Republican joins 2018 race for California governor

As reported by the Fresno Bee:

Assemblyman Travis Allen is the sixth candidate — and second Republican — to jump into California’s 2018 gubernatorial contest.

The candidates hoping to replace Democratic Gov. Jerry Brown are:

—Lt. Gov. Gavin Newsom, a Democrat. Newsom announced his bid to succeed Brown early, in 2015. He was elected lieutenant governor in 2010 after serving as San Francisco’s mayor.

—Antonio Villaraigosa, a Democrat. Villaraigosa is a former mayor of Los Angeles, the first Latino to hold the post in more than a century.

—State Treasurer John Chiang, a Democrat. Chiang serves as the state treasurer and would be California’s first Asian-American governor.

—Delaine Eastin, a Democrat. Eastin is the former state superintendent of public instruction, leading California’s public school system from 1995 to 2003.

—John Cox, a Republican. Cox is a San Diego-based businessman with experience in real estate management and investment firms. He’s already dumped $3 million of his own money into the race. He previously made an unsuccessful run for Congress in Illinois.

—Travis Allen, a Republican. Allen is a three-term assemblyman from Huntington Beach. He’s heading a ballot initiative to repeal a gas tax increase passed by mostly Democratic lawmakers earlier this year.

Democrats Talk Openly About Challenging Nancy Pelosi’s Leadership

Nancy-Pelois-denied-CommunionHouse Minority Leader Nancy Pelosi (D-CA) is facing unprecedented pressure, as frustrated Democrats have begun — for the first time in seven years — to talk about replacing her after a series of disappointments at the ballot box.

Pelosi was hailed as a driving force behind Democrats’ victory in 2006, when the party seized both houses of Congress and set the stage for victory in the 2008 presidential election. She became the first female Speaker of the House, and set about centralizing power in the Speaker’s office, ruling her caucus with unquestioned authority and promoting an unapologetically liberal agenda.

However, Pelosi’s role in the Obamacare debacle of 2009-10 helped provoke the Tea Party wave, sending her party to historic defeat and costing her the Speaker’s gavel. Amazingly, Pelosi did not resign at that point, and dispatched several would-be challengers, most notably Rep. Heath Shuler (D-NC), who later lost his seat to a Republican. She also fended off a challenge by Rep. Tim Ryan (D-OH) after 2016. Pelosi has been a prolific fundraiser for the party, even if she has also become a lightning rod for criticism and a useful political foil for Republicans to run against.

Ironically, Pelosi’s power within her caucus only grew as the Democrats lost seats, because most of the losses were in conservative swing districts. That left a core of liberal representatives from major cities, and blue states such as New York, Illinois, and Pelosi’s home state of California. There has been no political constituency in the caucus for an ideological alternative to the left-wing agenda that Pelosi and her coterie have continued to push even in defeat.

The high expectations that Pelosi set for Tuesday’s special election in Georgia may prove to be her undoing. Early in the week, with Jon Ossoff expected to win, Pelosi let it be known that she expected to take back the Speaker’s gavel after 2018. But Republican Karen Handel surged to victory, partly by tying her opponent to Pelosi.

As reality hit home, some Democrats began to break the taboo around challenging their leader. MSNBC analyst Matthew A. Miller tweeted: “No Dem wants to say it publicly, but taking their top bogeyman Pelosi off the table would help too. Fair or not, it’s the truth.”

Now, other critics are beginning to emerge.

“It’s time for some change. I think it’s time for a new generation of leadership,” said Rep. Seth Moulton (D-MA). And Rep Filemon Vela (D-TX) told Politico: “I think you’d have to be an idiot to think we could win the House with Pelosi at the top … Nancy Pelosi is not the only reason that Ossoff lost. But she certainly is one of the reasons.”

But Pelosi also has her defenders — and she will not go easily.

Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He was named one of the “most influential” people in news media in 2016. He is the co-author of How Trump Won: The Inside Story of a Revolution, is available from Regnery. Follow him on Twitter at @joelpollak.

This piece was originally published by Breitbart.com/California

Void in Leadership Continues for California High-Speed Rail

High Speed RailFour months after then-California High Speed Rail Authority Chief Executive Jeff Morales told authority board members he was moving on and two months after Morales made his decision public, the agency overseeing the state’s $64 billion bullet train project hasn’t settled on his successor.

In 2012, four months after Chief Executive Roelof van Ark abruptly left following two stormy years, Morales already had the job. This time around, the same speedy selection process seemed likely. The RT&S transportation industry website reported after Morales’ decision was announced in April that the board was likely to have his replacement approved before Morales’ final day of June 2.

