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Whopper Government Pension Raids Operating Budget

Monday June 27th, 2016   •   Posted by K. Lloyd Billingsley at 9:34am PDT   •  

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As we recently noted, the Regional Transit authority in California’s capital of Sacramento cut 20 administrative positions, saving taxpayers $1.5 million. In similar style, the salary of incoming business manager Henry Li is $14,000 less than that of outgoing boss Mike Wiley. Those reductions set a good example, but all is not well at Regional Transit.

As Tony Bizjak writes in the Sacramento Bee, RT officials wanted to keep Wiley through the end of the year, even though new manager Li does not need him. RT is considering a personal services contract with Wiley as a “retired annuitant” that would last until November 2017. Wiley’s pension is another matter.

His initial deal gave him a whopping $285,612 a year, “including $75,000 a year that would come out of RT’s operating budget.” A new deal would drop the pension to $279,000, but still grab money from the Regional Transit operating budget, reducing the amount by only $6,730 per year. Operating budgets are for operations, not pensions, so this is hardly an example of responsible management. Fabrizo Sasso, executive director of the Sacramento Central Labor Council, told Tony Bizjak that even with the proposed reductions, Wiley’s package is out of line, and called the personal services contract “insane.” Sasso is right on both counts, but Regional Transit is hardly the only place where things are out of line and insane.

In California and across the nation, extravagant government pensions are depleting budgets and threatening vital public services. For that story see Lawrence McQuillan’s California Dreaming: Lessons on How to Resolve America’s Public Pension Crisis.

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June 2016