Yesterday’s Chronicle front-page story about City employees making six-figure salaries caused a stir, and it’s likely to shape the upcoming budget negotiations in June. But first, it’s important to keep a little perspective. It’s easy to produce a list on how much different City workers get paid, because their salaries are public information. We don’t see the same kind of stories about private sector salaries, because it’s harder to access that data. Nevertheless, we now have a nifty tool to look up how much the City pays its workers – which will play a meaningful role when we face dire budget cuts. If anything, it has exposed how much the Police and Fire Departments get an unfair portion of the budget that drives its growth. I hope to focus more deeply on the list during the summer as these numbers become more relevant, but for starters here are my insights.

As the Bay Guardian noted, the overpaid City employees are “mostly cops.” Which is not exactly true, if you look more closely at the list. It’s really about cops and firefighters, whose departments are still top-heavy and have generous contracts that ensure healthy raises throughout the years. And this drives the budget’s priorities.

Of the 100 highest paid City employees in 2009, 15 were department heads – counting both the Police and Fire Chiefs. Another 26 are cops, and 37 were firefighters – even though the City has twice as many cops than firefighters. Only one person at Human Services made the list – the Director, who is number 33. Seven of the Top Ten are from Police and Fire, while the highest paid employee at the Health Department is ranked #22.

There are 158 police officers who made over $175,000 last year, and 146 firefighters. On the other hand, only 2 employees at Human Services made that much money. And while 143 Public Health workers made such salaries (which is also the largest City agency), the total overtime costs for those employees was $250,000. Meanwhile, cops who made over $175,000 took $4.8 million in overtime – and those 146 firefighters reaped $6.3 million.

Police, Fire, Public Health and Human Services are the four largest City Departments in the General Fund – and budget fights between the Mayor and the Board of Supervisors generally focus on their priorities. Gavin Newsom is asking all employee unions to do “give-backs” in their contracts to address the budget crisis. The list should offer some perspective …

Last year during budget season, Beyond Chron did an analysis of the Fire Department – based on figures from the Budget Analyst’s Office. At the time, the Department had 64 budgeted positions that paid more than $150,000. But now the Chronicle data shows that 118 firefighters had base salaries (excluding overtime) above that, and 67 made over $200,000. Even though the Supervisors cut $6 million out of their budget.

Remember the Battalion Chiefs? Fire Chief Joanna Hayes-White called them “crucial middle-managers” at last year’s Budget Committee, when a few Supervisors questioned her about them. They oversee a battalion of fire stations – and the union contract requires all nine battalions have a chief on duty 24 hours a day. At this point last year, there were 38 battalion chiefs – Beyond Chron recommended downsizing a few to cut costs. Now we know there are still 38 battalion chiefs, and all but five made over $200,000 last year.

Of course, the Chronicle’s list can often be misleading – because some employees were paid big sums last year because they retired. Deputy Police Chief Charles Keohane, whose #1 placement on the list earned him a mug shot in Rachel Gordon’s story, is such an example. His actual base salary was lower than MTA Chief Nat Ford (#3 on the list.) So when it comes to planning for future budgeting, his numbers aren’t always helpful.

But a clearer case would be Fire Battalion Chief Johnny Lo – who was #7 on the list. The Chronicle data (which also includes how much everyone got paid over the past two years) demonstrate that he consistently took a high salary every year, without retiring. Lo made $250,000 in 2007, $292,000 in 2008 and $294,000 in 2009. All of these payments were well above his base salary – because of the overtime amounts.

In fact, the data proves that (unlike the Fire Department), the Police Department made some good progress in recent years at curbing overtime costs. Among the City’s 500 highest paid cops, the Department cut its overtime costs last year by a third. But the problem is that mandated salary increases have pushed the Police budget’s growth.

Newsom signed a contract in 2007 with the POA – a ticking time-bomb that will give him an exploding police budget as his mayoral legacy. If you exclude overtime costs, the numbers are disturbing. In 2008, there were 145 cops whose base salaries exceeded $150,000. One year later, 232 police officers were in that category. In other words, even if Chief Gascon does a terrific job at cutting overtime, the Police budget liability will continue to grow.

Unfortunately, much of these structural problems can’t be resolved in June – when the Supervisors hold Committee hearings on each Department’s budget, and the public tries to follow it meaningfully. The Police and Fire Department salaries need to be made by re-negotiating union contracts, and only the Mayor – who is focused more on his run for Lieutenant Governor, and may have his own political agendas – gets to do that alone.

Newsom’s “give-backs” in the Police and Fire contracts last year were pitiful – as they only deferred part of their raises until 2012, when it will be the problem of a new Mayor. But the list – showing how well cops and firefighters are being paid, and how generous raises in their contracts have consequences on the budget – demands that we focus now.