Oct. 5, 2010 at 8:00 AM ET
State and local government budgets are by all accounts in dire straits. Last year, collectively, they faced a $100 billion budget shortfall. After 12 months of belt tightening, emergency aid, layoffs and tax hikes, things are even worse. The Center on Budget and Policy Priorities said in a report this year that the gap could be $140 billion. And last week, respected analyst Meredith Whitney suggested that state governments will collapse unless the federal government offers a trillion-dollar bailout that will rival the bank bailout of 2008.
And yet, across America, many government workers are getting rich off taxpayer-funded salaries. City managers get free luxury cars, firefighters get half-million-dollar lump payments and, in California, one city worker is being paid $500,000 annually during retirement. In New York state, $100,000 salaries can't be called rich, but at a time when unemployment remains near 10 percent, there are 99,000 state and local workers bringing home six figure salaries.
Two weeks ago we published a survey of government workers with super-sized salaries and invited Red Tape Chronicles readers to do some digging. You weren't shy. More than 1,000 tips came streaming in via e-mail, Facebook, Twitter and this blog, and we researched each one. Here are the best – or worst -- examples you sent.
1. Phoenix – double-dipping top cop
Two frequent causes of outsized government worker pay are so-called “double-dipping” and lump sum retirement payouts due to banked sick time, vacation and other benefits. In the case of Phoenix top cop Jack Harris, we have both. Harris retired from his post as police chief in 2007, receiving a one-time payment of $562,000 and beginning to draw his annual pension of $90,000. Two weeks later, the city rehired him as its “public safety manager” – critics say he’s doing exactly the same job -- at a base salary of $193,000 per year. While it’s common around the country for police officers and other government workers to retire, collect their pension and keep working, the state of Arizona passed a law specifically banning the practice earlier this decade. Conservative think tank Judicial Watch has filed a lawsuit in Maricopa County on behalf of a local resident, alleging the Harris is breaking this law.
"It appears that the senior law enforcement official in the city is gaming the system," said Judicial Watch's Christopher Farrell. "That is deeply corrosive to the whole sense of the rule of law." Farrell said he doesn't spite Harris his pension, but both the end-run of state law and the high salary – particularly at a time when Phoenix police were threatened with hundreds of layoffs – are egregious, Farrell said. "It's a gag reflex kind of thing."
David Leibowitz, spokesman for Phoenix Mayor Phil Gordon, said that Judicial Watch's lawsuit is politically motivated and maintained that Harris' compensation is in line with police chief pay in other major U.S. cities.
"The chief has served the city of Phoenix for many years. He's incredibly well qualified and his salary and total compensation is well within line with the largest cities in America," Leibowitz said.
Phoenix is America's fifth-largest city. The seventh-largest, San Antonio, pays Police Chief William McManus $183,000. Philadelphia, which is nearly the same size as Phoenix, pays Police Commissioner Charles H. Ramsey $195,000, though his pay will be cut to $187,500 this year.
Leibowitz said the method for arriving at Harris' salary shouldn't be a consideration.
"You (should) look at the overall money you are spending … and put it in context of the results you are getting," he said. "It's really cost effective. … We want people in Phoenix to believe they live in the safest large city in America."
Meanwhile, Phoenix pays a pretty penny to many other uniformed officers. There are 180 police officers and firefighters earning more than $100,000 annually. And fully 90 percent of the agency's budget goes to salaries, according to AZCentral.com.
2. In California: A pension check and an unemployment check ?
As we've seen, it's common for government workers to quit, collect a pension, and then go back to work. What happens when these double dippers get laid off due to budget constraints? In California, they collect unemployment checks, discovered recently thanks to some great reporting by the Sacramento Bee. There's no hard data on these special kinds of double dippers, but to give you a flavor, reporter Robert Lewis found that 53 former sheriff's deputies in Sacramento County collected a total of $300,000 in unemployment benefits last year, along with their regular pensions.
3. In Illinois suburb, a $435K parks director with a $166K pension
There is little debate about the ticking time bomb of state government pension obligations, which total an estimated $2 trillion nationwide. How did that number get so high so fast? In many cases, pension loopholes are exploited, exploited and exploited again. In Highland Park, Ill., a northern Chicago suburb, park district Executive Director Ralph Volpe and the local parks commission provide an instructive example. Volpe's salary in 2008 was $164,000, but the commission added $270,000 in bonuses. That raise was nice, but even nicer was the step up in his pension, which is based on an his last-year salary. The bonuses helped bump Volpe's pension up by more than $50,000 per year. The $166,000 he'll make annually now that he's retired exceeds his top base salary for the job. Residents forced three parks commissioners to resign after the deal was exposed by the Chicago Tribune, but they still have to pay Volpe for life.
