Jim Cooper's Orange County; Prop 61: GANN Initiative

Jim Cooper's Orange County is made possible by grants from the and Grace Steele foundation providing charitable assistance to deserving organizations in the areas of health education and culture by signaling landmark incorporated developer of Southern California real estate and builder of Landmark homes by Robert Half an account temp's providing permanent and temporary accounting financial and EDP personnel and by Disney Land part an important part of Orange County for over 30 years. One of the most hotly debated state ballot issues is Proposition 61 the gun initiative aimed at limiting pay of all public officials employees and individual public contractors. Backers of the initiative say it would save money by limiting salaries of all public employees. Opponents argue that it would drastically reduce the quality of government services and could cost far more than it would save. I'm Jim Cooper and I'll present Paul again the author of The Initiative. And Bill Hoenig state school superintendent on both sides of the issue.

With us today are two principals representing pro and con on this proposed initiative constitutional amendment and statute. But first here's what it would do. Proposition 61 a public official employee contractor compensation one would set the governor's pay at $80000 and limit pay of all other state and local government employees and public contractors to 80 percent of this or $64000 to state constitutional officers like the state treasurer would be limited to fifty two thousand five hundred dollars. Three no sick leave or vacation time could be carried over from one calendar year to another for no public contractor could be paid more than seventy five dollars an hour and are contracted for more than two years vote of the people required to increase public salaries in state county city or a special district.

Paul Gahn author of proposition 61 is founder and president of peoples advocate a citizens activist group founded in 1974 in 1977. His group along with the late Howard Jarvis backed the successful Takht limiting Proposition 13 and served as. Jim Cooper's Orange County is made possible by grants from the Harian Grace Steele foundation

providing charitable assistance to deserving organizations in the areas of health education and culture by signaling landmark incorporated developer of Southern California real estate and builder of Landmark homes by Robert Half an account temp's providing permanent and temporary accounting financial and EDP personnel and by Disney Land Park an important part of Orange County for over 30 years. One of the most probably debated thate ballot was that proposition 61 the Gahn initiative aimed at limiting pay of all public officials employees and individual public contractors. Backers of the initiative say it would save money by limiting salaries of all public employees. Opponents argue that it would drastically reduce the quality of government services and could cost far more than it would save. I'm Jim Cooper and I'll present Paul Gann the author of The Initiative. And Bill Hoenig state school superintendent on both sides of the issue. Whether today are two principals representing pro and con on this proposed initiative

constitutional amendment and statute. But first here's what it would do. Proposition 61 a public official employee contract for compensation. What's the governor's paid $80000 and limit pay of all other state and local government employees and public contractors to 80 percent of this or $64000 state constitutional officers like the state treasurer would be limited to fifty two thousand five hundred dollars. No sick leave or vacation time could be carried over from one calendar year to another. No public contractor could be paid more than seventy five dollars an hour nor contracted for more than two years vote of the people required to increase public salaries in state county city or a special district. Well yes vote a yes vote means you wanted to pass a no vote means that you're against it. And now let's meet our guests. Paul Gann author of proposition 61 is founder and president of peoples advocate a citizens activist group father of 1974.

In 1977 his group along with the late Howard Jarvis backed the successful pact limiting Proposition 13 and in 1980 and 1982 he backed two other successful initiatives on government spending and on crime bill Hoenig as the State Superintendent of Public Instruction heading up a system of 4 million students from kindergarten through 12th grade. In 1983 he championed a major reform of public education which he says is now threatened by the gun initiative. He was one of the signers against the proposal in the state ballot pamphlet. Well now I'll ask each of our guests to make a two minute opening statement after which I'll ask questions on the issues at the close of the program while each ask each of them to make a one minute summary. And now let's start with you Mr. Gahn. Surely. And I do agree with you that this has been has become a very controversial issue. In fact I think there's been more money raised to defeat Proposition 61 than has ever been raised to defeat any issue that I've been involved with. But what I believe with all my heart that the elected

