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Back in 1999, under governor Gray Davis, the State of California boosted pensions and allowed most government employees to retire at the age of 55. This led to a surge of unfunded liabilities, and even Jerry Brown pushed for minor reforms. State employees hired after January 1, 2013, would have to work to the age of 67 to gain maximum pension benefits. As Adam Ashton and Phillip Reese of the Sacramento Bee have discovered, some government agencies mounted a surge to hire people before the deadline. A full 707 people came on board during the last week of 2012, and on December 31, 2012, 204 government workers began their state job.
At the State Board of Equalization, 17 employees started work on New Year’s Eve, 2012, but it is not out of the question that they started later and that the BOE simply rigged the records. A BOE mouthpiece told the reporters that New Year’s Eve hires were “unusual” and that he was looking into it. For its part, CalPERS hired 20 employees the final week of 2012, “including two well-paid investment fund managers who started work on New Year’s Eve.” They earn some $200,000 a year and after 20 years could retire at age 55 with a pension of about $80,000 a year. A day later and they would have to work to the age of 62 to earn the same pension.
State agencies thus place the interests of government employees above the interests of taxpayers, and this should come as no surprise at the state Board of Equalization. As we previously noted, the board members use public funds to promote themselves, managers dish out raises without performance reviews, and those dismissed get hired back with no trouble.
As Dan Walters of the Sacramento Bee recently observed, after embarrassing audits the BOE “inevitably returns to its bad old ways.” Real reform would be to “abolish the board entirely” and fold it and the Franchise Tax Board into one professional revenue department. The legislature is unlikely to take such a step, however, “because it would mean abolishing offices that legislators themselves yearn to fill.” As with the New Year’s Eve hires, the bi-partisan ruling class looks after itself first and foremost.