Wednesday, May 25, 2011
The Public Employee Pension Elephant
Since the beginning of the year it would appear, if you follow the news and the polls, that public employees are catching up with lawyers, politicians and puppy-killers as the least popular groups of people in America. Increasingly we seem to begrudge them their jobs, their salaries, their benefits, and particularly their pensions.
That last item is the big one. By any reckoning the public-employee pension funds in California, where I live, are underfunded with respect to the payouts they will have to make. As the economy and the markets improve, so will that situation to some degree, but there remains a systemic problem (opinions differ on how great) that must be addressed.
In virtually all discussion about public employee costs to the taxpayer, there is a missing element that I suspect is little understood by the public at large: When we talk about public employee costs and pensions, we are in large measure talking about the cost of police, firefighters and other public safety employees.
Our county’s daily newspaper, the Santa Cruz Sentinel, has been doing an in-depth series on local public pensions, and it makes that point very clear. For example, six of the top ten pensioners in the City of Santa Cruz are retired police or fire officials, and their annual pensions range from $134,460 to $175,129.
In Watsonville, the second-largest city in the county, seven of the top ten pensioners are retired police and fire officials, with annual pensions ranging from $105,856 to $187,438.
Both cities contribute dramatically more money to police and fire pensions than they do to the pensions of other employees. In the current fiscal year, the city of Santa Cruz is contributing 36 percent of a police employee salary toward pensions; 41 percent of fire employee salary; and 13 percent of salary for other employees. (Employees also contribute varying lesser amounts.)
Watsonville’s comparable figures are 27 percent for police employees; 20 percent for fire employees; and 13 percent of salary for other employees.
And on top of the pension costs is the fact that these departments eat up a lion’s share of the total budget. According to the Sentinel article, 56 percent of the City of Santa Cruz general-fund budget is police and firefighter salaries (I assume that includes benefits). That pretty much means that you can’t talk about the cost of cutting city government without cutting police and firefighters. Already those men and women are agreeing to contribute more to their pensions and modify the system so future retirees will receive less.
If you look at other towns around the country, I suspect the figures would be similar. Does that mean that we’re paying too much for our public safety employees? I can’t answer that one. These are people who suit up for work every day knowing that they could be shot at or that the may have to run into a burning building, where the stability of the roof is doubtful. Also, the higher pension numbers cited apply to the lucky. Many police officers and firefighters don’t last long enough to collect a full pension because on-the-job injuries require them to give up their uniforms at a relatively young age.
A concluding note: I can pass on this information because Sunday’s newspaper carried eight articles on local pensions, written by seven different reporters. Knowing what it takes to get this sort of information, I doubt it was obtained with a quick phone call or a few keystrokes on the computer. How many bloggers would have the time or know-how to run this all down? To ask that question is to answer another: Do we still need newspapers?