official and the politician and the people who run the government have too much control over the taxpayers money. So what proposition 61 will do is return control of that money back to the people who pay the bill the voting taxpayer. And I think that's only right because you know it was we the people who gathered together some 200 years or so ago to create a more perfect union not we the bureaucrats but we have now allowed ourselves to go to the point of where the bureaucracy is the government and the people are the people who pay the bill that is the taxpaying voter are there because they need us to pay the bill. So I say that it's time that you and I the tax payer has the right to control the amount of money that we pay out and the amount of retirement benefits that we pay out as an example. They say that my bill will only take care of about 16 people's retirement benefits if it takes care of any. The fact is it will even take care of my opponents.

It will take care of his retirement benefits because if 61 fails to win then his salary will go from fifty two thousand five hundred dollars if we win and if we lose it will go to eighty seven thousand five hundred dollars so the difference in his putting in his retirement benefits when he retires could be thousands multiplied thousands of dollars so it does affect a lot of potential retirement benefits as well as salaries. All right. Thank you Mr. hoing. Well I think this this is a bad bad idea for the state of California just from this standpoint and I urge the viewers to take a look at this measure. Does it really save money. Kornya the legislative analyst an independent organization took a look at this. It will cost seven billion dollars up to $7 billion just to buy out the sick leave that's been accrued and the vacation time that's been accrued. All of our existing employees. So for a cost saving measure is going

to cost us a bundle just to put it in place and the savings are much much less a ratio of three to one. That's number one. Number two I think it will put us at a competitive disadvantage. We have police chiefs who are effective fire chiefs who are effective employees throughout the state. Thousand university professors people at our hospitals and directors of our hospitals 90 percent of the faculty of the University of California Medical School. So it's going to cause a broad swath throughout our personnel and in pools of schools I know something about we have a situation where the superintendent of Los Angeles can only get paid equal to what the superintendent in Skokie Illinois and the Skokie Illinois only has 750 students. Los Angeles has 600000 students. We're just not going to be able to compete. It's ambiguous it's badly drawn. It'll be in the courts for two or three years and we will suffer during that time because of that and the ambiguous nature of this proposal. And finally Mr. Dean makes the point. Give the power back to the people.

This will because of the loopholes and here will go back to the legislature. The decision to override these decisions and all the dealing up there and deciding who's going to get the relief and who's not is going to put us right back into a political situation. I think it's a bad bill. Gentlemen I'd like to talk about first what has been brought up as an ambiguity. Some people say it's unconstitutional. Let me start this part of the discussion with a quote from John van de Camp who is as you know the attorney general. He called this a nightmare of ambiguity and he said that it was poorly drafted and it will take years of court rulings to even determine which employees it will really affect. Do you want to take the charge of ambiguity of unconstitutionality. Once we start with you again. Surely surely. In fact the attorney general of the state of California has and has never supported me. He didn't support me with Proposition 13. He didn't support me with any of my

bills. So I'm not terribly upset that the attorney general of the state of California is not supporting Proposition 61 because you see if Proposition 61 wins it will cost the attorney general the difference in fifty two thousand five hundred dollars a year and an eighty seven thousand five hundred dollars a year. So he has a little self interest in it. And another thing it will do it does spell out very plainly that the state of California. Can the legislators of the state of California can increase a salary to a half a million dollars a year if it's necessary to replace an important position would that kind of money the legislature with the two thirds vote but at home the people in the district in the city and then the county by just a majority vote that is 51 percent of the people can vote for a raise. And they can pay your city manager one hundred and fifty thousand dollars a year are they can pay him $50000 a year.

