The State Worker

Blog backs review your thoughtful and provocative online comments, amplify points, answer questions, correct our mistakes and humbly accept your warranted criticism.

Oct. 27 SEIU donations to Obama, against McCain exceed $16.5 million

I am sickened that my SEUI (sic) dues are being used support Obama or any political person. Those funds are to support our benefits.

Unions cannot use member dues for political purposes. They can, however, accept donations to their political action committees (PACs). That money can be used for political purposes.

Oct. 28 Public employees, public records and public trust

Yeah, what's your deal Jon? You really ought to at least try to appear impartial and objective versus unabashed muckraker.

We want to tell state worker stories. Sometimes those stories will be positive. Sometimes they won't. Our aim isn't impartiality or total objectivity. It's fairness.

Oct. 28 Furloughs? Pay cuts? State worker rumor mill in overdrive

Does anyone really think that the state will cut pay and furlough workers? Never happened, never will...

State workers took a 5 percent pay cut in mid-1992, which was restored at the end of 1993.

Oct. 29 Order in the court: Arguments heard in employee pay lawsuit

This lawsuit is about a stop gap measure the Governator tried to use before the budget was passed. It has since been passed (yes it is a pitiful joke of a budget I know). This issue is now moot and a waste of time and money.

The folks at DPA tell us that the administration is pursuing the lawsuit because Schwarzenegger wants to know whether the controller is constitutionally prohibited from paying more than the federal minimum wage to state workers without a budget in place. (The Supreme Court of California found that this was the case in White v. Davis.) If he prevails before the end of the 2008-09 fiscal year and the 2009-10 budget talks bog down, he might issue another temporary pay reduction order.

Oct. 30 Prop 5 goes after correctional officers

... Nobody cleans up in prison where the drugs are brought in by the guards.

We looked around, briefly, but couldn't find any online data supporting or refuting this assertion.

Oct. 30 California state worker ratio second-lowest in the nation

Does the Center's study include comparisons of states as to which categories it employees workers. How do these states compare in computerized record keeping that may reduce the need for support workers? Does the study look at states by factors as to reliance on state services versus that of county and city services? Why do the states near the top of the list need more employees per capita?

No. The data comes from the U.S. Census Bureau, which focuses on geography, work status (full or part time), employee function / department and the level of government (state or local).

Great questions, though!

From the Center for Continuing Study of the California Economy, this comment on new U.S. Census Bureau statistics:

In 2007 California had the 2nd lowest number of full-time equivalent state government employees relative to population among all states. California had 103 state employees for every 10,000 residents while Illinois had the lowest ratio at 97.

The data suggest that at the aggregate level California is not "overstaffed" relative to caseloads in the major program areas. Indeed, a stronger case can be made that public
programs are being carried out with less staffing than in most other states.

Read the Center's "Numbers in the News" report by clicking here.

When compared with other states, where should California rank in its ratio of government employees to population?

The Campaign for New Drug Policies and the Drug Policy Alliance Network, backed by billionaire George Soros, have a new pro-Prop 5 ad that says, "Our prisons are overcrowded, and our prison guards are overjoyed."

Why? Because, the ad says, overcrowded prisons equals overtime for prison guards.

Clearly, the pro-5 folks think that there's a rich vein of public disdain for correctional officers to be mined.

The ballot measure would boost state spending on drug rehab programs by hundreds of millions of dollars each year. Many offenders in prison on drug and property crimes would be taken out of jail and put into treatment.

Proponents say passing Prop 5 would stem prison costs. Opponents say that it would put more convicts on the street and give them more chances to commit crimes than if they were behind bars.

The Department of General Services today hosted the 9th Annual State Agency Recognition Awards for state departments that advocate for and contract with small businesses and Disabled Veteran Business Enterprises (DVBE in state-speak). You can read the press release by clicking here.

Judges representing small and veteran-owned businesses and the state picked the winners.

The envelopes, please!

Most Improved Small Business/Disabled Veteran Business Enterprise Participation

• Environmental Protection Agency-SB/Small


• Gambling Control Commission-SB/Medium


• Department of Industrial Relations-SB/Large


• Office of Real Estate Appraisers-DVBE/Small


• California Tahoe Conservancy-DVBE/Medium


• Department of Social Services-DVBE/Large

• Military Department-Gold


• California State Parks-Silver


• California Arts Council-Bronze


• Department of Industrial Relations-Honorable Mention

• Maureen Moss-Department Consumer Affairs- Gold


• Steve Ebo-Department of Veterans Affairs- Silver


• Robin McCune-Department of Corrections and Rehabilitation-Mule Creek- Bronze


• Ronald O'Brian- Department of Corrections and Rehabilitation- El Paso de Robles- Bronze

• Department of Corrections-Preston Youth Correctional Facility

Agency Secretary Special Achievement Award

• Department of Housing and Community Development

Small Business and DVBE Leadership Award-Presented by the California Small Business Association and the California Disabled Veteran Business Alliance

• Liz Santucci-Department of Transportation-District 9

We hear from DPA's Lynelle Jolley that a federal judge considered two of three motions presented today regarding the executive order lawsuit between Gov. Arnold Schwarzenegger and state Controller John Chiang.

"The two motions he considered are whether the case should be sent back to state court, and whether it should be moved to the Northern district (from the Eastern district) if it remains in federal court," Jolley said in an e-mail to The Bee. The Northern district is in San Francisco. The Eastern district is in Sacramento.

The judge said he'll have "an expedited decision in about a week," Jolley reported. He didn't take up a motion to dismiss the case.

