Earlier this week, California State Controller John Chiang made headlines by opening up the books on the state's payroll. The details only served to confirm what anecdotal evidence has been pointing towards for a long time: public sector pay in the
The figures released by Chiang's office show that more than 1,400 state employees took home over $200,000 apiece last year. Some of the more outrageous examples: a surgeon in the state's beleaguered prison system collected over $775,000 on the year; the chief investment offer at CalPERS (the public pension fund which has nearly $240 billion in unfunded liabilities according to a 2010 Stanford study) pocketed a cool $548,142; and the president of the state's publicly-funded stem cell research institute pulled down nearly half a million dollars.
The problem, however, isn't simply salary size. It's the ability to monetize unused benefits - in many cases in violation of the law. As the
Total compensation for many of the best-paid state jobs on Chiang's list was pushed higher -- in some cases more than doubled -- by six-figure payouts for unused vacation and sick time.
A May analysis by The Times of Chiang's database -- a version obtained by request, which contained employee names and greater detail on payouts -- showed a prison psychiatrist, Fong Lai, received $594,976 for more than 2 1/2 years worth of unused sick time. A prison dentist, Robert Stogsdill, got a $553,253 payout.
Managers of state agencies are supposed [to] cap at 80 days the amount of unused vacation time their employees can save but routinely ignore the limit, The Times found.
There may be considerable complexity in determining the proper level of compensation for public employees. One principle that's not difficult to discern, however: state managers shouldn't get to "routinely ignore" the rules in order to fatten up their friends' paychecks at taxpayer expense.
I'd be careful about these headline numbers. You're certainly right about sick time payouts as a stealth (and unnecessary) way of padding compensation. But there are some positions in state government that should be paid well more than $200,000 per year.
Particularly, a $550,000 salary for the CIO of a state pension fund with about $240 billion in assets under management sounds downright cheap to me. As long as we have pension funds under public management, the funds will have to compete with private firms to hire financial managers. Failing to attract good talent into these positions is a false economy that will cost taxpayers in the long run. (The underfunding at CalPERS, as I understand it, is driven largely by bad policy choices and bad national accounting standards, not errors by the investment managers.)
People often make the error of comparing public sector management salaries to the governor's salary. But Governor is a high-prestige position with enormous non-monetary compensation. There are other jobs in the public sector that require significant expertise or managerial skill where salaries must be higher than the governor's to draw talent; nobody's going to work for CalPERS for the glamour.
Studies comparing public and private employee compensation tend to find the greatest degree of overpayment at the bottom of the compensation scale; unskilled workers do much better if they work for the government. Medium-skill union workers have also succeeded in extracting above-normal compensation packages; in California's case, that's especially true of prison guards and teachers. While the salaries at the top make for good headlines, they're not where the main overpayments are.
Josh,
You'll get no argument from me that there are public positions worthy of incomes well into the six figures. And CalPERS is the best example cited here (particularly given the fact that that's something of a turnaround job at this point).
Some of the more outrageous examples, however, speak for themselves (while I'm tempted to say I know people who need $600,000 worth of therapy, I think we can agree that the state overpaid there). Others, however, are a little more subtle. The salary to head the stem cell institute may not be beyond the pale for someone leading an endeavor on the cutting edge of research science -- but, particularly given California's current financial travails, it's not necessarily a cost that the public should have taken on in the first place.
Troy,
I think you will find that, for better or worse, the voters approved a ballot measure to fund stem cell research in the state using 3 billion in bonds to finance the endeavor. This is structural spending, that is mandated by voter approved law. The $ to pay for his salary comes from the bonds, not the general fund. The measure was passed in 2004. That position has been there for 7 years now.