Archives for April 2013

Santa Monica is now making communist even the PTA

sickle1Californians are so reflexively supportive of school funding, having enacted initiative after initiative for school construction funding, a state lottery to supplement education funds, and a constitutional guarantee that education is the biggest line item in the state budgt, that the liberal establishment has for years also had the local Parents and Teachers Associations (“PTAs”) hood-winked into thinking they need to engage in widespread private fundraising to provide additional supplemental funds for local schools to “buy erasers and chalk.”

One example is the PTA in Point Dune Elementary in Malibu, which was able to hold golf tournaments, fundraising dinners and book fairs to raise $2,100 per child during the 2009-2010 school year to help pay for music and art programs, as well as a dedicated marine science lab. Malibu sits in the Santa Monica-Malibu School District, which combines the two coastal cities into one governing board. Santa Monica, always dominated by liberal politics, is a city of 90,000 compared to Malibu’s 13,000. But Santa Monica has a lower median income per family, and the PTAs in Santa Monica do not take as active an interest in fundraising projects for their own schools as do Malibu residents.

Predictably, the governing board of the school district, controlled by liberal members from dominant Santa Monica, have developed a plan to “equalize” what they consider to be the “disparity” in the private PTA support within the school district. Their plan is to take control of and centralize all PTA supplemental fundraising projects in the district into one private charity controlled by the school board, and then redistribute the private contributions “equitably” between schools both in Malibu and Santa Monica.

In other words, donors in Malibu who want to provide supplemental funds to assist their own children in schools in their own community, will have most of their donations diverted to schools that their children do not attend. The plan of course will probably result in a drop-off of PTA participation by Malibu residents in future, and children will suffer as a result. It can be labeled classic “money redistribution” and has been called “ludicrous” by one Malibu High School parent.

Californians are indeed generous with schools and have vigorously responded to school needs at the ballot box, such as the Proposition 30 tax increase, and through private philanthropy. But the liberal education establishment that controls things has their own dark agenda at work throughout the system, gobbling up tax money intended for the classroom and diverting it to high salaries and benefits, and now “communizing” even private sector donations.

Assembly panel backs halt to fracking

From LA Times:

Plans to halt fracking in California advanced in the Legislature on Monday, when a key committee approved three measures that would prohibit the practice until the state can study it further.

The votes were a victory for environmentalists, who have been scrambling to slow the boom in fracking nationwide. A proposed moratorium on fracking failed in the California Legislature last year.

(Read Full Article)fracking oil gas

California officials split on how to divvy up $500 million in clean-energy funds

From Sac Bee:

The fight over Proposition 39 didn’t end at the ballot box.

Six months after voters overwhelmingly approved a change in the corporate tax code that’s expected to net the state an additional $1 billion in revenue for five years, lawmakers are wrangling over how to spend an estimated $500 million a year the measure earmarks for energy efficiency projects.

(Read Full Article)wind energy turbine

Sacramento City Manager: Pension Costs Causing Budget Shortfall

From Capital Public Radio:

Shirey says Sacramento has lost some federal grant monies, but about half of the shortfall is caused by City contributions to law enforcement pensions,  “Our problem is that our expenses continue to outstrip our revenues and that’s due mainly to employee costs and -most particularly- pension costs.”

Shirey says five-million dollars of the shortfall would be made up if the police officers, sergeants and other smaller unions agree to pay into their own pensions.

(Read Full Article)

For GOP, opposition shouldn’t only mean obstruction

From the Washington Post:

Since Franklin Roosevelt busted the curve, presidents have generally tried to avoid the 100-day measure of their effectiveness. But as President Obama’s second term reaches this milestone, his legislative yield is particularly paltry.

Obama overplayed his hand on sequestration, with dire warnings that were roundly ignored. Then he poured his limited reserves of passion into a modest gun control measure that failed. Immigration reform remains a possibility only because of Obama’s irrelevance to the process. Any sign of excessive presidential enthusiasm would cause even pro-reform conservatives to bolt. And a grand budget bargain involving serious entitlement and tax reform remains unlikely at best. Gene Sperling, director of the National Economic Council, recently conceded: “I can’t tell you what the specific path is at this moment.”

(Read Full Article)

Photo courtesy of DonkeyHotey, flickr

Photo courtesy of DonkeyHotey, flickr

Morning Bell: Remember the Economy? It’s Still Bad

From the Foundry:

According to a poll earlier this year, voters have a higher opinion of cockroaches than Congressmen. President Obama’s personal popularity remains solid, but his job approval rating is going down. Why are our elected officials unpopular?

It might just be because they are not listening. In poll after poll, the American people continue to tell Washington that their top priority is the economy. A recent Fox News poll asked participants what is the most important issue facing the nation. The results: the economy got 42 percent, deficit 17 percent, guns 5 percent, and immigration 4 percent.

