A Legislative Analyst’s Office proposal that asks the Legislature to use its powers to reduce state personnel costs puts majority Democrats on a collision course with their most loyal allies: public employee unions. So far, the Democratic leadership’s reaction has been disappointing.
Senate President Pro Tem Darrell Steinberg says he opposes imposing lower wages outside the collective bargaining process. “We need to save money in a way that’s effective,” Steinberg told The Bee last week. “That means working with the people on the front lines. Don’t go around them.”
Steinberg ignores reality.
California’s collective bargaining process is dysfunctional. Collective bargaining assumes that employers or workers give up something and the other side gives something in return. But the state is broke. It has nothing to give. It can only take. Because state law allows existing contracts to remain in place if no agreement is reached, employee unions have an incentive to outwait lame duck Gov. Arnold Schwarzenegger, betting that a new administration will offer something better.
Only the Legislature can break the logjam. It has the authority to reduce salaries and benefits. A failure to exercise that authority will lead to deeper cuts for local government, the poor, blind and disabled, schools, and the public at large. The governor’s proposal would cut $2.5 billion from personnel costs through a combination of salary reductions, increased employee contributions to pension plans and attrition.
The 5 percent salary reductions proposed would be less costly to employees than the current three-day-a-month furloughs and less disruptive to the public. It’s a reasonable sacrifice given the magnitude of the state’s deficit, and lay-offs, pay cuts and hits to retirement savings that private-sector workers have endured.
According to the legislative analyst, the governor’s second proposal, a 5 percent increase in employee contributions to the retirement system, is legally risky if not done through collective bargaining. This proposal is worth risking a court challenge. No one, not the Legislature, the governor, nor unions, should ignore the public’s growing anger over lavishly generous public employee retirement benefits.
When coupled with lifetime health benefits, these pension obligations contribute heavily to state, local government and school districts’ soaring deficits. If unions won’t agree to a modest 5 percent increase in employee contributions to help pay for benefits far richer than those available to the vast majority of workers in the private sector, they risk a public backlash.
The governor’s final proposal – across-the-board personnel cuts for all departments – doesn’t make sense, especially for special funded programs. For example, why cut the work force at the Department of Motor Vehicles, a fee-supported agency? Cuts at DMV would do nothing to reduce the state’s general fund deficit, but would fuel public antipathy toward government by lengthening the two-hour-long waits at DMV offices.
Majority Democrats in the Legislature can help shape the governor’s personnel proposals in ways that are fair to the public and state workers, or they can bow to union bosses and let the state drift deeper into crisis.