In case you're just back from camping in Antarctica, the lawsuit came from a dispute between Schwarzenegger and Chiang last summer over the controller's refusal to issue payroll checks that slashed state workers' pay to $6.55 per hour. Schwarzenegger sought the payroll reduction to conserve cash until lawmakers reached a budget deal.

Lawyers for the state employee unions, including the Service Employees International Union, California Correctional Peace Officers Association and the California Statewide Law Enforcement Association in August filed to move the lawsuit into federal court. DPA, representing Schwarzenegger's administration, wants to keep the matter in state court.

Here's an opinion piece from today's Los Angeles Daily News that opines on the rising cost of public employee pensions. The punchline of the editorial:

Now, we don't want to begrudge anyone the chance to have a solid, comfortable retirement after decades of hard work and service. But there is something inherently unfair when private-sector workers get hit on both sides - they lose the value of their own retirement funds and have to fork over more of their taxpayer dollars to keep public-employee pensions secure.

When taxpayers are struggling to fund their own retirements, they shouldn't get saddled with the rising costs of public employees' pensions. It's time for reform.

It looks to us like a fight over defining "fair" is shaping up. On one side: public employees and their unions. On the other: private sector workers, some local governments and taxpayer groups.

Each side is trying to frame the debate. Is it fair to write public employee retirement guarantees into law and then rewrite them when the economy tanks? Is it fair for public employees to receive defined and early retirement benefits that are backstopped with taxpayer money?

(In fairness, we must note that in the fat times, employer/taxpayer contributions to some funds, including CalPERS, were virtually zero.)

If the economy continues its slide, these questions will become more pointed and calls for fundamental changes will grow. Brace yourselves, state workers.

Monday's announcement by Gov. Arnold Schwarzenegger that he will call lawmakers to a special session to deal with the state's growing budget mess has revved up the rumor machine among worried state workers, judging by calls and e-mails we've fielded:

"I heard that state supervisors and managers will be getting a 5% pay cut. [I'm a manager.]" one e-mailer wrote. "My boss [exempt] said he'd heard that exempts were getting a 5% pay cut. Generally I don't like to listen to rumors, but obviously this one, if true, will affect many of us!"

Another long-time state worker heard that furloughs are coming. "Better than just whacking jobs," he said.

And current contract talks were on the mind of one state worker who called us: "If the state is already $10 billion in the hole, there's no way we're getting a raise."

If you missed it, you can read Bee reporter Jim Sanders' story on the planned special legislative session by clicking here.

And Steve Wiegand of The Bee Capitol Bureau has more here.

IMAGE: Brian Baer / Sacramento Bee

Are there dots here that we should connect?

Let's start with today's Chu Vu story reported by Bee crime reporters Kim Minugh and Sam Stanton . According to Bee sources, the former Sacramento County deputy allegedly used a department computer to look up personal information on Steve Lo, a state correctional officer who was gunned down at his home earlier this month.

Vu was arrested on an unrelated weapons charge, but Sacramento police consider him a "principal" in the homicide investigation.

Now consider the soon-to-be-closed case of Rachael Rivas Dumbrique. Last week the 33-year-old former Department of Consumer Affairs worker pleaded no contest to a felony count of illegally downloading confidential state information that included the names and Social Security numbers of 5,500 current and former department employees. As Bee reporter Andrew McIntosh reported in this story, Dumbrique is scheduled for sentencing next month.

Now the obvious connection: Both cases involve public employees and their access to private information.

It's bad enough that in the era of electronic finance that we have to worry about criminals stealing our identities or hacking our credit card information. It's worse -- far worse, in our estimation -- when public employees abuse their access to the information assigned to us privately by the government (such as social security numbers) or that we are compelled to give privately (such as our address or income).

It makes us wonder, how often does this happen? How many public employees do this? How many have access? And beyond that, how effective are government attempts to squash abuse of this unique and powerful government authority?

SEIU's political action committee, SEIU Committee on Political Education, has given $13.53 million to Barack Obama's Democratic presidential campaign and another $3.16 million to oppose Republican John McCain's campaign, according to federal disclosure reports.

Meanwhile, the union's national office this morning put out this press release, touting its campaign efforts on behalf of Obama.

Money collected from union dues cannot be donated to political campaigns. SEIU, like many other unions, encourages members to donate to its PAC, which is free to use that money for political purposes.

But as we reported last week, The National Right to Work Legal Defense Foundation has filed a complaint with the Federal Election Commission that challenges the legality of a union political fundraising policy the foundation says that SEIU adopted at its summer convention.

The 4-page complaint filed today alleges that the union has set political fundraising targets for the locals and fines those that fail to meet those totals.

SEIU Local 1000 president Yvonne Walker blasted the complaint as, "a pre-election ploy by a group that is upset that workers are spending money to support candidates who support workers," and said that the foundation is "misrepresenting SEIU's political program in order to try to score political points in the media." The local represents about 95,000 state workers across several bargaining units.

Want to look more deeply into SEIU COPE's federal campaign donations?

You can read its latest Federal Election Commission disclosure form on its Obama donations by clicking here. Look for the "Candidate Year-to-Date Per Election for Office Sought" to get the latest number.

Click here for SEIU total donations opposing John McCain as of Oct. 15.

And you can click here for the union PAC's reports going all the way back to 1993.

Final note: We'd like to hear from SEIU members of either political persuation for a pre-election piece we're writing for this Thursday's State Worker column.

Call us at (916) 321-1043 or e-mail jortiz@sacbee.com if you'd like to be part of our column.

IMAGES: Sacramento Bee wire services

The editors at New Jersey's Ashbury Park Press have rounded up tart back-and-forth comments about state workers prompted by its two-part analysis of New Jersey civil service pay data. The stories, which ran Tuesday and Wednesday, found that:

... although Gov. (John) Corzine has reduced the number of state workers 5.5 percent since 2006, their salaries grew 5.7 percent. And the average compensation for all state employees increased 11.9 percent. One reason: Top management making six-figure salaries has grown almost 80 percent, to 4,422 employees, during that time.

