Washington lawmakers propose legislation for state workers getting paid twice by taxpayers

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Politicians want to put an end to the loophole that allows state employees to collect both a pension and a paycheck, a highly-charged topic nationwide on pension reform agendas.

A bill introduced Tuesday aims to end the state’s “retire-rehire” policy, by which state employees can “double-dip” and earn both a salary and a pension by going back to work shortly after retirement. The bill is sponsored by Democratic Senate Majority Leader Lisa Brown of Spokane and Republican Senate Minority Leader Mike Hewitt of Walla Walla.

Hewitt says that given the budget crisis and the underfunding of state pension plans, Washington cannot afford to pay these employees twice.

Gov. Chris Gregoire and other lawmakers have proposed closing the loophole.

An investigation by The Seattle Times last year found that 2,000 state employees were collecting both a pension and salary, costing taxpayers about $85 million yearly.

Hewitt’s bill will be heard in the Senate Ways and Means committee.

The Associated Press

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Wisconsin Democrats still hiding to evade vote on union reform legislation

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The Wisconsin State Patrol was dispatched Friday to find a Democratic state senator who fled the Capitol to delay the near-certain passage of a bill to end a half-century of collective bargaining rights for public workers, a measure that’s attracted thousands of protesters for four days.

With Democrats saying they won’t return before Saturday, it was unclear when the Senate would be able to begin debating Gov. Scott Walker’s measure meant to ease the state’s budget woes. Democrats who disappeared Thursday at first kept their whereabouts secret, then started to emerge to give interviews and fan the protests.

Senate Republicans convened briefly Friday morning to renew a call to find the Democrats, then recessed. Senate Majority Leader Scott Fitzgerald, R-Juneau, told reporters he has asked the governor to send two state troopers to Senate Democratic Minority Leader Mark Miller’s suburban Madison home. He said he believes Miller may be there – he did not elaborate on why he thought that – and Walker agreed to dispatch the officers.

Early Friday, an Associated Press reporter went to Miller’s home in Monona, but no one answered the door. In an interview on ABC’s “Good Morning America,” Miller said the Democrats “had left the state so we were out of reach of the Wisconsin State Patrol.”

The Wisconsin Constitution prohibits police from arresting state lawmakers while the Legislature is in session, except in cases of felonies, breaches of the peace or treason. Fitzgerald said he’s not looking to have Miller arrested, but he wants to send a signal about how serious things are becoming in the Capitol.

Fitzgerald said he spoke with Miller by phone late Thursday night and asked him to bring his caucus back to Madison for a vote on Friday morning, but Miller refused. Meanwhile, the protests are growing so large that Capitol workers and lawmakers’ staff cannot safely move through the halls, he said.

The situation has become “a powder keg,” he said.

“I’m starting to hold Sen. Miller responsible for this,” Fitzgerald said. “He shut down democracy.”

The protests have attracted teachers, grade school children, college students and other workers over four days. Police report they have been largely peaceful, with only nine people cited for minor acts of civil disobedience as of Thursday night.

While the Senate was paralyzed, the Assembly met briefly on Friday. Speaker Jeff Fitzgerald, R-Horicon, said the Assembly would vote on the bill later in the day after Democrats have had a chance to meet privately.

Assembly Minority Leader Peter Barca vowed to fight to the “bitter end,” in a speech delivered on the Assembly floor after Republicans had turned off the microphones and left.

“This is wrong!” Barca shouted to wild applause from the packed gallery. “Desperately wrong and we will not stand for it!”

Under Walker’s plan, state and local public employees could no longer collectively bargain over any issue except wage increases that are no higher than the Consumer Price Index. It would also make workers pay half the costs of their pensions and at least 12.6 percent of their health care premiums. State employees’ costs would go up by an average of 8 percent. The changes would save the state $30 million by June 30 and $300 million over the next two years to address a $3.6 billion budget shortfall.

Unions could still represent workers, but they could not force employees to pay dues and would have to hold annual votes to stay organized. Local police, firefighters and state troopers would retain their collective bargaining rights.