3. In Bellwood, Ill., $250,000 for life
Meanwhile, west of Chicago, Roy McCampbell, a retired city administrator in Bellwood, earned $472,000 in 2009 – tops for any municipal worker in the state. His base salary was a modest $129,000, but that was beefed up by a series of enhancements, including $126,000 for unused sick and vacation days. Salary sleuths should take a close look at government workers' vacation and sick day provisions. They are often a contract sweetener used to disguise the real cost of a contract. McCampbell's last-year windfall raised his pension by $70,000 per year. He now holds the top pension payout in Illinois, $250,000 annually. That's more than the price of most single-family homes in Bellwood, a primarily African-American, working-class town of 20,000 with a per capita income of $24,000 and an average home value under $200,000. Of the 138 homes recently sold in the town, according to Zilliow.com, the top price was $182,000.
4. Miami – Amid budget crisis, average salary is $100,000
How bad are things in Miami? Earlier this year County Manager George Burgess sent a memo out urging employees to stop buying bottled water. This came as the city was facinga $118 million budget shortfall and the mayor was calling for nearly 200 staff layoffs.
Meanwhile, Burgess' salary and benefits package totaled $425,000 last year. It includes use of a 2010 Infiniti M35, which cost taxpayers $30,000 for a three-year lease, according to the Palm Beach Post.
Miami has plenty of well-paid employees. Nearly 100 earn more than $200,000 per year, costing the city $23 million annually, according to a 2009 analysis by the Biscayne Times (pdf). And 1,751 of the city's 3,964 workers earn six-figure paychecks. Fully 80 percent of the city's budget is devoted to salaries, a crushing amount that leaves precious little for parks or road improvements.
5. Laughlin, Nev. – Burning down, or burning through cash?
Laughlin is a tiny Nevada border gambling town, a little Las Vegas for Northern Arizona residents. Not including tourists, the city had a population of 7,000 during the last Census. Last year its top 10 employees pulled in nearly $3 million in pay, making it a perfect example of another bane of taxpayers– overtime pay.
As KLAS-TV in Nevada noted in a recent story about excessive overtime pay, "One might expect the town of Laughlin to be a blazing inferno." One Laughlin firefighter alone earned $92,000 in overtime pay last year.
Laughlin is in Clark County, which also includes Las Vegas. Other firefighters from around the county are also well compensated. The two top earners, who collected $474,000 and $444,000, were firefighters who won large disability payments, according to KLAS.
The nearby city of Henderson, also in Clark County, generates some heavy paystubs, too. The assistant city attorney earned $550,000, including $433,000 in a one-time payout; the city attorney earned $435,000, $350,000 of it in a one-time payout, and a fire battalion chief earned $400,000, almost all from a one-time payout. Not to be outdone, North Las Vegas' assistant fire chief earned $661,000.
6. Clarkstown, N.Y. -- an average salary of $150,000
Clarkstown, N.Y., is a pretty town of 85,000 about an hour north of New York City. But an ugly taxpayer revolt is under way there, in part because of police salaries. Disclosures that retiring police Capt. Thomas Purtill pulled down $543,000 last year –- tops for all municipal workers in New York state -- led to creation of the "Disgusted Taxpayers of Clarktown" political action committee and an organization called simply "Clarkstown Taxpayers."
Purtill's earnings included a one-time $250,000 payout to settle a dispute over sick pay. According to the local Journal News newspaper, Purtill injured his back in 2006 and was only able to work two days per week until he retired. In 2008, he earned $335,000.
Purtill wasn't alone: Four of the top 10 municipal workers among the state's 1,500 municipalities were Clarkstown cops. Nearly 150 of Clarkstown's 173-member police force earned six figure salaries in 2009, not including overtime, for an average salary of $151,000.
8. Norfolk, Va.-- a great $29,000 a year job
Twelve years ago, Jill McGlone, an employee of the Norfolk Community Services Board, was placed on administrative leave during a personnel investigation. She never set foot in the office again, but no one seemed to notice. McGlone continued to draw paychecks – including regular raises – for 12 years, until her story was brought to light this year. Her salary last year was $29,000. Local officials are befuddled by the incident, and five employees have lost their jobs since McGlone's no-show job came to light. A criminal investigation has begun, according to the Virginian-Pilot.
The city manager of Norfolk earns $213,000 in base salary, by the way, according to data collected by the Pilot. Two assistant city managers split $300,000, and two assistants to the city manager earn about $90,000 in base pay while serving the city of 230,000.
