Gann’s Salary Plan Is Only Penny Wise

California taxpayers have yet another opportunity to rein in government, this time by sharply curtailing salaries paid their top public servants. The vehicle is an initiative on the fall ballot fathered by Proposition 13 co-author Paul Gann.

The basic thrust of the initiative is to limit the governor’s salary to $80,000 a year and hold everybody else’s to no more than 80% of that, or $64,000. Since most taxpayers view both salary figures as a lot of money, and since the proposal also attacks overblown public service pensions, Gann is likely to pick up a good deal of popular support. He figures that more than 2,500 individuals will be affected and that passage of the initiative will save the state about $24 million.

Unfortunately, the measure also will do some serious mischief; in fact, it already has.

It will head off a long overdue boost in the governor’s salary to $102,000 and that of other constitutional officers to $87,500 next year. The governor’s salary has been at $49,100 for 20 years, and the other top officials’ at $42,000. Many department heads in local government make more than $64,000 now.

Faced with the possibility of salary reductions, some officials nearing retirement are making plans to retire early because their pensions are tied to their salary level and will be reduced if the measure passes. Just the fact that the issue is on the ballot is making it tougher to recruit talent for at least one key position in the state and probably for others.

The position in question is executive director of the Los Angeles County-USC Medical Center. Norman C. Roberts, who manages public sector activities for Korn/Ferry International, a major executive recruitment firm, says he’s having problems finding candidates for the job because of uncertainty over pay. The job pays only $80,000 as it is, while comparable hospital administrator jobs, even at nonprofit institutions, offer $100,000 or more, along with better fringe benefits.

In addition, Roberts is hearing from current city and state officials looking for jobs in other states.

More Serious Than Prop. 13

“This initiative will have a far more serious effect than Proposition 13 (which sharply reduced property taxes) ever had,” contends Roberts. While public and private sector salaries are pretty much in line with each other at lower levels, he points out, the public servants at the top already lag far behind executives with similar levels of responsibility in corporations and other private organizations. You can always fill jobs at lower salaries, but the question is getting qualified people. Failing that, the quality of government will suffer badly, he says.

Ray Remy, president of the Los Angeles Area Chamber of Commerce and former deputy mayor of Los Angeles, is similarly upset by the Gann proposal. Setting a $64,000 ceiling will create a tremendous compaction of salary levels below the top, leaving little incentive for public servants to want to advance, he says. “It’s a bad message to send to young people choosing careers.”

Remy believes that private business has a big stake in the campaign: If the level of public service deteriorates, the state’s economic climate will deteriorate with it.

Gann argues that he’s never seen a shortage of people willing to seek public jobs and that those who do it primarily for the salary are dangerous. “They can be bought.”

He agrees that there are some jobs--like top medical school teaching posts and other highly technical positions--where a $64,000 limit is unrealistic. But he contends that there’s a huge loophole in the initiative to provide for those cases. The initiative gives the state Legislature the power, on a two-thirds vote, to lift salary levels in such individual cases.

Gann’s strongest case, however, involves pensions, some of which have become abusively large. The problem with his initiative is that it goes far beyond attacking those abuses and would introduce a cumbersome salary-setting procedure at the very time that the state of California is about to catch up with reality in its top salaries.

It’s true that taxpayers can expect their public servants to work for less than some of the wastefully high salaries in private industry. But the Gann initiative’s limitations are unreasonably low.