Several hundred protesters were in the building early Friday and their ranks were growing. Many had spent the night in the Capitol and another large rally was planned around noon.

As many as 25,000 students, teachers and prison guards have turned out at the Capitol this week to protest, standing shoulder-to-shoulder in the building’s hallways, sitting cross-legged across the floor and making it difficult to move from room to room. Some brought along sleeping bags and stayed through the night. Union organizers expected yet more to gather Friday.

The protesters chants of “Kill the Bill!” and “Recall Walker Now!” could be heard throughout the day and long past dark. They beat on drums and carried signs deriding Walker and his plan to end collective bargaining for state, county and local workers, except for police, firefighters and the state patrol.

Hundreds of teachers have joined the protests by calling in sick, forcing school districts – including the state’s largest, Milwaukee Public Schools – to cancel classes.

Some signs seen at the Capitol compared the governor to former Egyptian leader Hosni Mubarak, who stepped down last week after weeks of mass protests against his three-decade rule. On read, “Impeach Scott Mubarak!” and another said, “Walker like an Egyptian.” Others compared to Walker and his supporters to boy wizard Harry Potter’s nemesis and his evil minions, calling them “Governor Voldemort and his DeathEater Legislators.”

Despite the groundswell of support, it seems Democrats are merely delaying the inevitable – Republicans say they have the votes to pass the bill – yet the protesters are undeterred.

“I always expect the worst, but at the least I figure this would lead to such larger strikes that it would be a bad move for Republicans and Scott Walker,” Graupner said.

In an interview with Milwaukee television station WTMJ, President Barack Obama compared Walker’s bill to “an assault on unions.”

Senate Republicans planned to try for a vote again Friday. With 19 seats, they hold a majority in the 33-member chamber, but they are one vote short of the number necessary to conduct business. The GOP needs at least one Democrat to be present before any voting can take place. The measure needs 17 votes to pass.

Speaking on CBS’ “The Early Show” on Friday morning, Walker urged the Democrats to return to Madison and face the vote.

“The state senators who are hiding out down in Illinois should show up for work, have their say, have their vote, add their amendments, but in the end, we’ve got a $3.6 billion budget deficit we’ve got to balance.”

Senate rules and the state constitution say absent members can be compelled to appear, but it does not say how.

“We left the state so we were out of the reach of the Wisconsin state patrol, which has the authority to round us up and bring us back to the legislature,” state Sen. Mark Miller told ABC’s “Good Morning America” from an undisclosed location Friday.

Sen. Tim Cullen said he and other Democrats planned to stage their boycott until Saturday to give the public more time to speak out against the bill.

“The plan is to try and slow this down because it’s an extreme piece of legislation that’s tearing this state apart,” said Sen. Jon Erpenbach, who was with Democratic senators in northern Illinois on Thursday before they dispersed.

Walker, who took office last month, called the boycott a “stunt.” He vowed not to concede.

“It’s more about theatrics than anything else,” Walker said.

Some Democrats elsewhere applauded the developments as a long-awaited sign that their party was fighting back against the Republican wave created by November’s midterm election.

“I am glad to see some Democrats, for a change, with a backbone. I’m really proud to hear that they did that,” said Democratic state Sen. Judy Eason-McIntyre of Oklahoma, another state where Republicans won the governorship in November and also control both legislative chambers.

Thursday’s events were reminiscent of a 2003 dispute in Texas, where Democrats twice fled the state to prevent adoption of a redistricting bill designed to give Republicans more seats in Congress. The bill passed a few months later.

The proposal marks a dramatic shift for Wisconsin, which passed a comprehensive collective bargaining law in 1959 and was the birthplace of the national union representing all non-federal public employees.

In addition to eliminating collective-bargaining rights, the legislation also would make public workers pay half the costs of their pensions and at least 12.6 percent of their health care coverage – increases Walker calls “modest” compared with those in the private sector.

Republican leaders said they expected Wisconsin residents would be pleased with the savings the bill would achieve – $30 million by July 1 and $300 million over the next two years to address a $3.6 billion budget shortfall.

The Associated Press

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Minnesota governor proposes 13.95 percent state income tax, highest in the U.S.

