A (Red) Rose By Any Other Name

OK San Diego taxpayers, if you’re like me you’ve got your tuxes pressed and shoes shined, ready to attend THE social event of the San Diego  season. Set your watches for tonight at 7PM.

That , of course, is when I’ll be entertaining one and all by watching this Tuesday’s Lost on DVR !  I’ve got the widescreen and Bose sound system.  You bring the popcorn.  A good time will be had by all.

Unless, of course, you’re otherwise engaged.  Like in attending the San Diego County Taxpayers Association’s  “15^TH ANNUAL GOLDEN WATCHDOG & GOLDEN FLEECE AWARDS DINNER TONIGHT: Highlighting the Good, Bad and Ugly of Local Government soiree tonight at the Town and Country.

Me?  I’ve got too many bluebooks to grade and too many other things to do with the $200 or $250 ticket price (I forget the actual tab as I seem to have disposed of my invitation. )  And I really , really want to see how they resolve all those plot twists with Jack, Kate, Sawyer and the crew. (Twenty dollar bet it all ends with Jack waking up and saying, “Whoa dude, what a dream.”)

Look, I think the SDCTA is a fine group dedicated to its cause and doing no small public good in stimulating a community dialog on government accountability and oversight.   They are a civic minded crew, no bones.  My continual beef, petty though it is, remains that the SDCTA persists in claiming to be something it is not: a  nonpartisan group that represents San Diego County taxpayers. .

I’ve already bellyached about the representing county taxpayers bit.  There are plenty of county taxpayers (and, if you’ve bought a soda in the last year you, my friend, are a taxpayer) who do not see eye to eye (or adjoining universe to adjoining universe) with the SDCTA.

But I can forgive them that minor transgression.  A number of brands tend to overstate themselves.  Like the League of Women Voters which tend to come across of the League of Progressive Women’s Voters.  And the SDCTA’s name is accurate to an extent: it  is in San Diego County and does represent taxpayers.  At least some of them.

My bigger beef is that the SDCTA claims to be a nonpartisan organization.  It says so right in their Mission Statement, right between the claims to be a non-profit organization (true dat) and to be dedicated to promoting accountable government (true dat, too.) But then the mission statement goes on to say the SDCTA is dedicated to also  promoting “cost-effective and efficient government and opposing unnecessary taxes and fees.”

And therein lies my problem.

Ain’t no way, in this partisan age of ours that you can put the words “non-partisan” and “promoting cost-effective and effective government and opposing unnecessary taxes and fees”  into the same sentence without running into a massive contradiction.   It is precisely determining what exactly constitutes effective and efficient  government and unnecessary taxes and fees that forms the fundamental fault line between the two political major parties.

And the SDCTA consistently comes down on one side of that division.

The current June propositions are a case in point.  The SDCTA website lists its June ballot recommendations (here) . So do the websites for the  San Diego County Republicans (here) and the San Diego County Democrats (here).  I’ve summarized their positions  in the table below:

Of the six local propositions the County Republicans, Democrats and the SDCTA all took positions on  the “non-partisan” SDCTA lines up 100% with the GOP.   (In fairness, the SDCTA breaks 50/50 with the two parties on the statewide propositions.  This time around.)  I haven’t taken the time to track, election by election, SDCTA ballot recommendations and compare them to the two parties.  Maybe this summer.  My hunch, though, is that, over the long haul,  such research will  find a strong correlation between the SDCTA and the GOP.  I don’t think an organization that predominantly and consistently endorses the positions of one of the two parties has a lock on the claim to be “non-partisan.”

Indeed, the SDCTA’s claim to be non-partisan strikes me as something of a cop out.  If the organization truly has faith in its convictions shouldn’t it acknowledge  whom it aligns with and supports?  Claiming to be non-partisan is an attempt by the SDCTA to give itself an imprimatur of superiority over all those other crassly partisan groups wrestling down in the political mud and muck while the SDCTA stands proudly on its noble non-partisan pedestal above the fray.  It’s a brilliant marketing ploy, to be sure.  But most group today that  like to claim to be nonpartisan are like products that  claim to be “new and improved” or “low fat.”  The question is: Compared to what?

So I’ll spend tonight in watching the alternative realities that unfold on Lost.  Meanwhile the SDCTA can continue living in its own alternative reality where it is truly non-partisan.

401k(illed)

The San Diego County Taxpayers Association has released a new report showing that the increased city pension costs across the county are resulting in increased taxes.

The report provides a good summary of the various pension plans and obligations distributed amongst the county’s 17 municipalities. The report is also thick with suggestions to cut pension costs. The only thing the report lacks is empirical proof of its basic thesis: that pension costs are driving tax increases in specific instances. In other words, the report is long on supposition but short on validation.

But man, is it long on recommendations.

The SDCTA’s argument is essentially reducible to the claim that, because pension costs impact cities’ finances and some cities have raised sales taxes, pension costs are the causal factor. Now, I do not doubt that the SDCTA is right in its basic conclusion that pension costs are a contributing factor in a number of cities increasing sales taxes in recent years. But pension costs are just that: a contributing factor. Declining property tax revenues, Sacramento revenue clawbacks, increased operational costs—like health-care benefits—and increased spending mandates are also contributing factors. The report does not state just how big an impact pension pressures have had on tax hike decisions. Indeed, the report provides no empirical statistical evidence in support of the initial hypothesis except a simple association: Since cities have high pension costs and cities have raised taxes, the tax increases are caused by the pension costs. This may be true (again, I think, to a degree, it is). But it may be a fallacy of false causes. There isn’t a Chi Square or a Pearson’s R—let alone a Yule’s Q—worth of real numbers in the report to validate what is left as ultimately a subjective analysis, let alone justify the sweeping changes to municipal pension plans the SDCTA offers as remedy.

