Why California Is In Trouble – 340,000 Public Employees With $100,000+ Paychecks Cost Taxpayers $45 Billion

By Adam Andrzejewski, Forbes

Top 10 California public school salaries & pensions

Despite California’s $54 billion budget deficit and $1 trillion unfunded pension liability, there are 340,390 government employees bringing home six-figure salary and pension checks.

Recently, though, Gov. Gavin Newsom asked U.S. taxpayers for a bailout.

The governor wrote a letter to Congress requesting $1 trillion in coronavirus 50-state aid. Then, House Speaker Nancy Pelosi obliged by adding $500 billion for the states into the HEROES Act – the bill passed and now awaits action in the Senate.

Here, in part, is why California is asking for taxpayers help.

Our auditors at OpentheBooks.com found truck drivers in San Francisco making $159,000 per year; lifeguards in LA County costing taxpayers $365,000; nurses at UCSF making up to $501,000; the UCLA athletic director earning $1.8 million; and 1,420 city employees out-earning all 50 state governors ($202,000).

Using our new interactive mapping tool, quickly review (by ZIP code) the 340,390 California public employees and retirees who earn more than $100,000 and cost taxpayers $45 billion (FY2018-9). Just click a pin and scroll down to see the results rendered in the chart beneath the map.

Here are a few examples of what you’ll uncover:

• 109,627 teachers and school administrators – including the CEO of Summit Everest charter schools Diane Tavenner ($450,115); and superintendents Michael Lin ($443,875) at Corona-Norco Unified; Polly Bove ($395,257) at Fremont Union High; Christopher Hoffman ($351,885) at Elk Grove Unified; and Al Mijares ($348,276) at the Orange County Dept. of Education.
• 66,403 college and university employees – including the athletic director at UCLA, Daniel Guerrero ($1.8 million), who is retiring amid criticisms that his teams lost too frequently. The school’s football coach, Charles (Chip) Kelly ($3.3 million), compiled a 7-17 record during his first two years and is the most highly compensated public employee in the state. Furthermore, there are 11,310 college and university employees making more than $200,000.
• 62,204 State of California employees – including a nurse, Ito Chikako, at the University of California, who made $501,391 – paid through the state system. David Winsor Sirkin, Sr. Psychiatrist at Correctional & Rehabilitative Services, made $409,399. Corrections paid two dentists $385,596 last year. The chief regulator at barbering & cosmetology made $124,296.
• 45,718 city and town employees – including 1,420 municipal administrators and employees who out-earned the California governor – the highest paid state governor ($202,000). Highly compensated city managers included Deanna Santana (Santa Clara – $396,158); Paul Arevalo (West Hollywood — $353,603); Fredrick Cole (Santa Monica – $342,780); David Ready (Palm Springs – $340,149); Edward Shikada (Palo Alto – $329,080); and Scott Ochoa (Ontario – $328,500).

Reaching out to all governments mentioned, Santa Clara responded saying that their city is complex and they compete for talent in Silicon Valley. Palm Springs responded by saying the city manager is cutting his pay by 20-percent to $288,579.

In 2017, we found that 44 lifeguards in Los Angeles County cost taxpayers between $200,000 and $365,000. Today, it’s worse with salaries comprising only about half the total cost when including overtime, extra pay and benefits.

In total, $45 billion in cash compensation flows to local and state government workers across California earning six figures. Our auditors did not include the cost of benefits.

We also haven’t included the payroll costs of at least 28,000 federal employees making $100,000+ within the executive agencies based in California.

Corruption In San Francisco

San Francisco’s self-titled “Mr. Clean,” Mohammed Nuru, Public Works Director, is best known for failed efforts to keep feces and hypodermic needles out of the public way. Cases of human waste on city streets spiked to 31,000 in 2019 – an all-time high.

Nuru earned a $269,500 annual salary in 2018 (up $55,000 over a seven-year period). Allegedly, that wasn’t enough. In February, Nuru was arrested for charges that included bribery.

Only in San Francisco can team members on the “poop patrol” cost taxpayers up to $184,000 each.

Taxpayer-Expensive Educators

In the community college system, 10,807 employees made six figures and 247 made more than $200,000 last year.

Edward Hernandez, Jr. (Rancho Santiago – $325,799) and Francis Gorrick (West Hills – $316,034) have the highest pensions. In 2015, stakeholders criticized then-president of El Camino College Thomas Fallo for his $345,000 “supersized” salary. Fallo retired and receives a $314,021 pension.

K-12 payrolls show 109,627 teachers and administrators earned over $100,000 per year. Nearly 94,000 of those highly compensated educators are currently employed, and the other 15,735 are retired with six-figure pensions.

Ten educators hit the pension jackpot and retired on $300,000+. These include: William Habermehl (Orange County Dept. of Education – $380,096); Richard Bray (Tustin Unified School District – $329,826); Virginia Shattuck, (Norwalk–La Mirada Unified School District – $327,139); James Smith (Evergreen Elementary – $309,725); and Richard Miller (Santa Anna Unified— $305,066).

Private associations, nonprofits, and lawmakers

All kinds of entities are jumping on the gravy train. Private associations, nonprofit organizations, and former lawmakers have gamed the system for personal gain.

• Assemblyman Jim Cooper (D-Elk Grove) is double dipping the pay and pension systems. Retired at age 50 from the Sacramento County Sheriff, Cooper earned a $173,820 pension. He makes $107,242 as an elected member of the general assembly – although he refused the non-taxable per diem that’s estimated at $39,000 a year. Total benefit: $281,162
• Who knew that the “student unions” on college campuses pay their administrators up to $206,000 and their pensions are guaranteed by taxpayers? The union at UCLA – Associated Students, Inc. – paid four administrators between $191,000 and $206,000 last year. There are 52 student union administrators across the state who made six figures last year. Retirees received pensions up to $136,000.
• Government “associations” of all types are dialed into the public pension system. These associations are organized as “non-profits” and include associations of governments, school boards, water districts, utilities, special districts, and even flood control associations.

We found 314 six-figure administrators who run these government associations, which are funded by taxpayers for $44 million a year. The most highly compensated was Darin Chidsey {Southern California Association of Governments (SCAG) – $289,109}.

SCAG responded to our request for comment saying they are “the nation’s largest metropolitan planning organization” and located in “a very competitive job market.”

Highly Compensated Locals

In the City of Fremont, nearly 700 six-figure employees made $91 million last year. The city attorney, Harvey Levine, was the highest earner at $291,031. Even the animal services manager cost taxpayers up to $130,000 with over four weeks of PTO, pension, and additional retirement annuity benefits – in the first year of employment.

The Sanitation District of Los Angeles has a history of spiking salaries to pad pensions. In fact, four of the top five all-time sanitation high earners are either currently employed or retired from this district: Stephen Maguin ($366,387 – pension); Grace Robinson Hyde ($329,131 – salary); James Stahl ($321,838 – pension); and Robert Ferrante ($306,552 – salary).

The sanitation district responded to our request for comment saying that all laws with respect to compensation were followed and “pension spiking” is not allowed. However, we noticed that some of those retirement pensions exceed current salaries.

Before the COVID-19 crisis, state and local governments in California were plausibly operating. Now, with tax revenues dropping, underlying financial weaknesses are being exposed.

In a move praised by fiscal reformers, Gov. Newsom proposed a 10-percent across-the-board reduction in state employee salaries along with state agency budget cuts of five percent.

However, the governor admitted that if the federal government sends states more aid, then the salary reductions will be restored.

California, in other words, like many states with excessive pay and pension costs, is relying on the U.S. taxpayer to see them through crisis.

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