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Vying for the top spot in how much states charge their residents in income taxes, newly-elected Democrat Gov. Mark Dayton proposed on Tuesday that the tax rate in Minnesota be raised from 7.85 percent to 10.95 percent for couples earning over $150,000 and single filers making over $85,000. In addition, a special 3 percent surcharge would be assessed for the next two years on those earning more than $500,000.

The new taxes were part of Dayton’s proposed two-year budget of $37 billion. The $2.9 billion that the added tax would generate in revenues would only partially offset the projected $6.2 billion budget deficit.

GOP leaders say that the increased tax would be the highest in the nation by far, and drive wealthy taxpayers from the state. The highest rate currently charged in any state is 11 percent, by Oregon, which does not have a state sales tax, and Hawaii.

Dayton’s budget proposes an increase in spending of 7.5 percent during the next two years, although Republicans said that the figure was closer to 22 percent after taking into account $2.3 billion in federal stimulus monies and $1.9 billion in delayed school payments, the previous governor, Tim Pawlenty, used to balance the state’s budget.

Dayton also proposed a state property tax on all homes valued at more than $1 million.

House Speaker Kurt Zellers said “This budget is detached from the reality that every other state has recognized.”

Pioneer Press

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Cuomo takes aim at supersized school superintendent salaries

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Cuomo thinks some public school superintendents salaries need to be capped.

Perhaps at an annual salary of $179,000, New York Gov. Andrew M. Cuomo is a bargain. On the other hand, perhaps more than a few of the state’s public school superintendent’s salaries are over-the-top inflated. At least that’s what comes to mind upon hearing what the hamlet of Syosset on Long Island is paying its school chief, Carole G. Hankin: $386,868. Her total package including benefits, expense accounts and other comp: $506,000.

Singled out by Cuomo in his budget address as an example of excess in many school districts, Hankin earned more than any other school superintendent in the state.  According to the New York Times, Cuomo’s remarks set the tone for his proposed reduction in local school aid by $2.5 billion, to help balance the state’s budget deficit.

“I understand that they sometimes have to manage budgets, and sometimes the budgets are difficult,” he said. “But why they get paid more than the governor of the state I really don’t understand.”

Currently over 40 percent of public school superintendents make more than $200,000 per year in salary and benefits, and there is no state regulation on how much they can earn.

While state attorney general, school superintendents caught Coumo’s attention, with a practice many were involved with, called double-dipping. While retired and collecting substantial pension checks, many superintendents continued to work in other school districts, and earning large salaries.

Given the current finances of the state, and local school districts, Cuomo said that the practice was unaffordable and just plain wrong.

New Jersey’s Gov. Chris Christie is also trying to make sense of the outsized salaries paid to public school administrators in the Garden State. He recently set a cap on the salaries of most of the state’s medium-sized school districts at $175,000 – the same salary paid to the governor. The cap, which triggered a lawsuit by the New Jersey Association of School Administrators, would require over 70 percent of the superintendents to take a pay cut.

School superintendents don’t see the issue the same way as state officials and taxpayers.

Robert J. Lowry, Jr., the deputy director of the New York State Council of School Superintendents said, “The state and the schools are facing difficult times that ultimately require strong leadership. Superintendents are trying to provide that leadership, and in many districts, they have passed up raises or made other concessions to save money for their districts and also to set an example.”

The New York Times

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GOP slashes budgets of agencies, goes easy on itself

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Republicans now running the House are barely touching Congress’ generous own budget even as they take a cleaver to many domestic agencies. A new GOP proposal would reduce domestic agencies’ spending by 9 percent on average through September, when the current budget year ends.

If that plan becomes law, it could lead to layoffs of tens of thousands of federal employees, big cuts to heating and housing subsidies for the poor, reduced grants to schools and law enforcement agencies, and a major hit to the Internal Revenue Service’s budget.

Congress, on the other hand, would get nicked by only 2 percent, or $94 million.

Recent hefty increases to the congressional budget — engineered by Democrats when they held power in the House from 2007-2010 — would remain largely in place under a plan announced Thursday by the chairman of the House Appropriations Committee, Rep. Harold Rogers, R-Ky.