But the CHSRA board met in closed session on the succession issue on May 10 and June 14 without reaching a decision. The rail agency’s number two job – deputy chief executive – has also been vacant since Dennis Trujillo left in December.

The empty slots atop the CHSRA power structure come at a critical time.

According to a federal report prepared under the Obama administration, the state’s high-speed rail project is already seven years behind schedule and on its way to having a 50 percent cost overrun on the $6.4 billion, 118-mile first segment now being built in the Central Valley.

The project also continues to face legal challenges which argue that it violates the terms of Proposition 1A, the 2008 ballot measure providing $9.95 billion in bond seed money for the project. The rail authority has won most recent judgments. But opponents remain confident they eventually will prevail because of a 2014 state appellate court ruling that held the project still was subject to a financial “straitjacket” that would require it to show short- and long-term financial viability without public subsidies before the project could significantly proceed. The project’s struggle to attract private investment shows that at least in the private sector, there are many doubts that the bullet train could operate successfully without such subsidies.

Obama administration rules could haunt project

But the election of Donald Trump as president in November also has led to a huge new headache for CHSRA. All 14 California House Republicans have urged Transportation Secretary Elaine Chao to reverse Obama administration actions that loosened federal rules to give California access to about $3 billion in federal dollars for the project.

Rep. Jeff Dunman, R-Turlock, and his colleagues have focused their harshest fire on a 2012 decision that gave the state the go-ahead to spend about $200 million in federal funds but not have matching state spending. The decision went against longstanding Washington precedent.

Withdrawing all federal funding could also be justified by citing the Obama administration’s 2009 regulations for projects that were to be paid for or partly paid for with money from the economic stimulus bill passed a month after President Obama took office. The Federal Railroad Administration rules said projects that didn’t demonstrate “reasonableness of financial estimates” and “quality of planning process” would get no funding.

That’s the same agency which recently concluded the project was seven years behind schedule and on course for a 50 percent cost overrun on its initial segment

The California High Speed Rail Authority board’s next meeting is July 18 in Sacramento.

This article was originally published by CalWatchdog.com

Judge allows lawsuit on life-ending drugs for terminally ill

As reported by the Associated Press:

A judge on Friday allowed a legal challenge to proceed against California’s law letting terminally ill patients seek prescriptions for life-ending drugs.

Riverside County Superior Court Judge Daniel A. Ottolia ruled that a group of doctors had provided sufficient information for a lawsuit over the 2016 law allowing medically-assisted death.

California’s Attorney General Xavier Becerra had argued that the suit should be dismissed because doctors aren’t bound to issue these prescriptions and the law merely offers patients a choice. But Ottolia found that the plaintiffs had alleged enough information to argue that the law violates the state’s constitution by treating terminally ill people distinctly from others contemplating taking their lives.

“This is a violation of both the equal protection and due process clause of the constitution,” plaintiffs’ attorney Stephen Larson told reporters after the ruling.

California is one of a number of states where terminally ill patients can get prescriptions to take life-ending drugs, along with Oregon, Washington, Vermont and Montana. …

Click here to read the full article

Recall effort stymied by Sacramento

Members of the California Legislature apparently believe they have the power to change outcomes they don’t like. This is like awarding the NBA Championship to Cleveland by retroactively mandating that all of Golden State’s three point baskets be counted as only two.

While basketball is not on the minds of lawmakers, they are working to interfere with something of much greater value to average Californians, their constitutional right to recall elected officials. The Sacramento politicians think they have found a way to derail what appears to be a successful grassroots effort to recall state Sen. Josh Newman, who cast a key vote imposing a new $5.2 billion annual gas and car tax on already overburdened taxpayers.

The power of recall is a powerful tool of direct democracy. The secretary of state’s website says, “Recall is the power of the voters to remove elected officials before their terms expire. It has been a fundamental part of our governmental system since 1911 and has been used by voters to express their dissatisfaction with their elected representatives.”

In the 29th Senate District, covering parts of Orange, Los Angeles and San Bernardino counties, voters have been busy exercising their right to recall their tax-raising representative Josh Newman. Much to the surprise of Sacramento insiders, it looks like the campaign will succeed in gathering enough signatures to force the senator to be held accountable in a special election — already the secretary of state has instructed county registrars to begin counting the signatures. The chance that the recall of one of their own will be successful has lawmakers panicking. Their solution is to surreptitiously change the recall rules that have been in place for over a century.

