The MGH Report

Michael G. Haran, Proprietor

Managing the Public Sector

Posted by on Oct 26, 2014

Healdsburg Tribune


With this year’s elections fast approaching both candidates for the 4th Supervisorial District, James Gore and Deb Fudge, have represented that they possess the knowledge and skills necessary to manage Sonoma County’s public sector and its problems, one of which is the gorilla in the room – unfunded pension liabilities.

With annual pension costs having increased from $25 million in 2002 to $117 million and are expected to grow to $200 million by 2020 with the county’s unfunded liability at about $300 million (PD 10/11/14) even considering water related issues, this is the most pressing issue facing the county’s elected officials.

Now I have no squawk about how much public employees are paid. Even the issues I have about too many county managers isn’t about pay. It is critical that public employees get paid a middle class wage as all the support we can give the middle class is important to stave off the ravages of the growing aristocracy in this country. Without a strong middle class we could go the way of the Middle East – yikes!

It’s the retirement system that’s broke and needs to be fixed. This problem got rooted when public pension became guaranteed and tied to a wage and benefit plan that was intended to compete with the private sector. Back then everyone had a pension and it was felt that in order for the public sector to attract talented professionals they had to offer benefits that were as good, or better, then what was being paid in the private sector. The problem is the public sector pensions are guaranteed while the private sector pensions were/are not and those that didn’t get eliminated have gotten decimated as many corporations switched their employee pensions to 401ks.

Now the situation has reversed with the public sector jobs paying more than most private sector jobs and with benefits including retirement at age 50 to 55 with up to 90% salary and the immoral practice of perk “spiking” (Jerry Brown and the legislature has tried to put a stop to this but several unions have sued to restore the practice).

So what can be done to bring the system back into balance? The only way that retirement benefits can be “unguaranteed” so that they will fluctuate with the market like everyone else’s 401k, is for legislators to amend the state’s retirement system. This, however, is problematic since most elected state officials are “in the pockets” of the powerful public employee unions. Even if a ballot initiative were to pass it would be ruled unconstitutional by California’s Supreme Court and then it would have to go to the U.S. Supreme Court – which may very well happen. This is why Mike McGuire was against the initiative and saw that in order to get any reform the unions would have to agree to change. Many have but it hasn’t been enough to impact the long-term liabilities and more concessions have to be made.  As stated in a contemporary economic theory:

“This means that the political, legal, religious and educational systems must be understood dynamically in terms of whether they serve to enhance or to hinder human development. Thus, a system that, at one point in time, may have served a progressive role in society may, because of changes in the possibilities created by new modes of production, come to serve a negative function. Accordingly, it might be quite appropriate and functional for a certain perspective or ideology to dominate the thinking at a given historical moment, while at a later time those same ideas may become unproductive expressions of false consciousness and hegemony.”

The situation is not hopeless if all stakeholders work together and in good faith. This is the problem with politicians signing pledges. They work against good faith and erode the ability to compromise. I do not see how any candidate for elected public office who has pledged allegiance to one party or another could possible take an oath of office without perjuring themselves even before they’ve taken their seat at the dais.


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Teacher Equality

Posted by on Oct 5, 2014

Since the June 10th ruling in the education-equity case, Vergara v. California by Judge Rolf M. Treu, where he essentially agreed with the plaintiffs—nine California students—that the state’s laws governing teacher tenure and dismissal unfairly saddle disadvantaged and minority students with weaker teachers, tenure reform has become a hot-button item.

Teacher Equality #2

Teacher Equality

Ironically, this lawsuit isn’t about teacher tenure per say. It is about teacher equity, or rather teacher quality distribution, a subject that has been a focal point of the No Child Left Behind Act of 2002. NCLB has received a lot of flak regarding its common standards and high-states testing mandate but its greatest achievement, or attempted achievement, has been the program’s Equality of Educational Opportunity of which Teacher Equity Planning is a part.

This lawsuit comes as California is working on its own “Plan for Highly Qualified Teachers” which was written and approved by the State Board of Education in September 2010. It reflects the steps the state is currently taking to ensure that students from low-income families and minority students are not taught at higher rates than other students by inexperienced, unqualified, or out-of-field teachers.

This month the U.S. Department of Education detailed its long-delayed “50-state strategy” for ensuring that poor and minority students get access to as many great teachers as their more advantaged peers. But fewer than half of states have separate teacher-equity plans on file with the department.

A national survey of teachers found that core classes in high-poverty schools are twice as likely to be taught by out-of-field teachers as similar classes at schools serving more advantaged students. The difficulty in compliance is reflected in the fact that states have a limited authority and capacity to ensure that districts distribute teachers fairly, since decisions like hiring and transfers tend to be made at the local level. In addition, states are also focused on developing new teacher-evaluation systems that take into consideration student outcomes.

Teacher Equity #1

Teacher Equality for Minority Students

The idea of teacher tenure started as part of the labor movement in the late 19th century when teachers demanded protection from parents, administrators and politicians who would try to dictate lesson plans or exclude controversial materials. New Jersey became the first state to pass tenure legislation when, in 1910, it granted fair-dismissal rights to college professors and during the 1920s it was extended to elementary and high school teachers as well. Today about 2.3 million public school teachers in the U.S. have tenure.

Though tenure doesn’t guarantee lifetime employment it does make firing teachers a difficult and costly process, one that involves the union, the school board, the principal, the judicial system and thousands of dollars in legal fees. As a result of union contracts and state-labor laws in most states, a tenured teacher can’t be dismissed until charges are filed and months of evaluations, hearings and appeals have occurred. Meanwhile, school districts must pay out thousands of dollars for paid leave and substitute instructors. The system is deliberately slow and can take anywhere from ten months to ten years.

Some school districts have resorted to separation or “buy-out” agreements to avoid extensive hearings and costs and in 1997, Oregon abolished tenure and replaced it with 2-year renewable contracts and a rehabilitation program for underachieving instructors. Other states like Connecticut, New York and Michigan have simply eliminated the word “tenure” from teacher contracts while retaining the due-process rights.

Judge Treu stayed his ruling pending appeals and knowing how long that could take, California’s Teacher Equity Plan may be in place way before teacher tenure is reformed.

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