As you can imagine, readers have reacted. If you've read our Thursday column, The State Worker, you'll find their comments eerily familiar. Some are angry toward state workers and the unions. Some call for tearing down civil service and replacing it with a privatized system. And, of course, some comments defend state workers and the status quo or question the data the newspaper used.

Click here for "Readers debate value of state work force."

We featured state worker Pepper Lewis in a recent State Worker column about labor contract negotiations. Little did we know when we reached out to Lewis that she is a singer/song writer who has recorded a few of her songs, including "Schwarzenegger is a Winner."

Lewis gave us a copy to share on this blog and we asked her a few questions:

When did you write the song and why?

When I substituted a few years ago for the Sacramento Unified School District as a high school teacher, I wrote this song with the help of my students. My bachelor of arts degree is in journalism/English writing and a minor in music.

My students were fascinated with Arnold's run for governor of California, so I came up with this idea.

This song seems fairly positive about the governor. Do you support him?

I really don't understand what that means. Honestly.

... People are jealous, hateful, spiteful, xenophobic. They underestimate actors and bodybuilders. Muscles are equated with low intelligence, for some people. Athletes who are successful are millionaires, and a lot of people who thought they were gifted never make it as professional athletes.

But what about how Schwarzenegger has governed? A lot of state workers I hear from are mad at him.

Now as a state employee, I do not blame Schwarzenegger for the budget crisis. It has to do with the previous Democratic governor, with us borrowing money, bad political decisions. He's doing his best under the circumstances. The legislators need to be fired or their paychecks withheld until a budget is signed. Changes need to be made.

"Winner" borrows its melody from "Rolling on the River" by Creedence Clearwater Revival with the instrumental music of hip-hop entertainer, Too Short.

Click here to listen to the 4-minute 14-second "Schwarzenegger is a Winner"

Yvonne Walker, SEIU Local 1000 president, issued this statement to the State Worker after we asked about a pending federal complaint against the union's political fundraising policy:

"This is just a pre-election ploy by a group that is upset that workers are spending money to support candidates who support workers," Walker said in an e-mail to the State Worker. "The National Right To Work folks are just grasping at this to make a cheap political point less than two weeks before a presidential election.

"They are misrepresenting SEIU's political program in order to try to score political points in the media. It just shows you that they are getting desperate and they will try anything to stop workers from joining together to back candidates who support working people."

As we reported this blog post earlier today, the National Right to Work Legal Defense Foundation said it will file a complaint with the Federal Election Commission that challenges the legality of a political fundraising policy the foundation says that SEIU adopted at its summer convention.

The policy sets up fines for union locals that fail to meet the political fundraising targets, and that's illegal, the foundation says.

The foundation just sent us an advance copy its 4-page complaint with a note that its attorneys will file a signed version on Monday. Read it by clicking here.

The National Right to Work Legal Defense Foundation this morning said it will file a complaint with the Federal Election Commission that challenges the legality of a political fundraising policy the foundation says that SEIU adopted at its summer convention.

The policy sets up fines for union locals that fail to meet the political fundraising targets, and that's illegal, the foundation says.

We called folks at SEIU Local 1000 for comment. Spokesman Jim Zamora said that officials are looking into the complaint and will have a comment for us soon.

We're also working to get a copy of the complaint, which will be formally filed on Monday, from what we understand. We'll pass along when it comes in. In the meantime, you can read the foundation's press release by clicking here.

Nothing's perfect, especially when you're talking about overhauling the Sacramento area's most-viewed and most complex news Web site.

The sacbee.com redesign launch last week had a few snags. One of them, as several of you quickly pointed out, was that the new site had links to this blog but none to the State Worker columns we write each Thursday for both the Bee's print and online editions. You used to find the column through either the Business tab or the Politics tab on the old site.

We mentioned it to online Assistant Managing Editor Ken Chavez and literally within an hour the problem was fixed.

If you look to the right of this post, you'll see a new "Now on the State Worker column" feature. Below that, Ken's staff added links to the most recent weekly ramblings, including today's column about how much state workers matter to the local economy.

If you click on the "More headlines" button below the the list of the three most recent columns and you'll go into State Worker column archives.

And while we're plugging, make sure you read today's report, written with Bee business ace Dale Kasler, about how CalPERS losses could force employers to ante up more in payroll fees to cover the fund's retirement obligations. We broke that news in this Monday blog post. You can go there to link to the CalPERS analysis of its assets and the range of possible payroll fee hikes it may demand from employers depending on what its assets are worth next summer.

CalPERS just released this statement about how the fund is handling its investment losses.

Watch for a story from Bee business reporter Dale Kasler tomorrow that analyzes news that we broke in this Monday post about the fund's downturn and possible impact on future employer contributions.

And don't forget to check our our weekly State Worker column every Thursday online and on page A3 of the print edition of The Bee.

New figures from the U.S. Census Bureau show that California in 2007 accounted for a little more than 11 percent of the nation's state and local government employees and close to 15 percent of its state and local payrolls.

California had 1.83 million state and local civil service workers making $9.5 billion each month, compared with 16.4 million workers nationally with a monthly payroll of $64.2 billion. The head count is in Full Time Equivalent units.

You can click here to see the table we've built for state and local data on California and the nation. The data includes information from 1997 and 2002.

Or you can get more deeply into the data by clicking here. Let us know if you find anything interesting, and we'll post it and give you credit. Just remember: You have to be able to explain the significance of your findings in simple terms to a soft-headed reporter.

IMAGE: U.S. Census Bureau

As reported by The Bee's Andrew MacIntosh in this story, former state worker Rachel Rivas Dumbrique has pleaded no contest to a single felony count of illegally downloading state human resources records and shipping them to her personal e-mail account. She'll be sentenced in November.

While this case clearly is newsworthy -- Dumbrique committed a felony by compromising thousands of personal information files -- not every instance of employee misconduct deserves airing in The Bee.

This is on our mind because we're regularly getting tips about state worker misconduct (usuallly from state workers). Each time one comes our way, we ask several questions:

• If we write about this, who will care?


• Is this costing taxpayers' money through diversion, theft or inefficiency?


• Is health, safety or property at risk?


• Does this exemplify a larger trend worth public attention?


• Does this indicate holes in the system to keep people or agencies accountable?

There are more, but you get the idea.

So what do you think? What filters, if any, should the media have when covering state worker misconduct? What is the line between reporting misconduct and bashing state workers?

Photo credit: José Luis Villegas / Sacramento Bee

First the news, then the analysis:

The American Federation of State, County, and Municipal Employees Local 3299 says that its bargaining team has reached a tentative deal with the University of California covering 11,500 patient care workers.

Union members in November will vote next month on ratifying the agreement, a 5 year deal that includes a 20 percent increase over five years and guaranteed base wage of $14.50 by the end of the contract, improved overtime provisions and pension and health insurance bargaining rights. You can read the union's description of the agreement by clicking here.

AFSCME is still bargaining for a new labor agreement for about 8,500 university system service workers that it represents.

Union and the UC negotiators started contract talks more than a year ago. Last summer, union members briefly picketed several UC facilities, including UC Davis Medical Center. Wages were the big sticking point.

We wonder if the AFSCME story -- long, tough negotiations largely over pay, perhaps even picket lines if bargaining drags on for a while -- is about to play out in other contract talks.

You say that state workers can't legally strike? Tell it to AFSCME. The union's five-day strike in July defied a restraining order by a judge who found that the labor action would endanger public safety.

California government is strapped for cash, but many state workers clearly are sick of contracts that for years have featured pay increases that they say have lagged inflation. How likely is it that the rank-and-file will accept contracts with little or no wage increases? Or will the tough economy and the state's tight budget make workers more willing to sign off on contracts with little or no pay increase?

AFSCME 3299 members held out for more than a year without a contract largely because of money, and it still hasn't finished a deal for nearly half its members. CCPOA doesn't have a labor agreement and no one is talking about restarting those talks.

We're nearly a month past the budget signing, nearly four months into the fiscal year and the union representing about 1 in 3 state workers, SEIU, won't restart talks until after next month's elections -- albeit it by mutual consent with the state.

If the markets don't turn around by the middle of next year, California's public employers will have to make plans to kick in more money to fund retirements, according to information to be presented to CalPERS leaders today.

CalPERS' "funded status," the percentage of its long-term pension costs covered by the market value of its assets, could fall as low as 68 percent by the middle of next year, the fund's actuaries have estimated. That compares with CalPERS' 102 percent funded status as of June 30, 2007 and an estimated 92 percent funded status as of June 30 this year.

Experts generally regard 80 percent as the threshold for healthy pension funds.

The 68-percent funded status projection assumes a 20 percent loss on investments as of June 30, 2009, according to the 4-page report scheduled for presentation today at CalPERS' Benefits and Administration Committee in San Luis Obispo.

Under that scenario, employer rates would increase by 2 percent to 4 percent of payroll. The rate hikes would take effect in fiscal 2010-11 for state plans and the schools pool. Public agency employers would see their rates increase the following fiscal year.

At the other end of the spectrum, if CalPERS realizes a 20 percent gain on its assets, employer payroll contribution rates would fall between 0.3 percent and 0.6 percent from present levels.

CalPERS lost 20 percent of its value from July 1 to October 10, according to the report, "(h)owever, we are still eight months away from the end of the fiscal year and the markets still have time to turn around."

CalPERS' retirement benefits are guaranteed, so if CalPERS' assets can't meet all of its obligations, it can increase contributions rates on employers. Employees also contribute to their own retirement accounts, but that amount can only be changed through collective bargaining.

"The good news," according to the CalPERS report, "is that cushioning the impact of investment setbacks is the fact that CalPERS experienced double digit gains in the four years leading up to the 2007-2008 fiscal year ... CalPERS rate stabilization policies now spread market gains and losses over 15 years, thus reducing the volatility of employer rates."

You can read CalPERS' investment analysis, including a range of hypothetical investment outcomes and impacts to employers -- and by extension, the impact to taxpayers -- by clicking here.

The Golden 1 Credit Union says in the press release that it sliiced up more than 30 tons -- that's right, more than 60,000 pounds -- of sensitive materials last week at public shredding event held at its facilities.

We posted this item on Friday linking to an post by National Review Online blogger David Frum that raises questions about CalPERS' stock market investments in light of Wall Street's financial crisis.

CalPERS spokeswoman Pat Macht didn't want to let the post go unchallenged and sent along this statement:

This type of blog seems to imply our retirees benefits are in some kind of trouble. This mischaracterization manufactures worries for our retirees. CalPERS wishes to re- emphasize that our members retirements are 100 percent guaranteed by the constitution and state law. And CalPERS has never missed a benefit payment in its 77 year history.

Patricia K. Macht
Assistant Executive Officer
Office of Public Affairs

Let's be clear about this. Since state legislation established the fund in 1931, CalPERS has never missed a payment.

CalPERS' members have guaranteed retirement benefits that are funded three ways: employee contributions, employer contributions and returns on CalPERS' vast investment holdings. If the fund's assets are squeezed and the revenue from that income stream slows down too much, the fund can ask employers to contribute more.

This, of course, doesn't make taxpayers outside of the civil service system happy, because "employer contributions" are essentially passed through to the public, since the "employers" are government entities.

In a post titled "Tomorrow's Nightmare Today," on the National Review Online, blogger David Frum says that CalPERS' recent reassuring statement in response to the stock market's meltdown rings hollow:

Calpers compares today's crisis to the S&L crisis of the 1990s. One difference: the S&L crisis occurred as baby boomers were moving into their peak earning years. This crisis occurs as the first baby boomers approach retirement. Will asset values have recovered by 2011, when the babies born in 1946 turn 65? I can't see it. Those pension funds will be coming under severe strain ... and will clamor for help.

Frum has been an editorial page editor for the Wall Street Journal and a columnist for Forbes magazine. He is a resident fellow with American Enterprise Institute, a Washington, D.C., think-tank. You can read his blog here.

IMAGE: Anne Chadwick Williams / Sacramento Bee

Just catching up on odds and ends here at The State Worker. Here's an e-mail thread about DMV's hours that you might find interesting. It illustrates, in a very small way, how we follow up on tips that come our way.

It started with Capitol Bureau Chief Dan Smith passing along this e-mail on Monday:

SACBEE

S.T.
Folsom, CA

Tuesday morning we sent a quick e-mail to the ever-responsive, always-professional Steve Haskins, DMV spokesman:

Hi Steve:

Thanks,
Jon

Steve's response a few hours later:

Hi Jon,

Steve

The state auditor has a new report that finds the Department of Fish and Game's handling of money from the Bay-Delta Sport Fishing Enhancement Stamp is being mismanaged -- but not like you probably think.

The program's spending isn't out of control. Rather, most of the millions of dollars collected through the program aren't being spent because the department has trouble tracking what it does spend.

From the audit's executive summary:

As of June 30, 2008, the fish stamp account had an unspent balance of more than $7 million, although a portion was committed to approved projects that have not yet been funded. Thus, individuals who purchase the fish stamp are not obtaining the full benefit of the fees they are required to pay.

We also identified expenditures that Fish and Game charged inappropriately to the fish stamp account. The law specifying allowable uses of fish stamp revenue is broad, but based on our review of a sample of expenditures, Fish and Game does not ensure that the money is used appropriately.

You can read the summary by clicking here, or download the entire 40-page audit by clicking here.

As noted by Andrew McIntosh's story in today's Bee, budget constraints forced officials this year to cancel the Governor's Employee Safety Award ceremony.

But we've got the winners and their stories of heroism, innovation, sacrifice and professionalism that have saved lives and money. Click here for the 11-page list.

Congratulations from the State Worker to all, and thanks for your service!

This sad story broke in today's Bee. Our condolences to Officer Steve Lo's wife and his five children.

Assemblyman Joel Anderson talks about CalPERS, CalSTRS and University of California pension funds and divestment policy in this interview today with Frontpage Magazine, an online publication of the David Horowitz Freedom Center.

Anderson, R-Alpine, wrote legislation last year mandating that the funds dump their Iranian holdings. According to an analysis of the bill, CalPERS figured that

... if all 50 of the companies potentially meeting the criteria for divestment were excluded from the fund over the past five years, the overall annualized rate of return would have fallen from 9.84 percent to 9.83 percent -- a $66 million loss in fund value. These losses would have been made up through higher employer contributions over a multi-year period.

Gov. Arnold Schwarzenegger signed the legislation over the objections of the funds' boards, which argued it cut into their obligation to chase the most profitable investments for their members. In the FrontPage interview, Anderson says he wants the UC system's $42 billion retirement fund to divest its Iranian holdings.

Now consider this: CalPERS assets have gone from $260 billion to about $193 billion in the last 12 months. Since Sept. 15, the fund's stock holdings have declined $12.4 billion to $36.8 billion, according to Bloomberg news service estimates.

Iranian holdings represented a tiny fraction of CalPERS portfolio, and money pulled from them is invested elsewhere. But you have to wonder if Wall Street's meltdown and its devastating impact on pension funds' portfolios will work against similar divestment policies in the future.

IMAGE: greenwichmeantime.com

State engineers in Bargaining Unit 9 have received raises ranging between 7.7 percent and 10.1 percent, a roughly $500- to $900-per-month bump.

The 10,500 engineers represented by Professional Engineers in California Government have received checks ranging between $1,500 to $2,700, minus payroll tax deductions, to cover July, August and September retro pay, according to the union's Web site.

Like CHP officers, PECG members have an agreement with the state that guarantees their pay at levels comparable to those for similar jobs in other agencies. You can read the language in the expired contract that defines Unit 9's "salary parity" by clicking here and scrolling down to Article 3, Salaries and Compensation, on page 8.

Bruce Blanning, PECG's executive director, told the State Worker in a telephone interview this morning that the engineers with this contract, "are now paid the same, on average, as city and county engineers."

PECG says that it is in talks with the state over giving supervisors and managers that it represents the same increases.

We're planning to write about this for Thursday's State Worker column. Any thoughts? We'd love to hear from you here or, if you'd like to be part of the column, you can reach us by clicking on the e-mail link below or calling (916) 321-1043.

IMAGE: engineeringschools.com

State patrol officers' pay and benefits run almost $1,500 per month more than their highest-paid counterparts in 10 states, according to a recent report released by the Department of Personnel Administration. The data considers pay and employer benefit contributions as of January 1, 2007.

