You'd think that everyone in California would understand by now that one of the biggest obstacles to meaningful government reform in Sacramento is the impressive political power wielded by the state's public employee unions. Yet the seeming permanence of the state's fiscal crisis leads me to doubt it.
Luckily and coincidentally, on the same day we get a strong reminder from two different sources. First, the American Council of Engineering Companies – California issued a statement taking to task the Professional Engineers in California Government (PECG) for a recent ad campaign attacking privatization and suggesting cost savings from bringing contracted services back in-house (I both cringe and laugh at this ridiculous notion). From the statement:
"In today's difficult economy of layoffs and furlough notices, it is incomprehensible to us that PECG is spending tens of thousands in taxpayer-generated dollars to create and run a series of ads attacking contracted out services and spreading misinformation about state pensions. [...]
The fact is that a 2007 report by the former head of the non-partisan Legislative Analyst's Office showed the comparable cost of in house (state-employed) engineers ranged from $173,434 to $209,212 while the average cost of an outside (privately-employed) engineer was $193,000. [Read the entire report: www.celsoc.org/userdocuments/File/LECG_Rpt_2007.pdf]
While seemingly close in salary costs, when you consider the extra liability per state worker in pension and health care benefits – sometimes more than a million dollars – short-term contracts are a much cheaper option for the state and can actually help reduce costs. [...]
Furthermore, less than 10 percent of transportation engineering and design work conducted by the state is contracted out to private engineering companies. Ninety percent is handled by state employees. In light of this dramatically one-sided statistic, it is disingenuous of the union representing state workers to suggest that cost savings of any kind can be made by further restricting contracts. If anything, the opposite is true.”
This is what governments always do to defend themselves against privatization and keep the budget gravy train rolling—take long-term pension and health benefits off the table to make themselves look cheaper than they ever could possibly be if forced to account for the ture "all-in" costs of service delivery. How easy it becomes to game the system when those costs disappear from the ledger. Kudos to the ACEC for calling a spade a spade.
The second piece is noteworthy, and one I've been waiting for for a long time. National Public Radio's All Things Considered does an incredible public service by shining a critical spotlight on the mighty prison guards union—the California Correctional Peace Officers Associations—which had perhaps the biggest hand in creating the state's prison crisis and which remains the biggest obstacle to privatization and meaningful prison reform. The CCPOA has literally driven California's correctional system over the cliff and still has its foot on the accelerator. As NPR reports:
In three decades, the California Correctional Peace Officers Association has become one of the most powerful political forces in California. The union has contributed millions of dollars to support "three strikes" and other laws that lengthen sentences and increase parole sanctions. It donated $1 million to Wilson after he backed the three strikes law.
And the result for the union has been dramatic. Since the laws went into effect and the inmate population boomed, the union grew from 2,600 officers to 45,000 officers. Salaries jumped: In 1980, the average officer earned $15,000 a year; today, one in every 10 officers makes more than $100,000 a year.
Lance Corcoran, spokesman for the union, says it does what is best for its members. "We have advocated successfully for our members," he said.
Unfortunately, success for CCPOA's members translates into a correctional system death spiral for taxpayers. But I digress:
But [Corcoran] disputes that the union has purposefully tried to increase the prison population. [...] Campaign records, however, show much of the funding to promote and push for the passage of the laws came from a political action committee the union created. It is run out of a group called Crime Victims United of California.
Its director, Harriet Salarno, says the committee is independent from the union. But a review of the PAC's financial records shows the PAC has not received a donation from another group besides the union since 2004. [...]
But Corcoran acknowledges that the union has benefited from the increase in the prison population after these laws passed. "We've had the opportunity to grow," Corcoran says, "and that has brought with it both success and criticism."
To me, here's the most damning part of the NPR piece—former state corrections secretaries calling out the CCPOA:
[Former state corrections secretary Jeanne] Woodford says she stepped down as secretary of the corrections department when she found out that the union had been going on behind her back to negotiate directly with the governor's office. "The union is incredibly powerful," Woodford says.
Former Secretary Roderick Hickman resigned for the same reason in February 2006. "The biggest problem that I had was the relationship that I had with the union," Hickman says.
Hickman says the union was able to control the department's policy decisions, including undermining efforts to divert offenders from prison and reduce the prison population. "Maybe I was just impatient," he says, "or it wasn't going to go fast enough, but [the department] is still in the same place I left it, with an over $8 billion budget. Now it's over $10 billion."
Today, 70 percent of that budget goes to pay salaries and benefits to the union and staff. Just 5 percent of the budget goes to education and vocational programs — the kind of programs that study after study in the past 10 years has found will keep inmates from returning to prison.
California taxpayers should be appalled and outraged. These comments are coming from the people who ran the system and were stymied by the CCPOA juggernaut. As I wrote here back in June:
Prison guards are California's largest personnel expense, and their unions lead the charge to prevent private competition for their jobs. They fight tooth-and-nail for taxpayer money in the form of higher salaries and gold-plated pension benefits that are far more lavish than most in the private sector receive. These inflated personnel costs are a major reason taxpayers pay roughly $45,000 a year to house each inmate (the highest among the 50 states).
When looking at the billions in California prison spending it is very easy to see why government prison guards earning $73,000 a year—plus tens of thousands in overtime, plus outstanding health benefits, plus amazing retirement benefits—wouldn't want to face competition from private prisons.
The guards and unions have a great gig going. Unfortunately that gig is appallingly expensive for taxpayers.
If there's any hope for rescuing California's failing corrections system, it will only come when policymakers shove CCPOA out of the way and get on with the long-overdue and necessary work of reform. Privatization can and should play an important role in this process, as it already is through the state's contracts for thousands of beds in out-of-state private prisons, which helped the state ease the most severe overcrowding (and which, of course, CCPOA sought an injunction to prevent—and lost).
UPDATE: The CCPOA's influence is an old, old story that people only may be just waking up to. Here's a 2003 Wall Street Journal editorial that takes them to task.