500px-Capitol_Building_MG_1600_Sans_watermarkWith little notice, the Legislature amended Senate Bill 96, as it was about to pass in connection with the state budget on June 15, for the purpose of changing the rules governing the current recall effort. The purpose of the bill is shamelessly transparent: “It is the Legislature’s intent that the changes made by this act in the Elections Code apply retroactively to recalls that are pending at any stage at the time of the act’s enactment… .”

Their end game is delay. They want to delay the ultimate vote on ousting Newman for as long as possible, despite the constitutional guarantee to have the vote as quickly as possible — between 60 days and 180 days from the recall petitions having been certified.

Here’s how they do it: First, they try to delay the petition review process by requiring the county Registrars of Voters to check the validity of every signature submitted. Normally, the registrars are permitted to check a random sample of the signatures, saving both time and money.

Second, and more disturbing, is the provision buried deep in the text that states, “Notwithstanding any other law, the Secretary of State shall not certify the sufficiency of the signatures [on the recall petitions] until the Legislative Joint Budget Committee has 30 days to review and comment on the estimate [of recall costs] submitted by the Department of Finance.”

Here’s the kicker. The Department of Finance is part of the governor’s office and the bill does not require the governor’s office to prepare that analysis under any time limit. Gov. Brown, who has already come out against the recall, can simply delay that report indefinitely, which, in turn, would hold up certification of the recall effort and the ultimate election.

Perhaps it should come as no surprise that those in power in Sacramento will stop at nothing to retain their power and influence, putting their own interests ahead of those of average Californians. But lawmakers who disrespect voters should be wary. Polls show that nearly 60 percent of Californians oppose the new gas tax. The higher taxes will kick in just before the beginning of next year’s election season. Voters are very likely to remember who is responsible and choose to retire multiple representatives, not just a single senator, in the regularly scheduled 2018 election.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This piece was originally published by the Orange County Register

Amazon Purchase of Whole Foods: Will Kill Off Cashiers Union

Thanks to Amazon, that worthless LAUSD diploma is now having less value.  Amazon bought Whole Foods to get into a new market.  As a side point to this, the cashiers and many other unionized workers will no longer have a job.  Plus, grocery shopping will become a pleasure—imagine, going to a grocery store—and NO check out lines—NONE.

“The jobs to be cut include cashiers, who’d be replaced by Amazon’s own “Just Walk Out Technology,” now being tested at its Amazon Go convenience store in Seattle. When customers with the Amazon Go app on their smartphones walk into the store, the system logs them into the store’s network and establishes the connection to their Amazon account.

The system uses “computer vision, sensor fusion, and deep learning,” Amazon says, to track everything customers pull off the shelf. If customers put an item back, the system removes it from the virtual cart in their app. When done, customers can just walk out without having to go through a check-out line. The system will automatically charge the customer’s account and send out a receipt.

This system would replace the cashiers at Whole Foods, “according to the person familiar with the matter, who asked not to be named because the plans are private,” Bloomberg reported.”

The bigger news is that is Amazon/Whole Foods can do this—so can Safeway, Stater Bros. Raleys, Target and WalMart!   All that will be needed is minimum wage workers to stock the selves—and my guess is that a lot of that will be by robot and computer.  All that Common Core math and phony credits will be worthless in the brave new world—no more than five years away.

amazon

Amazon to Slash Jobs at Whole Foods, Dump Cashiers, Switch to Cheaper Products in Price War with Wal-Mart

by Wolf Richter, Wolf Street,  6/19/17

Here’s something Wal-Mart could do to Amazon, just to be nasty.

Amazon expects to slash jobs and other costs at Whole Foods, “a person with knowledge of the company’s grocery plans” told Bloomberg. The ink isn’t even dry on the proposed deal, but synergies and efficiencies are already being trotted out.

Amazon agreed to acquire Whole Foods for $13.7 billion, a 27% premium over the stock price on Thursday at close, and now intends to push down prices to slough off Whole Food’s nickname “Whole Paycheck,” and go after Wal-Mart Stores, Target, the German discounters Aldi and Lidl that are expanding in the US, Costco, and grocery store chains, such as Kroger and the private-equity owned chains Safeway and Albertson’s.

The jobs to be cut include cashiers, who’d be replaced by Amazon’s own “Just Walk Out Technology,” now being tested at its Amazon Go convenience store in Seattle. When customers with the Amazon Go app on their smartphones walk into the store, the system logs them into the store’s network and establishes the connection to their Amazon account.

The system uses “computer vision, sensor fusion, and deep learning,” Amazon says, to track everything customers pull off the shelf. If customers put an item back, the system removes it from the virtual cart in their app. When done, customers can just walk out without having to go through a check-out line. The system will automatically charge the customer’s account and send out a receipt.