The survey starts by measuring CHP patrol officers' maximum base pay -- $5,762 per month -- against the median maximum wage for state patrol officers in neighboring Oregon, Washington, Arizona and Nevada and densely populated Florida, Illinois, New York, Ohio, Pennsylvania and Texas. The median top pay for those 10 states, $5,093, is 11.62 percent less.

But with benefits, the CHP package goes to $8,512 versus other states' $7,018 max median total compensation and widens the gap to 17.55 percent.

Click here for the breakdown of out-of-state statistics used for the wage and benefits comparison.

CHP patrol officers' salary and benefits align more closely to police and sheriffs in California's cities and counties, the survey found. The median maximum pay for the 36 agencies surveyed was $5,632, or 2.26 percent less than CHP's comparable top step. Kick in employer-paid benefits and the total compensation for local patrol officers goes to $7,911, or 7.06 percent below top pay and extras for CHP.

Unlike its correctional officers total compensation survey, the patrol officers' report did not include federal employees' earnings and benefits because there was "no comparable class" at that level, according to the survey tables.

CHP wages are determined by a formula that links its pay rates to an average of five other agencies: LA police and sheriffs departments, the San Diego Police Department, the San Francisco Police Department and the Oakland Police Department. This year CHP officers received a 4.1 percent increase in July.

Click here to for the breakdown of local agencies surveyed for the comparison.

In our line of work you get to know a lot of people. One of the folks we've talked with quite a bit is Ian Pickett, a sergeant at Calipatria State Prison in Imperial County. He's been a bold, thoughtful advocate for his profession, willing to speak openly and on the record about what he likes and doesn't like about the job, CCPOA and leadership by state officials.

We quoted Pickett in our recent CCPOA pay story. Here's his e-mailed assessment of the piece:

Just read your article, not bad but it still leaned a little biased. I dont really blame you for that though, there is just a huge lack of knowledge on the general public's part of what really happens behind those walls.

Take care
Ian Pickett

The IRS said today it would delay applying Notice 2007-69, a potentially far-reaching rule change altering tax law that defines the "normal" retirement age. The new date: "on or after" Jan. 1, 2011.

You can read the document here.

There's been plenty of confusion -- among the media, pension administrators and even the IRS itself -- about whether the rule could put some state and local public pension plans in legal peril.

Read our earlier pension tension entries on Notice 2007-69 by clicking here.

We're probably crazy for asking this, but is today's story about California correctional officer pay unfair?

"Please, please, please try writing something positive about us," said an anonymous caller who left a voice mail message this morning.

"These people are ridiculously overpaid," said another caller who didn't leave a name or number. "The Bee should investigate them."

Of course, the caller didn't leave any suggestion about what we should "investigate."

We won't deny that reporters have biases. All of us do. The standard that we aim for at the State Worker is fairness. Did all sides have a chance to weigh in? Where the facts presented accurately? Were the issues placed in context?

As readers, we bring bias to what we read, too. It's especially true when the subject is something we know a lot about, like our work.

Here at the State Worker, we're humbled each week to write about subjects and comment on events that personally impact our readers. Often you know far more about the subject than we do because you're living it.

If we get it wrong, let us know. If you have ideas for different angles we should consider, tell us. If you have insights that would deepen our understanding, share them.

As far as today's piece on wages, let's put it this way: If we go out to dinner with family tonight and meet a correctional officer and his or her family at the same restaurant, we'd be comfortable saying hello and talking about the story.

Few things that we write about here or in our weekly State Worker column get more response than when we talk about CCPOA. The union is often cited in The Bee and elsewhere as exemplifying how a well-heeled union can buy favors from elected officials. The stories usually have high-ups in the union and state government launching broadsides at each other.

We're more interested in hearing from the folks who work in the prisons, the front-line officers who have to live with the decisions made by legislators, the governor and their union.

Here's an example: A State Worker reader who goes by Prsnguard5150, sent along a YouTube video that he made about CCPOA's efforts to recall Gov. Arnold Schwarzenegger. The video link came with this e-mail:

Hello, please allow me to introduce myself. I am well seasoned Correctional Officer. If you want to get a feel for what Correctional Officers generally feel about Arnold, feel free to look at some of my more political videos. The YouTube page and the videos are done on my own time and in support of CCPOA. CCPOA has not endorsed my page or the views on it. Arnold is not only under fire from CCPOA the organization, but the members too. Members such as me.

The soundtrack to the 1 minute 43 second video is a portion of "The Enemy," by Godsmack.

We've been getting a steady stream of inquiries about what's going on with IRS Notice 2007-69, an obscure change to tax law that could impact public employee pension funds, depending on its interpretation.

The potentially far-reaching rule change alters tax law that defines the "normal" retirement age and could put some state and local public pension plans in legal peril.

Congress and Treasury Department officials met last month to talk over the changes. Representatives of several concerned organizations were in that meeting, including CalPERS' attorney Peter Mixon.

Treasury officials during that Sept. 19 meeting committed to pushing back the date that the notice would go into effect so that they would have more time to analyze its application to public funds or change the rule altogether.

The officials said that they would make a formal announcement clarifying their plans within two weeks of the Sept. 19 meeting. Friday marks three weeks.

In short, there's been no movement since our last report to you. We've been checking in regularly with our contact in Washington, D.C., Jeannine Markoe Raymond, director of Federal Relations for the National Association of State Retirement Administrators.

Her Wednesday e-mail to the State Worker: I was told to check in the "middle" of this week, so I'll ping in tomorrow.

New data released by the Department of Personnel Administration shows that California's state correctional officers make 38 percent more than their highest-paid counterparts in a survey of 10 states and the federal government.

DPA's numbers are more focused than those in the latest national correctional officers pay report by the federal Bureau of Labor Statistics. California correctional officers make about twice the national average when all 50 states are factored in, according to the BLS.

