California: the Golden Parachute State

Chris Garcia, Guest Contributor, Pepperdine University

As a friend of mine, Los Angeles radio show host John Phillips, put it, local elected officials in California are robbing their constituents so they can live like multi-millionaire gangster rappers. What’s sad is that he’s not far off. His colorful analysis has proven true, as recent reports reveal that city managers in Southern California are paying themselves hundreds of thousands of dollars, living in lavish mansions and cruising to work in limousines — all on the taxpayers’ dime. Couple this unchecked corruption with California’s historically incompetent leadership, and you have the makings of a fiscal calamity.

The story breaking out of Bell, California, is a scene right out of an R. Kelly music video — the mayor runs a drug house, while city officials take kickbacks from thug tow companies and hold parties with underage female escorts. In late July, residents erupted in outrage after discovering that Robert Rizzo, the city’s chief administrative officer, was paid a salary of nearly $800,000. Upon retirement, Rizzo’s pension benefit would amount to $600,000 annually — its estimated total value a whopping $30 million. Predicting the exorbitant retirement checks that its city employees would later collect, Bell voted to take in $3 million in illegal property taxes from its residents, whose average annual income is under $25,000.

Vernon is the latest city contributing to the heap of government waste in California, with a massive $325 million budget for a city of less than 100 residents. The Los Angeles Times recently reported that in 2005, former city administrator Bruce Malkenhorst paid himself a salary of $911,563, retiring on a taxpayer-funded annual pension of $500,000. Malkenhorst is currently awaiting trial on charges that he spent city money on himself.

The result? California-based companies are flocking in record numbers to less-restrictive, less-taxed states like Arizona and Texas, as they discover that in California, corrupt politicians and labor unions have taken control. The growth of government, wasteful spending, and burdensome regulations that create a hostile business environment are redefining the term “Golden Parachute” for private sector employers. The spotlight has quickly shifted from traditionally-ridiculed corporate executives to union-protected government workers, whose audacity to rake in outrageous salaries and benefits in an underperforming economy raises eyebrows.

Unfortunately, these scandals are microcosms of the statewide financial problems plaguing the Golden Parachute State. California’s behemoth budget deficit is approaching $20 billion. Its unemployment rate exceeds the national average — an alarming 12 percent — in a state whose pension fund is on the brink of bankruptcy.

The California Public Employees’ Retirement System (CalPERS), the largest public retirement fund in the nation, needs $3.9 billion this year from the state in order to finance retiree costs, according to Pensions and Investments. CalPERS is currently in $500 billion of debt.

As it stands now, a typical state worker in California making $36,000 per year can retire at age 55, with a guaranteed, inflation-protected, one-million-dollar retirement fund. One million dollars. Guaranteed. There are nearly half a million retired public employees enrolled in CalPERS.

The people of California — and Americans nationwide for that matter — are looking for answers. How can this possibly be sustainable? Where is the accountability?

Advertisements

15 comments

  1. Excellent analysis.

    The UC administration deserves a closer look as well, in terms of salary, retirement and size. How much is the state paying for numerous unnecessary vice-chancellors, diversity officers, ethnic studies professors, etc….?

  2. I waas recommended this website by my cousin. I am not certain whether or not
    thnis post is written via him as no one else understand such precise approximately my trouble.

    You are incredible! Thank you!

  3. Haave you ever considered about adding a little bit more than just yourr articles?
    I mean, what you say is valuable and all. But imagine if you added some grat graphics or videos to
    give your posts more, “pop”! Yoour content is excellent but with images and videos, this website could undeniably
    be one off the very bbest iin its niche. Terrific blog!

  4. I have been browsing online more than 2 hours today, yet
    I never found any interesting article like yours. It’s pretty worth enough for me.
    In my opinion, if all web owners and bloggers
    made good content as you did, the web will be much more useful than ever before.

  5. Just wish to ssay your article is as astonishing.
    The clarity in yor publish is just great and i could think you are a professional in this subject.
    Fine together with yohr permission let me to grasp your
    RSS feed to keep up to date with coming near near post.

    Thank you a million and please carry on the rewarding work.

  6. Why users still make use of to read news papers when
    in this technological globe the whole thing is existing on net?

  7. I constantly emailed this weeb site post page to
    all my contacts, as if like to read it then my friends will too.

  8. Fine way of explaining, andd good paragraph to take facts regarding mmy presentation
    focus, which i am going to deliver in school.

  9. This piece of writing will help the internet users for setting up new weblog or even a blog ffrom
    start to end.

  10. Oh my goodness! Awesome article dude! Thank you,
    However I am experiencing issues with your RSS. I don’t understand thee
    reason why I cannot subscribe to it. Is there anybody getting the same RSS
    issues? Anybody who knows the solution will you kindly respond?
    Thanx!!

  11. It’s very effortless to find out any topic on web as compared to textbooks,
    as I fund thks piece off writing aat this website.

  12. Locksmiths more often than you want your advertising to generate consumer ACTION.
    Also a1 locksmith in town killed were the door. Instead
    of paying for the U. As such, it is for your family will be banned.
    Although the profession of locksmithing he could use the lock fails.
    Locksmith IQ is known for providing professional and efficient too in providing locksmith services.
    Are the locks, however, burden the locksmith will come to you as fast as traffic allows us.

  13. It’s really a great aand useful piece of information. I’m satisfied
    that you simply shared this helpful info wwith us.
    Please stay us informed like this. Thanks for sharing.

  14. WOW just what I was searching for. Came here by searching for buy cigarettes

  15. If you want to take a great deal from this paragraph then you have to
    apply such methods to your won weblog.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: