Pay Measure Seen Costing, Not Saving, County Money

Passage of a statewide public employee pay limitation measure--instead of saving money--could cost Los Angeles County nearly $200 million the first year while law enforcement, fire and health services could be cut, the county’s chief fiscal officer said Tuesday.

Chief Administrative Officer James C. Hankla said the Nov. 4 ballot measure, sponsored by tax crusader Paul Gann, also could leave county emergency services short-staffed during times of disaster.

Hankla’s attack on the measure came less than a week after three other county officials, led by Sheriff Sherman Block, asked the state Supreme Court to prevent the initiative from appearing on the ballot because it is allegedly unconstitutional. The petition is still pending.

The Gann Public Pay Initiative would limit the governor’s income to $80,000 until his term is over and would limit other elected or appointed state and local government officials to no more than 80% of that total, or $64,000. The measure also would prohibit public employees from carrying over accumulated sick or vacation pay from one year to another.

Hankla said one of the ambiguities of the Gann initiative is whether the $64,000 limit is on salary only or a combination of salary and other benefits such as vacation, sick leave, retirement or health insurance.

If the courts determine that the measure applies to salaries alone, the county would be forced to cut back $16.7 million in pay to 1,900 county employees, including 818 doctors, 401 attorneys, 509 judges and court commissioners and 52 public safety employees, Hankla’s analysis indicated.

The cuts would amount to $104.7 million and affect about 4,000 county employees if salary and benefits were included, Hankla added.

While the county would realize savings in salaries and possibly benefits, Hankla said the reductions would be more than offset by a probable one-time pay-out of accumulated sick and vacation time ranging from $190 million to $260 million. Hankla said the pay-out probably would be required because of the initiative’s ban on carry-overs of these benefits.

The salary savings also would be offset by up to $23 million a year now tied up in more than 175 contracts with private firms to perform public services, Hankla said. The measure would ban outside contracts lasting more than two years and also would limit the amount of contracts to $64,000 a year and no more than $75 an hour.

The combination of one-time pay-outs and the lost private contracting could result in a net cost increase of $189 million to $197 million the first year, Hankla said.

Hankla was unwilling to predict what would happen beyond the first year, but he said the pay limitations would hinder the county’s efforts to either retain or recruit “the high quality of employees needed to provide government services.”

“For persons with talent, marketable job skills, motivation and ambition, (this initiative) can only reduce the attractiveness of public employment,” Hankla said.

In times of emergency, such as fire seasons or after an earthquake, Hankla said, the county would have to “overhire” for critical positions because employees nearing the $64,000 ceiling would not be able to collect overtime.