How Much Do California’s County Workers Make?

In April, with the pandemic shutdown sending California’s economy into free fall, Gavin Newsom convened a Zoom meeting with the four living California ex governors. He asked them to describe the biggest crisis they faced while in office. As reported by the New York Times, according to Pete Wilson, it was the 1994 Northridge earthquake. For Gray Davis, it was the electricity brownouts that cost him his job. Arnold Schwarzenegger and Jerry Brown both cited the Great Recession as their biggest challenge. None of them considered what they faced to be comparable to what Newsom is up against.

In June, as the lockdown eased, California’s economy started to come back to life. Maybe the damage would be contained, and maybe recovery would be swift. But when the COVID case count ticked upward in late June and early July, Newsom tightened the screws. He called his new approach using a “dimmer switch,” which would turn up or down depending on rates of positive cases and hospitalizations.

Whatever it’s called, the consequence of Newsom’s dimmer switch is less economic activity. In February 2020, California’s unemployment rate was at a historic low of 3.9 percent. Three months later, in May, it was at a historic high of 16.4 percent. As the lockdown eased, it ticked down a bit, tracking at 14.9 percent in June. With the new lockdown measures, it could go back up. One thing is certain: The pandemic shutdown is not going to end soon, as was hoped […] Read More

Rates of Pay and Pension Debt in California’s Distressed Cities

Nobody needs reminding that California’s cities, like every other going concern in America, are heading for tough economic times. As recently as two months ago, robust collections of sales taxes, utility taxes, transient occupancy taxes, property taxes and other sources of taxes and fees were pouring money into municipal coffers. Now, with the economy abruptly ground to a near standstill, these revenues are all but dried up. But municipal expenses haven’t dropped proportionately, if at all.

What bears reminding is the fact that even before the sudden pandemic shutdown, California’s cities were in financial trouble. Just six months ago – and it seems like a century has passed – the California state auditor released a fiscal health analysis of California’s cities. Measuring factors including cash liquidity, debt burden, financial reserves, revenue trends, and retirement obligations, the report ranked the cities from the healthiest to the most afflicted.

During the economic downturns already endured by California cities in this century, public sector pay and benefits continued to increase even as the private sector workforce experienced layoffs and pay cuts. In the aftermath of the tech bubble bursting, pension benefit enhancements continued to gain approval by cities, one by one, justified by the reasoning that if a neighboring city had done so, then every city must follow suit. In the aftermath of the real estate bubble bursting, city workers took furloughs, where they worked one day less per week and received 20 percent lower pay – but their rate of pay […] Read More