So in addressing the question of ambiguity and possible constitutional questions are you denying both of those. I deny both of those yes. What about that. What about the question that this it may save 250 million according to John Vickerman acting legislative analyst or depending on how it's interpreted to pay off all of the pay of the accumulated sick leave and accumulated vacation leave could cost 7 billion depending on this ambiguity that he refers to. What about that. Well I think any elected or appointed official and that's what this gentleman is and of course he isn't the legislative council or he won't be as soon as the poor place person that they voted to replace him with comes on board. But my point is that any bureaucrat that had anything to do in the last 20 years with the taxpayers problems that has allowed this thing to build up illegally and unconstitutionally to a 7 billion dollar national debt against the taxpayer of the state of California which the taxpayer was not aware of and neither was the legislative council aware of it until proposition 61 came along. What

proposition 61 is doing is saving the people $7 billion. Because what the opposition wants to do they want to loot leave this loophole open here so that within another seven or eight years we owe $14 billion. So let's clear this up for our viewers. Are you saying that if if the proposition 61 passes that the state will have to write a check for 7 billion to pay off all that vacation leave and leave. No there's a lot of arguments going on about. Let me tell you what happened. Let me respond. All right. But let's give him a chance. Are you saying yes or no. I'm not you know and neither does the attorney general. All right let's let Mr. Horn take now the question about the question is ambiguity and unconstitutionality. Well first of all I think it's terrible to take a risk for seven billion dollars and play that with play that with the state of California if it's ambiguous. It shouldn't be passed because it does risks costing a $7 billion. Mr. Gahn says that nobody knew about this this accrued sick leave. The reason people knew about it it's been

it's been an obvious fact for a long time. The reason it's going to cost the state so much is most many people do not take their sick leave. They save it for a catastrophic illness. And what this what this bill will do is going to force the state to pay it off in one fell swoop. And that's one fourth of a year's budget. That's a terrific way to save money for the state. Number two he mentioned the fact of ambiguity let me just read from the measure itself. In Section 26 A. It talks about the salary of the governor and the salary of the other constitutional officers and then B Section 26 B It talks about compensation in excess of 80 percent. If you read compensation as courts have done to include salary plus benefits about 30 percent. That means we're down to forty nine thousand dollars salary and that means police chiefs and heads of hospitals and superintendents and professors in the colleges all are going to have to be cut down to that level. And I think that's going to make it very difficult to recruit. So the very initiative itself is an ambiguous and that's what the attorney general is

referring to. Finally I like to just respond because there's been a personal allegation here. I've been fighting for quality schools for all my life and I'm going to fight this bill because I think it's going to harm education. And I don't think is going to put us in a position where we can't recruit and put these reforms in jeopardy. And that's why I'm fighting this and I'd fight it one way or the other and that's why the opposition has gathered against this bill. The Chamber of Commerce the California taxpayers association the PTA the California Manufacturers Association of Police Chiefs. These are career people. These aren't constitutional officers only. These aren't legislators these are career people who are working to provide services for the people of the state and that's why you've That's why you've unleashed this hornet's nest of opposition. Let me ask you I do want to respond to that. May I please. Yes. I just wanted to tell the opposition that the only people we have with us is the taxpayer that pays the bill the same people we've had and every one of our bills the people who pay the bill. But I'd like to ask him a question a personal question. His

opposition the opposition all of these brilliant people and they are brilliant. I know because I speak to some of them and they tell me they are. But how in the if. 61. Here's what they say. And this is as phony as a three dollar bill. What did they say. If 60 Gahn 61 wins down only do we have to get 61. We have to get going with 61. I got news for them they won't get me. But if 61 wins it will cost the taxpayers $7 billion. Well what do they say then that if we lose that wipes that 7 billion dollars out or did they want to tell you the truth and say that if it continues the way it's going now in another seven or eight to 10 years it will be 14 or 15 billion dollars. Well the response to that is pretty straightforward. Number one as I said earlier we're not sure. Not everybody claims all the sick leave. So the point is when they carry it forward they use it as a reserve. If for a severe illness and if you