This system would replace the cashiers at Whole Foods, “according to the person familiar with the matter, who asked not to be named because the plans are private,” Bloomberg reported.

So not the cumbersome self-check-out machines we’ve been grappling with for years, but something that would allow Amazon to differentiate itself. However, the main advantage would be a radical reduction in labor costs at Whole Foods stores. The “employees remaining would help improve the shopping experience, the person said,” according to Bloomberg.

Amazon also expects to make a number of other changes, including to the merchandise the store carries, all in order to push down prices. Amazon would introduce private-label products – in addition to Whole Foods’ existing private-label products – to replace products that it considers too expensive. So get ready for Amazon’s food brands.

These changes won’t take place until after the transaction has closed, which is expected to be later this year.

The grocery price war is already red-hot. So the high prices that have hobbled Whole Foods over the past two years will likely be gone.

After Whole Foods becomes part of the Amazon empire later this year, it no longer needs to make significant and growing profits. That quaint concept is out the window. Amazon is like so beyond that. It can lose money, no problem. On its own, Whole Foods could have never done that.

An Amazon spokesperson denied everything. Amazon has “no plans to use no-checkout technology to automate the jobs of cashiers at Whole Foods and no job reductions are planned,” he told Bloomberg in a statement.

Alas, almost all acquisitions of this type entail efforts to find synergies and efficiencies, as they’re called, to bring costs down to make the transaction work, which translates into hefty job cuts. And since the deal is far from closing, there need not be official “plans” at this point.

Amazon has made an art out of pricing, with prices jumping up and down dramatically, depending on who is looking at it, what kinds of cookies and browsing history they have on their devices, and what is known about them, for example when they’re checking a price while logged into Amazon.

This “variable pricing” model – which has spawned an entire sub-industry to defeat it – has spread to other retailers and can drive astute shoppers nuts. Of course, airlines and other industries also have used it for years. It would be interesting to see if Amazon can figure out how to move it to its brick-and-mortar stores – say, with prices only being posted on smartphones with the Amazon Go app when you get to the product.

Amazon is also going after low- and middle-income shoppers. For a mass-market retailer, it needs all customers. It already has cheaper Amazon Prime memberships for customers who are on government assistance, according to Bloomberg. And it’s testing a program to deliver groceries to recipients of food stamps.

Now if Wal-Mart Stores wanted to put a little squeeze on Amazon, just to be nasty, it could offer something like $4 billion more for Whole Foods so that Amazon would outbid Wal-Mart by offering another $2 billion or $3 billion, at which point Wal-Mart would walk away, celebrating, and Amazon would have to come up with $20 billion to buy Whole Foods, not $13.6 billion, which could dent its credit rating and make things just a little harder for Amazon in the future. Just thinking out loud here.

When Amazon announced the deal, shares of Wal-Mart, Kroger, Costco, and Target get crushed. Read…  Amazon, the Death of Brick & Mortar, Buys into Brick & Mortar

 

 

 

Eber: Real pension reform in California

Last Friday I had the honor of guest hosting the Andy Caldwell Show, on KUHL—Santa Maria and 1290am Santa Barbara.  My first guest was Rich Eber—and this article is actually an expansion of his talking points, preparing for the show.  Maybe the most important issue facing Californians is the collapse of CalPERS—today we have a companion piece, “The Next CalPERS Victim: City of Oroville”.  City after city are going broke, cutting cops, stopping the repair of streets, just to finance CalPERS—and as the city manager of Modesto said,. CalPERS is unsustainable”.  This is good money chasing bad money.

One might ask why this collapse of public employee pension plans is not a relevant subject at the so called bargaining table.  For one thing tax payers do not have a seat at these negotiations.  The unions are making agreements with political hacks that are responsible for electing them to office in the first place. Apparently, conflict of interest rules don’t apply in these cases.

The pension crisis did not occur overnight. The current downward spiral started in 1999 back in the administration of Governor Gray Davis. At the time CalPERS and other pension funds had a major surplus of funds assisted at the time by double digit profits in their investment portfolio. To take advantage of this good fortune, SB-400 was passed.

It increased pensions for all levels of public employees based upon the false notion that the stock market would continue to climb to record levels.  When the recession soon hit combined with horrendous investment decisions by unaccountable management employees at CalPERS, tax payers have ended up holding the bag.

How bad is it?  Jerry Brown is STEALING $6 billion from a reserve fund, money meant for dozens of other agencies.  This is an important article, please forward to your email list—our economic future is in danger.

