By Steven Greenhut

STOCKTON — Workers for the city of Stockton who attended the unveiling Wednesday night of a new report detailing trends in public-employee compensation in California complained about cuts in their compensation packages that are causing hardship for them and their city.

But the report, prepared on behalf of the Howard Jarvis Taxpayers Foundation and released at a meeting of the San Joaquin County Taxpayers Association, left me searching for the world’s smallest violin — that metaphorical instrument I play whenever my kids, or anyone else, starts whining about something that’s largely their own fault.

Stockton is bankrupt, following more than a decade of Bacchanalian feasting on taxpayer dollars, including a lifetime medical benefit bestowed on city employees and a most-generous “3 percent at 50” pension plan for its highly paid public safety workers.

The city burned through its pension-obligation bonds — the equivalent of a family taking out a loan to pay the mortgage — and is now trying to stiff its bondholders in bankruptcy. There was no obvious complaint by city unions or employees during the tax feast, but now that they are facing “cuts” — some real, but others that are merely rollbacks in expected raises and limits on special-pay gimmicks — they and their members are playing the victims.

But the numbers tell the story.

Consider this nugget from the blandly titled study, “California State Employee Compensation Trends,” prepared by Steven B. Frates of the Center for Government Analysis: “Total expenditures by the state government of California to finance salaries and pension benefits for state government employees increased almost three times as fast (29 percent) as the per capital personal income of all Californians (9.8 percent) from 2005-10.”

As Frates put it, in plain English: “They [public employees] were getting richer three times faster than the general population.”

Tax increase

Californians are stuck watching those dreadful union-financed campaign TV ads supporting Proposition 30, which would push our highest income-tax rates to the stratosphere and boost sales taxes. The main rationale for high taxes, we’re told, is that California is slashing public school funding and laying off teachers.

But if the raises and benefit boosts granted the state’s public employees from 2005-10 had been merely at the 9.8 percent rate of income growth experienced by the rest of us, the state government would have saved $2.1 billion in 2010 alone — enough to pay for nearly 25,000 new teachers, more than the number that have been laid off.

We’ve heard Gov. Jerry Brown and the Legislature’s Democratic majority bemoan draconian cuts in government. But even in the thick of the financial mess, state government has been hiring. The number of state government employees increased 5 percent during 2005-10, which is slightly higher than the job-growth rate in the general population.

State Sen. Mimi Walters, R-Laguna Niguel, kicked off Wednesday’s program with an under-the-Capitol-dome look at the state’s efforts at pension reform.

She confirmed what this column and others have been saying. The governor announced a 12-point pension-reform plan in 2011 but did nothing to promote it. After Republicans offered legislation advancing the Democratic governor’s pension reforms, the governor’s fellow party members refused to give it a hearing.

On the last day of session, the Democrats cobbled together something that Walters calls “pension change” rather than “pension reform” given that it does little, mostly applies to future workers and is not a constitutional change — meaning that future legislators can easily kill these modest changes. It does nothing about the unfunded health care promises of the sort that sent Stockton into the poorhouse.

The state’s leaders view pension reform as public relations to convince Californians that they are “doing something” so that voters are more willing to approve yet another tax hike.

Pension problem

But the compensation report showcases the reality of the pension problem. During 2005-10, the growth in pension expenses soared 45 percent for all categories of state government employees. The cost of pensions for public-safety workers increased 94 percent. Figures for employees of local governments no doubt are similar to this state data.

The state data is two years old, so the situation surely has worsened, but the California Public Employees’ Retirement System likes to stonewall and delay. As the report noted, “CalPERS’ tardiness in posting relevant data in a timely manner is unseemly in an open democratic society.”

Everything about this pension mess is unseemly, indeed.

Those of us who oppose tax increases know how the government spends money. This data on pay and pensions for public employees reveals, as Frates said, that the government’s priority has not been providing better services, but boosting salary and benefits for those who work for government.

What will happen if California voters approve Prop. 30? Check out the many bills that moved through the Legislature this session, as legislators crafted new proposed programs and benefit increases for their public-employee constituents.

Before the Wednesday presentation, I gave Frates a tour of central Stockton. We drove by the impressive port, on the edge of the Sacramento Delta, past the Ivy League-reminiscent campus of the University of the Pacific, through the leafy old neighborhoods near Victory Park, and around the mostly vacant downtown, with its restored Fox Theater and historic buildings. It’s a beautiful old city, but Frates noted the decrepit situation: pothole-pocked streets, litter, old shopping carts, graffiti and scary characters hanging out in the parks and on street corners.

The purpose of government is to provide services to the public, not to enrich the people who work for it. The compensation report, and the conditions in the city where it was released, remind us that if elected officials focus on the latter, we get far less of the former.

Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity. Write to him at: steven.greenhut@franklincenterhq.org.

JULY 26, 2010

By JOHN SEILER

A revealing new study shows that in recent years increases in the administrative costs of California’s K-12 schools have squeezed salaries for teachers. It shines a powerful searchlight on exactly what goes on in the dark corners of school budgets.