automatically say you have to buy it out now it's going to cost the state quite a bit. Number two there's a big difference between owing an amount of money for the next 25 years and having it come up with it. Right now anybody that owns a mortgage will tell you there's a difference between paying off now and the value of something in 25 years that's discounted. And that means that that figure that you're talking about is one tenth one twelfth of the amount. So what you're forcing with this bill is very bad fiscal policy. It's forcing an immediate payment of $7 billion or up to seven billion dollars when the state would only have to pay that off over a long long period of time. A portion of it. And that's why this bill is a disaster financially. Can you tell you if I may. Why this bill is good and he just made my point for me. These the people who are responsible to the taxpayer and they take an oath of office and they're very sacred with it. But and they are supposed to pay out of each budget year. This is a state of budget. We have a state budget a city budget a county budget the district budget the

school budget. Why in the name of Heaven have they allowed this thing to build up from year to year instead of taking that cost out of the budget year that the dang thing has occurred in. Why not. Why do they sell say to me that we have not set aside seven billion dollars a year to year basis to take care of this 7 billion dollar obligation. To me it should be the most frightening thing that's ever happened to the taxpayer of the state of California. And yeah I do because I don't see what this does about that. That's a situation that has occurred over the years. This doesn't stop that. All this does is force the state to pay that obligation now and pay it off on existing dollars when they could wait and make it in and not face that total amount. I think that's that's the one major reason why why this bill is so ambiguous and so fraught with danger because it's going to cost those taxpayers. You say you're worried about a tremendous amount of money now. Do you have any comments on the argument about the about the argument about pay. Because we've been told that if you have if the public employees are limited to 80 percent of the governor or the governor has 80000 then the salary

of all public employees has the $64000 ceiling. But Mr. Hoenig said if you if you crank in the fringe benefits that will reduce the salary to about 49 out which it wasn't your answer to that. It doesn't. And by the way I would like to tell I would I would like to tell our superintendent of schools that this was copied from a bill done for me by the Legislative Council in 1974. Are you glad you asked Lady counsil not by my lawyers are by my staff. Are you maintaining that the 64000 not with the pay and that end of that is to be on top as a salary and I think that's ridiculous. That would be on top of that. But in the end everybody doesn't get $64000. I mean those who do that those who do. But if you were getting $64000 a year that isn't what it cost the taxpayer it cost the taxpayer 80 $4000 to pay you that 60. Well I'm I'm saying that and you're saying that the French would be on top of this. Yes. Indeed. Let me ask a question about the mediocrity argument and I've heard this by several people I may quote you one and I'm asking you both to respond to this.

State Senator John Seymour says that this bill meaning the Gahn initiative would ensure incompetence and mediocrity in government now who wants to respond to that first. Well I think if you can't compete in the marketplace for quality people you're going to you're going to end up with less qualified people running our major institutions and that's our schools our hospitals our public hospitals our universities. And I I don't know how Mr. Glenn gets around the very words that are used in this initiative because it does say compensation and compensation includes fringe benefits. The very measure says that so it is ambiguous. Salaries used in one place compensation or another it's going to be thrown in the courts and in the meantime and I have personal experience with this one. I know of districts who have been trying to hire superintendent from other states. Good people they won't come here because of the cloud that this is put on. And for two years we're not going to be able to hire or in many instances lose good people who just won't take the chance. You've said that this is a penny wise and pound foolish idea and it would turn California into a second rate

state. You were quoted as saying that you want to say why you think it's foolish. I mean because anyway in part because it saves less than one percent of the budget on these restrictions. But in return you take this risk for the $7 billion. And number two you're not going to be able to hire quality people who are managing a 35 million dollar a year enterprise at the state level and another $30 billion at the local level and you're going to put that off a risk with second rate managers because you can't compete. That's ridiculous. When you're saving it continue saving year after year. But let me tell you about these qualified people that are looking after us now see more as an example. You know when he ran when he realized that something should be done about the stupidity of the bill passed in 1963 and then the bill passed in 1983 that that was. Bill are we talking about when we're talking about we're talking about retirement. You're talking about a retirement bill. He's passed a retirement bill. It's called Proposition 57 now. He will not tell you and neither will any of the other opposition that according to the Supreme Court that is a vested interest those