Calpers headquarters is seen in Sacramento, California, October 21, 2009. REUTERS/Max Whittaker

Calpers headquarters is seen in Sacramento, California, October 21, 2009. REUTERS/Max Whittaker

Real pension reform in California by Richard Eber

Richard Eber, California Political News and Views  6/20/17

 

I’m sick of it.  When it comes to the failing public employee pension programs in California, it is easy to relate to iconic character Howard Beal in the move classic  Network who quipped ‘I’M AS MAD AS HELL, AND I’M NOT GOING TO TAKE THIS ANYMORE!’

What has turned out to be a man made pension crisis in California is ridiculous.  Just because public employee unions control both the Republican and Democratic Parties in California, does that mean their members are entitled to retirement pay that is more for the gross income of over half the households in California?

In doing this, pension funds that support these workers are at least a trillion dollars in the hole. All the governor can do is give what amounts to a six billion dollar gift/loan to the failing system.  He is afraid to put this before voters or even have the legislature deal with the problem.  This situation is that poisonous and volatile.

One might ask why this collapse of public employee pension plans is not a relevant subject at the so called bargaining table.  For one thing tax payers do not have a seat at these negotiations.  The unions are making agreements with political hacks that are responsible for electing them to office in the first place. Apparently, conflict of interest rules don’t apply in these cases.

The pension crisis did not occur overnight. The current downward spiral started in 1999 back in the administration of Governor Gray Davis. At the time CalPERS and other pension funds had a major surplus of funds assisted at the time by double digit profits in their investment portfolio. To take advantage of this good fortune, SB-400 was passed.

It increased pensions for all levels of public employees based upon the false notion that the stock market would continue to climb to record levels.  When the recession soon hit combined with horrendous investment decisions by unaccountable management employees at CalPERS, tax payers have ended up holding the bag.

In 2011 a half hearted attempt was made to fix the problems of the CalPERS and CalSTERS pension funds.  The state placed new hires in a  less lucrative defined benefit plan and tried to end the practice of pension spiking where the last years of an employee’s service,  higher  earnings are used  calculate  more  lucrative pension benefits.

Given what had transpired, one would think public employee unions would realize they had a good thing going and no try to kill the golden goose.   But instead they have filed lawsuits in the courts to try to nullify even these modest reforms of 2011.

Currently there are three cases of these types pending in the California Supreme Court.  If they do not go well, tax payers will likely have to make up the difference if CalPERS can’t deliver the benefits promised retired public employees.

The sh-t has already hit the fan. Budgets of cities and counties throughout California have seen their liabilities go up while at the same time their contributions towards present and past employees has continued to climb.  This along with fewer tax dollars being returned to the communities after Jerry Brown did away with Redevelopment at the start of his third term has resulted in budget deficits for those affected.

To remedy fewer dollars being available to perform essential services and new mandates handed down by the State, little choice has been given other than to raise local sales taxes to make up the difference. Virtually every city and county in California has had to fork over additional money to make up the shortfall either directly or indirectly

And now we are finding that these sales tax increases of the past decade are not enough.   Larger contributions are being asked for to make up for the shortfall.  In the next 3 to 5 years local government will be asked to reach into their increasingly empty pockets once again to fund the money pit in Sacramento.

So what can the citizens of California do fix the disparity of benefits public employees receive that don’t even remotely resemble what is offered in the best pension plans in private enterprise. Here are a few ideas on the to do list:

  1. Start getting much tougher in negotiations with the public employee unions. This goes for everyone from civil service workers to teachers, fire fighters, and police.  It must be made clear that “we value your service but just can’t pay for all of what you are presently receiving.”
  1. If public employees want to keep their present benefits, they must contribute the extra dollars to make up what is owed CalPERS no matter how high that cost might be. This burden cannot continue to all on the backs of tax payers.
  1. End pension spiking completely. This can be partially taken care of by calculating

Pensions on base pay, not on overtime which is often the case with law enforcement and with fire fighters.

  1. Limit the amount of pensions that can be received to no more than 1.5% per year. This is especially true for public safety workers.
  1. Increase the age for when retirees can receive pensions to at least 55. This would assist with reducing pension costs caused by recipients living to any older ages than in previous times.
  1. Reduce the size of pensions to a set amount not to exceed $ 100,000 per year.
  1. Eliminate all double dipping where retired employees can start a new pension program. This is especially true with law enforcement/Fire fighters who retire after 20 years and get a job with another governmental agency.
  1. Reduce medical benefits and even eliminate other for pensions that exceed amounts where there is plenty of income to pay for those services. As an example, someone getting a pension of $125,000 per year can pay for their own healthcare.
  1. Change pensions altogether from the CalPERS model to a 401K system used by private enterprise. Under such a program tax payers would be protected from fulgurations in financial markets and would cease to have the liabilities currently in place.
  1. If public employees are unwilling to make these sacrifices, they should laid off and replaced by new workers who are willing to be employed under the new system. Ronald Reagan’s strategy of dealing with striking airport controllers should be emulated.