The study is, “An Analysis of K-12 Education Expenditures in California: FY 2003-4 to FY 2008-09,” from the Davenport Institute at Pepperdine University. The scholars who wrote it are Steven B. Frates and Michael A. Shires. Frates has been one of my top sources for more than a decade. No one knows state and local budgets better than he does.

The Executive Summary is here.

The key finding:

Over the last several years, the expression “budget cuts” has been heard often regarding K‐12 public school district expenditures in California. In reality, total expenditures (excluding Capital Expenditures) have increased every year from FY 2003‐04 through FY 2007‐08, before leveling off in FY 2008‐09. (If Capital expenditures are included, the Total Expenditures have increased every Fiscal Year).

The study contradicts a lawsuit against the state, alleging under-funding of education, which I reported on a week ago here on CalWatchDog.com.

A couple more numbers from the study:

Total expenditures (excluding Capital Expenditures) increased from $45,603,379,048 to $55,601,177,318 during this period, an increase of 22%. To put this 22% increase in perspective, it was notably greater than the 15% increase in Per Capita Personal Income (PCPI) for all Californians during this period. It was also greater than the increase in inflation or the consumer price index during this period.

It’s pretty obvious that funding for K-12 education in California’s public schools has not been cut. So, what’s the problem?

“The trend line in various types of expenditures are slanted heavily toward administration,” Frates told me. “Administration went up faster than teachers’ salaries. The bureaucracy grows — it gets a bigger slice of the resources.”

How does this happen, when everyone from the governor down to the local school board, wants more money put into teaching? “The political process is controlled by the people who run the school system. And the media don’t cover this. How often to I do a study of it?”

I asked why Gov. Schwarzenegger didn’t do more. “The governor had many things on his plate to deal with. There were attempts” that didn’t catch on.

Disclosure

Another big problem, he said, is that not just school budgets, but most state and local budgets and California are difficult to access by the public and media. “There should be more prompt availability of data showing where the money goes,” he urged. “It should be readily available to any citizen online. It shouldn’t take a Ph.D. six months to dig out the information.”

He also urged my “colleagues in the Fourth Estate” — the media — to more closely scrutinize school budgets. “I would say there needs to be greater focus on the issues.”

The study’s numbers go only up to FY 2008-09. I asked how the numbers look for FY 2009-10, which ended just a month ago, on June 30; and which saw major budget cuts because of the Great Recession.

“The data for then will come out next spring,” he lamented. He said the public schools bureaucracy “is not very prompt in its reporting of data to the public. That’s a recurring problem. It does not speak well of California. Such data” — by all parts of government, not just the schools — “should be available by the end of the fiscal year.”

Administrative bloat

Some more conclusions from the study:

* Average Daily Attendance (ADA) fell from approximately 5.8 million in FY 2003-04 to 5.6 million in FY 2008-09. This means that, with budgets increasing, more money should have gone toward teaching each student; and it would have if administration had not eaten more of the education money pie.

Fiscal Year…Average Daily Attendance
03-04                   5,808,685
04-05                   5,810,058
05-06                   5,700,463
06-07                   5,744,828
07-08                   5,724,487
08-09                   5,630,222

* Between FY 2003-04 and FY 2008-09, California Per Capita Personal Income (PCPI) went up 15 percent — but certificated teachers’ salaries rose 21 percent, administrators’ salaries 28 percent and certificated pupil support salaries 42 percent.

* From the study:

Statewide, Total Expenditures per student (excluding capital expenditures) increased from $7,851 in FY03‐04 to $9,876 in FY 07‐08, before declining by one dollar, to $9,875 in FY 08‐09. This was an increase of 25.8% in Total Expenditures per student from FY 03‐04 through FY 08‐09.

This 28.5% increase was substantially greater than the 15% increase in California PCPI over this same period.

What this means is that, although Total Expenditures per student increased much faster than California PCPI, relatively less of this increased revenue per student has been going to Teacher Salaries and Benefits and relatively more has been going to other expenditures, notably Administrator salaries and benefits.

* From the study:

Statewide, Total Expenditures, including Capital Expenditures, per student increased from $9,799 in FY 03‐04 to $12,134 in FY 08‐09.

This last number is significant in light of what I wrote about just a week ago, in the article I mentioned. I noted that a study by the California Budget Project found that per-pupil spending for FY 2008-09  was $8,826, compared to the $11,372 national average.

But that’s way below the $12,134 identified by the Pepperdine study for the same fiscal year.

Solutions

What can be done to improve matters in the classroom, restoring California schools to the preeminence they once had? “Stop the growth in administrative expenditures,” Frates urged to me. “Focus instead on growth in the classroom.”

He again emphasized the importance of timely reporting of data by government, and the media properly exercising its watchdog role of ferreting out the facts of what’s really going on in government.

John Seiler, an editorial writer with The Orange County Register for 19 years, is a reporter and analyst for CalWatchDog.com. His email: writejohnseiler@gmail.com.