The Wrong Sector of the Economy is Growing

by Andy Caldwell

Everything is fine here.

Move along.

Nothing to see here.

Those are some of the nicer responses I have been receiving from people who believe exorbitant government salaries are defensible and our pension crisis is under control. Nonetheless, our local governments and the state of California are in huge financial trouble for three primary reasons. They are not business or taxpayer friendly. They have created unsustainable salary and pension costs, and they have served to create and perpetuate a permanent welfare class along the way with a huge workforce of government bureaucrats to serve the same.

Relatedly, the Santa Barbara County Association of Governments, the agency in charge of regional transportation planning and funding in the county presented a chart titled “Jobs 2010-20- We (emphasis added) Are Growing Economically,” but the facts don’t align with the title. That is, if the “we” in the title of the slide referred to Goleta and Santa Maria, well then, yes, “we” are growing economically, as these two communities each added 5,000 jobs during that ten-year period.

However, Lompoc, Guadalupe, and Solvang, had nothing to celebrate. Guadalupe and Solvang lost jobs between 2010-2020, and Lompoc – the third largest city in the county and home to 30% of all Section 8 housing in the county – remained completely stagnant, having gained no jobs in that ten-year period. Unfortunately, the powers that be – the “we” – don’t seem to notice or care.

Private Sector Subsidizing Public Sector

Another indication that things are not going well for the private sector. As the county government budget grew 1,000% from 1982 to 2022 (from $142 million to $1.4 billion), the budget of the department that administers welfare programs, the county’s Social Services department, grew 2,500% from $10 million to $250 million during that same period. The department’s 900 employees comprise 20% of the county’s oversized workforce. The number of families receiving benefits nearly doubled between 2016 and 2024; the department now serves some 38,000 families on food stamps not to mention other welfare programs.

But that is only part of the picture. Another county department, Public Health (533 employees with an annual budget of $100 million), takes care of many of the same “clients” who can’t afford health care.

But wait, there’s more! There is a third department, Behavioral Wellness, that serves people with alcohol, drug, and mental health problems. It has 462 employees, and its budget is $175 million per year. Needless to say, not a few of the “clients” of these three departments overlap. All told, taxpayers are shelling out over $500 million per year, yet the caseloads of these 2,000 employees (nearly 50% of the entire county workforce) have never gone down. 

Whose Are These Employees Anyway?

Now I am going to explain how the county is stuck on stupid regarding the pension costs associated with these departments. Social Services, Public Health, and Behavioral Wellness are not exclusively “county” departments because most of their funding comes from the state and federal government, nevertheless, of course, it is all taxpayer monies. That is, in this respect, these departments function as an arm of our state and federal governments and the supervisors are required to administer the programs while contributing a “match” of county funds for the programs.

While the state and feds contribute the lion’s share of the upfront costs for these employees, they leave county taxpayers holding the bag on pension losses associated with these same employees when they retire. Moreover, these particular county employees not only receive a government pension, but they also receive social security when they retire.

That begs two questions. Why do these employees get both a pension and social security when they retire, and why are local taxpayers ultimately on the hook for these defect state and federal employees?