A Nation of Moochers (17 page)

• In Governor Christie’s state of New Jersey, auditors found the state’s Turnpike Authority blew $43 million on “unneeded perks and bonuses.” One employee with a base salary of $73,469 actually pulled down $321,985 after a series of payouts and bonuses. Among the various perks for the turnpike employees: $430,000 for free E-ZPass transponders so that employees could get to work. All of the goodies were handed out even as tolls were being raised.
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• In Milwaukee, Wisconsin, county officials voted themselves huge pension benefits that included so-called backdrop payments.
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Even though the pension scandal sparked a voter revolt that forced the county executive and several supervisors out of office, the pension payouts continue. In 2010, one 66-year-old assistant district attorney retired with a backdrop payment of almost $1.1 million, in addition to an annual pension of $66,024.
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Not even the Greeks can sustain that sort of spending for long.

Two Scoops

Public pensions are so generous that many public employees come back for seconds.

Double-dipping from the public trough is fairly widespread, including a Florida college president who pocketed an $893,286 retirement lump-sum payment on top of his $14,631 monthly pension—while still drawing $441,538 in salary.
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It was all perfectly legal: Florida law allows officials to “retire” for thirty days and then return to work at their old jobs at full salary, while collecting their pensions. The
St. Petersburg Times
found that nearly ten thousand Florida officials collect pensions and paychecks from the public. North Florida County state’s attorney Willie Meggs announced that he had “simply changed his mind about plans to retire,” a decision that meant he could (1) collect a lump sum of $519,995, (2) his full annual salary of $151,139, and (3) a monthly pension of $7,749. “It’s my cotton-picking money,” he explained.
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Well, it is now.

In Phoenix, when the city’s police chief Jack Harris retired from his job in 2007, he received a one-time lump sum of $562,000 and began receiving a $90,000 annual city pension. But just two weeks after retiring, the city rehired him with the title Public Safety Manager—a position nearly identical to his old job—at a salary of $193,000 a year.
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College presidents also got in on the double-dipping: The president of Indian River State College pocketed more than $585,000 in a lump sum and supplemented his $286,470 salary with a monthly state pension of $9,823. At Northwest Florida State College, the president earned an annual salary of $228,000, which was then supplemented with a monthly pension of $8,803 and a lump-sum payment of $553,228 in 2007.
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Florida, unfortunately, was not alone. The retired superintendent of the New Trier Township High School district in Illinois collected a $261,681-per-year pension, but he was able to supplement that generous benefit with a salary of $170,000 as superintendent of a school district in California, putting his combined total compensation at $431,681. Even though Illinois law bars double-dipping, the rule does not apply to officials who cross state lines, and an investigation by the
Chicago Tribune
found that leaving the state “is one of the most lucrative ways for retired superintendents to collect multiple checks.”
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In Washington State, educational bureaucrats also enjoy the sweet taste of the double-dip at the public trough—without having to move or even change jobs. Consider Greg Royer, a vice president at Washington State University, whose $304,000 annual salary makes him one of the state’s highest paid employees. As
The Seattle Times
reported, Royer is one of many employees who supplement their taxpayer-funded salaries with taxpayer-funded pensions. For seven years, Royer collected an annual pension of $105,000 on top of his salary. It is important to note here that Royer did not break the law, but simply took advantage of the system rigged for employees like him. His double-dip was not especially unusual. The newspaper found “at least 40 university or community-college employees” took advantage of a loophole that allowed them to retire and then be rehired within weeks, “often returning to the same job without the position ever being advertised. That has allowed them to double dip by collecting both a salary and a pension.”
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Here’s how it worked for Royer: He was first hired on October 1, 1973; on his thirtieth anniversary, October 1, 2003, he “retired.” One month to the day later, on November 1, he was “rehired” and thus commenced receiving both salary and full pension. As the paper noted: “Royer, 61, has collected about $700,000 in retirement benefits while continuing to draw his salary. In recent years, he’s been responsible for overseeing some of the deepest budget cuts in the university’s history. Last year, for instance, WSU announced it was cutting about 360 jobs, axing its theater and dance program and hiking tuition by 14 percent.”
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Then there was Rick Rutkowski, the president of Green River Community College, who executed a similar maneuver to fatten his wallet. Rutkowski, who made $179,000 a year, “retired” on December 1, 2001, was rehired exactly one month later on January 1, and collected a $64,000 annual pension in addition to his salary. As an editorial writer for
The Seattle Times
later marveled: “Rutkowski amazingly does not believe what he did was ethically wrong.”

“I had served 30 years and consequently was entitled to the pension,” he told the
Times.
“I don’t think there are any ethical issues involved, regardless of the fact that it doesn’t feel good for many people.”

No Greek bureaucrat could have put it any better.

