Category Archives:CalSTRS and Your Pension
CALIFORNIA PUBLIC SECTOR UNIONS NEED TO FOLLOW WHAT IS GOING ON IN WISCONSIN
California public sector employee organizations need to closely follow how things are unfolding in the State of Wisconsin. Recently, Wisconsin Governor Scott Walker proposed the passage of a plan to have Wisconsin public sector employees pay a greater share of their pension costs and healthcare coverage. The governor’s proposal comes in the face of a projected 3.6 billion dollar budget shortfall and is designed to avoid widespread layoffs. The governor also proposed the elimination of collective bargaining rights for Wisconsin public sector employees.
The governor’s proposal resulted in a massive public employee demonstration at the Wisconsin capital. Public schools were closed on Wednesday because so many teachers called in sick to attend the protest. The move by the Wisconsin governor and legislature is a significant shift for Wisconsin and should alarm public employee unions in all other states because Wisconsin, which first passed comprehensive collective bargaining laws in 1959 is considered the birthplace of public sector employee unions representing non-federal public employees.
The Wisconsin governor’s proposal represents a new approach to dealing with government budget problems. For years Wisconsin and most other local and other state governments, especially California, have dealt with budget shortfalls by trimming expenses where possible in a series of short term fixes such as furloughs, compensation deferrals, and the like. Moreover, governments have deferred budget problems to the next fiscal year. The new era appears to be one of direct action without apologies. For the first time, maybe in decades, governors such as Scott Walker appear to have public support. Walker said that while he appreciated the concerns of the public employees, he said taxpayers, “need to be heard as well”. Walker commented that the private sector has been devastated by the recession and that, by comparison, the seven percent (7%) wage reduction to Wisconsin public employees is a minor form of pain compared to what most private sector employees have been forced to endure.
Leaders of California public sector employee unions should take note. The longstanding assumption, especially in public safety, that the public will support them is misplaced and in many cases flat out wrong. California’s public sector employee organizations need to disregard the same old stale arguments they have been making for years for this simple reason: the private sector taxpaying public no longer cares. California’s public sector employee organizations need to be progressive, forward thinking, and creative. They should focus on telling their story as an indispensable service to California. The strategy of public employee unions in California over the next year will be critical as to whether California faces a similar effort to eliminate collective bargaining rights for public sector employees, which will likely come in the form of a ballot initiative.
Presentation on Bargaining in Tough Economic Times
If your union, association or bargaining unit has been struggling you are not alone. However, if you’ve lost your shirt at the bargaining table over the last few years, you are probably not represented by G&A.
Our Labor specialists have devised a tactical bargaining strategy combining diplomacy and concessions to acheive unpresidented gains. If you are your Borad would like to learn how G&A has been successful in our Association’s negotiations.
Click the following link to view our presentation on the web.
http://www.authorstream.com/Presentation/goyettemarketing-794456-bargaining-tough-economic-times/
If you would like to learn more, to receive a more comprehensive pesonalized training, or are not curreently represented by a team who is making progress, email Jennifer now and discover how you can be succesful tomorrow.
GOVERNMENT AS USUAL IN SACRAMENTO COUNTY
Sacramento County has given us yet another piece of evidence that certain elected officials and managers of California government entities have devolved into nothing more than their own personal existence justification system. Over the last three years we have repeatedly seen government managers go to extraordinary lengths to protect themselves and their friends.
On Wednesday, May 26, 2010, the Sacramento Bee reported that during 2009, the number of Sacramento County’s highest paid employees significantly increased. Yes, that’s right, increased. During the worst fiscal crisis in Sacramento County’s history the number of Sacramento County employees making over $100,000.00 a year in base salary increased. Remember, for the last three years Sacramento County has had budget deficets over $100 million.
Sacramento County officials were quick to defend themselves by saying that the salary increase were the result of collective bargaining agreements they have no control over. However, what is clear is Sacramento County leaders and most government officials do not want that control. They do not want to make hard decisions that are necessary in today’s economic climate. Government officials are quick to slap a band-aid on the severed artery by furloughing employees, laying off some of the lowest paid employees and attempting to freeze wage or benefit increases. Government leaders hold on from one pay period to the next, use smoke and mirrors to pay their bills, all while fending off difficult questions as to why they are making the decisions they make. Here is what drives them: Sacramento County officials and most government leaders first and foremost want to protect themselves and their closest allies and friends. In Sacramento County’s case that starts with supervisors and goes to the County Administrator’s office. They refuse to recognize the obvious solution which is significant parts of their governmental empires have to permanently go away. A massive restructuring of California government must occur so that these government entities can provide the basic, fundamental, and indispensable services they are required to provide.