people have a vested interest. And what are they saying why don't they tell you the truth and say what we'll do with 57 is cut this off by buying those people out. Now if these people are so smart why did they vote in 1983 for a salary increase that would increase pensions from $57000 a year to 130 4500 and $2 a year. What do you mean that's intellectual high. People that we don't want to retire. If it is no wonder you want to respond to that I do one of the claims that Mr. Gahn has made is that this is his measure 61 does something about pension abuse. It doesn't what. Proposition 57 does cut the cord between salary increases currently and those people who have retired and I have a list here from Cal tax research that list some of the people. And you can just see the difference in figures 57 makes the cuts 61 doesn't so it was billed as pension reform. It has nothing to do with pension reform. It has to do with limiting the ability to hire people. And the risk of buying out for

a for accrued sick leave and when. Hey let me ask you gentlemen both to respond to this. This is an analysis by the Cal tax the Cal tax research it thoroughly analyzed again and it may or may on one state and you. Yes or Cal tax. Are the people that made the statement about Proposition 13 that all the schools will be closed the next day all of fire departments will be closed the next day and all the policemen will go to Kentucky to get a good job so they'll make a hell of a lot of money. All right let me read now that you've had that say it let still quote Keltec restartable and what they say about the Gahn initiative they say it would immediately put California out of market competition for top medical and legal professionals for toxic experts for a variety of other top technical skills and the major public managers and administrators for which California is a national competition. I might throw in the judges for example a pair of court judges get eighty one thousand a year. They're very much concerned that we would then have mediocre judges. So what about that argument of. Putting us out of the competition

with competent people throughout the whole aspect of the law schools. The professors who teach at the medical schools for example in the University of California. What about that. Yeah what we did was provide in Proposition 61 the means for the California legislature to take care of that. In other words whatever it cost to replace it some idiot said to me well don't you want a good open heart surgeon. You're damn right. I had open heart surgery. I wanted to good when I had a good one. If it takes a hundred thousand dollars a year to hire him the California legislature with a two thirds vote can hire him for a hundred thousand dollars. Now we have the head of our department of education the higher education that has a salary of a hundred and sixty thousand dollars a year. I think the legislature will continue that salary because they have the right to do it. But I hope they will seriously consider cutting off part of one hundred and eleven thousand I was just told yesterday that he receives to take care of his house. What we are referring to now what office are we referring to. The head of the University of California. Yes Mr.

Gardner. OK. Well I think yes. I don't think it's good public policy to go up with every contract in the state to the legislature for a person who's saying they're trying to get local control and tax payers rights to throw all those contracts the decisions to the legislature is just not workable. It's going to it's going to I think going to be a terrible precedent. And you know people are not going to trust that if they have to go negotiate by getting a bill through. It's not going to happen. And the measure itself by the way does not apply to local people that has to be done at the local level with the local vote that means every time you want to hire police chiefs or fire chief or there or the or the people that the police and the firemen who work in those organizations schools of medicine schools or medicine at hospitals and all the judges you have to go to vote every time you do that that's ridiculous. That's a state issue. And the California legislature takes care of it doesn't say I. It doesn't say it says a local hired employee has to be voted on by local people.

