Posted on 12/20/2012 11:09:16 AM PST by blam
Down And Out In California
By Douglas French
12/20/12
Gas in Vegas is a dollar cheaper a gallon than in the Golden State, or so a friend and recent LA transplant tells me. He went on to say the top tax rate in California is over 13%, while, of course, Nevada has no state income tax.
Over dinner at Del Frisco’s, he explained how industries are being ruined by runaway government in his old home state. Nevada would surely benefit from businesses making their escape. Plenty of people are leaving California — nearly 700,000, I read somewhere — however, my friend says these 700,000 have been replaced by an equal amount of uncounted “illegals,” as he put it.
The California legislature has democratic supermajorities in both chambers, and of course, California voters have determined that what ails their great state can be fixed with the return of Jerry Brown to the governor’s mansion. But what really ails California, like many other states, is mathematics. The state’s inflow doesn’t cover its outflow. Like Greece, California can’t print its own currency (although it does resort to IOUs occasionally). Gov. Brown was stunned to find a $28 billion “wall of debt” when he took office.
How’s this happen in a state with so much going for it?
California is one of many despotic states that are losing residents in favor of those that are less despotic. People are leaving the red for the green, and none is redder than the one-time golden state. Here is a picture of what freedom does (it attracts people) and what tyranny does (it drives people away). Fear not: pick up and move! It’s more effective than political action.
In general, state governments don’t seem to be the best negotiators when putting together pay and retirement packages. There’s something about spending someone else’s money that makes one less careful than if spending his own.
“It starts with the governor and the legislature and wanders down the line. These people are playing with the taxpayers’ money,” said Steven Frates, research director of Pepperdine University’s Davenport Institute.
States paid out more than $711 million to 111,000 people who left jobs as employees of the 12 most populous U.S. states last year for unused vacation and other paid time off, according to payroll data on 1.4 million public workers compiled by Bloomberg.
Employees from California accounted for 39% of that total. Since 2005 the Golden State has shelled out $1.4 billion for unused vacation and other paid time off. That kind of money would put a lot of cops on the beat and teachers in classrooms. Instead, this taxpayer dough is ensuring cushy retirements for government workers who are no longer on the job.
For instance, the state of California cut a $608,821 check to psychiatrist Gertrudis Agcaoili, who retired last year from a state mental hospital in Napa, Calif. Ms. Agcaoili kept her nose to the Freudian grindstone for 30 years, not taking vacation, and now she’s cashing in. She makes no apologies, telling Bloomberg, “It was my prerogative, I did not go on vacation.” End of interview.
But in the private sector, vacation is a use-it-or-lose-it proposition. Or maybe a few weeks can be banked, but not 72 weeks like Ms. Agcaoili had, who pulled down $2.4 million in pay from the state since 2005. And there should be no fear that Ms. Agcaoili will be dining on cat food in her retirement: The California Public Employees’ Retirement System (CalPERS) will be paying her $199,000 a year in pension payments.
Since the state is so short on money, employees have actually been encouraged not to take their vacations. In fact, the state is happy to accommodate them, because filling in for vacationers is costly.
“Requiring employees to take all of their leave would have increased overtime costs at state prisons and hospitals, lowered reimbursements in tax collection and other fee-generating programs, and reduced services in other settings,” state of California HR man David Gay told Bloomberg.
Prison guards in California can now accrue unlimited vacation time courtesy of Gov. Brown. According to California’s nonpartisan Legislative Analyst’s Office, the average prison guard has accumulated 19 weeks of unused vacation, a liability estimated at $600 million. These are the same prison guards that received a 34% raise in pay from Gov. Gray Davis when he was in office.
“Of the 100 biggest payments in 2011 in the dozen [most populous] states, all but 10 went to California state workers. The average payout for the top 100 was $178,267, in addition to regular wages,” says Bloomberg.
There’s a rule limiting the accrual of unused leave to 640 hours, but everyone ignores it. Well, evidently, as Bloomberg reports, unused leave grew from $1.4 billion in 2003 to $3.9 billion in 2011.
Paying out for the accrual of unused leave would bankrupt a private company. While government workers are always believed to be underworked, many assumed they’re underpaid as well. Not hardly, as Michael B. Marois & Rodney Yap explain:
“The lump-sum retirement payments, seldom granted in private industry, mirror a broader trend in which California’s public employees receive far more than comparable workers elsewhere in almost all job and wage categories, from public safety to health care, base salary to overtime. California, the world’s ninth- biggest economy, has set a pattern for lax management, inefficient operations, and out-of-control costs, the Bloomberg data show.”
