California Crisis: The Bell Effect Spreads

By Varney and Co

The fallout from the pay scandal in Bell California continues to spread. Outrage over the city administrator’s $800,000 salary has politicians and administrators publicly denouncing the policies which lead to the extravagant pay.

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Most recently, California Controller John Chiang now says that municipalities must report the salaries of all city officials to the public. The Reason Foundation’s Adrian Moore appeared on Varney and Company to discuss the controller’s new policy.

“The press has always wanted the city governments to provide all the salary information for government workers,” explained Moore. “The governments have always resisted that because they say it interferes with their negotiations with the public employees union if everyone knows everyone’s salaries. It’s interesting that this crisis might blow that open and finally give us access to what we’re paying people.”

California’s budget crisis remains focused around public worker pay and pensions. The Los Angeles City Council says that within four years, one third of all the money paid out of the general fund will go to retirees. Critics maintain that this type of policy and spending will eventually bankrupt the city and force California into insolvency.

“It’s not even remotely sustainable. Something on the order of 5-10% is kind of the sustainable level, they’re saying we are going to be three times that in a matter of a blink of an eye,” said Moore. “It’s not just Los Angeles. A whole bunch of cities are looking at getting into the 25-30% range by 2020 and there is no way that will work. We will have to unwind this stuff.”