Post-pension reform law, let the public employee gaming begin

Dec. 5, 2012

By Chris Reed

This Orange County Register story about top executives at the giant Metropolitan Water District of Southern California figuring out a way to game Gov. Jerry Brown’s pension reform by joining a union is only going to be one of dozens, even hundreds, that we see in coming years. Public employee unions are going to leave a dime on the table if at all possible.

“Today, the water district paysboth a 7 percent employer contribution and a 7 percent employee contribution for unrepresented employees’ retirement plans. The perk benefits the employees in two ways. First, they don’t have to contribute to the plans from their own paychecks. Second, the setup boosts their final retirement payout.

“The governor’s pension law pushes public agenciesto eliminate this same kind of retirement spiking. It requires agencies including the water district to end the practice before 2018 and have employees contribute to their own retirements.

“By shifting to a union right now, the executives can delay the water district’s board of directors from ending the retirement spiking practice for several years. Courts have found a union’s existing labor contract generally supersedes new state law.

“The union’s president, Rick Lynds, said their pay and benefits will now fall under the protection of the union’s existing contract, which expires in 2015.”

This trickery by the upper ranks of MWD should come as no surprise to those who remember how the water wholesaler tried to assault its 19 million customers in 2009 by sneaking through a 25 percent retroactive pension hike for all 2,000 MWD employees even though its pension fund had a $400 million unfunded liability and water rates had been soaring for years. This is one government agency where the worst conniving is done by management — not by rank-and-file unions.


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  1. Hondo
    Hondo 6 December, 2012, 07:25

    Moonbeams wall of debt is here. You can game the system all you want, but when the state voted in the highest taxes in the country, at all levels of govt., it destroyed the economic base from which the taxes come from.
    Apple just crashed again. The state was counting on the taxes from Apple and facebook to balance their budget. Now what.

    Reply this comment
  2. Douglas
    Douglas 6 December, 2012, 07:41

    Highest tax “rates”, not the “highest taxes in the country”.

    Number four in effective tax burden.

    Reply this comment
  3. Rex the Wonder Dog!
    Rex the Wonder Dog! 6 December, 2012, 08:08

    Doug, take your stupid spin elsewhere, really. Your comments are bogus to start with, but even if they were TRUE who cares if it is 1st or 4th, does a 3 place differential make that much difference- NO, now let the grown ups figure out a way to clean this mess up.

    Reply this comment
  4. SeeSaw
    SeeSaw 6 December, 2012, 09:27

    That’s funny–the biggest spinner on the comment forums calling another poster a spinner. What is bogus about refuting the idea that CA has the highest taxes in the country, when the biggest spin is just the opposite?

    Reply this comment
  5. SeeSaw
    SeeSaw 6 December, 2012, 11:47

    The management group has the right to organize, but I don’t know how it is legal for it to join the rank and file union that it negotiated with in passing the rank and file group’s current contract. Seems like they would have to bargain a contract of their own. According to the pension reform act they can draw it out for five years, in the CB process. (Then, there will probably be some court suits filed on both sides.) If they have extra take-home for the next five years, it should help the economy. I don’t know why there should be a lot of chest-beating over this. The very rich use every avenue available to them for cutting their taxes and shielding as much as they can for their own little piggy banks, don’t they?

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  6. Douglas
    Douglas 6 December, 2012, 13:50

    JON COUPAL / President, Howard Jarvis Taxpayers Association

    “We in California have just moved up from fifth to fourth in a ranking of the states by the Washington, D.C.–based Tax Foundation.” “California leads 46 other states in per-capita tax burden”

    What? NOT number one? Who does this Jon Coupal think he is?

    Come on, folks, “rates” is rates and “base” is base. If you don’t believe me, ask John Boehner. You can increase taxes by increasing rates OR by eliminating deductions.

    “Highest rates” is NOT the same thing as highest taxes.

    Reply this comment
  7. Douglas
    Douglas 6 December, 2012, 14:00

    Then you can ask Daniel Mitchell (CATO Institute) about increasing revenue by decreasing tax rates.

    “This means teaching folks on the left that tax policy affects incentives to earn and report taxable income.”..”If you double tax rates, for instance, you won’t double tax revenue.”

    “But it also means teaching folks on the right that it is wildly wrong to claim that “all tax cuts pay for themselves” or that “tax increases always mean less revenue.” Those results occur in rare circumstances.”

    Note to John Boehner: It is not wrong to claim that all tax cuts pay for themselves: It is WILDLY wrong.

    It is not wrong to claim that tax increases (prop 30? anyone) always mean less revenue: It is WILDLY wrong.

    Who does this Daniel Mitchell think he is?

    Reply this comment

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