Collective Bargaining For Public Employees

Thirteen years ago, the California Chamber of Commerce and other big business organizations cut a deal with Governor Jerry Brown not to oppose a 30 percent temporary tax increase on individuals. Since then the state’s General Fund has extracted an extra $95 billion from individual taxpayers, including small businesses that pay business taxes at individual rates, and annual General Fund Expenditures have increased 165 percent.

Recent guests on Gov. Gavin Newsom’s podcast, such as MAGA influencers Steve Bannon and Charlie Kirk, might be stunned to learn about the policies the governor is pursuing between his stints masquerading as a friendly host for right-wing guests. So might Californians.

In its first 10 years, California’s “temporary” income tax increase enacted 13 years ago extracted $75 billion of extra payments from taxpayers. Since then, two more tax years have elapsed, implying $95 billion of total extra tax payments to date.

At the root of California’s poor public services is legislation signed by Governors Ronald Reagan and Jerry Brown in 1968, 1975 and 1977 that conferred collective bargaining rights on the public employees who provide those services. In the private sector, labor and management report to different parties…

Earlier this month we wrote to you about $195 billion in annual spending by California governments on compensation and benefits for public employees but that figure did not include spending by counties, which the Mercury News reported yesterday to be $45 billion per year.

If ever you had any doubt that governments in California are run primarily for the benefit of public employees, look no further than $195 billion of annual spending by those governments on compensation and benefits awarded by elected officials who receive support or avoid opposition by public sector unions.

Earlier this week, Elon Musk announced he was relocating the headquarters of two California companies to another state after Governor Gavin Newsom signed a law that Musk characterized as infringing on parental rights. Newsom responded by accusing Musk of being a vassal to Donald Trump in a tweet that said: “You bent the knee” to which Musk replied: “You never get off your knees.”

Often I’m asked whether California could levy a wealth tax on individuals. My answer is that, absent persistent political pressure by taxpayer advocates, the political door in California is always open to all forms of tax increases, including a wealth tax.

One of the first things I learned after Governor Schwarzenegger appointed me to the board of the California State Teachers’ Retirement System (CalSTRS) in 2005 is that public employees only contribute to their pensions upfront but taxpayers contribute upfront and are on the hook for 100 percent of any funding deficiencies.

Despite a healthy national economy, California has a budget deficit that Governor Newsom proposes to close in the main by drawing on budget reserves, borrowing money, shifting funds, and deferring spending — ie, steps normally taken only during recessions.

Why have corporations, unions and associations put up more than $10 million that Gov. Gavin Newsom is using for state and national advertisements featuring him? The answer is that Newsom has delivered billions of state dollars to them.

In 1968, Governor Ronald Reagan signed the Meyers-Milias-Brown Act establishing collective bargaining for California’s municipal, county, and local special district employees. Services for municipal, county and special district residents and taxpayers have been in decline ever since.

A grave threat to democracy in California is sitting on Governor Newsom’s desk. If signed by him, Assembly Bill 1 would allow legislative staff to form a government employee union. That means that the state employees who write and edit thousands of pieces of legislation every year and provide advice to elected legislators about those bills would become a special interest with business before the state.

This report examines the compensation of California state correctional officers relative to several other groups. It examines wages in detail because of the richness of available data. It examines benefits in less depth because available data are far less comparable and detailed.

Recently a journalist concluded “the California Dream is dying.”