05-10-09, Commentary by Herbert Molano in the Vanguard Weekly News, “When A Pension System Stinks Of Abuse”

Relax now. You are fifty-five and did thirty years under the umbrella of Glendale’s retirement system. The morning dew clings to your golf bag and the course looks serene. Your $10,000 check will arrive from CALPERS this month. No need to despair about the economy. Your mortgage is paid off. Kids finished college and the only concern you have is whether the cruise ship you’ll take this month will be exposed to the swine flu.

For the next thirty years, whether the economy thrives or tanks, you’ll get at least that amount every single month. Life is good and fair. Or is it?

How did it ever come to pass that lawmakers went out to approve pensions that allow a retiree to get 90% of their last working salary? It’s easy for any lawmaker to give away something that isn’t theirs – the taxpayers’ money. But it is doubly easy to approve benefits that will kick in some time in the distant future. By the time those payments are due, the lawmaker could well be long gone and six-feet under. So who cares?

Well, it’s now payback time in California, Glendale and every city where short-sighted lawmakers gave away the store. While government retiree’s live off a pension more suitable for a baron or baroness, our whole financial house is breaking apart creaking into bankruptcy tomorrow. In my opinion, no retirement pay should be higher than the average per capita income of a working adult in that jurisdiction.

There was a covenant that existed for many years. You worked for government knowing that your pay would be about 10% less than compatible wages in private industry, but your job was almost fire-proof, and your pension would be secured. A pension that paid 45% of your last salary was not considered chump change. You knew the rules, you accepted a string of bad bosses, but you clawed your way to a worry-free retirement.

Not anymore. Now pay is based on some castle-in-the-sky arrangement that your public employee union arranged with politicians. Now your salary is compared with the salary of some other artificial arrangement in some other city, and when their salaries go up, you can claim unfair treatment that can only be mitigated by an equivalent raise. And what if revenues from taxpayers aren’t there to meet those obligations? Well, squeeze them again and again. Go ahead. Fix that last year’s salary with special assignments, bump it up with some accumulated sick pay that can serve as salary computation enhancements and retire in glorious ignorance of an economy that is collapsing around you.

It’s time for another taxpayer revolt. Not only are those pay arrangements revolting to common decency, those pay and benefit concoctions should make taxpayers mad enough to remind elected officials of Shay’s rebellion of 1786. The conditions that led to the uprising of nine thousand men ready to battle the state are strikingly similar.

While farmers in Massachusetts were defaulting on their loans en masse due to ultra-high interest rates, fees to file legal complaints were deemed unbearable and unfair. In the mean time the state legislators were paying themselves sky-high compensations. Sound familiar? The state had built up high debt and the high interest the state was paying was impacting an ever more frustrated farmers and taxpayers.

Now back to Glendale in 2009. Ever heard a single word of concern uttered by our councilmen to the struggle rate-payers have in meeting their electric utility bill? Found any word of empathy to the plight of tens of thousands of residents who are struggling to meet their basic necessities? None, zero, zilch!

So unfair a system, so crass the disregard, and so ignominious city employee demands in the middle of the worst recession in eighty years that there is little recourse but to make massive and unparalleled changes to the system that holds the taxpayer hostage to the financial whims of the public employee unions.

A fish rots from the head down. It’s time to raise a stink and rid ourselves of the architects of this debacle and the corrupt politicians who helped create it.

Herbert Molano