But let me tell you what the what the state of California tax payer the person who pays the bill can do if the if the California legislature pays some some qualified person that knows how to lay down a light rail issue that for underage that actually works. Tom. Yeah. They want to hire an expert I'd hope that the idiot they hire would know that they can build a light rail for 136 million dollars instead of 250 million. But but they can. What the California legislature can do is to hire the expert to take care of the job whatever that job may be. But then if they go crazy as they have been in just recently they went crazy enough to where we take a $4000 a month man and let him raise a salary a hundred dollars an hour. So today after six or eight weeks that's $4000 a month he makes thirteen thousand one hundred fifty seven dollars a month. Now they've already okayed that. I think that's stupidity going to see these. I mean we don't want a judge this is the legislature that made the mistake that you want a judge now in every case that is what's wrong with this and their seizure is it throws those decisions out of competent people. Of

course there's going to be some abuses but you don't take a meat axe to the whole system and put our police forces and our fire forces in our schools and our hospitals and our judges at jeopardy and also cost the taxpayer seven billion dollars in boot. It will cost the taxpayers seven billion dollars if it's going to cost them. If this is vested. I don't care what any. I don't care if he's an attorney with the fifth degree. If he says that if this is funded and he says that we can get out of paying it he's a liar. Anybody that says that 61 can stop the state from paying a vested interest a contractual interest. That's a lie. There's a question that they can ask. Let me come back one more. I got a problem with the lie aspect. It's not a lie because I mean who wouldn't make that. I mean why the hysterical statement is that not everybody takes their sick pay because they save it and they never use it. This forces you to pay it off now. So it does cost more. Number two it forces you to pay it off this year. Seven billion dollars

this year that's different than $7 billion or whatever figure over a long long period of time. That is not as much cost so you are costing the government money. Well we're happy we're having gentlemen to come up very quickly now to a final closing statement so I'm going to ask each of our guests to make a one minute summary and they'll each time express why they want the person to vote the way he wants them to. And Mr. Gahanna I know you want them to vote yes. So let's start with you and your one minute something. Yes I do want them to vote yes because it isn't for me it's for us. But let me tell you what a yes vote will do. It will put the taxpayer that pays the bill back in business. It will make him the boss and he's supposed to be anyway. But I like to point out one thing that my opponent right here today. If this thing loses will pick up an extra thirty five thousand dollars a year in salary. Well now over the years. And then he will get an automatic raise every year so long as he's in retirement. Yes and then in retirement he will get a big shot in the arm. But if we win it will set his salary at fifty two thousand five hundred dollars a year and it

won't be raised until such time as the people who pay the bill vote to give him a raise just like it was in 1966 for the legislature before we voted that out in 1966. All right. Thank you for our closing statement from Mr. Hornick Mike. My salary was raised by the legislature the very people you say you give the right to do and it was by more than a two thirds vote so this measure is not going to stop that at all. And it's to me to go after constitutional officers that's one thing. But in the process get seven thousand people at the university to get the doctors in our state the judges the superintendents all of our police and fire and and people who work and do service for the state I think is a bad idea and it's going to cost in boot. And finally it's an ambiguous measure. It's going to be in the courts. And I don't think the people of California should risk that kind of harm to this state. It's not doom and gloom it's not going to be the end the government is going to make us or tend to make us less competitive and not able to attract good people for this state. I think people should vote no on this measure it's badly drafted and it's not going to help California.

All right thank you. Thank you both of you gentlemen for this debate of course. In our society the final answer is when you walk in the polling place and you have this small little X here and that's all going to be in one paragraph what you ought to do is get one of these documents like this the California ballot issue they're free at your local registrar of voters office are free and read the arguments pro and con yourself and then make up your mind and then get out and vote. Well our time is almost up. Donna I want to thank both guests for this very timely discussion on Proposition 61. This has been a special broadcast for public television with Paul Gahn proposition 61 author and state superintendent Bill Hoenig. I'm Jim Cooper. Thanks for being with us. B.

B B. B. C. D. Jim Cowper's Orange County is made possible by grants from the Harian Grace steel foundation providing charitable assistance to deserving organizations in the areas of health education and culture. Why single landmark incorporated developer of Southern California real estate and builder of Landmark homes by Robert Half an account temp's providing permanent and temporary accounting

financial