Governor’s top staff deserved raises

IF YOU WERE outraged by the recent news that Gov. Arnold Schwarzenegger increased salaries of top executive-branch officials, take a deep breath, count to 10 and remember the People’s Party.

In the 1850s, the People’s Party, blasting wasteful spending, swept to power in municipal elections in San Francisco. The party quickly cut spending and slashed the salaries of city workers and teachers — only to find, within months, that schools were closing for lack of funds and teachers were leaving in droves. The People’s Party, you may have noticed, is no longer in power.

The fact is, pay hikes aren’t always such a bad idea. Certainly the question of how much money to pay state officials is debatable. But much of the outrage and outcry last week over Schwarzenegger’s pay hikes echoed the People’s Party’s thoughtless shibboleths.

America has long been blessed with a healthy skepticism about politics; just think of the skewering that politicians have gotten from the likes of Mark Twain and Jon Stewart. But it’s less attractive when that skepticism morphs into unhealthy cynicism, a cynicism that proclaims democracy while preaching distrust of democracy’s institutions and announces as fact canards about government waste and incompetence.

Consider this: Gubernatorial staffers and state agency officials are responsible for negotiating healthcare reforms that could become a template for the nation. Across the negotiating table from them are healthcare industry representatives, all of whom earn far more than their public counterparts.

As California’s secretary of Health and Human Services, for instance, Kim Belshe runs an agency with a $29-billion budget, including a statewide $14.5-billion health program — but earns about $130,000 annually. In contrast, the Blue Cross executive in charge of California operations earns a base salary in excess of $500,000, plus thousands more in stock options and bonuses.

My point is not that Belshe should earn the same as a corporate executive. The point is that she and most public officials are not overpaid — and that they could earn far more in the private sector. Why don’t they? For the same reason that clergy, teachers and soldiers don’t leave their low-paying professions: a commitment to public service.

But that commitment goes only so far. It is a hard reality facing California that an estimated 70,000 state employees — a fifth of all state workers — will retire in the next few years. A disproportionate number are top administrators and managers. Yes, budgets are tight these days, but the fact is, unless the state offers salaries that are decent in comparison with private-sector compensation (although certainly not equal to them), we will not be able to attract or retain first-rate replacements.

What’s a decent salary? It’s often been defined as one that is sufficiently generous that public officials won’t run immediately to the lobbying corps or to industry — but not so generous that a commitment to public service is devalued or that voters are outraged.

Pay hikes for state officials are, in general, closely scrutinized. Indeed, concerns about public reactions can deter elected officials from seeking necessary increases.

For example, for years after the Legislature went full time in 1966, it rarely raised its salary or that of other state elected officials even though it was permitted to do so by the Constitution. By 1990, salaries were significantly below what they would have been if adjusted for inflation or increased at the constitutionally permitted rate. Ultimately, there were rising concerns that the financial burden of holding office in California could prevent people of modest means from seeking office.

This was reinforced by the passage of Proposition 112 in 1990, which created the toughest ethics laws in the country, banning honoraria, restricting gifts and prohibiting elected officials from engaging in various types of private business.

The measure also took the authority over pay raises away from the Legislature and gave it to the California Citizens Compensation Commission, an independent body whose members include representatives of business, labor unions, compensation experts and members of the general public.

I helped draft Proposition 112, and although I have not approved of everything the compensation commission has done, I believe that it has generally proved successful at maintaining appropriate salary levels. It might provide a useful mechanism for setting salaries of top executive-branch officials.

Our democracy is not served by knee-jerk cynicism about public officials and their pay. As the cliche goes, we get what we pay for. The People’s Party got what it was willing to pay for. Californians today know that good government requires neither punitively low nor extravagantly high public salaries.