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Associated Press
Jun 30, 2004 - 01:00 AM

by MICHAEL R. BLOOD, Associated Press Writer

Schwarzenegger rewards employees with higher pay

LOS ANGELES -- Even as he calls for shared sacrifice to solve the state's financial crisis, Gov. Arnold Schwarzenegger is spending more than his predecessor on salaries for his official staff, an Associated Press investigation found.

Among the key findings: Schwarzenegger is spending nearly 8 percent more on salaries in the governor's office than former Gov. Gray Davis did at the end of his term; he is paying a higher average salary for each employee; and he's paying more six-figure incomes within his inner circle.

Schwarzenegger's office responds that he has fewer employees on his official payroll, has refused to accept a salary for himself and has submitted an overall office budget for the fiscal year beginning July 1 that is identical to the current year.

However, The Associated Press also obtained payroll documents for both governors' staffs that show the overall number of employees and the spending on salaries are far higher than the official budgets indicate. That's because dozens of employees who report directly to the governor are paid from the budgets of other state departments.

Asked about the higher salaries and growth in the governor's office payroll, Schwarzenegger spokeswoman Margita Thompson said, "The governor is proud of his staff and thinks they are part of what has turned this state around."

Thompson noted that Schwarzenegger at this point has fewer employees than Davis, but added that he would continue to hire additional staff. The governor's office is "traditionally exempt" from the hiring freeze he imposed on state agencies last year, she said.

The AP obtained the governor's office payroll records through a California Public Records Act request to the state Controller's Office.

According to those records, the average annual salary for employees in the governor's office has risen 22 percent since Sept. 30, 2003, just a week before voters ousted Davis in the state's historic recall election. It rose from $48,861 in September to $59,585 as of May 28, seven months after Schwarzenegger was sworn in.

Schwarzenegger also has 14 employees on the official governor's payroll making $100,000 or more a year, up from eight on Davis' staff as of Sept. 30.

"For a governor who came to office saying he would cut the government, he seems to have really pumped it up, at least salaries for his inner circle," said Jamie Court, a consumer activist with the Santa Monica-based Foundation for Taxpayer and Consumer Rights. "It doesn't show much respect for taxpayers."

Voters blamed Davis for runaway state spending that led in part to the state's record budget deficit, replacing him with Schwarzenegger during the Oct. 7 recall election.

Since then, Schwarzenegger has engineered a record round of state borrowing to help close a $17 billion budget gap. He has cut spending for higher education and other services and said he wants to save more money by reopening contracts with some state employee unions.

He is requesting the same funding for his office, $6.1 million, that it had this year. In addition to salaries, that budget covers equipment, benefits, travel and other costs for the next fiscal year.

The number of employees on his official payroll, 61, actually is lower than the number on Davis' roster on Sept. 30 of last year. At that time, a year into his second term, Davis listed 69 people on his payroll. (One hourly staffer who was on both payrolls was omitted from this total because the annual pay was only about $3,000 a year).

While the size of Schwarzenegger's office staff is smaller, the size of the payroll has grown, from $3.37 million annually at the end of Davis' tenure to $3.63 million as of last month, a 7.7 percent increase.

In response to an AP request, Schwarzenegger's office on Tuesday released internal documents from the Davis administration showing the payroll records for all state employees who reported to Davis as of last August. That tally, which could not be immediately confirmed by official state records, shows Davis' office payroll at $3.54 million. Schwarzenegger's official office payroll by the end of May was still 2.5 percent higher.

The state payroll records also show that many members of Schwarzenegger's staff are making higher salaries than their counterparts in the Davis administration.

Schwarzenegger's legal secretary, Peter Siggins, makes an annual salary of $123,284. That's an 8 percent jump from his predecessor under Davis, Barry Goode, who was paid $113,964.

Schwarzenegger's communications chief, Robert Stutzman, also is paid $123,284, 8 percent higher than Davis' former communications director, Peter Ragone.

Similarly, Schwarzenegger's appointments secretary, Randal Hernandez, ($123,284 a year), and press secretary, Thompson ($118,015 a year), also earn more than their Davis predecessors.

"The governor feels he's been able to attract extremely qualified, the best staff," Thompson said.

Schwarzenegger, a Hollywood multimillionaire, does not accept the office's $175,000 salary, which is returned to the budget.

The higher salaries for those who work for him are "disheartening to see when one of the messages that keeps going out is everybody has to share the pain," said John Travis, president of the California Faculty Association, which represents 23,000 professors, librarians and coaches in the California State University system. "It's surprising that everybody is not having a painful experience with this budget."

In addition to the higher individual salaries, Schwarzenegger gave raises toseven Davis veterans who were picked up by his staff during the transition, records show. The raises ranged from about 5 percent to 21 percent, although most of the workers were clerks or secretaries.

The official state payroll records reviewed by The Associated Press provide just a glimpse of the true size and cost of a governor's staff.

Governors have long obscured the precise number of people working for them by attaching various staffers to different state agencies. Their salaries and which agency picks up the tab are difficult to determine, effectively creating two staff rosters for the governor's office.

For example, Terri Carbaugh, Schwarzenegger's deputy press secretary, makes $100,013 but is not listed on the official executive office payroll.

According to documents released by Schwarzenegger's office under a separate California Public Records Act request, there are 154 people working for him, not just the 61 listed on official payroll records for the governor's office.

The salaries for those staffers, which range from a $26,000-a-year clerk to his $131,000-a-year chief of staff, total $11.6 million annually.

That payroll figure is more than three times the $3.6 million in salaries funded by his official office budget.

Many of the additional employees, often referred to as "loaned" or "borrowed" employees, are paid by other state agencies or through special funds, even though they work directly for the governor.

The average salary for Schwarzenegger's 154 state employees is $75,260. Nearly one-third of all those employees make $90,000 a year or more, those records show. Twenty-six make $100,000 a year or more.

A confidential staff roster for Davis obtained by the AP, dated Sept. 28, 2003, shows at least 164 people were working for Davis in the month before he lost the recall election. That roster did not contain salary figures.

The unofficial Davis documents released Tuesday by Schwarzenegger's office show 194 people working for Davis last August, with salaries totaling $12 million and an average salary of about $62,000.

Thompson said the total spending is a more accurate reflection of the governor's operations.

Schwarzenegger, who has called the state bureaucracy a "mastodon frozen in time," has a task force studying the structure and cost of government. In a separate recommendation, his office has said it wants to incorporate all employees working for the governor into his budget, along with the funds to support them.

As for the traditionally opaque budgeting system for the governor's staff, Thompson said, "We are trying to change that to make a more transparent system."




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