As California continues to drown in red ink, it's worth noting how the state got into such fiscal dire straits in the first place, as a lesson about how not to run a government.
In a move that smacked of blatant political favoritism, one-term Gov. Gray Davis, who nine years ago became the first U.S. governor in 82 years to be recalled, implemented policies that continue to screw over the state's 20 million taxpayers who got stuck paying the tab.
"Davis escalated salaries and benefits for 164,000 state workers, including a 34 percent raise for prison guards, the first of a series of steps in which he and successors saddled California with a legacy of dysfunction," Bloomberg News reported recently in a piece detailing the state's ongoing budgetary woes. "Today, the state's highest-paid employees make far more than comparable workers elsewhere in almost all job and wage categories, from public safety to health care, base pay to overtime."
'It was completely avoidable'
What's worse, in the years since, Gray's successor, Arnold Schwarzenegger, was unable to convince enough state lawmakers to help fix the out-of-whack salary structure, despite successive budget deficits totaling tens of billions annually. Seems like lawmakers beholden to public employee unions instead of taxpayers don't mind police officers making $484,000 and a psychiatrist $822,000 a year, respectively.
According to payroll data compiled by Bloomberg on 1.4 million employees in the 12 most populous states, California is a stand-out. The state "has set a pattern of lax management, inefficient operations and out-of-control costs," the financial newswire reported.
All across the country, such poor public policy and leadership in the past is forcing states to cut school funding, public safety operations and benefits for their poorest residents "as they struggle with fallout left by politicians who made pay-and-pension promises that taxpayers couldn't afford," Bloomberg said.
"It was completely avoidable," said David Crane, a public-policy lecturer at Stanford University.
"All it took was for political leaders to think more about the general population and the future, rather than their political futures," said Crane, a Democrat who worked as an economic adviser to former Governor Schwarzenegger, a Republican. "Citizens should be mad as hell, and they shouldn't take it anymore."
The pattern of state governments handing out largess to political allies has been repeated from coast to coast and is largely responsible for contributing to combined state budget shortfalls of $500 billion in just the past four years alone.
So much red ink has caused some governors, like Republican Scott Walker of Wisconsin, to remove collective bargaining (union) rights from most government employees, as well as taking other steps to cap or cut payroll spending.
In the Golden State, Gov. Jerry Brown - a stalwart of California politics for most of his professional life who served as the state's chief executive previously, from 1975-1983 - has been unable to curb overtime expenses that lead the 12 biggest states. He also has not been able to limit payments for accumulated vacation time that saw one state worker collect $609,000 at retirement last year.
He has; however, continued requiring workers to take an unpaid day off each month, which Bloomberg says could burden the state with new costs at some point in the future.
Here's one of his "solutions" to solving California's $160 billion budget debt: He waived a cap on accrued leave for prison guards while giving them additional paid days off, compliments of the state's taxpayers.
Brown did that despite the fact that California's existing liability for unused leave of its state workers has more than doubled in the past eight years and currently stands at $3.9 billion.
"It's outrageous what public employees in California receive in compensation and benefits," Lanny Ebenstein, who heads the California Center for Public Policy, a Santa Barbara-based research institution critical of public payrolls, told Bloomberg. "Until public employee compensation and benefits are brought in line, there will be no answer to the fiscal shortfalls that California governments at every level face."
More taxes, more spending?
Here are some additional shocking statistics and figures:
-- As stated, one state psychiatrist in California was paid $822,000, while a state Highway Patrol officer collected $484,000 in pay and pension benefits; 17 other employees got checks for more than $200,000 for unused vacation and leave.
-- State psychiatrists were among the highest paid employees in other states, too, including Pennsylvania, Ohio, Michigan and New Jersey, with total compensation $270,000 to $327,000 for the highest-paid.
-- Some state police officers in Pennsylvania got checks as big as $190,000 for unused personal leave and vacation time, even as they were able to retire young enough to begin second careers.
-- Virginia paid some active state officers up to $109,000 in overtime alone.
Again, though, California stands out.
"California spends most of its money on salaries, retirement payments, health care benefits for government workers, and other compensation," said Schwarzenegger. "State revenues are up more than 50 percent over the past 10 years, but still we've had to cut spending on services because so much of that revenue increase went to increases in compensation and benefits."
One thing Brown has succeeded in accomplishing: He convinced voters to back a huge tax increase last month, all the while promising that the extra money will only be used to help balance the state's budget.
Where have we heard that before?