President Obama inherited a weak economy, to be sure, but his policies, including Obamacare with its costly expected mandates on businesses and the Dodd-Frank financial services regulations have made the situation worse. Even when we see some economic growth, the jobs growth has been feeble. People have been leaving the workforce. Heritage’s James Sherk noted recently, “Labor force participation dropped to 63.3 percent, the lowest rate since 1979..” America needs to get its people back to productive work, not recruit Americans to start taking food stamps.

(Read Full Article)


Treasury to Pay Down Debt For First Time in Six Years

From the Wall Street Journal:

WASHINGTON—The federal government said Monday it would pay down a small portion of the national debt this quarter for the first time in six years.

The debt reduction, seen as temporary, is a sign that higher tax receipts and spending cuts are improving Washington’s finances. The respite in borrowing will likely give the Obama administration a bit more time before running up against the federal debt ceiling.

The Treasury Department said that it expects to retire a net $35 billion in bonds, notes and bills from April to the end of June. That compares with its estimate from earlier this year that it would rack up an additional $103 billion in marketable debt in the second quarter.

(Read Full Article)obama debt

CA’s Ongoing War on Working Folks

Why is it that the political party that once proudly declared that it stood for working people is now laboring so hard to cost those Californians who are still working their jobs?

middle class recessionThe Democratic party so dominates the Legislature and all constitutional offices, that Republicans almost need a passport to enter Sacramento. One would think that this would be the majority party’s opportunity to help California, which is tied with two other states for the highest unemployment in the nation, get back to work.

While Democratic lawmakers may try to comfort themselves with statistics that show the unemployment rate is declining, a closer look shows that the statistics are misleading. The declining numbers result from significant numbers of the unemployed giving up on the job market, and well over two-million Californians, who would like to be working, continue to be in economic distress.

The Legislature’s response to this suffering is to move to pass over 30 bills that the California Chamber of Commerce calls “job killers.” While those who believe that the Chamber only represents “evil” business interests may want to stop reading at this point, those who understand that it is business that puts most Californians to work, should be aware that these bills add to our state’s already crushing burden on jobs providers, a burden that is resulting in the loss of substantial business activity and jobs to other states.

At first glance some of the bills, which can be viewed on the CalChamber website, may appear relatively innocuous. Assembly Bill 1138 increases civil penalties against employers who fail to conspicuously post a list of every employee covered under a worker’s compensation policy. However, all it would take is for a notice to slip from the bulletin board to the floor out of sight behind the water cooler, to create an opportunity for a trial lawyer to file a suit that would damage the employer and that employer’s hiring ability, while fattening the attorney’s wallet.

Other bills have a much greater potential for mischief. Senate Bill 747 requires the Department of Public Health to regulate manufacturers of consumer product that the Department determines contribute to a public health epidemic — obesity, for example. So while even those watching their weight may find themselves unable to indulge in an occasional snack that does not have the Michelle Obama seal of approval, manufacturers, delivery people and retailers may find that their jobs are at risk.

However, it is important to look at more than the impact of individual bills, the total effect of these regulations and mandates must be considered.

For those who may have seen Steve McQueen’s last film, “Tom Horn,” the historically accurate conclusion graphically illustrates what can be the dramatic impact of incrementalism. Condemned to death, Horn stepped onto the gallows trap door, which was connected to a lever that pulled the plug out of a barrel of water. As the water gradually drained away, it caused a lever with a counterweight to slowly rise, eventually pulling out the support beam under the trap door. The dismal end was the result of the loss of a last few drops of water, but they were preceded by several gallons.

A grim example? Perhaps, but grim, too, will be the outcome for both workers and the unemployed if the Sacramento Democrats insist on continuing to make war on those who are still working, while allowing those who are already unemployed to just twist in the wind.

(Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights. Originally posted on HJTA.)

Is this the year to prefund retiree health care?

With pensions presumably shored up by Gov. Brown’s reform and a CalPERS rate hike, will the problem-solving trend spread to what is, by some measures, an even bigger retirement debt: health care promised state workers?

Healthcare costsIt was no surprise last week when a Democratic-controlled Senate committee rejected a Republican’s proposal to begin setting aside money to pay for retiree health care promised new state workers, putting a small dent in a $64 billion 30-year debt.

Labor lobbyists told the committee they do not oppose “prefunding” retiree health care that is now “pay as you go.” This year $1.8 billion is budgeted for annual costs with no money added to invest and yield earnings to reduce long-term costs.

The labor unions said the funding of retiree health care is a pay issue, possibly affecting the total amount available for salaries, and therefore should be addressed through collective bargaining.

