Vol. 12, No. 3,009 - The American Reporter - October 19, 2006



Jill Stewart
WHACKING THE RAILROAD BARONS

by Jill Stewart
American Reporter Correspondent
Sacramento, Calif.

Printable version of this story

SACRAMENTO -- In the early 20th Century, corrupt railroad barons controlled the Sacramento statehouse, and even wrote the laws. Voters got so sick of it they ushered in reforms including the ballot initiative and recall process.

Now another bunch is spending huge sums, maneuvering legislators into office, and secretly ghost-writing the laws - just like the railroad barons. And just like the railroad barons, this crowd is out entirely for itself. The taxpayers and California can go blow.

If you guessed I'm talking about big labor unions - particularly unions that represent state workers - you must be a serious political junkie. Because the quietly subversive takeover of the legislature by these unions has gone largely unremarked over the decades.

Indeed, some media still cover Sacramento as if the state's business leaders are the big power. As if, by some feat of magic, the largely emasculated Chamber of Commerce still throws its weight around and gets its legislative agenda passed into law.

So I was intrigued to hear Gov. Arnold Schwarzenegger's State of the State address on Jan. 5. He never uttered the phrase "labor union" during his gutsy speech calling for massive reform, but the phrase was hanging over his delivery just the same. For example:

  • His proposal to institute across-the-board budget cuts during years of revenue shortfalls is not only a good idea, it's also a threat to the supremacy of government unions. Across-the-board cuts would mean that government departments, during years of revenue shortfalls, would probably institute layoffs in the sacred, full-employment shrine that is Sacramento. Remember, virtually none of California's 323,000 state workers were laid off during the past five years, despite the $32 billion Gray Davis budget deficit, because no politicos had the nerve to send out pink slips to powerful unions who make or break their political careers. So we borrowed instead.
  • Schwarzenegger says the $50 billion taxpayers spend annually on schools - far more money per classroom and per teacher than we spent in the heydays before Proposition 13 - should produce better results. Schwarzenegger blames in part the failure to reward top teachers with higher pay or to get rid of incompetent teachers. Unfortunately, thanks to the anti-reformist teachers' unions, merit pay for teachers is banned here - yet it is allowed in Colorado. And, due to fierce meddling by teachers' unions, several thousand grossly incompetent California teachers - alcoholics, desk-sleepers and so on - cannot be fired without tremendously bitter years-long legal battles. California school administrators tell me that, for all practical purposes, a teacher must commit a crime or suffer severe mental problems before the children can be rid of them. Good Lord.
  • Schwarzenegger thinks it's time to unsweeten the incredibly sweet state worker pensions. Costs have exploded in part because workers are guaranteed a set amount for life no matter how poorly the investment does, and worker pay-ins are fairly paltry. Taxpayers pay the difference. Ken Mandler, editor of Capital Weekly newspaper, which specializes in state salary coverage, says that because of huge state matching benefits, "The average state employee working as a secretary will enjoy a pension of nearly $1 million if they retire after years." Think of it. Middle-class California taxpayers, struggling to save their own modest retirement pots, are forced to help each state worker build a cool $1 million pension payout. How nauseating. Mandler says state workers get matching funds "equal to more than 10 times what IBM just offered its employees as a pension match." Mandler likes this system and even teaches classes on how to land cushy state jobs. But I say that because the median state worker earns $59,000 per year - $25,000 more than median earnings for all Californians - these rich-man pensions are all the more outrageous.

Unfortunately, I don't see Democrats in the legislature backing Schwarzenegger's reforms. The truth is, the ruling Democrats don't fear Schwarzenegger the way they fear the wealthy unions who put them in office, and who can spend endless sums ousting them from office.

Unions such as the Service Employees International Union are capable of showing up on a moment's notice at any committee hearing in the Capitol, where they sit in their matching purple t-shirts and intimidate fearful legislators.

Statewide, counting both the private and public sector, only 16.8 percent of California workers are members of a union, according to the Bureau of Labor Statistics. Yet unions dominate the dark recesses of the legislative mind.

So don't hold out much hope for change in Sacramento.

Lynn Daucher, a moderate Republican Assemblywoman from Brea who = holds similar economic views to Schwarzenegger's, predicted that the special legislative session the governor has called "will start falling apart in a matter of days."

Senate President Pro Tem Don Perata seemed to indicate little chance of any major reforms anytime soon, telling me he saw several of Schwarzenegger's proposals as "negotiating positions, and many ideas that will be dealt with at later times."

I suspect Schwarzenegger will in fact take much of his reform package to the voters this year, but he'll have to do it largely without the legislature. He simply will not get the votes from the majority Democrats in the Assembly or Senate, although he is likely to get solid backing from most of the Republicans.

At one point in his speech, Schwarzenegger said, "And we all know what's going to happen. The special interests will run tv ads calling me cruel and heartless. They will organize protests out in front of the Capitol. They will try to say I don't understand the consequences of these decisions."

In 2004, the governor didn't do much, if anything, to loosen the grip of the unions. Admittedly, he was focused on averting state bankruptcy and halting the massive fraud and abuse that's bled our state's workers comp system dry.

But in this State of the State speech, he finally sounded very much like a governor mentally and emotionally preparing himself to take on some seriously nasty railroad barons.

Copyright 2006 Joe Shea The American Reporter. All Rights Reserved.

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