Citizens of the Golden State are currently on a precipice like they’ve never experienced before. Californians are either struggling to stay afloat, or they are sailing away to start over in other states. Meanwhile, union members and public employees have been making out like bandits and the “gold” in California is no longer found in rivers and streams—it is being mined inside the California Public Employees' Retirement System.
This week, the first victim of the bloated union machine is Stockton, California, which has become the largest city to file bankruptcy in the U.S.
According to the UT San Diego, some of the most damning testimony about union corruption in the Stockton bankruptcy hearing came from City Council member Kathy Miller.
“In the 1990s,” Miller said, “Stockton granted its employees some of the most generous and unsustainable labor contracts in the State of California... Safety employees could now retire at the age of 50...Many safety retirees today earn 90 to 100 percent of what they made when they were still on the job.”
Miller also talked about the city granting things like “unlimited vacation and sick time” that could be “cashed out when an employee retired” and “Lamborghini” style health plans.
Other outrageous expenditures have been coming out of Stockton for years. From StocktonFireFacts.com, here are the top 10 boondoggles:
1. City Council spent $48 Million to purchase a new City Hall building for itself. That’s just the purchase price and the cost to pay Wall Street to BORROW the money necessary for the new governmental palace. The total cost of the building after all the interest is calculated? We don’t know and the City Council never asked.
2. $33 Million settlement with Howard Jarivs Taxpayers Association due to the City illegally using Water Utility fees to fund the construction of the Stockton Events Center.
3. $22 million sunk into money losing Downtown Marina and has racked up $700,000 in annual operating cost losses. During the height of a City budget crisis, the Stockton City Council sunk $22 million into building a new downtown marina and then due to underestimating the costs, needed to add another $2.3 million to the bill. City bureaucrats estimated that the marina would lose $100,000 a year. The actual figure has balloned to $700,000 in losses a year.
4. Paid $1.25 million over the independent appraisal value for a piece of property owned by a former councilmember. The site was supposed to be used for a new fire station, which even the Stockton Fire Department stated it didn’t want. The Stockton Record’s Editorial Board urged the Council to reject the deal, stating, “the city shouldn’t be dopey. It should pay no more than the appraised value.” Unfortunately, Dopey won at that Council meeting. The Council this year scrapped plans for the fire station, meaning that $2.75 million taxpayer funds have been wasted. You can view the property here.
5. $4 million legal settlement because the City failed to maintain our sewer system, causing too many sewage spills and violating the Federal Clean Water Act.
6. $7 million loss at entertainment venues (Stockton Arena, Stockton Ballpark, Bob Hope Theater, etc.) subsidized by the City General Fund—which pays for firefighters and police officers
7. $25,000 to clean up elephant dung at the Stockton Arena.We’d write more, but why?
8. $205,000 settlement for City’s failure to meet Americans with Disabilities Act requirements within the city. Note that in addition to the settlement, money needed to be spent to bring facilities into compliance. We do not have that total
9. $200,000 settlement with the Building Industry Association of the Delta due to City improperly using development fees to pay for General Fund services.
10. $400,000 settlement with the San Joaquin Hotel & Motel Property Owner’s Association for devaluing property prior to the City attempting to purchase them.
None of this is anything new, and sadly none of it is surprising. For years now, California’s state priorities have been all about satisfying unions and union workers at the expense of students and taxpayers. Of course, anyone who regularly listens to KFI’s Jon and Ken Show in Los Angeles knew this was going to happen, and the only real surprise is that more California cities haven’t already gone belly-up. However, Stockton probably won’t be alone for very long; many are predicting that other cities have been waiting for someone to be the first ‘fall guy’ and more bankruptcy proceedings will almost certainly follow suit.
The thing Stockton (and Bell and others) never seem to figure out is that promising insane, out-of-control “forever pensions” to anyone who works in a public capacity is impossible to maintain. You’d also think that parents of public school students would be a little curious as to why they have had to dip into their own pockets to buy things like books and lab equipment when the average (union) California teacher makes around $83,000 (total compensation, according to Salary.com)
What’s the solution? For one, it’s time to put the kibosh on the bullying, self-serving unions and the politicians they own. I recently interviewed Mallory Factor, author of the bestselling book “Shadowbosses” and talked to him about union corruption and the possibility of making California a right-to-work state. Here is my interview:
Today, at 11:20 AM PT: Get the Market Movements in Advance: William's Edge Webinar for October 31st, 2014 | John Ransom
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for October 29th, 2014 | John Ransom