Special Interests vs. Fiscal Reform

It is impossible to easily summarize all of the efforts government worker unions have mounted in California to consolidate their power. But the efforts by these unions to disrupt reform initiative efforts, as well as undermine the initiative process itself, is worthy of special mention, and is the focus of this post.

As Californians realize that unions stand firmly opposed to reducing government worker pay and benefits as one way to reduce government deficits, and further realize that their elected officials are controlled by these unions and unable to enact reforms, the citizens initiative has become their tool of last resort. Across the state, grassroots organizations have mounted initiatives designed to reduce government expenditures – through banning Project Labor Agreements, or right-sizing government worker pensions, or through campaign finance reforms that target unions alongside large corporations. These measures constitute a profound threat to government union power.

Here are some of the ways government worker unions have spent millions of dollars over the past six months to fight reform through the initiative process:

MISINFORMATION TO THEIR OWN MEMBERSHIP: In mid-July the SEIU created a “think before you ink” flyer filled with misinformation and distortions regarding a major threat to their power, the “Stop Special Interests” initiative that would ban corporations or unions from withholding money from paychecks to finance political activity. The flyer claims, for example, that “business donates more to politics than unions by a ratio of 15-1.” Actually in California the unions spend more than business on politics, […] Read More

The Impact of Tax Exempt Pensions

It is surprisingly difficult to gather data on just how many public safety employees claim disability in their retirements, but this should not prevent us from estimating what the benefits bestowed on disability claimants cost taxpayers.

A common program to compensate public safety workers for job-related disabilities is to grant them a tax exemption, whereby 50% of their retirement pension is exempt from state and federal taxes. While it is virtually impossible to collect data from pension fund administrators on exactly how many retired public safety workers have retired with this benefit, a 2004 investigative report by the Sacramento Bee found that among retired members of the California Highway Patrol, 66% of the rank and file officers, and 82% of the chiefs retired with service disabilities. Similarly, a 2006 investigative report by the San Jose Mercury found that two-thirds of San Jose Firefighters retired with service disabilities. Neither of these reports remain available online, although a Google search on the term “Chief’s Disease” (a term coined by the Sacramento Bee) will find dozens of secondary references to these studies; you can start here, and here.

The point of this analysis, other than to point out the shocking lack of comprehensive data on this issue, is to perform a what-if, based on assumptions that might be reasonably extrapolated from the available data.

The first section of the table below, “Impact per Worker,” shows what a person receiving a service disability tax exemption is really making annually, based on normalizing […] Read More