The plan, developed in close consultation with Republican Speaker John Boehner’s office, would cut Congress’ budget less than any other domestic spending bill, except for the one covering the Department of Homeland Security.

All 12 spending bills left unfinished by Democrats will go into a single, enormous measure that Republicans promise to bring up the week of Feb. 14.”Charity begins at home, and Congress should lead the way with cuts to their own budget,” said Steve Ellis of Taxpayers for Common Sense, a Washington-based watchdog group. “Instead they’re protecting their bottom line while slashing everyone else’s.”

The cut to Congress gets a little deeper, to 3.5 percent, if it were imposed for a full calendar year instead of the seven months that will remain in the current budget year. But so, too, would the cuts to other agencies — growing to 16 percent.

When Democrats took over Congress in 2007, they inherited a $3.8 billion budget for Congress. That includes money for members’ and leadership offices, House and Senate committees, and support agencies such as the Capitol Police and the Congressional Budget Office, which crunches numbers for lawmakers as they consider legislation.

Since then, that budget has risen to $4.7 billion, a 23 percent increase over four years. The biggest jump, 11 percent, occurred when President Barack Obama signed a Democratic-written spending bill just after he took office in 2009.

Among the first items of business when the GOP regained the House was to pass a bipartisan measure to cut office and committee budgets by 5 percent. That move that prompted much self-congratulation even though it would produce just $35 million in savings. For context, the deficit is climbing toward $1.5 trillion this year.

Republicans bristle at the suggestion that Congress is getting off easy. They promise further cuts when the Senate pitches in and when the two chambers work out joint items such as budgets for the Capitol Police, Library of Congress and the Government Accountability Office.

“Earlier this year, the House passed unprecedented cuts to its own budget, and we are cutting more … a total of nearly $100 million in House-related spending cuts,” said Boehner’s spokesman, Michael Steel. “The Senate has substantial responsibility for the overall legislative branch appropriations bill, and we hope to work with them to cut even more going forward.”

Republicans will provide more details about the spending bill in the week ahead.

Legislative branch cuts are hardly unprecedented. Former Speaker Newt Gingrich engineered an 8 percent cut in Congress’s budget when Republicans last wrested control of the House, in 1995.

When Democrats gained a majority in 2007, the budget for the office of the speaker’s office — considered the most powerful of any in Congress — exploded. As speaker, Rep. Nancy Pelosi, D-Calif., engineered a $2 million, 71 percent increase immediately after that transfer of party control.

A Pelosi spokesman attributed some of the increase to her decision to consolidate a variety of leadership jobs within her office — as opposed to the power-sharing approach of her predecessor, Republican Dennis Hastert of Illinois.

Regardless, Boehner inherited a pretty flush office account, which permits him a sizable staff contingent, including a press and communications operation with a dozen people. Capitol Hill news coverage has increased considerably in recent years with the advent of the 24-hour news cycle, the growth of niche publications and a range of new online media, including Twitter and Facebook.

The Associated Press

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Bloomberg proposes changes to NYC pension system to save city from financial disaster

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New York’s Mayor Michael R. Bloomberg announced a proposal on Wednesday that would end some of the city’s most generous pension provisions for its workers and save billions of dollars in the process. He said unless there is aggressive pension reform, the current system will soon bankrupt the city.

Bloomberg, who until recently, was considered an ally of the unions, is now in the position of drawing their ire.

Vowing to save the city from bankruptcy, NYC Mayor Michael R. Bloomberg proposed controversial pension reform.

Some of the proposed changes include mandatory 10 years of employment before new hires are eligible for benefits– double the current number of years, and require them to be at least 65 years old before receiving benefits. Currently, workers can begin drawing benefits as early as age 57, and many cops and fire fighters receive full benefits after 20 years, no matter how old they are.

Another proposed change would prevent employees from being able to use overtime wages in determining the base for their retirement pay, a controversial and widespread abuse known as “pension spiking.” City managers routinely allow retiring workers to load up on overtime in their final year before retirement, often increasing their pension payments by over 50 percent.

