California Circles the Drain

The government of the once Golden State is a lead-pipe cinch to lurch into insolvency any month now.

The California State government is an estimated $19 billion in the hole. No exact figure is possible since no budget (constitutionally required on July 1) has yet been adopted by the state legislature. Revenues are down and spending is up. The state continues to hire during a “hiring freeze.”

To solve the crisis, the Democratic majority in the legislature demands higher taxes on top of already high taxes which are driving jobs and businesses out of the state. To use the current word for this state of affairs—the situation is untenable.

Californians know it, too. The most recent Field Poll has 93% of California voters agreeing that these are bad economic times, with only 26% expecting the state’s economy to improve in 2011.

The media is peppered with grim stories of government fraud, waste, and abuse. The daily Lindsay Lohan story provides only partial diversion. Voters avidly follow every word uttered by Snooki both on and off “Jersey Shore.” Anything is better than stories which detail the utter corruption and incompetence of California government.

Stories like this one:

The Los Angeles Times reports that over $69 million in welfare paid out in debit cards to destitute Californians to keep a roof over their head and clothes on their back has turned up in Las Vegas, Hawaii, and on Caribbean cruise ships. Some months ago, in another report, the cards were turning up at Indian casinos in California. The cards could be programmed to deny use at these places, but are not.

Corruption and incompetence is not confined to state government. Consider the “prevailing wage” for public servants in the City of Bell, Calif. The city manager received almost $800,000 per year—nearly twice the salary of the President of the United States. In a city of 40,000 people.

The ex-police chief of Bell claimed a disability retirement due to a back injury, also citing pre-existing injuries to his knee and neck. While waiting on a decision on his case, the chief took spinning classes, ran a 5K race and disclosed that he enjoyed snow skiing and had participated in the 120 mile Baker-to-Las Vegas run. The chief made $437,000 per year in Bell and was looking forward to over $400,000 annual retirement payment, half of that tax free in the form of the disability payment.

These revelations were blood in the water to political sharks circling for election advantage. Bell officials, past and present, have been sued by state Atty. Gen. Jerry Brown to renew his voter appeal during his campaign to become governor again.

The A.G. was no doubt counting on voters to forget that it was Gov. Jerry Brown in 1978 who signed a law allowing public employee collective bargaining which led to unionization of public employees and, in turn, to the bloated salaries, even more bloated pension benefits, and disability fraud now rampant in all levels of California government “service”.

The sense of entitlement to bloated salaries for public employees permeates the California public sector. The Orange County Cemetery District (one of 250 Cemetery Districts in California) is a government agency created to manage three historic cemeteries. The district’s budget is $3.5 million a year. The general manager of the district “earns” annual pay of $173,377, including $55,379 for auto allowance, health, life, dental, and disability insurance, and retirement contribution. Nice “work” if you can get it.

The latest revelations of bloated salaries and pensions involve the City of San Diego.

After digging by Councilmember Carl DeMaio, it was revealed that a San Diego City librarian retired from her $139,700 job with an annual retirement payment starting at over $227,000 plus full medical. A four- star general in the U.S. Army gets around $149,600 per year in retirement.

Members of the San Diego City Council are vested in their pension benefits from minute one of their “service.” For each year, or part of a year, “served,” they receive 3.5% of their annual salary for life beginning immediately after they leave the council. Mr. DeMaio has refused a pension. But others have received outrageous benefits.

San Diego City Councilmember Ralph Inzunza resigned at age 31 just short of the end of his four-year term of office after a scandal. He immediately began receiving $21,058 every year for the rest of his life. The amount will increase every year according to a Cost Of Living Adjustment (COLA) formula.

City Councilmember Michael Zucchet served less than three years of his four-year term before he resigned at age 35 as a result of a scandal. He immediately began to receive $14,764 per year which he will also receive every year, adjusted for the COLA.

Current City Councilmember Donna Frye has served eight years (two terms is the limit) and legally “purchased” five additional years for 15% of the actual cost of each additional year for a total of 13 years of “service.” She will immediately receive about $40,000 every year for the rest of her life, adjusted upward every year by the COLA.

The ten most highly paid employees who retired from the City of San Diego last year will cost the pension fund $61 million over their projected life spans.

The cost of these bloated pension benefits will require a $240 million contribution from the city’s budget this year, up from $34 million just seven years ago. As a result, city services have been cut back and the voters are livid.

The current San Diego City Council reached the predictable conclusion on how to solve this crisis. They refused to cut back their pension benefits. Instead, they put Proposition D on the ballot seeking voter approval for a “temporary” five-year sales tax increase of one half of one percent—a tax which they say will yield over $100 million a year to restore city services. No surprise, Frye signed the ballot argument in favor of Proposition D.

Opponents dubbed Proposition D the “Pension Tax,” because the money will most certainly be needed to blunt the ever-increasing yearly city contributions to the pension fund, now projected to exceed $500 million per year just a few years from now.

California’s aging system of roads and bridges is poorly maintained, too many of the public schools are among the worst in the nation, 37 million residents include 4 million to 5 million illegals. The state ranks near last in business friendly rankings and is one of the highest taxed states. The last car manufacturing plant in California closed last year, the last aircraft manufacturing plant closes next year, the chemical plants are gone, ditto the furniture makers and a host of other employers.

The public sector has become a parasite which is consuming the host—the people of this once great state.

Californians wonder if anything can be done to reverse the decline—or if anyone is even willing to try.