In addition to Ms. Agcaoili, other state employees are cashing in big. A highway patrol officer collected $484,000 in pay and pension benefits while 17 employees received checks of more than $200,000 for unused vacation and leave. According to Bloomberg’s data, the best-paid staff in other states earned far less for the same work.
But California is hardly alone with inflated government salaries. Firemen in Clark County, Nev. (Las Vegas), routinely make well into six-figure salaries and overtime pay. The first several pages of these salaries compiled in 2009 by Las Vegas Channel 8 are firefighters making well over $100,000.
Ms. Agcaoili is 79, but many cops and firefighters retire in their 50s, collect nearly 100% of their salary as a pension, and then start new careers.This leaves cities and states to pay for two or three cops to have only one on the beat.
The math just does not work. The clock is ticking on California. People are fleeing. Soon it will not be so golden.
Read more: Down and Out In California http://dailyreckoning.com/down-and-out-in-california/#ixzz2FcGAHGvu
You can leave but you can never 'check-out.'
So, replacing 700,000 makers with 700,000 takers. What could go wrong there? :O
That same 53 year old cop then marries a 35 yo woman who lives to 85. So the tax payer pays a cop salary for half a century, for no benefit in terms of law and order.
It might actually be cheaper to let the employees accumulate paid time off than to hire replacements, or pay off accumulated time off at each year end. I believe California has ruled that paid time off is part of the employees earnings and the state cannot just write it off.
If they postpone it until the employee retires they are paying with money that has lost value and it was a loan for which the state did not have to pay interest.
California wasn’t always so horrible. It used to be a thriving and fun place——even L.A.——back when.....
Reagan was governor.
Yorty was mayor.
Parker then Gates were the police chiefs.
And get this: B-1 Bob Dornan was actually congressman representing LA’s westside before moving down to Orange County.
Now those were the days!
What if that cop is like Clint Eastwood, who married a 31 y.o. woman when he was 66 and has a daughter from that marriage now 16 and he’s 82 now. The wife could live at least another 40 years. Anyway I’m jealous.....:)
California tried to hit us for a property tax bill a month after we moved to Indiana. We ignored it.
Good luck on them getting the exit tax to work (with US citizens in other states). ‘Taxation without representation’ does have a nice ring. Where have I heard that before?
I worked on his first campaign, in 1976.
i used to be a long haul trucker,and back in the 70’s / 60’s i loved to go to la.
For anyone who is ready to leave California, and has horses or wishes to have them:
I have a 5.58 acre place all set up for 12 horses in separate locations for sale. N Nevada high desert. 35 miles to Carson City. 50 miles to Reno.
This is NOT a foreclosure—I own it.
I have a family member with health issues and I need to be closer to him.
The whole state of California has become a roach motel. You enter and die. You can never leave.
SOOOOOO glad I left there in ‘76 to join the Air Force.. before California began to die in the chokehold of liberalism.
My son lives in LA County.
I left in '73....never looked back.
It must be heaven on earth to live in a state so prosperous that it can pay 11,000 employees of the state prison system over $100,000 per year and 900 employees over $200,000.
“... however, my friend says these 700,000 have been replaced by an equal amount of uncounted “illegals,” as he put it. So, replacing 700,000 makers with 700,000 takers. What could go wrong there?”
That is NJ in a nutshell; companies and workers who can are fleeing, and being replaced by illegals. Our last Dem governor admitted years ago that without the illegals NJ lost population (and we lost an electoral vote to prove it). Here in NJ it is caused by the same nonsense; a cop I know recently retired at 46 (no disability or anything; he reached 25 years of service). He’ll be drawing a generous pension and benefits decades into the future, while another cop would normally hired to replace him. However, due to property tax caps those replacement cops aren’t being hired (in fact, many were laid off); as a result NJ is watching crime rise while masking the data.
Lucky him, works the same way with a military retiree. Personally I’d go for 27 or 28, but I’m a bit younger than your hypothetical. At least as a military retiree they can pay me with highly depreciated paper. Me thinks our retirees at the state and local level will be getting a screwing with COLA and possibly even distribution caps. I’d like to see the look on the psychiatrists face if and when she’s told that her pension has been capped at 52K a year by the federal master overseeing California’s reorganization.
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