The SDCTA  initially argues in the report that pension plans need be reformed because they are leading to higher taxes (again, a claim unsubstantiated). However, the bulk of the report’s recommendations focus not on a fiscal-efficacy argument but, instead, on a fairness argument which the purported analysis did not address. Stripped of its fiscal-impact component, SDCTA’s argument for pension reform  is reducible to this:

It’s unfair that municipal-worker pensions are better than those of most private-sector workers, therefore the defined-benefit plans most municipal workers have should be replaced with the defined-contribution plans (401k) that most private workers have.

Oh, really? One could just as easily reverse the argument saying it’s unfair that municipal-worker pensions are better than those of most private-sector workers, therefore the defined contribution plans (401k) that most private workers have should be replaced with the defined-benefit plans most municipal workers have.

Why punish municipal workers by taking away the pension plans they were promised—and worked faithfully in exchange for?  Why not improve the retirement plans most private employees have, instead?

Oh, right. We used to do that, back in the days when labor-union membership was stronger, government regulations were tighter and American workers of all stripes—blue collar or white, labor or management—fresh from ending a depression and winning a world war demanded of their employers and government that they be treated with a little (cue Aretha Franklin)  R*E*S*P*E*C*T.  The American post-war social compact was clear: If American workers work hard, they will, in cooperation with the companies they labor for  and the government they vote for, achieve the security of retirement. As a result, more and more workers were protected not only by the safety net of Social Security, but by the guarantee of defined-benefit private retirement plans.

Geez, they were such Mad Men back then.

Over the last generation, corporations (and I’m not bashing them—corporate owners and managers simply did what society and government allowed them to do, so we are all in this together, Mr. Moore), freed of government regulation and the post-war sense of public obligation, shed their defined-benefit plans even faster than they shed American workers. Now the only real vestige of the past golden age of guaranteed retirement is, for the most part, government workers.  No wonder business and capital groups across America would like to see such municipal plans go away: Once defined-benefit plans are banished everywhere in the realm even the concept of them will Orwellianly disappear from the public discourse.

And by the way, one of my beefs about the SDCTA is that it is, ultimately, much more of a business/capital group than a worker/labor group, even though workers—including labor union members—pay a fair hunk of taxes.  Of course, wealthy people pay far more in terms of most taxes than poorer workers do. Hmmm, now just what set of taxpayers does the SDCTA gravitate towards?  The proof of the pudding is in the analyzing, as my pop the chemist used to say. The SDCTA report states:

As one typical example, the report shows that a city administrator with 30 years of service earning $75,000 at the peak of her career would receive an annual pension of $72,900 plus yearly cost of living increases. An equivalent benefit for an employee in the private sector retiring at age 60 would require an individual to have an IRA, 401k or other pension account worth more than $1.8 million.

True dat. But what should really grab attention is not that the city employee with the defined-benefit plan will get 97 percent of their base pay in retirement.  The real shocker is that to get anything near that, an average worker would need squirrel away at least $15k-$30k or more a year for their entire working life to get a good pension—and then pray that they aren’t hit with a Dot.com or Wall Street Meltdown that reduces their 401k to financial road-kill just as they plan to check out.

Now, are some of the negotiated benefits city workers get too generous? Perhaps.  Retirement ages, most certainly, need be looked at. (And not just for municipal workers. If life expectancy is growing, the expectation that people need work longer before retiring needs be considered for all retirement systems, including social security.) But the SDCTA report is a less a real analysis of tax policy and pension plans than a wish-list for those dedicated to the proposition that the only good defined-benefit retirement plan is a dead defined-benefit retirement plan.

In the Money

I got my e-invitation to the San Diego County Tax Payer’s Association’s 14^th Annual Golden Watchdog and Golden Fleece Awards.  The event’s being held this year on May 13 at the tony Town and Country Resort in Mission Valley (right down the street from the entity that used to be known as the Union Tribune but may one day in the not too distant future be known as the Union Condominiums…)

I’m passing on attendance. 

It’s not just that I (and many of the taxpayers the SDCTPA claims to represent) have ideological disagreements with a group that is knee-jerk reactionary when it comes to any mention of enhanced public revenues (aka blood-sucking taxes.)  Even higher taxes,  on occasion, serve a public good even though most of us—even my self, on most occasions—do not like paying them. It’s not just that I have a minor irritation with the SDCTPA over its name, as I’ve written about before.  The SDCTPA does not represent all tax payers in San Diego county (I do believe that is the task assigned to the progressive jazz quintet known as the Board of Supervisors.) Yet, that they don’t more accurately call themselves the San Diego County Republican & Libertarian Tax Payer’s Association is only a small quibble.

It’s not even my annoyance that, while the SDCTPA loves to ridicule the ridiculous spending of public institutions (spending which, at least, purports and attempts to do something for this thing called the public good)  it says not a peep about the ridiculous spending of the private sector (Sunroad, debasement of the Padre Brand over a de-nuptialization, ghost-town developments in Eastlake, not to mention pretty much anything happening within a hundred klicks of Wallstreet these days ring a bell, anybody?)  These days (and for much of the last generation) the true fleecing of America has come courtesy of the best and the brightest minds of the Wharton, Harvard and Chicago schools of business.

No, my ultimate reason for passing on the tax-paying bashing binge is much more parochial: the $200/head dinner price.  Unless the chicken is really that good, seems to me the SDCTAA should put themselves on the menu for a fleecing award.

Hmmm, the SDCTAA celebrates the exposure of government waste at a $200 per person event.   I wonder just which tax brackets their membership comes from…