The DPA's out-of-state comparison considered federal corrections wages and those in neighboring Oregon, Washington, Arizona and Nevada plus heavily populated states Florida, Illinois, New York, Ohio, Pennsylvania and Texas. Throw in "total compensation" -- medical, dental and vision benefits, employer retirement contributions and the like -- and California correctional officers beat the median survey population by about 29 percent and the next highest -- Pennsylvania -- by about 24 percent.

The administration also looked at salaries paid to California city and county correctional officers. State officers earn about 20 percent more. With benefits the disparity falls to about 12 percent. You can read that page of the report by clicking here.

The comparisons are based on a California correctional officer's maximum base annual salary of $73,728, a national maximum median of $45,036 per year and a California city and county maximum median of $58,680.

The BLS survey shows the median state correctional officer salary at $36,140 per year and $34,820 for local governments.

Question: What, if anything, will these numbers mean to the ongoing contract battle between the Schwarzenegger administration and CCPOA? Will other unions attempt to leverage the information to an advantage as contract talks continue?

We've heard that, because of a state payroll snaffu, some former retired annuitants who lost their jobs this summer have been getting letters from the state demanding they return money overpaid them.

Here's what happened, according to the details noted on a form sent to one terminated employee and otained by the State Worker. (We've changed the dollar amounts that could identify the worker because this person fears being identified would harm her chances of rehire with the state.)

Due to the executive order, you were given a salary advance for the time that was due to you prior to your separation. The salary advance was for the amount of $2000.00. At the time you were on direct deposit. It was requested to be cancelled so that a paper warrant would issue to clear the salary advance. Controllers issued a warrant in the net amount of $500.00 for a total of 24 hours on 08/06/08. This warrant issued was direct deposit.

We apologize for any inconvience this may have caused you.

We've called the the Department of Transportation, which issued the letter, to get a sense of how many "Notice of Salary Advance" letters it has sent out. We're also reaching out to the Controllers Office for help to gauge the scope of the payroll error and for suggestions about how to handle it.

Let us know if you have a similar story. Come back soon for more details.

How much should we blame the managers?

There's always a tendency to read reports like last week's Bureau of State Audits account of improper state employee activity and focus on the workers caught misusing their position or access. But move past that and another theme surfaces -- a failure of state management.

A few examples mentioned in the audit, which you can read by clicking here:

A Department of Justice manager whose failure to track subordinates' work time reporting allowed them to take 727 hours of pay that was "potentially unearned."

An Employment Development Department employee who drank on the job, "and his drinking impeded his ability to perform his duties safely ... his supervisors had been aware of the situation for years."

The supervisors at Housing and Community Development failed either to notice or to act on signs that an employee was absent an estimated 1,200 hours, time she spent working for a nonprofit that gets about 40 percent of its money from HCD. "Through their inaction, HCD's management permitted the employee's improper conduct to occur and continue." Cost to the state: An estimated $34,700 in wages for work that wasn't done.

And in some cases, the boss is the rule breaker, like the CalTrans supervisor who used his state computer to conduct personal business.

There's more, as Bee colleague Andrew McIntosh reported in this story, but you get the idea.

The State Worker fields plenty of comments blasting the boss. Some of the critics contend that if the state upgraded its management corps, many other bureaucratic problems -- inefficiency, low morale, and the like -- would be well on the way to solution.

There is another side to this, however. Managers tell us that it's maddening to supervise people in a system that demands management accountability while undercutting management authority at the same time. Take the guy at EDD with the alcohol problem. His punishment? Two days suspension without pay.

Do what it takes to move out the bad apple and risk that you'll not be backed up, stymied by the rules or blocked by union protections. Leave the bad apple alone and risk rot spreading throughout your unit as your staff questions your dedication, courage, skill or understanding of "what's really going on." Management inaction squashes employee morale, damages management's standing and breeds more bad behavior.

If we're to believe what we hear in letters, e-mails and phone messages from state employees, the BSA's audit is a fleeting glimpse of how workers rip off the state. How much of that happens because bosses aren't watching? Because they're not speaking up? Or is it because the barriers to effective management in today's state bureaucracy in some cases are simply insurmountable?

We're writing about this topic for Thursday's State Worker column in print and online. If you'd like to weigh in, on the record, we'd love to hear from you. Contact us via the e-mail link below or call (916) 321-1043.

IMAGE: MSNBC.com

As we reported on Friday, state Sen. Dean Florez sent a letter to Treasurer Bill Lockyer suggesting that CalPERS buy the $7 billion in bonds that the state needs to sell this month to make ends meet. You can get up to speed on Florez' proposal and CalPERS statement about the idea by clicking here.

State Worker BrainBank expert Susan Mangiero , well-known pension consultant and host of the Pension Risk Matters blog, points out that the Florez plan is like one floated in August by the Governor of Massechusetts to get that state's pension fund to buy $50 million in student loan-backed public bonds. You can read here for the details in The Boston Globe's Aug. 7 report.

A week after that story, The Globe reported that the governor's idea was dead:

Two last-minute proposals to assist (the state educational financing authority) were floated last week by Gov. Deval L. Patrick and state Treasurer Timothy P. Cahill, but both appear destined for dead ends.

Patrick had suggested that the state pension fund buy a portion of the planned bond offering. But Cahill opposed the idea, and the rest of the pension board has taken no action. A letter last week from the fund's executive director said buying the bonds directly would violate the $51 billion fund's investment policies.

You can read that follow up piece by clicking here.

CalPERS spokeswoman Pat Macht on Friday left the door open for the fund to buy the state's debt, saying in an email that that CalPERS would evaluate buying California notes just as it would evaluate any other investment.