As
The Seattle Times
noted, Royer and Rutkowski were hardly alone. The paper found nearly two thousand double-dipping state employees at a cost to taxpayers of $85 million a year. This pales in comparison to Ohio, whose teachers’ retirement system paid out more than $741 million to 15,857 faculty and staff members who were still working for school systems and accumulating a second retirement plan. In Ohio, the average teacher retired at the age of 59.
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In North Carolina, the highest paid pensioner in the state was the former director of a mental health program who retired with an annual benefit of $211,373, despite the fact that the state auditor had said his agency “wasn’t performing the functions it was supposed to be carrying out and that he was grossly overpaid.” Eventually, his operation was shut down and he was rendered redundant. But as a local newspaper reported: “[I]t turns out that he had been doing a very good job of feathering his own nest. He had retired in 2005, and then returned to the same job as a ‘contractor’ but at the much higher salary of $319,000 a year. Thus, when he ‘retired’ again, his pension had zoomed from $145,000 (which still seems a gracious plenty) to its present mind-boggling level, making him one of only two state retirees pulling down more than $200,000.”
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Urban Myths

Many of the perks and benefits for public employees are sustained and supported by the equivalent of urban legends. Foremost among the defenses has been the longstanding and now absurdly out-of-date claim that the generous benefits for public employees compensates for their lower salaries. Now that those salaries eclipse their private counterparts, the justification is inoperative, even among public-employee zealots. More recently, generous fringes and retirements benefits for uniformed employees have been defended on the grounds that police officers and firefighters die young, and so merit the special treatment. This is a compelling political argument, especially after 9/11, and clearly police officers and firefighters are called on to take risks above and beyond most employees in the private sector. But do those risks justify such a dramatic differential? Police and fire services, after all, do not have a monopoly on danger. In fact, according to the Bureau of Labor Statistics, the most dangerous jobs in America are:

1. Commercial fishing jobs

2. Timber logging

3. Aircraft pilots and flight engineers

4. Structural iron and steel workers

5. Farmers and ranchers
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Teachers, college administrators, and government bureaucrats do not make the list, and few fishermen or loggers enjoy the sort of retirement and pension perks enjoyed by public-sector pencil pushers.

California’s “3 percent at 50” (3 percent of their final year’s pay times the number of years worked, available at age 50) pensions for public-safety employees is championed by unions on the grounds that so many cops and firefighters die young. Some union propagandists go so far as to claim that the typical cop or firefighter lasts only five to eight years past retirement. But these claims are not supported by retirement system data. In fact, California’s retirement system has found that police and firefighters are, in fact, the longest living categories of public-sector employees. As Steve Greenhut noted, public-safety employees “live on average into the low- to mid-80s.” And the high rate of duty disability claims? Greenhut reported that
The Sacramento Bee
once found that “82 percent of manager level officers in the California Highway Patrol retired on disability—a number that spiked after CHP shut down its fraud division.”
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Working for the Man

What all of this means is that private-sector workers work longer, for less pay, and with fewer benefits to support an increasingly affluent public sector. Americans for Tax Reform found that in 2010, taxpayers now work 231 days out of the year “just to meet all costs imposed by government—8 days later than last year and a full 32 days longer than 2008.”
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Put another way, government at all levels now consumes more than 63 percent of the national income. Workers have to work 104 days to cover the cost of the federal government; and another 52 days to pay the freight for state and local government; and another 74 days just to cover the cost of complying with the regulations promulgated by government bureaucracies.

It would be unfair to blame all of this on public employees, many of whom work hard at difficult and crucial jobs. The same cannot be said of the public-employee unions and their incestuous nexus with the politicians who have abetted their rise and bloat. The public-union experiment over the last half century has been a disaster: The unions have become an entrenched, obdurate, and grasping special interest devoted to expanding government spending and employment, even at the expense of public services. Ironically, the public-employee unions bear only a passing resemblance to their private counterparts. Government is a monopoly. Unlike private unions, there is no competition that limits their appetites or against which their demands can be measured. Public employees also enjoy civil service protections that are largely unknown in the private sector.

Even in times of economic distress, the unions remain a powerful barrier to reform and innovation, protecting the status quo as they protect their own powers, privileges, and perks no matter how unsustainable. The result is that public employees have become a new class of takers, increasingly mooching off taxpayers even as services are curtailed, especially at the local and state level.

The war in Wisconsin demonstrated just how far they are willing to go to hold on to their claim on other people’s money.

The Moocher Empire Strikes Back

In early 2011, traditionally progressive Wisconsin became ground zero for the fight over public-employee privileges.

When Wisconsin governor Scott Walker proposed curtailing public-employee-union power, the state’s capitol was besieged by hundreds of thousands of protestors and gripped by weeks of legislative gridlock and legal wrangling. Teachers staged illegal sick-outs, legislators received death threats, businesses were threatened with boycotts, and civil rights leaders descended on Madison, Wisconsin, trailing clouds of apocalyptic rhetoric unheard since the heady days of the sixties. Reverend Jesse Jackson Sr. likened the struggle to preserve union power not only to the civil rights movement, but also to the Exodus, comparing the mild-mannered and somewhat wonkish Walker to “a modern-day Pharaoh.”
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This was relatively benign compared with protestor signs that compared the governor to deposed Egyptian dictator Hosni Mubarak and to Adolf Hitler.

Ironically, the protests had been launched by some of the most generously compensated public employees in the country, who were being asked to make relatively modest contributions to the state’s massive deficit. Wisconsin had lost more than 170,000 jobs in the Great Recession—almost all in the private sector—and the state’s per capita income had fallen below the national average. Even so, Wisconsin’s overall tax burden continued to be among the heaviest in the nation, in part because government workers had been shielded from the economic tribulations. State employees in Wisconsin, for instance, enjoyed one of the best pension systems in the country. Those pensions were funded by contributions from the state and from the employees themselves—
except that the state also paid the “employee” portion of the pensions.
As a result, while taxpayers contributed $1.37 billion a year into the state’s pension fund in 2009, most state employees paid precisely nothing toward their own retirements.