Big Labor Pushed California Taxpayers Into $241,000,000,000 Hole
Back in 1977, the editors of the Sacramento (Calif.) Bee accurately predicted that the government-sector monopoly-bargaining legislation then headed toward the desk of Democrat Gov. Jerry Brown would “put union [bosses] in positions where they could dictate to elected officials on public policy.” Brown ignored the admonition and signed the Big Labor-promoted measure anyway. Circa 1977 photo of Brown with singer Linda Ronstadt: Bettmann/Getty
Davis sums up the hole in which hardworking employees, business owners, and other citizens now find themselves in one paragraph:
Today, the difference between what all California government agencies have set aside for pensions and what they will eventually owe amounts to $241 billion, according to the state controller.
California’s fiscal downfall can be traced back to the enactment of a series of pro-government union monopoly state laws enacted starting almost half a century ago with the 1968 Meyers-Milias-Brown Act and continuing throughout the 1970’s during Gov. Jerry Brown’s first two terms in office.
But matters definitely took a dramatic turn for the worse in 1999, when union-label and union boss-appeasing lawmakers and Gov. Gray Davis believed (or, more likely, pretended to believe) Big Labor’s preposterous promise that a massive legislative expansion of government employee compensation and a sharp reduction in the age at which government employees became eligible to collect taxpayer-funded pensions would somehow not impose any new costs on California taxpayers.
As Davis demonstrates in the opening paragraphs of his expose, this promise turned out to be hollow almost from the get-go:
With the stroke of [Gov. Gray Davis’] pen, . . . [m]ore than 200,000 civil servants became eligible to retire at 55 — and in many cases collect more than half their highest salary for life. [Some civil servants] could retire at 50 and receive as much as 90% of their peak pay for as long as they lived.Â
Proponents . . . promise[d] [the measure] would impose no new costs on California taxpayers. The state employees’ pension fund, they said, would grow fast enough to pay the bill in full.
They were off — by billions of dollars — and taxpayers will bear the consequences for decades to come.
This year, state employee pensions will cost taxpayers $5.4 billion, according to the Department of Finance. . . .
[I]t’s more than 30 times what the state paid for retirement benefits in 2000, before the effects of the new pension law, SB 400, had kicked in, according to data from the California Public Employees’ Retirement System [CALPERS].
Today Big Labor puppet politicians like Gray Davis admit that the assumptions of S.B.400, the outrageously costly pension expansion he rubber-stamped 17 years ago, were totally false. But Davis and others pretend there was no way they could have known that the equity markets where most of the pension assets were invested wouldn’t do as well from 1999 forward as they had during the great bull market of 1982-1999.
But is it really plausible that, as of 1999, the then-56-year-old Gray Davis had never heard of a bear market before? A far more reasonable explanation is that, thanks to the monopoly power politicians granted them over the course of several decades, government union bosses have been calling the shots in California for a long time, and Golden State politicians tend overwhelmingly to do what the say, even if it goes against the politicians’ own better judgment.
 By now, the hole California elected officials have dug for the state’s citizens is so deep it may seem like there’s no hope. But the fact is that California’s talented, creative and hardworking citizens do have the capacity to make their state solvent again. But politicians first need to help them by revoking government union bigwigs’ “exclusive”-bargaining and forced-dues power over public servants.