Randall Cheek of Service Employees International Union, Local 1000, the largest state worker union, went a step further:

“I agree with the other union representatives that this is something that should be done at the bargaining table,“ said Cheek. “We are at the bargaining table right now trying to negotiate a new contract, and I am sure that will come up.”

An Assembly floor analysis of Brown’s pension reform last year, AB 340, mentioned the “willingness” of unions to bargain while explaining why two of the 12 points in the governor’s original reform plan were not in the bill.

“The governor chose to drop the CalPERS board issue (adding independent members with financial expertise) and, on the health care vesting issue, state employee bargaining units have shown a willingness to bargain over this and so the Conference Committee believed it should remain subject to collective bargaining,” said the analysis.

Brown’s press office declined to comment last week on whether the administration, facing major battles over school funding and other issues, will put long-ignored state worker retiree health care on the bargaining table this year.

The governor’s proposal in the 12-point plan was modest. New hires would work 15 years, instead of 10 years, to be eligible for partial retiree health care coverage and 25 years, instead of 20 years, to move all the way up the steps to full coverage.

The current plan can cover the full cost of health care insurance for a retiree and 90 percent for dependents. The governor proposed “changing the anomaly” in which active workers pay about 15 percent of their health care insurance and retirees can pay nothing.

“Contrary to current practices, rules requiring all retirees to look to Medicare to the fullest extent possible when they become eligible will be full enforced,” said the governor’s proposal.

Most current state workers can retire at age 55 or, if in a safety plan like police and firefighters, at age 50. Federal Medicare coverage does not begin for most persons until age 65.

Arguably, the generous state worker retiree health care plan encourages the early retirement that the governor’s AB 340 plan for new hires delays by extending retirement ages to help control pension costs.

“The state’s retiree health care premium costs have increased by more than 60 percent in the last five years and will almost double over 10 years,” the governor’s 12-point proposal said in October 2011. “This approach has to change.”

The state owes $64 billion over the next 30 years for retiree health care promised current state workers, state Controller John Chiang said in an updated estimate in February.

“To take advantage of the tremendous cost savings resulting from fully prefunding, the State would need to contribute $3.51 billion in 2012-13, or $1.70 billion more than the State currently has budgeted,” Chiang said in a news release.

Growing state retiree health care costs are now roughly comparable with pension costs.

The $1.8 billion budgeted for state worker retiree health care this year, nearly all from the general fund, is approaching the $2.3 billion state general fund payment to CalPERS for pensions, $3.8 billion total when special funds are included.

The $64 billion debt or “unfunded liability” for state worker retiree health care is more than a $57 billion unfunded liability for state and local pensions reported by the California Public Employees Retirement System in its latest annual financial report (p. 128).

The pension unfunded liability is a floating number that can go up or down with changes in several factors: investment earnings, the way assets are valued and whether debt is expected to be paid off in 30 years or refinanced annually.

For example, on the same page of its financial report CalPERS shows a $57 billion unfunded liability using actuarial value assets and an $87 billion unfunded liability using market value assets.

The estimated $64 billion debt for state worker retiree health care is probably firmer than the CalPERS debt estimates. But how health care costs will change in the next three decades cannot be predicted with precision.

Switching to pension-like prefunding is easier said than done. A bill by former Assemblyman Dave Elder, D-Long Beach, created a state worker retiree health care fund two decades ago, but no money was put into it.

Many government employers did not even calculate the future cost of retiree health care promised current workers. That changed in 2004 when the Governmental Accounting Standards Board said retiree health care debt should be reported.

CalPERS created a retiree health care fund in 2007 that had $2.7 billion worth of investments last week from about 350 local governments, which unlike the state have begun prefunding.

The No. 1 recommendation of the Governor’s Public Employee Post-Employment Benefits Commission in 2008 was that retiree health care should be prefunded, followed by the No. 3 recommendation specifically mentioning the state:

“The State of California shall establish prefunding as both a policy and budget priority, develop and make public a prefunding plan, and begin prefunding its OPEB liabilities (non-pension or Other Post Employment Benefits).”

Some think retiree health care lacks the legal guarantee given pensions under a series of court rulings. And in the Vallejo and Stockton bankruptcies, the cities chose to cut retiree health care rather than pensions.

The chairman of the Senate retirement committee, Jim Beall, D-San Jose, mentioned another issue, containing rising health care costs, as the panel rejected SB 774 by Sen. Mimi Walters, R-Laguna Niguel.

Beall said when Santa Clara County began prefunding retiree health care, getting a better bond rating, health insurers began “dramatic increases in rates” that eroded long-term savings.

“Controlling the overall health care cost is so important,” he said. “It’s the bigger issue in my opinion.”

(Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at

Rep. Jordan on Fisker: Obama Administration Lost $200M in Taxpayer Money