All new city employees would be required to pay more of their own monies into their retirement accounts, and some existing employees, mostly police and firefighters would lose some existing benefits, namely a $12,000 annual stipend they receive in addition to their regular pension.

“This reflects the dire fiscal circumstances the city faces, the devastating impact of increasing pension costs and the desperate need for aggressive reforms,” said Marc La Vorgna, a mayoral spokesman told the New York Times.

The current move is an about-face for Bloomberg, who in the past has used generous pension benefits as a way to keep the city’s 300,000 workers happy and prevent them from striking at times of contract negotiations. As recently as 2008, Bloomberg helped push through a new teachers union contract that included a pension provision allowing them to retire five years earlier than before, with full retirement benefits.

Later that same year, as the financial crisis was in full swing and wages were stagnant throughout the country, Bloomberg gave the city’s largest municipal union back-to-back 4 percent raises, without any concessions on pension benefits.

If successful, the changes could immediately save the city at least $200 million per year, although far larger savings, in the billions of dollars would be further down the road.

One union official, angry over the proposals, called Bloomberg a “dictator.” Harry Nespoli, chairman of the Municipal Labor Committee, an umbrella group of unions, said that Bloomberg had “has set back labor relations 40 years.” Nespoli added “We’re fed up with this. He’s going to have a battle. We’re just not going to roll over.”

Teachers union chief, Michael Mulgrew, called the mayor “insane,” and said that Bloomberg “has just decided, I’m going to attack, attack, attack everybody.”

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California releases more data on highly-compensated state employees; 15 earn over $300,000

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Following up on his commitment to provide more transparency on salaries paid to state employees, California State Controller John Chiang released data on Tuesday disclosing the compensation paid to employees in 693 local agencies including transit, waste disposal, and fire and police protection districts.

Chiang began the project last year after information became public in the city of Bell scandal, in which the top city administrator paid himself $1.5 million to run the blue-collar suburb outside of Los Angeles.

Last October, Chiang’s office posted data online reporting salaries for over 600,000 city and county officials throughout California.

The current report is phase one of a four-part undertaking to document salaries paid to employees of special districts. The next update to the data base will include government employees in land reclamation and levee maintenance, health, hospital and water agencies.

The current report covers more than 40,000 state workers, and shows that at least 15 special district employees earned over $300,000 in 2009. Heading the list was Dennis Diemer, general manager of the East Bay Municipal Utility District, which provides water for several Bay Area cities, including Oakland and Berkeley. His total compensation for the year was $420,220.

When contacted by the Los Angeles Times, Diemer, who is retiring this month, said his pay was larger than normal in 2009 because he elected to cash in unused vacation pay amounting to $107,000. In 2010, he said his pay dropped to $315,000.

In the Los Angeles area, two transportation officials made the list. Expo Line Construction Authority Chief Executive Richard Thorpe was paid $371,917 and former Metrolink Chief Executive David Solow received $340,381.

Water executives were also among the highly-compensated. Cucamonga County Water District’s executive director earned $344,466, the general manager of the Santa Margarita Water District earned $376,297 and the assistant general manager of the Coachella Valley Water District earned $350,503.

The list includes a police commander in the Bay Area Rapid Transit District who earned $355,000, and several police and fire chiefs who made over $250,000.

In contrast to the highly-paid employees of the special districts, the top-ranking official in the state, Gov. Jerry Brown, makes only $175,000 per year.

Chiang said “I thought this type of reporting was necessary four years ago, pre-dating Bell,” he said. “You can’t have failing cities and counties and special districts. It will take down your infrastructure.” He said the database would help the public “get a better sense of compensation and decide if it’s fair.”

The compensation reported by the districts include all the wages that are reported on employee W-2 forms in “Box-5 Wages”, meaning total wages subject to Medicare. The total includes all cash compensation including salary, overtime, and payments for unused vacation and sick days.

Chiang demanded salary information from over 900 of the state’s local agencies and more than 172 refused to provide data or provided inadequate information.  Those agencies may be subject to a $5,000 penalty, according to the controller’s website.

Information from: Los Angeles Times

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