Mostly foxes guarding the henhouse

When the governor announced the appointees to the Public Employee Post-Employment Benefits Commission he correctly outlined the seriousness of the problem they must address by saying that soaring state-worker pension obligations are putting other important programs in jeopardy and solutions must be found that do not harm taxpayers or saddle future generations.

Given his framing of the issue the new makeup of the commission is cause for concern.

In his classic book about Wall Street Fred Schwed tells the story of a visitor to the New York financial district. When the tourist arrived at the Battery a guide pointed to some handsome ships riding at anchor and said they were the yachts of the bankers and brokers. "’Where are the customers’ yachts?’ asked the naí¿ve visitor" thus providing Schwed with the title of his book.

I had a similar reaction when I looked at the list of 12 appointees to the pension commission. I see plenty of representatives of government and labor but where are the taxpayers’ representatives?

One of the governor’s six appointees Dave Low who is the assistant director of governmental relations for the California School Employees Association was satisfied saying the commission "is relatively balanced with both management and labor interests represented."

However from the perspective of taxpayers we have multiple foxes guarding the henhouse. Of the 12 members only two have a professional history that suggests some sensitivity to the interests of taxpayers. Anaheim Mayor Curt Pringle has advocated and implemented free-market principles in his city. Likewise John Cogan a senior fellow at the Hoover Institution and a fiscal expert at both the federal and state level has a demonstrated academic background that should serve the commission well.

The remaining 10 members including six picked by the Democratic leaders of the Legislature are either directly tied to labor or are at best unknown quantities for taxpayers.

It is obvious that it is the position of public-employee unions to advocate on behalf of government employees. The fact that labor is not overly concerned about the impact of their demands on taxpayers is no surprise. However what may be less apparent is that taxpayers cannot count on management to defend their interests.

Unions wield tremendous ballot-box clout and elected officials who can also be defined as "management" ignore labor’s concerns at their peril.

In the 2005 special election one of the four reform proposals would have required public-employee unions to seek members’ permission before spending money on political causes. The unions spent well over $100 million to defend the status quo and argue that any limitation on how they raised and spent money would put them at a disadvantage since no similar restrictions were to be placed on corporations.

That makes no sense.

Since when do public employees have an adversarial relationship with corporations? While private sector unions may have those concerns for public employee unions those with whom they clash are taxpayers who must pay for their members’ salaries and benefits. This is why they work so hard to co-opt those who should be representing the taxpayers’ interests: elected officials.

When politicians see they can give in to union demands with impunity because those same unions will guarantee their reelection the system which should give full consideration to the taxpayers’ perspective breaks down.

Taxpayers don’t hold out much hope that this new commission will accomplish much which is too bad. The original announcement by the governor creating the commission had those of us who pay the bills a bit encouraged. But the makeup of the commission with few exceptions suggests that it will generate a report that like so many other reports will gather dust on a shelf. Meanwhile the train wreck gets closer.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest taxpayer organization — which is dedicated to the protection of Proposition 13 and promoting taxpayers’ rights.

This column appeared inThe Orange County Register on March 8 2007.