9. Jefferson County, Ala. -- money flushed down the sewer
In Alabama, Jefferson County Attorney Jeff Sewell earns $375,000. Given that his county is in the biggest financial mess in the entire country and the nation's biggest-ever government bankruptcy is looming, the salary doesn't look too bad. It looks like an outright bargain compared to the $500-per-hour salary being paid to John S. Young, a court-appointed receiver who's trying to figure out how the county will catch up on $500 million in default payments. In case you're wondering, $500 per hour equals roughly a $1 million annual salary, assuming he puts in 40 hours a week and takes two weeks vacation.
Jefferson County, which includes Birmingham, started down the road to perdition in 1994, when it was sued over a failing sewer system. The county began construction of a new one to satisfy a judgment, but costs ballooned to $3 billion. Unable to service the debt, the county turned to Wall Street for help. Investment banks sold officials on credit default swaps and other tricky funding mechanisms. We all know how that worked out. In this case, the county ended up with swaps that made it liable for nearly $6 billion. Now Jefferson County is in danger of becoming America's largest government bankruptcy in history – shattering the old record of $1.7 billion set by Orange County, Calif., in 1994. Incidentally, nearly two dozen government officials have been jailed over shady deals and alleged bribery by brokers competing for the county's business.
Bloomberg ran an excellent history of the doomed project earlier this year, including this tragic sentence:
"Through a long series of ill-conceived financial transactions, the sewer ratepayers of Jefferson County have been saddled with a debt of roughly $11,491 per residential sewer customer." Bad Wall Street bets raised the city's interest on debt from 3 percent to 10 percent almost overnight, increasing its debt service payment from $10 million to $23 million, which is why the county simply can't pay its bills.
Young, who left a private sector water company job that brought him $1.6 million in 2008 to take on the receivership, told local journalists that he was worth it, as he expected to negotiate significant interest and fee discounts from creditors
"I know I have more value than the price they're paying me," he told John Archibald of the Birmingham News.
10. Pahrump, Nev. – Heidi Fleiss, a DA, and two crashes,
DUI in one day
Robert Beckett's job is to prosecute crimes in an almost-forgotten part of Nevada called Nye County that borders Death Valley. At $105,000 annually, his pay is set by the state, and doesn't sound egregious for an attorney with 16 years on the job. But Beckett allegedly helped himself to additional funding and committed other crimes, making his salary seem quite excessive.
In 2008, midway through his fourth term, Beckett crashed a county-owned Ford Expedition in the desert near Shoshone, Calif. Six hours later, he crashed a Dodge pickup truck on the same highway. Soon after, he failed a breath alcohol test, according to the Associated Press.
Then, in May, he was arrested in his office and charged with 20 counts of fraudulent appropriation of property for allegedly raiding a "bad check fund." Nevertheless, he continued his campaign for election to a fifth term before losing in a June primary.
The pressure was apparently too much for him. In September, former famed Hollywood Madam Heidi Fleiss – who now operates a laundry business in Pahrump -- called police to report a suspicious vehicle parked near her home. Inside was Beckett, police say, asleep behind the wheel of a county-issued vehicle. Beckett later failed a breath test and was arrested.
"I feel bad for the guy, but drunk driving is like shooting a gun in a crowd of people," Fleiss reportedly told the Pahrump Valley Times. "If I'd known it was him, I never would have called the police. I would have told him to lay down in the guest house and sleep it off."
11. Utah Transit Authority John Inglish
Utah is among the most forward-thinking mass transit states in the United States, as Salt Lake boasts a modern and rapidly expanding light rail system that is the envy of many cities. Still, General Manager John Inglish's salary of $350,000 last year -- exceeded the pay of top transportation bosses in Los Angeles, San Francisco, Denver and Phoenix. Inglish even makes more than the head of the highly scrutinized Washington, D.C., Metro system chief John Catoe, who was paid $315,000 annually before stepping down earlier this year. And it's roughly equal to New York City transportation chief Jay Walder's, who is currently facing calls to accept a salary cut amid fare hikes and service cuts.
CALIFORNIA – A special section
Bell, Calif. started the era of outrage over public servant pay with revelations that the city manager was earning $800,000 per year. That story spurred several news outfits and bloggers to hunt for the second highest-paid government worker in California. As is the case with these things, it all depends on how you count. So we've included a representative sample of highly compensated public officials. Many of them came to light because the League of California Cities, in response to the Bell incident, conducted a statewide survey of city manager compensation, which it released on Sept. 10. Aware of the target this placed on their backs, many managers included extensive explanations in the "special issues" field, which makes for amusing reading if you have the time. In all, 16 city managers pulled down more than $300,000 in salary last year, the survey found.
