxpayer disrepect going on throughout the U.S. today.

Government officials and public sector unions are doing as they please, and taxpayers are getting the bill. In fact, even in those places where government tries to do what's in the public interest, public-employee unions are there to "remind" them who they really are there to serve. And assuming they want to stay in office, who the bureaucrats need to please.

The taxpayers are the suckers on the sidelines whose sole role is to pay the bills run up by the government and the unions. Sounds a lot like being the parents of teenagers.

Meanwhile, the city of Stockton, California is bankrupt, its creditors are being stiffed, its city officials have been intimidated, taxpayers are being screwed and the public sector unions have won the battle --- at least for now. Not the war, mind you, just the battle.

It's all about money and morality, or the lack thereof.

Thus, public-employee unions and the Democratic Party provide us with another great example of public choice theory in action (See several prior recent posts for a discussion of public choice theory.) And the example is the unaffordability of public sector pensions which government bureaucrats and public union officals have negotiated over the years.

And because taxpayers weren't asked or required to make sufficient contributions to the negotiated plans which promised those retirement benefits, they weren't properly funded. Now that we're down the road and the money isn't there to pay the pensions, we have the classic case of piling up future government spending obligations without taxing the citizens sufficiently to pay for them. Public choice theory in action for sure.

California presents us an even more specific case study of how ridiculous this public union and government "conspiracy" against taxpayers has become. The city of Stockton in particular. Rather than using the tax dollars to keep the streets clean and the citizens safe, the taxes paid are more and more going to pay the pensions of Stockton's retired public employees. Sound familiar, Illinoisans?

In any event, To Serve and Protect is an interesting story about the lengths to which unions will go to imtimidate government officials when the politicians dare to try to act in the public's interest and attempt to do what's right instead playing ball with the unions:

"What is a powerful public union to do when it looks like a city's busted balance sheet is finally forcing some fiscal reform? Naturally, buy a house next door to the city manager's and launch an intimidation campaign aimed at getting him to avoid any real fixes. At least that's what the police union of Stockton, Calif., did in 2011—with great success.

The police union claimed that the home purchase was meant to diversify its "investments." But at the time, Stockton City Manager Bob Deis was asking the union to come to the table and renegotiate benefits that were contributing to exploding labor costs and budget gaps exceeding $40 million as far as the eye could see. Already, Mr. Deis had tried to stave off municipal bankruptcy by cutting the city's staff 25%, furloughing employees and trimming fringe benefits.
The police union in Stockton, Calif., posted this billboard during a 2011 labor dispute.

He warned in March 2011 that the city might have to lay off another 16% of municipal workers. Three months later the police union moved in next door. Officers then embarked on a noisy renovation. Not long after that, Mr. Deis discovered a bumper sticker affixed to his car of a boy urinating on a pair of dice (as it happens, Mr. Deis's surname is pronounced "dice").

The union also invested in billboards welcoming visitors to "the 2nd most dangerous city in California" and warning that "due to cuts in the budget, we can no longer guarantee your safety." Mr. Deis's phone number was plastered at the bottom of the signs.

The union's investments have paid off.

Although unsustainable retirement costs forced the city to declare bankruptcy last summer, Mr. Deis has ruled out modifying workers' pensions. As he wrote in these pages in September, "If Stockton didn't offer an industry-standard pension plan"—that is, one that allows officers to retire at age 50 with an annuity equal to 90% of their salary—"we simply would not be able to staff an already challenged police department. . . . The city is fiercely competing for qualified individuals."

Despite furloughs and scaled-back retirement benefits for new workers, Stockton had a record number of police recruits this year—1,300 for 17 slots.

In lieu of reducing pensions, Mr. Deis has proposed slashing $200 million in bond debt that the city issued in 2007, most of which went to pay for workers' pensions. The bond insurers are challenging the city's attempt to scalp them while leaving pensions unshaven. . . .

Mr. Deis had once called the union "thugs," but after it approved the new contract he proclaimed that he was "extremely proud of them coming together and giving personally," and that he was looking "forward to locking arms with all of our employees groups." Perhaps he's suffering from Stockton syndrome, the condition in which public officials who are taken hostage by government unions begin to sympathize with their captors.

But strong-arming police unions aren't unique to Stockton. Last summer, a private investigator used by Lackie, Dammeier, McGill & Ethir—the law firm representing the public-safety union of Costa Mesa, Calif.—followed Mayor Jim Righeimer (who was serving at the time as mayor pro tem) home from a pub and called the cops on him for drunken driving. Mr. Righeimer, who had merely imbibed two Diet Cokes, passed the sobriety test. Costa Mesa's police union fired the firm after Mr. Righeimer went public about the incident.

The private eye Chris Lanzillo—a 43-year-old retired Riverside police officer—later told the Daily Pilot newspaper that the real reason he was at the sports bar was to entrap Costa Mesa Councilmen Gary Monahan and Steve Mensinger with a woman. Mr. Righeimer says the councilmen facing re-election were targeted because they supported pension reforms.

"There's this attitude that don't you dare touch our pensions or money," the mayor tells me. Mr. Righeimer adds that the harassment "comes right out of their playbook"—referring to a primer that Lackie, Dammeier, McGill & Ethir posted on its website encouraging unions to intimidate and extort public officials.

The playbook instructs unions to storm council meetings, create work slowdowns, and buy billboards advertising city crime rates. Oh, and never let a crime go to waste: "Every high profile crime that takes place should result in the association's uproar at the governing body for not having enough officers on the street, which could have avoided the incident."

The playbook also instructs officers to make clear that they "do not want wage increases" for themselves, "but simply to attract better qualified individuals and to keep more experienced officers from leaving." And they should focus their energy "on a city manager, councilperson, mayor or police chief and keep the pressure up until that person assures you his loyalty and then move on to the next victim." (The law firm, which removed the playbook from its website last summer, didn't respond to a call asking for comment. The Journal has included a link to the playbook online.)

Detroit's police union appears to have swiped a page from the playbook. After Mayor Dave Bing last year proposed cutting police pay by 10% and modifying retirement benefits, 400 officers blanketed Comerica Park (home of the Detroit Tigers) with fliers warning spectators to "enter Detroit at your own risk."

Meanwhile, police officers' rich benefits may actually be endangering the public. With unions claiming that pensions are inviolable, many insolvent cities have slashed their police forces—and crime rates have soared.

Homicides have tripled in Stockton in the past four years and risen by 60% in Flint, Mich., which has halved its police force since 2008 to pay for retirement benefits. Murders are up by about a third in Oakland since the city laid off 100 officers in 2010 to close a $30 million deficit. The police union had rejected concessions made by other unions.

Stockton, Flint, Detroit and Oakland are among the 10 most violent cities in America—and may stay that way if police unions insist on protecting their pensions at all costs."

Summing Up

Take a look at the link to the union "playbook" referenced hereinabove.

If spending a few minutes reading the union "playbook" doesn't "piss" you off, to use a word from the union "playbook," then nothing will.

So welcome to the unaffordable and corrupt political Land of Oz --- that fantasy land which has been created by public officials and their partners, public sector union leaders.

As for the taxpayers, well, the joke's intended to be on us. We get the bill.

And We the Minons will continue to get the bill, at least until we are willing to call a spade a shovel, get mad as hell, and start making everyone, including our politicians, fellow taxpayers, public sector union leaders and public employees, start facing facts.

In other words, we're being fleeced in the name of "fairness" and "safety."

And we're letting them lie and take advantage of us without even putting up a good fight and while letting them take more and more of our hard earned money as well. Self help, anyone?

As Pogo said, "We have met the enemy and he is us."

Thanks. Bob.

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