I for one want more government workers on the streets doing the actual work and less bureaucrats thinking of ways to justify their existence. Some form of real leadership needs to arise arises in California state and local governments for it’s fiscal problems to be fixed.
CalPERS Long Term Care (LTC) Insurance Update
The CalPERS LTC Fund is in serious financial trouble. The LTC Board has determined that swift action to improve the fiscal health of the Long Term Care Program is imperative.
Two actions will take place immediately, the first being that there will be no open enrollment program, nor will any new policies be issued until the fund conditions improve. The second will be an increase in rates of 15% to 20% for current policy holders next year.
CalPERS will be sending this information to CalPERS members this week.
GOVERNMENT MUST BEGIN TO DISMANTLE ITS MASSIVE BUREAUCRACY
The response of government to its spending habits during this Great Recession is disappointing to say the least. The State of California and local government entities throughout California are grappling with history budget shortfalls. Quarter after quarter financial experts report to these government entities that their tax revenues are falling short of expectations. The government responds with a series of shortsighted actions such as pay cuts and furloughs of its workforce and the reduction of services to some of California’s most needy residents. While these cost saving measures may get the government temporarily through those short term budget periods, they have obliterated the productivity of the employee workforce, aggravated existing social problems while only temporarily solving their financial problems. The leaders of these government entities have lost sight of a fundamental question. That question is as follows: “Why are we here?” Put another way, government leaders for the most part have refused to focus on the fundamental reasons their government entity exists in the first place. What are the indispensable services and protections that each government entity must provide California?
The reason our elected officials have not publically asked these questions, let alone taken action on them, is because to do so would produce a clear but painful solution for California’s elected officials and its managers that run California governments. The solution is clear: Dismantle the massive bureaucracy that strangles government and prevents it from carrying out its mission.
HOW DID WE GET HERE?
There are several reasons the government finds itself in its current financial mess. First, the government has grown to an unsustainable size. Between 1998 and 2008 California State and local governments have grown exponentially. In fact, this ten year period has produced five times faster growth in government than any other previous decade. Governments have added a myriad of programs and specialized jobs. They have also added massive numbers of employees at all levels.
Term limits for California politicians is another significant problem. In another glaring example of why the California ballot initiative process rarely works, the legacy of term limits will be the growth of government without leaders. From the minute a state politician is elected to office he or she immediately begins planning for their next political job. After all, they will only have a limited number of years in their current position. Therefore, politicians are afraid to make tough decisions. They are driven by public perception and polls. In short, they are incapable of being leaders. They are not vested for the long term. They are a group of yes men and women, who never want to be the bad guy, and never want to say no. Consequently, on both sides of the aisle they have said “yes” to a massive buildup in government bureaucracy.
Macro-economics is another very important factor that has led to California’s government malaise. Apparently, California’s leaders have chosen to ignore or simply do not know some basic laws of economics. The economy of the United States and California is driven by consumer spending. According to the Department of Consumer Affairs, almost 70% of the nation’s gross national product is now consumer spending. Compare that with the 1950’s whereover 2/3rds of the GNP was manufacturing. For today’s economy to grow, consumers must always spend in increasing amount of their money. In other words, for the economy to grow consumer spending must grow. Consumers long ago exhausted any surplus income they might have had. For the last 20 years, consumer spending has been driven by the credit market. Whether it be credit cards or home refinancing consumer spending, especially on big ticket items, was only possible because of the credit made available to consumers. Well, as we know, the credit house of cards has collapsed and will not be coming back.
Another significant factor causing government’s current problems was the assumption that the taxpayer could always pay more to government. All government is supported by the taxpayer–the private sector taxpayer. Taxes paid by government employees only support a fraction of government operations. The private sector taxpayer has always funded government. Today, in many sectors, the private sector has been radically reduced if not completely wiped out. In most cases, the taxpayer is not available to bail out government this time.
WHERE DO WE GO FROM HERE?
The starting point for any solution is that government managers and elected officials must ask the fundamental question: Why are we here and what are the fundamental and indispensable services we must provide California? If those managers and officials answer that question honestly they will recognize that large pieces of the bureaucracies they have created simply are not necessary.