As we reported earlier today, state Sen. Dean Florez, D-Shafter, sent this letter to Treasurer Bill Lockyer, suggesting that CalPERS should invest in California's debt, since the nation's credit markets have dried up.

We forwarded the letter to CalPERS spokeswoman Pat Macht for comment. Her e-mailed response:

Hi Jon --

First, we would not be surprised to be on the list of potential investors candidates to be approached by the bank or agent representing the RAN issuer, and of course, we are always interested in potential investments that will provide us with a risk adjusted rate of return. So, if we are approached, our investment staff would do their normal due diligence and make an objective evaluation of its merits, including returns as well as how it would fit within our own asset allocation ranges and targets which guide our investment selections. (However, if you are asking if there are legal impediments to investing in a RAN, the answer is no.)

Questions: Can you see any pitfalls with this plan? What if CalPERS were to decline after doing its due diligence?

State Sen. Dean Florez, D-Shafter, thinks he has a solution for California's looming $7 billion cash crunch: Sell it to CalPERS.

Florez's idea follows Treasurer Bill Lockyer's warning earlier this week that the financial markets' turmoil has dammed up investment money that usually buys the revenue anticipation notes that the state sells to cover its bills.

Gov. Arnold Schwarzenegger on Thursday sent a HELP! letter to U.S. Treasury Secretary Henry Paulson that said, in essence, "That credit problem that's squeezing business? Fix it, NOW, or I'm going to have to beg you guys for $7 billion to keep the lights on and the employees paid."

Florez thinks that it's logical for CalPERS to do what other investors won't right now and purchase the state's RANs. You can read his letter to Lockyer by clicking this link.

The State Worker called CalPERS to see what officials there think, but spokeswoman Pat Macht said she hadn't heard about the letter. We sent her a copy.

Sin is in.

Tobacco is out of bounds, but CalPERS and CalSTRS invest in plenty of other "sin stocks" as we reported here.

The funds' latest stock holdings report has been released, so we built a quick table comparing their alcohol, gambling and adult entertainment assets for the first and second quarters of this year.

Click here for the table.

You can look at the entire CalPERS federal report by clicking here, or view CalSTRS' report by clicking here.

CalSTRS is debating whether to change a policy that keeps it from direct investment in tobacco companies. CalPERS has a similar ban. But given the funds' investment in other sin stocks -- and the profitablity of tobacco companies -- should CalPERS change its policy and allow tabacco to fund state workers' retirement?

The State Bureau of Audits has released its latest report of improper employee activity. Our colleague Andrew McIntosh reports the details in this story. You can read the 71-page report by clicking here. The bureau also issued this summary fact sheet.

The audit reminds us of the many anonymous letters, e-mails and phone calls that we receive alleging that state workers have broken rules, taken money or abused their position.

We appreciate the information, and when we can, we follow up. If you're thinking about sending us a tip, there are a few things that you can do to help us investigate it:

Be specific: Names, money amounts, dates and times all lend credence to an accusation and help us narrow the scope of our investigation.

Provide documents: Paper trails are the strongest evidence. If you can't get the documents, tell us who wrote them or who we should ask for them.

Be ready for skepticism: A responsible reporter always asks tough questions before going public with a story that could put someone's reputation or livelihood at stake. So don't be surprised if you get grilled.

Be patient: Investigations can take weeks or months to complete. If you tell us something today, don't expect a story in The Bee tomorrow.

Our State Worker column is limited by space, but visitors to this blog get extra info, Web links, notes and quotes that don't see print but still inform what we write.

This week's column looks at what state workers can expect from the ongoing contract talks between union negotiators and the Department of Personnel Administration.

If you want to dive more deeply into the numbers we reference in the piece, click here to read the 2008 "total compensation" survey and other compensation studies from DPA.

We hear that negotiators for SEIU 1000 are taking a month-long break from contract bargaining. Union spokesman Jim Zamora said that the break will give government representatives time to sort out the state's finances and what money -- if any -- is available for wage increases.

"(The state hasn't) been able to address the money stuff," Zamora told the State Worker this afternoon. "We said, 'Go find out what's available, and then let's have a conversation.' "

The break also comes at a convenient time for SEIU activists who will take time off from work to campaign for Barack Obama in Nevada. Many will take vacation time over the next month, Zamora said. "We plan to start again as soon after the election as possible."

We hear that the SEIU's postponed talks also may delay other contracts. The timing of labor contract announcements is usually part of unions' strategy to get the best deal possible. Announce first, and you risk settling for a deal that's not as good as one announced later.

Since the SEIU is the state's biggest civil service union with 95,000 employees covered in nine of 21 bargaining units, its absence from labor talks this month will be conspicous -- and could keep other unions from announcing the terms of agreements that they reach.

Among the bills signed and vetoed by Gov. Arnold Schwarzenegger with an impact state workers and their jobs:

SB 1322: Allows public employees or applicants to decline taking the state oath. VETOED

AB 3010: Restricts possession and use of tobacco products at state mental hospitals. SIGNED

AB 2403: Authorizes CalTrans to buy some types of equipment using "best value" procurement methods instead of merely going with the lowest price. SIGNED

AB 865: Requires each state agency to answer an incoming call with a live customer service agent or automated telephone answering equipment with an automated prompt that allows a caller to select the option to speak with a live customer service agent. VETOED

AB 1605: Requires the State Public Health Officer to appoint a State Public Health Nurse as part of the executive team of the State Department of Public Health. VETOED

AB 1821: Changes higher education reporting requirements to the Legislature. VETOED

AB 1942: Increases penalties for procurement and contracting fraud and establishes a preference for bids made by certified small businesses and microbusinesses. VETOED