These ideas might sound a bit Draconian but unless something is done quickly, the State of California will find itself faced with Hopson’s choices of taking care of its employee’s exaggerated benefits packages versus the overall well being of its citizens. Given these alternatives there is little choice but to give priority to the needs of today.

Where does one start?  The first thing that should be done is stop rubber stamping the lections of Progressive Democrats who continue to thumb their noses dealing with the current pension crisis.  I just wish that elected statewide officials in California would concern themselves as much with real pension reform compared with their obsession monitoring restroom usage, eliminating fast food wrappers, and protecting Sanctuary City’s.

On second thought it is probably asking too much out of a bunch of progressive lunatics to expect them to act in a practical manor. So let me and Howard Beale fade into the sunset being “mad as hell” having no one around to listen to our well reasoned gripes.

Death of California Board of Equalization: SB 86 and AB 102

The Board of Equalization is dead.  Thanks to the Democrats, bureaucrats, instead of elected officials will decide tax cases.  In a comparatively short time—a whole government agency, elected by the people exists, now, in name only.

“Senate Bill 86 and AB 102 drastically change the way California has administered and collected numerous taxes and fees for the last 138 years. The Board of Equalization has four elected members, the State Controller serving as the fifth member, 4,700 employees, and hundreds of thousands of permit holders who provide over $60 billion (or 1/3) of California’s revenue. The Board of Equalization to date has taken concrete steps toward addressing the issues facing the agency and believes that more time should be given for the benefit of all California taxpayers.

KEY POLICY CONCERNS

Decisions of This Magnitude Do Not Belong in a Budget Bill 

Legislation enacted by the California Legislature is fully discussed and vetted through the committee process and a full floor vote in both the Assembly and Senate. SB 86 and AB 102 offer a sweeping change to one of government’s core functions – tax collection – through the budget process. In this process, there is little to no opportunity for public comment. As discussed below, the Legislature only has until midnight on June 15 to enact a budget bill. This leaves an important policy decision with far reaching consequences in a rushed position. Policy issues of far reaching importance should receive, and deserve, the benefit of the full committee and floor vote process. For these reasons, SB 86 and AB 102 should not be included in the 2017 budget. More time should be allowed for a deliberative process where taxpayers and legislators have a better opportunity to fully weigh the issues concerning the Board of Equalization.”

Guess the idea of an independent tax agency is not what the Democrats want—this is more “deep State” powers in the hands of a few, nameless, faceless folks that answer to the unions and Democrat Party, not the people of California.  Notice the media barely mentioned this coup against the voters of California.  The measure passed, is in the budget which Brown is going to sign—killing off more checks and balances.  Angry yet?

Tax

 

 

 

 

 

 

 

MEMORANDUM

 

Date:               June 13, 2017

 

To:                   Members, California State Legislature

 

From:              Diane Harkey, Chairwoman, State Board of                                 Equalization

 

Subject:           OPPOSITION to SB 86 and AB 102

 

BACKGROUND

 

Senate Bill 86 and AB 102 drastically change the way California has administered and collected numerous taxes and fees for the last 138 years. The Board of Equalization has four elected members, the State Controller serving as the fifth member, 4,700 employees, and hundreds of thousands of permit holders who provide over $60 billion (or 1/3) of California’s revenue. The Board of Equalization to date has taken concrete steps toward addressing the issues facing the agency and believes that more time should be given for the benefit of all California taxpayers.

 

KEY POLICY CONCERNS

 

Decisions of This Magnitude Do Not Belong in a Budget Bill 

Legislation enacted by the California Legislature is fully discussed and vetted through the committee process and a full floor vote in both the Assembly and Senate. SB 86 and AB 102 offer a sweeping change to one of government’s core functions – tax collection – through the budget process. In this process, there is little to no opportunity for public comment. As discussed below, the Legislature only has until midnight on June 15 to enact a budget bill. This leaves an important policy decision with far reaching consequences in a rushed position. Policy issues of far reaching importance should receive, and deserve, the benefit of the full committee and floor vote process. For these reasons, SB 86 and AB 102 should not be included in the 2017 budget. More time should be allowed for a deliberative process where taxpayers and legislators have a better opportunity to fully weigh the issues concerning the Board of Equalization.