12. Escondido City Manager Clay Phillips is not the best paid city manager, though his base salary of $225,000 is nothing to sneeze at. But his contract is typical, and offers benefits most workers could only dream of, inflating the city's cost of his employment to $326,000. According to the San Diego Union Tribune, he receives than 14 weeks of paid time off every year, along with a $9,000 auto allowance, a $1,000 computer stipend, a full $15,000 contribution to his 401 (k), and a life insurance policy. As another perk, he's allowed to bring his spouse on up to three conference trips every year, all expenses paid. His contract also has a clause that is somewhat like the "franchise player" status in the NFL. His salary can never drop below the third-highest city manager in San Diego County.
13. Bruce Channing of Laguna Hills is one of 16 city managers reporting salaries north of $300,000 – Channing earned $321,000. His municipality of 33,000 also provides him with use of a $60,000 Toyota Sequoia SUV. A local report suggests his benefits package is worth more than $400,000, but Channing disputes that.
14. Stephen H. Williams of Palmdale, earned $367,518, making him appear to be the top-paid city manager in post-Bell California. But he indicated in his disclosure that his salary appeared to be inflated because that amount included a "Banked Leave Time Cashout of $93,360.05," a "Stipend for Waiving Health" worth $600, an auto allowance worth $7,200 and $1,508 in life insurance premiums.
15. Joe Tait of San Juan Capistrano, a relatively small hamlet of 36,000, earned $324,000 last year, but didn't initially show up on the high-salary radar because he actually holds two jobs with that city – city manager and utilities director. Both pay him less than $200,000 per year. City officials defended the arrangement, according to the Orange County Register, by saying Tait actually saves them money.
16. Vernon -- Tait has nothing on Bruce Malkenhorst, however, who until recently held five jobs in the industrial the city of Vernon – population 96. He served as manager, clerk, treasurer, finance director, redevelopment director and utilities director. Now retired, Malkenhorst is the state's top pensioner, collecting $500,000 per year. He's but one of 24 California retirees receiving more than $200,000 annually, and one of nearly 5,000 earning six-figure pensions. While Malkenhorst cashes the checks, he is awaiting trial on charges he embezzled $60,000 while in office. Meanwhile, the Los Angeles Times has reported that Malkenhorst's salary has actually been underreported, and that in 2005 he actually earned $910,000.
17. San Ramon -- Since Malkenhorst is retired, the title of highest paid city manager could fall to Herbert Moniz, who helps run San Ramon, a town of 64,000 in Contra Cost County. Moniz earned $359,000 last year, after receiving a 10 percent raise in 2008, according to the local Patch.com site. He presides over a payroll of 582 – 101 of whom earned more than $100,000 last year. Meanwhile, the city is cutting services: drop-in fees at senior centers are going up, street sweeping has been reduced to once per month, landscaping has been cut back and the city's aquatic center will close more often next year, according to a newsletter recently sent to residents recently.
18. San Francisco - Of course, city managers aren't the only California city employees with salaries that appear outsized. In San Francisco, there is considerable consternation over the salary of Deputy Police Chief Charles Keohane, who retired in the middle of 2009 but still ended up as the highest-paid city worker, earning $516,000 with one-time payouts for vacation and sick days. Asked how he felt about it, Keohane told the San Francisco Chronicle, "Not so good, if it's going to get my name in the paper."
Keohane was hardly alone in the six-figure ranks of city employees, however. Six city workers eclipsed $300,000 (including four police officers) and nearly 100 earned $200,000. In all, nearly 10,000 San Francisco workers – or one-third of the workforce -- earned $100,000 or more last year, when including overtime pay. While we're in the City by the Bay, we can also mention that one in five of the city's 5,000 transit workers – who are employed by a separate agency -- also eclipses $100,000,too.
19. Avenal, Calif. -- It might easy to miss an entirely different set of well-paid government employees – those who work in special agencies or commissions. Fortunately, Red Tape readers sent in plenty of examples. Here's one: Timothy Malan, chief dentist of the state correctional facility in Avenal. Being a dentist to prisoners is probably an awful job, but he's well compensated –earning $621,000 last year. In fact, The Washington Times reported that 37 state dentists earned $290,000 or more last year.
20. State Compensation Insurance Fund – The more arcane and obscure the agency, the more likely you'll find surprisingly large paychecks, like the one granted to Janet Frank for running the state's workers comp program – she earned $1.6 million during a two-year stint. In one of the most dramatic stories of paycheck inflation as you'll ever read, Los Angeles Times reporter Michael Rothfeld reported how an agency already rocked by scandal recruited a top-notch candidate with a $450,000 salary and a $140,000 signing bonus in 2008. By the time those expensive two years had passed, Frank had somehow accumulated $107,000 worth of unused vacation days when she cashed out and went home to Colorado.
It's not too late for you to get in on the fun. Here's a list of some resources to get you started. Find out how many six-figure salaries your tax dollars are supporting.
STATE AND LOCAL PAY LOOKUP WEB SITES
If your state/city isn't listed here, try these two compendiums: