Wed, Jul

The Other Shoe Drops


PRISON PENSIONS BREAKOUT - I’ve been hoping against all odds for meaningful pension reform in California.  When I say meaningful, I don’t consider the latest deal Los Angeles is offering the Coalition of City Unions as the standard.

That proposal does little to resolve the structural problems associated with retiree healthcare and defined benefit plan retirement payments.

I want to see a hybrid plan where employees cover at least half of the retirement and one-third of the health costs, and that depends more on a 401K-style plan which includes modest employer matching contributions (say 50% of the first 6% contributed).

That’s why I was disappointed when the handful of Republicans who were negotiating with Governor Brown over extensions of temporary taxes did not make reform the benchmark of quid pro quo.

Discussions became murky and undefined when so many other issues were on the table.  As a result, no agreement was reached.

It appears that Brown will push ahead with a tax extension measure for the November ballot without one that reins in pension costs.

The Republicans lost whatever initiative they had.  Even if Brown was not going to agree to the level of reform the state needs, the GOP would have held the high ground by demonstrating that they gave it their best shot.

That was shoe number one.

Well, shoe number two fell the other day, but this time it was Brown who dropped it.

The Governor approved a pension deal with the Correctional Peace Officers Association that, among other things, would allow the guards to carry over and cash out unlimited vacation time upon retirement.  With eight weeks of vacation allowed per year, anyone can see that the potential cost is staggering.

These are the same prison guards who get paid for walking from the parking lot to their posts.  The same guards who deliver cell phones to inmates for a fee.

If you ever watch MSNBC’s Lockup, you’ll know the guards have to deal with society’s worst.  I understand the need for generous vacation benefits to escape the daily confrontations they face with sociopaths and psychotics.  But unused vacation must have tight caps.  Besides, their overall compensation and health benefits already make the cost of incarceration in California the highest in the nation.

If ever you could make a case for outsourcing, guarding convicts is as good a starting place as any.

There are states who will offer their services for less  - even other countries, although standards would have to be established for shipping prisoners overseas.

If Governor Brown had any hope of winning the voters’ support for a tax extension measure, it just evaporated.  He has handed his opponents weapons grade ammunition. They will wave the contract like a bloody shirt.

Even if the legislature fails to approve the deal – a distinct possibility since it will require four Republican votes – the stench of the attempted  payback for the $2 million in campaign support Brown received from the guards will cling to him.

Brown was elected for his extensive experience in state government and the wisdom that most expected came with it. If anyone was going to craft an acceptable compromise between taxes and pension reform, he was the one.

He’s had his successes and failures.  You would think he learned from them.

Maybe not.

(Paul Hatfield is a CPA and serves as Treasurer for the Neighborhood Council Valley Village.  He blogs at Village to Village and can be reached at:  [email protected])    -cw

Vol 9 Issue 33
Pub: Apr 26, 2011

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