 

Disruption to Revenue Collection

The revenue collected and administered by the Board of Equalization helps to pay for many of the things Californians rely on including our roads, public safety personnel, and our school system and teachers. Because this bill shifts core BOE responsibilities to a new body with a very short time frame to adjust, disruption to these programs and California’s budgetary schema could face delays, setbacks and disruption to the detriment of Californians. As noted above, giving this policy more time for deliberation, public comment and review could ensure that Californians and their government bodies which serve them do not face any unforeseen hardships as a result of a new tax collection and administration system.

 

Investigatory Powers

The ability for elected board members to inquire about tax issues before the BOE is a critically important function enshrined in statute per Section 15623 of the Government Code. SB 86 and AB 102 would remove this function as of July 1, 2017, less than three weeks from today. As noted above, the Board has taken steps to ensure that Board Members do not direct a conclusion or request a result be mandated in a tax matter before the Board. The ability to investigate per Section 15623 is an important tool for elected Board Members for two key reasons. First, it ensures taxpayers have an avenue if any abuse is occurring. Second, it strengthens the relationship between elected Board Members and the agency by ensuring an open line of communication.

 

Administrative Law Judges (ALJ)

Californians have a strong form of appellate recourse with the Board of Equalization because its Members are elected by taxpayers. This ensures that Board members are responsive to taxpayer concerns by working directly with agency civil servants to ensure that every taxpayer is heard, educated and assisted. The people of California need and deserve this important option when facing a complicated and often frightening tax issue. Solving taxpayer issues at the lowest possible level is a unique customer service goal the Board is proud of. It is an idea that can be embraced by any consumer in a daily commercial transaction. With respect to the many hardworking Administrative Law Judges in California, this transfer of appellate power is an untested method for tax administration and dispute resolution in our state.

 

The Board Has Already Taken Action

The BOE is a quasi-judicial body with members duly elected every four years. As a deliberative body of constitutional officers, the Board can and has set internal policies to strengthen its mission of ensuring taxpayers voluntary comply with paying their taxes for the good of the State of California.

 

The five elected members of the Board of Equalization have taken action in response to an evaluation from the Department of Finance Office of State Audits and Evaluations and the accompanying media interest. In order to fully address the evaluation, the Board came together to proactively address each concern. Each Board decision was conducted at a regularly scheduled meeting open to the public.

 

What follows below is a brief summary of actions taken by the Board which acknowledge needed changes with real solutions. By working together, the Board can continue to serve the best interests of the State of California through encouraging voluntary compliance and providing education to taxpayers.

  1. Disciplinary system for Board Members that fail to meet Board standards of conduct;
  2. Members may inquire but not provide direction as to how any particular concern was or should be resolved;
  3. Members may not at any time during the petition process, direct a conclusion or request a result be mandated;
  4. Limit Board hiring decisions to the Chief Counsel and Executive Director;
  5. Governance Policy to be adopted at the July 2017 hearing;
  6. Annual Review Report from the Executive Director to the full Board.

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Note: This newsletter may discuss complex tax laws and concepts. It may not address every situation, and is not considered written advice under Revenue and Taxation Code section 6596. Changes in law or regulations may have occurred since the time this newsletter was written. If there is a conflict between the text of this newsletter and the law, decisions will be based upon the law and not this newsletter. For specific help, please contact the BOE at 1-800-400-7115.

 

 

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CalPERS NEXT Victim: City of Oroville

Today we visit Oroville—the next victim of CalPERS.  It is unable to pay the required increase in CalPERS mandatory invoices.

“The pension plan time bomb will make its way to the City Council for discussion Tuesday.

Chico’s annual California Public Employees Retirement System contribution is projected to increase by $3.2 million in just five years.

One of those options could be local government agency management of pensions and offering defined contribution plans like a 401(k).”

At some point CalPERS collapses—but not before cities and counties go bankrupt—even the theft of $6 billion by Guv Brown will not slow down the process.

calpers

Pensions, development fees come to council

By Ashiah Scharaga, Oroville MR, 6/18/17

The pension plan time bomb will make its way to the City Council for discussion Tuesday.

Chico’s annual California Public Employees Retirement System contribution is projected to increase by $3.2 million in just five years.

Vice Mayor Reanette Fillmer said she’s interested in looking at other options for new employees, and examining what other cities are doing to tackle the issue.

One of those options could be local government agency management of pensions and offering defined contribution plans like a 401(k).

She’s interested in finding more cost-effective routes.

“It’s about reducing cost and long-term liability and getting the city into better financial state,” she said.

City Administrative Services Director Scott Dowell said if the city doesn’t plan for the projected contribution increases, “it could obviously have huge consequences for us in the future.”

