Mar112019

Big Payouts at CalPERS

by Lou Binninger

After Yuba County misappropriated hundreds of thousands of taxpayer dollars to promote Measure K and a 1% sales tax increase, it is now spending more to hire a private Nevada County law firm to defend the Measure in Yuba County Superior Court before Judge Stephen Berrier.

            Yuba County and the State of California are being sued by Howard Jarvis Taxpayers Association, Charles Mathews and John Mistler to invalidate the ordinance because the plaintiffs say the Measure needed a 2/3s approval versus the simple majority vote it received.

The Measure was promoted as a tax needed to maintain proper levels of public safety since there were no other monies available. The public was assured the needed new taxes would be secured in a special fund.

Since the November 2018 election hundreds of thousands of dollars are being released annually to the county general fund ($635,000 announced recently) from the Yuba County Water Agency. In spite of the county prophets of public-safety-doom there are no guarantees that these “newly discovered” dollars will be used to hire deputies and fund fire agencies. This is astonishing when recalling the pre-election scare-the-hell-out-of-‘em rhetoric.

 The irony is that prior to the election it was implied that a lack of public safety dollars led to the wounding of two Yuba County deputies responding to a parolee vandalizing a marijuana grow. The county administrator, five supervisors along with two additional water agency directors have that responsibility on them and not the citizens. There were hundreds of millions of dollars in the water agency account but they played a shell game risking the lives of public employees.

The real story here is the same throughout the state, counties and cities are going broke, unable to make their pension payments. However, few bureaucrats and politicians are honest enough to tell the truth. Instead the public gets razzle-dazzle and euphemisms like the “cost of doing business” is going up.

The state pension fund CalPERS is going under due to over-generous benefits, incompetent and corrupt union management, and politically correct stupidity in investing. Every week there is a new CalPERS crisis or miscue in the news.

The latest is “California state workers hoarding vacation days, creating $3.5 billion debt for taxpayers.” (These figures do not include local jurisdictions). State workers can cash-out unused vacation days. These amounts are not reflected in the unfunded pension liability noted on the books.

Melody Gutierrez with the LA Times wrote, “After 36 years as a California government transportation engineer, Bijan Sartipi retired with much more than a goodbye party: He was paid $405,000 for time off he never used — one of more than 450 state workers who took home six-figure checks when they left their jobs last year. And Sartipi didn’t top the list — a prison surgeon in Riverside pocketed $456,002.”

The crisis is caused by lax enforcement of the cap on vacation time accumulation and other benefits. State workers have hit the pension lottery. And the $3-4 billion vacation payout last year did not include legislative or University of California personnel.

The unfunded liability also does not include figures for employees who used stockpiled days-off at the end of their careers to remain employed while not actually working, boosting the value of their pensions.

Employment rules state that vacation balances for most employees be capped at 640 hours. However, poor enforcement of the rule, along with an increasing number of state workers retiring, led to a 60% rise in the number of six-figure payouts since 2012, when 280 employees each cashed in unused paid leave totaling $100,000 or more the LA Times analysis found.

Stanford public policy professor Joe Nation blames government mismanagement. “It’s like having a speed limit but not enforcing it,” he said. “This is not a good way to run any organization.” It seems like a mismanagement virus is affecting California government at all levels.

In the private sector, some businesses offer “use it or lose it” paid vacation approaches. Others cap vacation accrual benefits between 40 hours and 400 hours and do not allow time to be earned beyond those limits.

Meanwhile, in Yuba County, state attorneys will appear before Judge Berrier to ask to be released from the Measure K legal action at a 2PM hearing on March 19, 2019. A motion for an injunction against the tax taking effect will be heard, as well.

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