by Lou Binninger
Though politicians created the pension and health care crisis in California they all fault someone else. It’s like the 40-year smoker who has lung cancer and now blames the tobacco company and society for not warning him.
There is even a term for the evolving condition of cities and counties, service insolvency. That is where the jurisdiction is still paying bills, payroll, pensions and health but that’s it. There is little or nothing left for services.
As a city manager was once said, California cities have become pension providers that offer a few public services on the side. It’s a corrupted system when local governments exist to do little more than pay the people employed there.
Wherever unions have dominate, industries crumble under the weight of health and pension benefits. Before the bail-out General Motors had become a health and welfare business, no longer a competitive car company. Everyone remembers the pastry icon Hostess Twinkies, once a victim of Bakers Union greed. The nonunion private sector bought the brand and heavenly recipe out of bankruptcy and the tasty treat returned to the shelves.
Not surprisingly, the union-dominated Legislature has been of little help to local officials dealing with such fiscal troubles. The state pension systems have run up unfunded liabilities, or debts, ranging from $374 billion to $1 trillion (depending on the financial assumptions one makes). Regardless, legislators have avoided meaningful pension reform. They owe their soul to the unions. This has forced local governments to cut back services or raise taxes to meet their ever-increasing payments to California’s pension funds.
Now, union legislators have introduced Assembly Bill 1250 to gain complete control over local government. AB1250 would essentially stop county governments from outsourcing services (financial, economic, accounting, engineering, legal, etc.), which is a strategic way for counties to survive these days.
The legislation originally also applied to cities, but was dialed back. It now applies to all 58 counties except for San Francisco (which is exempt because it also is a city) and the authors plan to exempt Santa Clara County because of a hospital contract. Cities will be hamstrung next if this move is successful.
The bill is sponsored by the Service Employees International Union (SEIU) and authored by Assemblyman Reginald Byron Jones-Sawyer, a Los Angeles Democrat who previously was an SEIU vice president. It’s a brazen blitz to force county governments to spike the size of their full-time, unionized workforce. Ultimately, the bill sees county governments as employment agencies rather than service providers.
The bill removes the autonomy of local citizens and their supervisors to make the appropriate decisions regarding the financial benefits of outsourcing. Counties were not intended to provide cushy employment-to-grave benefits but were created to serve the citizens. Does anyone recall those days?
An analysis for the counties by the Oakland law firm Jarvis Fay Doporto & Gibson concluded that the latest version of the bill “will substantially increase the cost for delivery of county services and substantially decrease delivery of county services – including critical public health and safety services.” Counties will be forced to pare back services “to offset increased pension and benefit costs.” Small and rural communities in particular like Yuba-Sutter will face service reductions.
Although government outsourcing tasks to private companies usually saves huge sums of money while providing a more effective service this bill makes it nearly impossible with all the new rules and paperwork. Also, many companies may choose not to do government work due to the nonsense created to shut private enterprises out.