In the worst case scenario, the City Council could face tough decisions like whether to borrow money, reduce staffing levels or cut services in order to keep the budget balanced.

Also at the meeting, the City Council will comment on the development impact fee program update.

Developers could end up paying an additional $4,000 to $8,000 per home and apartment unit in Chico.

Fees include streets, parks/greenways impacts, bikeways, storm drainage, police and fire and sewer line categories.

 

State’s ‘balanced and progressive’ budget carries big risks for taxpayers

In this article Dan Walters calls out the very confused Guv Brown for his theft of $6 billion from a reserve fund meant for dozens of agencies—giving the money to the collapsing CalPERS—regardless of the fact it is going to fail, no matter how much money is given them.

“Borrowing to make the extra payment would not reduce the state’s overall debt, obviously. Brown contends that it would save money in the long run, because the interest paid on the loan would be less than the projected growth of pension debt.

It’s quite similar to the “pension obligation bonds” that local governments have floated, hoping to come out ahead via arbitrage, but they have sometimes backfired, and Brown is betting $6 billion that CalPERS can achieve its 7 percent annual earnings goal despite what the governor describes as “poor investment returns.”

Even if this fiscal gimmick works as hoped, the state’s retirement debt will continue to grow. The state’s regular payments to CalPERS fall way short of what would be needed to keep the debt from growing, much less pay it down. Overall, CalPERS has less than two-thirds of the money it needs to cover all pension commitments.”

The back drop of this budget is the falling State revenues.  We have jobs fleeing the Bay Area.  Sacramento Democrats are forcing the Federal government NOT to finance the illegal activities of the government.  This is a very important article, glad to see Dan Walters still on the case.

ShakingHandsWithMoney

State’s ‘balanced and progressive’ budget carries big risks for taxpayers

By Dan Walters, CalMatters,  6/18/17

Gov. Jerry Brown and legislative leaders are patting themselves on the back for what Brown describes as a “balanced and progressive budget” for the 2017-18 fiscal year that begins July 1.

The “progressive” description of the $185 billion budget alludes to expanding benefits for the very large number of impoverished Californians – at least a quarter, and perhaps more than a third of the state’s 39 million residents. They include an expansion of the state’s new “earned income tax credit” from low-income wage workers to the low-income self-employed.

The “balanced” claim refers to politicians’ traditional view that if they don’t spend every last dollar the state receives, or is projected to receive, a budget is “balanced.”

However, a more comprehensive view of the state’s financial situation clouds that characterization.

For instance, while the $125 billion general fund doesn’t directly rely on borrowed money, as have past budgets, it also doesn’t account for an increase in debt that will have to be eventually covered by general fund taxes, such as income and sales levies.

Brown’s revised budget proposal, released last month, points out that “the state now has $282 billion in long‑term costs, debts, and liabilities. The vast majority of these liabilities – $279 billion – are related to retirement costs of state and University of California employees (which) have grown by $51 billion in the last year alone due to poor investment returns and the adoption of more realistic assumptions about future earnings.”

The budget does little or nothing to whittle down that burden on future generations of taxpayers.

The budget allocates nearly $6 billion just for payments to the California Public Employees Retirement System (CalPERS) and Brown’s budget predicted sharp increases in the years ahead. He proposed, and legislators endorsed, another $6 billion one-time payment by borrowing the extra payment from another state fund.

Borrowing to make the extra payment would not reduce the state’s overall debt, obviously. Brown contends that it would save money in the long run, because the interest paid on the loan would be less than the projected growth of pension debt.

It’s quite similar to the “pension obligation bonds” that local governments have floated, hoping to come out ahead via arbitrage, but they have sometimes backfired, and Brown is betting $6 billion that CalPERS can achieve its 7 percent annual earnings goal despite what the governor describes as “poor investment returns.”

Even if this fiscal gimmick works as hoped, the state’s retirement debt will continue to grow. The state’s regular payments to CalPERS fall way short of what would be needed to keep the debt from growing, much less pay it down. Overall, CalPERS has less than two-thirds of the money it needs to cover all pension commitments.

Another cloud on the budget is the $9.9 billion in reserves that Brown and legislative leaders are touting as hedge against an economic downturn.

Most of it is in a “rainy day fund,” it had better be a very light shower, because it’s a truly paltry sum. Brown’s own budget staff estimates that even a moderate recession would slash state revenues by $55 billion over three years, largely because the state has become ever-more-dependent on income taxes from a relative handful of affluent taxpayers, making its revenue stream increasingly volatile.

The state sorely needs tax reform to reduce that volatility and ensure that the money will be there for all the goodies Brown and legislators are happily handing out. But that would take political will that is in very short supply.