SACRAMENTO -- Four years ago, barely three dozen California state workers earned a base salary of more than $200,000. Today, as the state faces a fiscal crisis, close to 1,000 state workers make that much.
Those and other large raises, many the result of lawsuits against the prison health care system, have cost the state hundreds of millions of dollars. They contrast starkly with the more modest raises of most rank-and-file state employees – and most private workers, according to a Sacramento Bee analysis of data from the state Controller's Office that can be viewed at www.sacbee.com/statepay.
"This kind of growth in salaries is coming at a time when the state should be looking at ways to economize," said David Kline, communications director for the California Taxpayers Association, noting the state's projected $8 billion deficit between now and June 2009.
At the top are investment gurus at the state's retirement funds, prison doctors and administrators. At the bottom are janitors, typists and a variety of assistants.
And, The Bee found, the recent raises widened the gap between the two.
The median salary of the 20 percent of full-time state workers in the basement of the state's payroll increased about 10 percent from November 2003 to January 2007, rising from $32,244 to $35,532. The median salary of the top fifth of state workers jumped about 20 percent, from $77,604 to $92,808.
Jump in six-figure salaries
Working for the state will never be the best way to get rich quick, but it is becoming a lot easier to earn a six-figure salary.
As of February, about 17,500 permanent, full-time state employees made six-figure base salaries – about one of every 14. When November 2003 wages are adjusted for inflation, that number then stood at 11,000, or one in 21.
Not included in those counts were University of California workers, and an additional 11,500 of them also earn six-figure salaries, or one in 10.5, a Bee analysis of a separate database maintained by the university system shows. After adjusting for inflation, that number stood at 9,634 during 2003, or one in 12. Among UC workers, the Bee didn't count those making less than $20,000, and the UC system did not provide salaries for those toiling at UC's two national labs.
In fact, four of the top five highest-paid workers in the state worked for the University of California as of 2007, though two of them have since moved on. When the UC is included in the analysis of state government employees, California's highest-salaried worker is Mark Laret, chief executive officer at UC San Francisco Medical Center. Laret earns a base salary of $566,838.
However, when gross UC salaries including bonuses and other compensation – not available to compare all state workers – were included, several UC doctors actually earned over $1 million last year. And Cal football coach Jeff Tedford came out on top, grossing about $2.7 million.
(The Bee's numbers do not include community college employees or legislative staffers – like the UC and CSU information, data on those workers' salaries are maintained separately from data for other state workers. The newspaper still is attempting to get those numbers.)
Two-tiered system of pay
The highest-paid 10 percent of state workers earn a median annual salary of $107,580, up almost 25 percent from November 2003, state records show. That's a much bigger increase than most state employees saw; the median salary for all other state employees during that period rose 14 percent.
Both trends mirror the two-tier system of remuneration occurring in the private sector as well. Across California, median salaries for the highest-paid private-sector workers rose more quickly than the salaries of the rest of the work force from 2001 to 2006, according to the U.S. Bureau of Labor Statistics.
Officials at state agencies said workers getting top raises do vital jobs, ranging from prescribing medicine that keeps prisoners from attacking guards to managing billions of dollars in retirement savings. The pay increases, they say, were necessary to remain competitive with the private sector.
"In order to attract the best names in the business, you have to pay them a lot more than you do basic civil servants," said Clark McKinley, a spokesman for CalPERS, which rewards its managers with some of the state's top salaries.
Prison health salaries soar
Much of the leap in six-figure salaries is related to the legal tussle involving prison health care. Noting high vacancy rates among positions for prison doctors and other health professionals, authorities in three separate federal court cases raised pay.
The impact was huge. In February 2008, the 1,000 highest-paid staff members at the Department of Corrections – the vast majority of them medical professionals – together earned annual salaries of $198 million. That's $68 million more than they earned in January 2007.
Dozens of prison psychiatrists, for example, saw their annual salaries rise from about $150,000 last year to $250,000 this year.
The salary increases were necessary to fight a crisis, said current receiver Clark Kelso. Job openings had reached such a high level that medical care was being seriously compromised. And why, Kelso and others ask, would doctors choose to work in a remote prison for less than they could earn in the private sector?
"It's market forces," said Stuart Bussey, president of the Union of American Physicians and Doctors. "Basically, this is not a pleasant place to work (and) you can make a couple hundred thousand easy in the private sector."
It's too early to evaluate how effective the raises have been, Kelso and others said. They seem to have helped attract dentists, said Robin Dezember, the state's director of correctional health care services. But while more psychiatrists are showing up at job fairs, vacancy rates for psychiatrists continue to hover around 50 percent. Openings for primary care physicians also are numerous.
"This isn't something where you raise the compensation and this magically happens," Kelso said. "We need the right combination of compensation, working conditions and reputation."
Kelso believes current salaries for prison doctors are about right. Depending on where in the state they work, primary care physicians and psychiatrists in the private sector typically make between $150,000 and $225,000, according to Salary.com. Most state prison doctors now earn between $220,000 and $280,000, salary records show.
A spreading pay spiral
The changes in state prisons had a ripple effect. One state agency got the governor to raise its salaries, arguing that otherwise their medical professionals would jump to jobs covered under the three court cases.
At the California Department of Mental Health, the 300 highest-paid employees – mostly psychiatrists – earned annual salaries ranging from $150,000 to $282,000 and totaling $60 million in February 2008, up $18 million from January 2007.
The raises have served their purpose, filling hundreds of vacancies, said Nancy Kincaid, a spokeswoman for the mental health department.
"We actually had some people return who had left," Kincaid said. Before the raises, she said, "there was a lot of involuntary overtime" to get the work done.
The state has approved roughly $300 million in budget augmentations during the last three years because of the lawsuits, according to numbers provided by the California Department of Finance.
While medical professionals represent a big chunk of the largest salary increases, other skilled professionals working for the state also received big raises.
The salaries for the 10 highest-paid executives at CalPERS, the state employee retirement system, jumped an average of 45 percent from November 2003 to February 2008. CalPERS Chief Investment Officer Russell Read, the highest-paid CalPERS employee, now makes $555,360, not including bonuses.
McKinley, the CalPERS spokesman, noted that the retirement system's portfolio is huge and constantly expanding. In fiscal year 2006-07, CalPERS income topped $50 billion. Someone managing that much money in the private sector would likely be a multimillionaire, McKinley said.
"He's running a quarter-trillion-dollar company," McKinley said of Read, adding that the motivation behind many executives' decision to work at CalPERS is not pay but "the challenge of being with the No. 1 public pension fund in the world."
Other departments that now employ many more six-figure workers include:
• Caltrans. The salaries for many of the department's lawyers and engineers have increased significantly. In late 2003, about 200 Caltrans employees made more than $89,000 – the equivalent of a $100,000 salary today when adjusted for inflation. As of February, about 2,000 Caltrans employees reached six figures in pay.
• Water Resources. Engineers in this department also received large raises during the past five years. Today, about 370 workers there make six figures, up from 82 in 2003.
• California Highway Patrol. Because of raises for many officers, the number of six-figure salaries at the CHP roughly doubled from late 2003 to February 2008. About 360 workers there make more than $100,000 today.
When asked about The Bee's findings, Department of Finance officials noted that the leaders of several state departments still make less than their counterparts leading similar agencies at the county level.
Jon Coupal, president of the Howard Jarvis Taxpayers Association, said the state needs to conduct careful salary surveys before raising pay for high-earning professionals. And, he said, it needs to look at demand for positions – if demand is high, taxpayers shouldn't have to pay for higher salaries.
"The percentage of state spending that goes to compensation of all forms is much higher than it's ever been," Coupal said. "What does it take to attract people? In California, we think generally speaking, the pay is excessive."