PECG Ad Campaign is Misleading, Deceptive and Irresponsible

This is a time when all Californians should work diligently to help put the state back on an even keel by practicing fiscal responsibility. Instead, PECG has chosen to use expensive means to create yet another misinformation campaign and sway public opinion into believing that state employed engineers are cheaper than private companies and that restricting contracted out services will save the state money.

The fact is that a 2007 report by the former head of the non-partisan Legislative Analyst’s Office, showed the comparable cost of in house (state-employed) engineers ranged from $173,434 to $209,212 while the average cost of an outside (privately-employed) engineer was $193,000.

Moreover, PECG’s misleading ad campaign states that pension benefits are only $2000 per state worker per month. In fact, a PECG member employed by Caltrans with a term of employment of 22.7 years - which is the average term of employment for state workers -- would have to earn less than $60,000 in the final year of employment to receive a pension of $2,000 a month.

Resources such as the state worker database point to significantly higher current salaries for Caltrans engineers, which strongly suggests that pension benefits themselves are higher than the $2,000 cited in PECG’s misleading ads and also that future pension liabilities will be significantly higher.

And there’s the rub. It’s not just that in house engineers have comparable salaries to contract engineers, it’s that when you consider the extra liability per state worker in pension and health care benefits – sometimes more than a million dollars over a lifetime -- short-term contracts are a much cheaper option for the state and can actually help reduce costs because the state is not on the hook for contract workers’ long term healthcare or pension benefits.

Unfortunately, less than 10 percent of transportation engineering and design work conducted by the state is contracted out to private engineering companies. Ninety percent is handled by state employees. In light of this dramatically one-sided statistic, it is disingenuous of the union representing state workers to suggest that cost savings of any kind can be made by further restricting outside contracts. If anything, the opposite is true.

The taxpayers, state leaders and ultimately the many fine state employees do not benefit from this misleading campaign as we try to identify the appropriate fiscal adjustments.

Tom Blackburn
President, ACEC California
Blackburn Consulting