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Contributors
K. Lloyd Billingsley - Contributor
[Courtesty of Pacific Research
Institute]
K. Lloyd
Billingsley is Editorial Director for the Pacific
Research Institute and has been widely published on topics
including on popular culture, defense policy, education reform,
and many other current policy issues. [go to Billingsley index]
 Sweethearts
Dance, You Pay
Politicians and unions strategize to stop privatization...
[K. Lloyd Billingsley] 10/3/03
While the
recall campaign grabs media coverage, state officials and union
bosses are escalating
the war on privatization.
Their efforts could undermine this important mechanism for helping
to restore California's fiscal health.
CalPERS,
the mammoth $145-billion public employees retirement system
is being pressured to desist
from investing in companies
that could privatize government
services.
Steve Westly,
state controller and CalPERS board member, told reporters, "I
could not be more opposed to contracting out. This is a red herring issue -
people who promise to save millions of dollars. It comes on the backs of people
who
have their health care taken away." Union bosses also got in their salvos.
"Privatization efforts by companies seeking profit from
public services represents a significant threat to CalPERS participants," said
Dennak Murphy of the Service Employees International Union.
What these
powerful players want is investment not based on the best return
but
political criteria. It fell to state Treasurer
Phil Angelides to point out that such a policy "could be
fraught with peril." As the prominent Democrat explained
to the Bee, "it is very important. . . that we retain access
to the top-tier investors. We have to be careful how we fight
this. There may be instances where jobs can best be provided
by the private sector."
Actually, there are many instances where jobs can best be provided
by the private sector. One of them is cleaning government buildings,
which used to be contracted out to private firms. The first Davis
administration reversed that policy, doubling the costs of that
service but adding new employees to state rolls and new members
to public-employee unions.
One of the targets of the anti-privatization assault is Edison
Schools, a private company that operates charter schools. These
are also under attack, with unions in Sacramento seeking jail
time for board members who approved a charter petition.
The problem is not privatization, which needs to be expanded,
not cut back. The real issues are the incompetence and politicization
at CalPERS and extravagant pensions and salaries. For example,
the California Administrative Service Authority (CASA) recently
gave 10 unearned years of service credit to Sacramento school
superintendent Jim Sweeney, which boosts his pension from the
range of $43,000 a year to nearly $120,000 a year, a sweetheart
deal by any standard.
Mr. Sweeney's final salary was $244,000, more than the governor
of California, who makes $175,000. So the system does work for
a select few. And speaking of sweetheart deals, the unions pressuring
CalPERS have many of their own.
Agency-fee policy allows them to confiscate the money of non-members.
Prevailing-wage law gives unions all public-works projects, locking
out those whose tax dollars pay the bills. Unions also enjoy
a taxpayer-funded lobby ($21 million since 2000) in the form
of the California Institute for Labor and Employment, a supposed
think-tank at UCLA and UC Berkeley which is, in reality, a front
for union-backed legislative campaigns. Together that package
amounts to considerable leverage for those who represent a scant
13.2 percent of workers, according to the federal Bureau of Labor
statistics.
Now unions
and their political allies want to use state pension systems
to further
attack privatization. They might suggest a
new California motto, "everything within the state, nothing
outside the state," if it hadn't been used already.
copyright
2003 Pacific Research Institute
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