Is The Public Growing Tired Of Inflated Government Executive Pay, Platinum Pension Plans?

Since the recession started and the ongoing state budget problems, there seems to be a small but growing number of people who are expressing disgust with the compensation packages government executives are receiving. The interesting aspect of this is that it seems to be coming from across the political spectrum.

An example of this was on display when the U.C. regents announced the 32% tuition hike. On several video clips, angry students rightfully questioned regents about the exessive pay of university executives.

There has also been much written about the explosive growth of CALPERS pension liabilities and some of the pay executives are receiving in retirement. We will not argue with providing government employees a reasonable pension -- this is only fair for those have provided years of service to the government.

The problem really comes into focus when those executives who draw six figure salaries receive up to 90% of their final pay in retirement for life. If you want to see some examples, peruse the websites Pension Tsunami or The California Foundation for Fiscal Responsibility to get a good taste of the problem.

This type of practice reminds of us what Rogers Smith, former CEO of General Motors and of Michael Moore’s Roger and Me fame said of his company: GM is a health insurance company that happens to manufactures cars. We all know how GM has fared.

If executive pay and their accompanying platinum pension plans continue to grow unabated, taxpayers are liable to be paying a healthy amount of their hard earned dollars just to support these executives at the expense of providing vital public services. Before we hear a choir of complaints, we also need to be reminded that most private sector employees are not covered by a defined pension plan.

Indeed, one source notes that nationally 80% of public sector employees are covered by pensions while only 18% of private sector employees have pensions.

What about Elk Grove -- In a lobster trap?

"Pension benefits are like a lobster trap [to state and local governments]. You can get in, but you can't get out.”

Elk Grove has seen how executive pay and their pensions can become a fiscal and political hot potato. Does the name John Danielson ring a bell?

As the city works its way through several fiscally difficult years, it will be worth watching how it handles executive compensation packages. Elk Grove has been given an opportunity to stake out a position that it is a pro-taxpayer-fiscally responsible government at the leading edge of taxpayer accountability.

That opportunity has presented itself in the form of the resignation of assistant city manager Patrick Blacklock. Typically, organizations would move to fill the vacant position.

These are anything but typical times though.

So that it may be at the forefront of government fiscal responsibility, city leadership ought to consider the following actions:

Until the current fiscal problems of the city are resolved, leave the position unfilled.

We realize the demands on government don’t move entirely lockstep with economic downturns. On the contrary, it could be argued that on an aggregate they may actually increase.

Nonetheless, it does provide the city an opportunity to redirect funds. Perhaps this money could be used for the balance of the year to make up funding shortfalls for the e-Tran bus services.

If the city does decide to fill the position immediately, look at the current pay structure. Can the pay scale be dropped?

It is no secret that California’s unemployment rate is above 12%. There is a huge pool of qualified people who have the skills to do the job at a lower rate than Blacklock was making. If you insist on filling the position, send the message to Elk Grove citizens that you are trying to make government more cost effective.

PS -- Don’t even try the argument about having to offer the same compensation because of competitive labor markets. If you do you’ll look like AIG or any of the other investment banks who are paying executive bonuses on the backs of taxpayers who bailed them out with TARP funds.

Elk Grove City leadership has an opportunity to show taxpayers they are fiscally responsible. How they handle this situation will be telling.