Soros-Backed Group Claims Charter Schools Are Racist

To Progressives like George Soros giving black children quality education is racist. In most cities, like D.C. and N.Y. at least a majority of those enrolled in charter schools are black. “A George Soros-backed advocacy group filed complaints in three cities alleging that charter schools are racist.

The Advancement Project is asking the Justice Department to investigate the closures of failing public schools in New Orleans, Chicago, and Newark on the grounds that the closings are racially motivated.

All three cities have black majorities in the schools. Can Soros force other races to attend the schools—or even live in the city? Newark’s black population is 49.7%, Chicago has a black population of 32.9% and New Orleans comes in at 67.25%.   Yes, schools are being closed—mostly because they are failures and no amount of money has saved them. The students going to charter schools succeed and excel—something Soros does not want—he has a Plantation mentality toward people of color. Expect anything different?

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Soros-Backed Group Claims Charter Schools Are Racist

Elizabeth Harrington, Washington Free Beacon, 5/14/14
A George Soros-backed advocacy group filed complaints in three cities alleging that charter schools are racist.

The Advancement Project is asking the Justice Department to investigate the closures of failing public schools in New Orleans, Chicago, and Newark on the grounds that the closings are racially motivated.

The group, whose mission is to dismantle “structural racism” and promote “racial justice,” filed complaints under Title VI of the Civil Rights Act on behalf of “Journey for Justice,” a coalition of grassroots organizations supported by teachers unions.

“The coalition has come together because, across our communities, education ‘reformers’ and privatizers are targeting neighborhood schools filled with children of color, and leaving behind devastation,” the organization wrote in a letter to Attorney General Eric Holder and Secretary of Education Arne Duncan, attached to the New Orleans complaint.

“By stealth, seizure, and sabotage, these corporate profiteers are closing and privatizing our schools, keeping public education for children of color, not only separate, not only unequal, but increasingly not public at all,” they said.

The organization compared charter schools to prisons.

“Adding insult to injury, the perpetrators of this injustice have cloaked themselves in the language of the Civil Rights Movement,” the Advancement Project wrote. “But too many of the charter and privately-managed schools that have multiplied as replacements for our beloved neighborhood schools are test prep mills that promote prison-like environments, and seem to be geared at keeping young people of color controlled, undereducated, and dehumanized.”

The complaint asks for an investigation into “racially discriminatory school closings,” and for the DOJ to stop the closures of five public schools in New Orleans. The group also wants a moratorium on school closings.

The complaint admits that all the schools the Advancement Project is fighting to remain open are failing. On page 10, a list of the schools shows that two received F grades in the 2011-2012 school year, the remaining three received a D+, D, and D-.

The Advancement Project has received nearly $4 million from George Soros’s Open Society Institute since 1999, according to the Capital Research Center, and grants from Open Society Foundations.

Harry Belafonte, who has compared the billionaire philanthropist David and Charles Koch to the KKK and called former President George W. Bush the “greatest terrorist in the world,” sits on the organization’s board of directors.

Journey for Justice Alliance is also allied with the Chicago Teachers Union, American Federation of Teachers, and Teachers for Social Justice.

The Advancement Project argues that charter school advocates used Hurricane Katrina to plot “behind closed doors” to open more charters, independently run schools that receive public funding. Teachers at charter schools are often not unionized.

“The ‘New Orleans experiment’ has failed, and African-American students have borne the brunt of this failure,” the complaint claims.

However, Louisiana posted a record-high graduation rate in 2012 at 72.3 percent, New Orleans leading the way with 77.8 percent of its students graduating. The city has been steadily increasing its graduation ranks since 2004, when only 54.4 percent of its students graduated. New Orleans has the highest charter school enrollment in the nation, at 79 percent.

Gov. Bobby Jindal (R.) touts his state’s education reform, which includes expanding charters and his Scholarship Program that allows students to flee failing public schools and attend private ones with a voucher. The vast majority of voucher awards go to minority students.

Jindal helped remove the cap on the number of charter schools allowed to operate in Louisiana, and increased K-12 education spending from $3.13 billion in January 2008 to $3.44 billion in July 2013. He requested an additional increase of $102.8 million in his budget this year.

The Recovery School District, a special district that manages chronically low-performing schools in the state, is the subject of the complaint. The district defended its policies as promoting civil rights.

“Over the last eight years, the schools in New Orleans have made tremendous progress by any academic measure—ACT scores, student achievement, graduation rate,” the district said in a statement. “In 2005, over 60 percent of our students attended failing schools. Today only 5 percent of students city-wide attend failing schools.”

“It is critical to insist on the civil rights of every child, and there is no doubt New Orleans is closer to assuring those rights than it was a decade ago,” they said.

While antagonistic to voucher programs, the Obama administration has been generally favorable to charter schools, making it unlikely the DOJ will meet the Advancement Project’s demands.

The Department of Education provided $242 million for the Charter Schools Program in 2013, and Secretary Arne Duncan has said that high-performing charters have “irrefutably demonstrated that low-income children can and do achieve at high levels.”

Charter schools also have bipartisan support in Congress, with the House of Representatives passing a bill to expand the charter school program last week.

 

20 California Counties: $73 BILLION in Unfunded Pension Liabilities

The California Political News and Views has brought you stories about CalPRS, CalSTRS, the UC system, LA DWP, among others having unfunded pension liabilities. Now a report has been made about the twenty counties that have their separate pensions systems. The bad news is that combined, they have unfunded liabilities of $73 billion.

As the costs go up, and due to revenues losses because productive jobs are leaving the State, these counties will join Detroit, Stockton, Vallejo and the State of California in an impending collapse of the systems.

“The report, issued by the California Policy Center, looks not only at pension costs—which are the sole focus of most such previous analyses—but also includes retirement health care costs, along with balances of any bonds counties have had to sell to raise money to pay retirees.

The 20 counties, with a combined population of 29.3 million, have a total unfunded liability for their pension systems of $37.2 billion. But, the study says, when you add pension bond obligations and unfunded health care liabilities, the unfunded total nearly doubles, to $72.3 billion.”

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A Time Bomb That Needs Defusing

Mountain News, 5/13/14

There’s good news and bad news for San Bernardino County residents in a new report, issued May 6 by a California think tank.

The report analyzes the level of unfunded retirement liabilities for the 20 California counties that have their own retirement systems. Though they represent just over a third of California’s 58 counties, these jurisdictions make up 77 percent of the state’s population. San Bernardino County is among them.

The good news is that of the 20 counties with their own pension plans, San Bernardino County ranks sixth best when it comes to the unfunded percentage of pensions, pension bonds and healthcare liabilities it shoulders for its retirees.

The bad news is that it its 72-percent overall funding ratio for its out-to-pasture workers still represents a liability of $4,713 per county household.

The report, issued by the California Policy Center, looks not only at pension costs—which are the sole focus of most such previous analyses—but also includes retirement health care costs, along with balances of any bonds counties have had to sell to raise money to pay retirees.

The 20 counties, with a combined population of 29.3 million, have a total unfunded liability for their pension systems of $37.2 billion. But, the study says, when you add pension bond obligations and unfunded health care liabilities, the unfunded total nearly doubles, to $72.3 billion.

Put another way, when you average the money these counties owe their retirees for just pensions, they are 74 percent funded—meaning they can’t cover one of every four dollars that, God forbid, they could be called on to pay. Adding in pension bond and health care costs, though, they could cover just 60 percent of the costs.

In financial circles, when a plan has unfunded liabilities of 20 percent or less, it’s considered healthy. At 72 percent funding, San Bernardino County is far better off than second-worst Los Angeles County, with just a 51-percent ratio, or once-bankrupt Orange County, whose fifth-worst ranking is at 60 percent.

But any county, or any level of government, for that matter, with a substantial unfunded pension liability has big problems, especially since, as the report says, reforms to date have not required public employees to help close the funding gap by payroll withholding.

Should the counties try to reach 100-percent pension funding in a modest 20 years, they would have to earmark amounts ranging from 23 percent of their total budget for Los Angeles County to 2 percent for Tulare County, with San Bernardino lawmakers needing to kick in 10 percent of their budget.

Obviously, that’s not going to happen, because even relatively well-funded San Bernardino County couldn’t afford to slash its level of public services by one-tenth to make sure retired workers continue well fed and cared for.

But serious as the numbers may appear, the scary fact is they’re probably understated. The report says the figures are based on pension systems earning 7.5 percent on their investments, a dubious assumption in today’s economy.

To get an idea of what a drop in earnings might mean, the report says the total unfunded pension liability for all of California’s public employee pension systems, including city, state and schools, is $128 billion, assuming 7.5 percent.

But should that return actually be a more conservative 5.5 percent, their total would skyrocket to $329 billion, and to $450 billion if the average return were just 4.5 percent.

These figures lead to the obvious conclusion—public employees who have yet to retire must begin contributing significantly to reducing their government’s unfunded pension liabilities. After all, it’s the retiring worker, and not the typical taxpayer, who’ll get the benefits.

A commitment to such change is a reasonable expectation for any candidate for public office. We hope those seeking county or state positions in June and November will pledge to do something about this ticking time bomb. If they won’t, voters should support candidates who will.

What Recovery? Another California Company moves Headquarters to Dallas

Toyota is moving to the suburbs of Dallas. Now another California firm is moving. Our State is in a Depression and the confused Governor thinks everything is great—even claims a surplus, while the State Controller puts out a press release showing a $10 billion cash deficit—and the LAO says we have a $340 billion debt.

One by one productive firms are leaving the State, as leases expire, or they get great deals from Texas.

“Amerflight LLC announced Thursday that it will relocate its headquarters and flight and maintenance operations from Bob Hope Airport in Burbank, California, to Dallas/Fort Worth International Airport.

The company has 600 employees and 170-plane fleet make it the largest U.S. FAR Part 135 air cargo carrier, the company said in a release.”

Wonder if the Guv has calculated the loss of revenue from so many leaving?

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Cargo carrier Ameriflight to relocate HQ, operations to D/FW Airport

Lance Murray, Dallas Business Journal, 5/15/14 

Chalk up another corporate relocation for Dallas-Fort Worth at California’s expense.

Amerflight LLC announced Thursday that it will relocate its headquarters and flight and maintenance operations from Bob Hope Airport in Burbank, California, to Dallas/Fort Worth International Airport.

The company has 600 employees and 170-plane fleet make it the largest U.S. FAR Part 135 air cargo carrier, the company said in a release. Not all the employees will relocate to D/FW Airport, as many are stationed at the company’s 17 bases around the country.

Ameriflight said it is aiming at a September move.

“Relcation to DFW will allow us to better serve our customers throughout North and South America, as well as centralize our operations at a major international hub in the nation’s geographic core,” Ameriflight President Andrew Lotter said. “It’s the right move for Ameriflight’s continued growth and expansion as the industry as the industry’s leader in small air cargo.”

Federal Aviation Regulations Part 135 govern commuter and on-demand aviation operations.

Ameriflight operates scheduled and contract services to destinations in 38 U.S. states, Canada, Mexico and the Caribbean.

 

Guv Brown New Budget: $1 Billion Higher—MediCaid Costs UP $1.2 Billion

We are just beginning to see the budget busting of the MediCaid fiasco to the people of California. In January the Guv presented a budget. A couple of days ago, he presented the revise of that budget—the difference is one billion dollars. The TOTAL increase goes to the “unexpected” addition costs of MediCaid. Next year expect multiples of this increase. At the same time, due to 50% of the doctors and 75% of the specialists refusing to participate, expect long wait times for appointments, driving lengthy distances to find a doctor—and even longer to find a hospital.

We now know that many of the health care programs promoted by the government through “Covered California” lied about the doctors and hospitals involved. This is called bait and switch, which is illegal—except when government does it. Almost one third of Californians will be getting health care, free, paid for by the other 2/3’s!

“With the influx in new enrollees, California’s total number of Medi-Cal beneficiaries is expected to increase to 11.5 million by 2015 — about 30% of the state population (HealthyCal, 5/13).”

Photo courtesy of RambergMediaImages, flickr

Photo courtesy of RambergMediaImages, flickr

Brown’s Revised Budget Includes Additional $1.2B for Medi-Cal

California Healthline, 5/14/14

On Tuesday, Gov. Jerry Brown (D) released a revised fiscal year 2014-2015 budget proposal that includes an additional $1.2 billion in Medi-Cal funding to account for about 800,000 new beneficiaries who qualified for the program before the expansion under the Affordable Care Act, HealthyCal reports.

Medi-Cal is California’s Medicaid program (Weintraub, HealthyCal, 5/13).

Background

Brown on Tuesday released his revised budget proposal, which includes more than $2 billion in additional spending over his initial budget proposal in January.

In addition to the increased Medi-Cal funding, the revised budget plan also includes higher spending on:

Additional contributions to CalPERS;

  • Additional staffing for the state’s unemployment insurance program;
  • Early childhood education;
  • Emergency drought assistance; and
  • Increasing In-Home Supportive Services’ caseloads.

In a release, Brown said the revised budget “shows that California can afford to provide health care to many more people, while at the same time paying its debts and shoring up the long-troubled teachers’ retirement system.”

Higher-Than-Expected Medi-Cal Enrollment

California officials had estimated that one million to two million additional residents would enroll in Medi-Cal through the end of 2014, but about 1.9 million consumers already had registered for the program by the end of March and an additional 900,000 applications are pending (California Healthline, 5/13).

About 800,000 of the new beneficiaries were eligible for the low-income health program before the ACA was implemented. The state is responsible for paying half the cost of new Medi-Cal beneficiaries who qualified for the program before the ACA went into effect (HealthyCal, 5/13).

Diana Dooley, a spokesperson for the Brown administration, said the state’s outreach efforts brought previously eligible residents “out of the woodwork” to enroll in Medi-Cal (Megerian, Los Angeles Times, 5/13).

With the influx in new enrollees, California’s total number of Medi-Cal beneficiaries is expected to increase to 11.5 million by 2015 — about 30% of the state population (HealthyCal, 5/13).

Details of Medi-Cal Funding in Budget Plan

The additional $1.2 billion in funding called for under Brown’s revised budget plan includes:

  • $193 million for 2013-2014; and
  • $918 million for 2014-2015.

The budget proposal also includes other expenditures related to the Medi-Cal program, including:

  • $191.2 million in funding to expand Medi-Cal mental health and substance misuse programs;
  • $187.2 million in funding for managed care rate increases; and
  • $94.4 million to enhance the technology program used to determine Medi-Cal eligibility and process Covered California applications (Robertson, Sacramento Business Journal, 5/13).

Lawmakers’ Reactions

Some state lawmakers applauded Brown’s efforts to expand health coverage through Medi-Cal, but others said his revised budget focused too much on the program.

Assembly member Jeff Gorrell (R-Camarillo) said the revised budget “represents a responsible framework,” but he added that the “dramatic increases in health care costs indicate that there are many unanswered questions in the implementation of the [ACA].”

Assembly Republican Leader Connie Conway (R-Tulare) in a release said government health care programs “will consume more and more of the state budget and eventually reduce the amount we can spend on other important priorities such as education, public safety and transportation” (Smith, “Capitol Alert,” Sacramento Bee, 5/13). She also said that spending $1.2 billion in state funds on residents who previously qualified for Medi-Cal without additional federal funding is “a problem” (Duckworth, KCBS, 5/13).

Health Advocates’ Reactions

Meanwhile, C. Duane Dauner, president and CEO of the California Hospital Association, in a release expressed “disappoint[ment]” that the revised budget did not reverse “looming retroactive Medi-Cal payment cuts to hospital-based skilled-nursing facilities.”

Dauner said that the “omission comes at a critical time in the evolution of the Medi-Cal program” and that the cuts could “threaten access to care for millions of low-income and elderly patients” (“Capitol Alert,” Sacramento Bee, 5/13).

A joint release by several health advocacy groups said the coalition was “pleased that the governor’s May revision reflects the continued success of the state’s expansion of Medi-Cal coverage to more children and families.” However, the release added that the budget “misse[d] a golden opportunity to build a healthier California” by restoring funding for children’s health programs.

The coalition includes:

  • California Coverage & Health Initiatives;
  • Children’s Defense Fund California;
  • Children Now;
  • PICO California;
  • The Children’s Partnership; and
  • United Ways of California (The Children’s Partnership release, 5/13).

 

 

 

 

Gov. Brown proposes change in tallying of low-income students for funding formula

Guv Brown has figured a way to change standards, in order to create more people—by changing definitions. Any wonder California has the highest rate of poverty in the nation—the confused Guv just changes definitions.

“In his May budget revision, Gov. Jerry Brown on Tuesday proposed a change that will allow school districts to more broadly define who is eligible for a free or reduced-price meal and, by association, who is identified as low-income and eligible to receive extra state education funds. The proposal would affect more than 1 million students who fall into a gray area of free lunch eligibility.”

This means, by changing the law, Jerry Brown just made one million more students poor, poverty stricken—by government fiat. Not in reality, but in order to use money tax dollars, then demanding more tax dollars and finally raising taxes because we have one million more poor kids. This is how government operates.

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Gov. Brown proposes change in tallying of low-income students for funding formula
By Jane Meredith Adams, EdSource, 5/14/14 

In his May budget revision, Gov. Jerry Brown on Tuesday proposed a change that will allow school districts to more broadly define who is eligible for a free or reduced-price meal and, by association, who is identified as low-income and eligible to receive extra state education funds. The proposal would affect more than 1 million students who fall into a gray area of free lunch eligibility.

While the new Local Control Funding Formula requires school districts to count low-income students annually, and ties funding to the tally, Brown’s proposal would allow a subset of schools with large numbers of low-income students to count them only once every four years. Instead of individual student data, schools where more than 80 percent of students qualify for free and reduced-price meals would be allowed to submit a group percentage of low-income students. The proposal would allow the schools to continue the system they have used for years, although it requires that districts be diligent about verifying student family income levels every four years.

Brown’s proposal would give districts what they have sought: greater flexibility and less paperwork. These 1,500 high-poverty schools operate under Provision 2 of the National School Lunch Program, which frees schools with high concentrations of low-income students from conducting the time-consuming and costly process of verifying income eligibility for free or reduced price meals every year. Instead, these schools collect a “base year” of income eligibility data every four years, although schools can obtain extensions and in some cases the data have become quite stale, according to the state. In exchange for being relieved of paperwork, the schools provide free meals to every student, with districts paying the difference between the qualified percentage and 100 percent.

But with hundreds of millions of dollars for low-income students on the line under the new funding system, the California Department of Education said it needed current student data. Districts with large populations of low-income students, led by Los Angeles Unified and Fresno Unified, have protested vociferously for the past nine months, even as they have collected the necessary information.

Ruth F. Quinto, chief financial officer of Fresno Unified, said last fall that the new data collection was unnecessary, given an abundance of federal and state data documenting poverty through the census, unemployment rates and enrollment in state food stamp programs.

Los Angeles Unified Superintendent John Deasy said that families were wary of filling out forms they’d never seen before, and according to the rules of the free lunch program, the schools couldn’t require that forms be returned for students to receive free meals. Deasy charged that requiring new forms from the low-income families was inconsistent with the spirit and the letter of the new funding formula, which the governor has described as a push toward equity for needy students.

But still, districts pulled together alternative income verification forms and launched widespread campaigns to collect information from families. Fresno Unified gave away tickets to the Fresno Fair to encourage families to return forms and sent teams of parents door-to-door. Oakland Unified handed out 1,400 tickets to Raiders games to reward schools that collected high numbers of forms.

After months of conversations with districts, school lunch advocates and the California School Boards Association, Gov. Brown proposed the changes in the May revision of his spending plan for 2014-15.

Deasy expressed gratitude that the governor had responded to districts’ complaints. “I want to thank Gov. Jerry Brown for listening to our concerns about streamlining processes under the new Local Control Funding Formula,” he said in a statement. “His proposed changes should help mitigate the burdensome process for collecting alternative forms to verify income eligibility, so that we can focus more attention on teaching and learning.”

Brown’s proposed changes would also allow the districts to throw out their 2013-14 count of high-needs students, if the count for 2014-15 is higher.

Tia Shimada at California Food Policy Advocates said the proposed changes would encourage schools to continue to participate in programs that serve all students free meals, while still being able to provide necessary data for the funding formula. The proposed changes are “a step in the right direction,” she said.

Report: NSA Bugged Internet Devices

Photo Courtesy of newfilm.dk, Flickr.

Photo Courtesy of newfilm.dk, Flickr.

Our government is going to cause foreign businesses and foreign nations to stop buying ANY technology from a United States firm. Thanks to the Snowden revelations, folks like Germany’s Merkel are being watched by NSA and the President of the United States. Already Europeans are stopping the acquisition of U.S. technology. Now it gets worse—not only are we spying on Prime Ministers and bankers in other countries, honest citizens here, NSA is using U.S. products sold overseas as spying devices.

In Japan buy a router from Cisco—and the NSA is spying on your computer and Internet—directly.

“The NSA obtains routers and other network devices being exported from the U.S., implants backdoor surveillance features, repackages the devices with factory seals and sends them to the international customers to tap into the networks of their users, The Guardian reports. The article cites a June 2010 report from the head of the NSA’s Access and Target Development Department leaked by Snowden.

Responding to an email about the report, NSA spokeswoman Vanee’ Vines would not comment “on specific, alleged intelligence-gathering activities,” but said the agency relies on the security of American-built tech devices.”

Report: NSA Bugged Internet Devices

Amid controversy, allegations on surveillance the new NSA director promises more transparency.

The NSA is reportedly tapping exported Internet routers before being sold to foreign nations.

By Tom Risen, US News, 5/13/14

The Obama administration has accused China of hacking companies and Congress has questioned whether Chinese businesses tamper with telecom devices, but the National Security Agency may be using those same tactics, according to reports citing documents leaked by former agency contractor Edward Snowden.

The NSA obtains routers and other network devices being exported from the U.S., implants backdoor surveillance features, repackages the devices with factory seals and sends them to the international customers to tap into the networks of their users, The Guardian reports. The article cites a June 2010 report from the head of the NSA’s Access and Target Development Department leaked by Snowden.

Responding to an email about the report, NSA spokeswoman Vanee’ Vines would not comment “on specific, alleged intelligence-gathering activities,” but said the agency relies on the security of American-built tech devices.

“While we cannot comment on specific, alleged intelligence-gathering activities, NSA’s interest in any given technology is driven by the use of that technology by foreign intelligence targets,” Vines said. “The United States pursues its intelligence mission with care to ensure that innocent users of those same technologies are not affected.”

This alleged espionage is the kind commercial spying the House Intelligence Committee suspected was being dealt by China-based telecom Huawei. The committee investigated Huawei in 2012 in part because its CEO used to be a military technologist for the People’s Liberation Army. The congressional scrutiny led the Chinese telecom to step back from the U.S. market.

Nearly a year has passed since reporter the June 2013 publication of the first story about widespread, secret NSA surveillance citing documents leaked by Snowden. This latest report in The Guardian is an excerpt from a book about the NSA disclosures called “No Place to Hide,” by Glenn Greenwald, who wrote the first news story about Snowden for the news group.

Reports citing documents leaked by Snowden also indicated the NSA has uploaded spyware on to computers to monitor both criminals and trade rivals.

The new director of the NSA, Vice Admiral Michael Rogers, promised on Monday the agency would be more transparent while it factors privacy rights into national security efforts, Reuters reports.

“The dialogue to date that we have had for much of the last nine months or so from my perspective, I wish was a little bit broader, had a little more context to it and was a little bit more balanced,” Rogers said at the Reuters Cybersecurity Summit, alluding to the surveillance debate generated by Snowden.

The trouble with transparency in the spy business is that everything is “compartmented” among the people in different secret operations, so very few people – if any – at the agencies know what everyone on the payroll is doing, says Bob Baer, a former secret case officer for the Central Intelligence Agency.

While Baer suspects some of the NSA reporting during the past year may have incomplete or inaccurate sources, he adds it is hard to account for contractors on the payroll doing surveillance or data mining for agencies.

“I have rarely seen an intelligence flack out and out lying – they may not know the whole story,” Baer says. “The intelligence community is so big, and there is always somebody pushing the envelope at some level.”
 

Companies Face Backlash Over Foreign Mergers To Avoid U.S. Taxes

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Notice American firms buying foreign companies—then moving their HQ to the foreing nation? No, not for the employees, the food, or technology—it is to save tax dollars.

“”Pfizer is going to, just by moving some paper around, pretend to be a foreign company and get out of paying their U.S. taxes, and it’s absolutely wrong,” Wamhoff says. “This hopefully is the sort of thing that will be a catalyst for congressional action.”

For Barbara Ryan, the managing director of FTI Consulting, it’s more about the need for tax reform and U.S. tax rates being too high. “We live in a global world, and we need to have a tax policy that is more consistent with tax rates outside,” she says.

Ryan says once one company does it, the pressure is on for others to follow.”

Apple and other technology firms have tens of billions in foreign nations—working to build the corporation and market share. If the money came back to California it would be taxed by Washington and Sacramento. To make it productive, instead of wasted by government, Apple and others create jobs in other nations.

Companies Face Backlash Over Foreign Mergers To Avoid U.S. Taxes

by Yuki Noguchi, KQED, 5/13/14

Pfizer is pursuing British drugmaker AstraZeneca, in part because it wants to lower its tax rate by moving its headquarters to London.

U.S. drugmaker Pfizer has offered more than $100 billion to acquire its London-based rival, AstraZeneca. Pfizer says it likes AstraZeneca’s strong “pipeline” of new drugs. But the American company makes clear it is pursuing the British firm because it wants to lower its tax rate.

All Pfizer has to do is buy the company and move its headquarters to London.

For companies, home isn’t necessarily where the heart is — or even where it does most of its business. Sometimes, it’s where corporate taxes are lowest.

It used to be easier for companies to keep their legal bases in out-of-the-way places, like Bermuda. It’s a practice known as tax inversion, and it was popular until 2004, when Congress changed the law. Now, companies whose ownership is 80 percent based in the U.S. are subject to U.S. taxes.

But tax inversion is coming back in a new form. In the last year, Chiquita, of banana fame, media giant Liberty Global and drug company Perrigo all announced deals to buy foreign companies and shift their headquarters. In each case, it lowered their tax burdens.

“So it’s something that is back as a hot thing for some companies to do,” says Michael Kirsch, a former international tax counsel for the U.S. Treasury and a law professor at Notre Dame. Kirsch says recent mergers between U.S. companies and foreign firms are aimed at circumventing the restrictions of the 2004 law.

That’s because a merger often means the firms fall below the 80 percent domestic ownership threshold.

Kirsch says after the merger, operationally, things don’t change much. Executives and personnel of the U.S. company often stay in the U.S.

One of the few downsides, Kirsch says, is public relations. A decade ago, Stanley, the toolmaker, abandoned a tax inversion plan in part because of backlash.

“This was a company that appeals to … working people in the U.S., and it sells tools and such,” Kirsch says. “I think they had more sensitivity to that potential reputational risk.”

And AstraZeneca CEO Pascal Soriot echoed that concern Tuesday. He testified before a British parliamentary committee detailing his objections to the Pfizer proposal.

“We are afraid [the concerns over tax inversion] could generate a substantial controversy and potentially delay this merger and potentially impact the reputation of our company as well,” Soriot said.

Steve Wamhoff is legislative director of Citizens for Tax Justice, a public advocacy group. He says that should be a concern for Pfizer.

“These corporations are American corporations in every sense of the word,” Wamhoff says. “They’re doing most of their business in the United States. They’re benefiting from the public investments that we all pay for.”

Wamhoff is pinning hopes on promises by Sen. Carl Levin, D-Mich., and others to crack down on tax avoidance.

“Pfizer is going to, just by moving some paper around, pretend to be a foreign company and get out of paying their U.S. taxes, and it’s absolutely wrong,” Wamhoff says. “This hopefully is the sort of thing that will be a catalyst for congressional action.”

For Barbara Ryan, the managing director of FTI Consulting, it’s more about the need for tax reform and U.S. tax rates being too high. “We live in a global world, and we need to have a tax policy that is more consistent with tax rates outside,” she says.

Ryan says once one company does it, the pressure is on for others to follow.

“So I think there’s sort of a foot race to maintain competitiveness,” she says. “The companies that have done it have an advantage over the companies that haven’t yet done it.”

So, Ryan says, she expects to see the trend accelerate.

 

In revised budget, Gov. Brown details costly 30-year plan to fix teacher pensions

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CalSTRS claims it has an unfunded liability of $74 billion. Based on that, Guv Brown, our very confused Governor is planning paying this off in 30 years! Imagine the interest costs over that period of time. If this was true. In fact, the Federal government using generally accepted standards says the real number is $166.9 billion—and growing. The Guvs plan is well intentioned, but not even a minor correction of the problem.

CalSTRS like CalPRS is going to collapse. Brown by not making the radical changes is going to cut teachers’ pay, cut facilities and equipment for students, while making sure union agreements are kept—even if harming the education of students. The media is applauding the Guv for “saving” CalSTRS—yet he is killing it off as well as the pensions of thousands of teachers. History will remember be had a chance to salvaged the system, yet played politics for the unions.

Billions meant for students and education, each year, will instead to go a collapsing pension system.

“. His proposed 30-year payment plan, subject to negotiation with the Legislature, would cost an additional $5 billion per year by the time it’s fully phased in over seven years. The bulk of it – $3.7 billion annually – would be the burden of school districts, potentially eating away between one-seventh or more of the increased funding they had expected under the Local Control Funding Formula.”

 

In revised budget, Gov. Brown details costly 30-year plan to fix teacher pensions
By John Fensterwald, EdSource, 5/14/14   

Gov. Brown points to a chart showing the possible insolvency of the CalSTRS pension fund for teachers and administrators in 30 years unless the state, teachers and school districts contribute more money to wipe out the $74 billion deficit. Source: Webcast of Brown’s press conference.

Gov. Jerry Brown is predicting that the state will take in $2.4 billion more in revenue in 2014-15 than initially estimated, but highly expectant education leaders won’t get a piece of it to implement the Common Core state standards or make a down payment for universal preschool. They can count on the double-digit spending increase that the governor proposed in January  – but not much more.

Instead, consistent with his philosophy of fiscal restraint and a commitment to pay down long-term debts, Brown is proposing in the revised May budget to make a down payment on the $74 billion shortfall in the pension program for teachers and administrators, the California State Teachers Retirement System, or CalSTRS. His proposed 30-year payment plan, subject to negotiation with the Legislature, would cost an additional $5 billion per year by the time it’s fully phased in over seven years. The bulk of it – $3.7 billion annually – would be the burden of school districts, potentially eating away between one-seventh or more of the increased funding they had expected under the Local Control Funding Formula (see Department of Finance summary of budget revision, starting on page 66).

In a press conference Tuesday, Brown made clear the state cannot duck this responsibility. Meeting pension obligations to teachers is part of what it costs to educate kids, Brown said, and must be paid for.

“The key point that is sometimes hard to grasp is that this is what it takes to educate our kids,” he said. “To get what they need, they need teachers. Teachers get what they need by having a pension. The pension has to be paid for.”

In January, Brown proposed that his administration and the Legislature spend next year negotiating a CalSTRS deal and then start funding it. But now he is proposing to start with the fiscal year that begins July 1, with an initial $450 million toward the unfunded liability. The state’s portion would be $73 million, with teachers paying $40 million more out of their salaries and districts kicking in about $337 million ­– equal to about a half of 1 percent of the projected $61 billion in Proposition 98 funding next year. Proposition 98, the primary source of funding for K-12 schools and community colleges, determines annual funding based on increases in enrollment and per capita state income or state revenue.

Jack Ehnes, chief executive officer of CalSTRS, said that closing the funding gap “can be resolved through gradual and predictable contribution increases, and the sooner those increases begin, the less risk to the state. Clearly, state policymakers understand this urgency, and … we are encouraged that a funding plan will be enacted this year.”

CalSTRS’ defined benefit program for its 860,000 members is funded through contributions from the state, employers (school districts) and employees, and returns on investments. CalSTRS lost about 40 percent of the value of its investments when the stock market plunged in 2008. Though the $183 billion value has now returned to where it was, the pension program is only about two-thirds funded to meet projected pension payouts over the next 30 years.

Contributions are determined as a percentage of employees’ pay. Teachers and administrators currently pay 8 percent of their salaries into the defined benefit program; the state pays 3 percent and districts 8.25 percent. Once fully phased in over three years, teachers would pay 10.25 percent of salaries and the state would pay 6.3 percent. Districts’ share, under Brown’s plan, would soar to 19.1 percent of employees’ pay, paid for out of Proposition 98 funding. The phase-in for districts would be seven years.

Assemblyman Rob Bonta, D-Oakland, chair of the Assembly Public Employees, Retirement and Social Security Committee, which is tackling the pension fund issue, called Brown’s proposal “a reasonable plan and a strong sign of progress” that is consistent with his committee’s principles of shared responsibility among contributors. “No one said it would be easy,” said Bonta, who plans a hearing soon to review the plan.

Dennis Meyers, Assistant Executive Director of the California School Boards Association, agreed with Bonta, calling the proposed pension contribution increases “daunting” at a time when school districts are recovering from the recession and phasing in the new funding system. He said his organization would take a hard look at Brown’s pension cost-sharing formula.

Little change in Prop. 98 funding

In January, Brown proposed a near-record increase in Proposition 98 spending. That won’t change much, even with an additional surge in overall state revenue, because of the complex way that Proposition 98 funding is calculated and retroactively adjusted. More than half of the new state revenue will fund a rush in enrollment in Medi-Cal, the federal and state subsidized health care program for low-income families that was expanded under the federal Affordable Care Act.

For K-12 schools and community colleges, there will be $242 million more available under Prop. 98 than in January, but nearly all of that will be eaten up by increased enrollments (see Department of Finance summary of budget revision, starting on page 15).

The January state budget included a $10.5 billion increase in K-12 and community college spending. Brown is proposing to split the new money between one-time expenditures and more dollars for ongoing spending.

Brown would use the bulk of the money to pay off the remaining $6 billion in late payments to school districts, known as deferrals. Paying that off will clear the decks of that portion of what Brown calls the state’s “wall of debt.” It will also free up cash for districts while eliminating loans that some districts – disproportionately those serving low-income students – had to take out.

The remaining $4.5 billion would fund districts’ operating budgets under the Local Control Funding Formula – more than double the $2.1 billion increase this year. In a January analysis, the non-partisan Legislative Analyst’s Office estimated that overall per-student spending would rise about 10 percent, from $7,936 per student in the current fiscal year to $8,724 in 2014-15. Under the formula, which distributes extra money based on enrollments of English learners, foster youth and low-income students, the percentage increases would vary significantly among districts, however.

Josephine Lucey, a school board member from Cupertino and president of the California School Boards Association, said,“We are pleased with the continued commitment and investment in the Local Control Funding Formula … so school district and county leaders and board members can invest in programs to achieve academic success.”

Other education leaders vowed to take the case to the Legislature for additional money for Common Core and an expansion of transitional kindergarten, an extra year of kindergarten for some 4-year-olds.

“While we are pleased to see progress toward implementing the Local Control Funding Formula, we are disappointed to see the governor did not include additional funding for implementation of new content standards, and will urge him and the Legislature to reconsider,” Valerie Cuevas, interim executive director of The Education Trust-West, said in a statement.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, had made a $1 billion expansion of preschool his top priority but, so far, has come away empty-handed. Brown, in a press conference, said that the state has increased Proposition 98 funding substantially for kindergarten through community college. Adding a 16th year of education, he said, would require shifting money from the other 15 years.

Noting that the state has not restored $1 billion in cuts to child-care and development programs since 2008, Deborah Kong, president of Early Edge California, a nonprofit that supports an expansion of the state’s early childhood services, said, “The governor and Legislature have a historic opportunity to make California a leader in education in these crucial weeks of the budget discussions. We urge them to make the wise investment in our future by making early learning a top priority.”

The May revision does include some new and expanded education programs:

  • $27 million to expand the capacity of the K‑12 High Speed Network, which provides Internet service to county offices of education and school districts. There will be grants for districts that need the most help preparing for the computer-based Common Core tests next spring.
  • $50 million to boost career-training programs at community colleges to help expand course offerings and purchase new equipment. The money comes on the heels of $250 million provided this year for the Career Pathways Trust, a state grant program that will fund partnerships between K-12 and community colleges for career technical education. Community college officials cheered the funding proposal, which they said would restore past cuts. Yet other advocates were disappointed there wasn’t additional funding for career technical programs at the K-12 level.

Mayor Johnson throws weight behind film tax credit

ShakingHandsWithMoney

Sacramento Mayor Kevin Johnson is a former basketball player. He recently took the lead in the Clippers/Sterling mess. Why? Because he was asked and got on the national scene. He has already signed away hundreds of millions of tax dollars to the billionaires that own the local basketball team—with the people paying to make them richer.

Now he has decided his friends in Hollywood are not rich enough. He wants your tax dollars so Alex Baldwin or George Clooney can make a movie—on the backs of the barely employed and small businesses that pay high taxes. Johnson so loves the rich, he wants to make them richer. As a Democrat, he so hates the poor he works hard to make them poorer. Expect anything different?

“The state Legislative Analyst’s Office recently criticized film tax credits for creating an “awkward precedent” of giving tax breaks to certain well-connected industries over others.

Nevertheless, Assembly Bill 1839 by Assemblymembers Raul Bocanegra, a Pacoima Democrat, and Mike Gatto, a Los Angeles Democrat, passed the Assembly Revenue and Taxation Committee on Tuesday evening. The vote was unanimous.”

Mayor Johnson throws weight behind film tax credit

Journal, 5/14/14

Sacramento Mayor Kevin Johnson has thrown his support behind a measure that would expand California’s film tax credit, which passed another legislative committee on Tuesday and heads for an Assembly floor vote.

The Sacramento mayor joined leaders from the state’s largest cities in a jointly written support letter to lawmakers that said California was losing “tens of thousands of middle class jobs” through its current, relatively small tax credit, and that a bolstered program would be a “smart, prudent investment” for the state’s economic competitiveness.

The Sacramento Film Commission has found some success in luring film crews here by promoting the city as a historic Gold Rush town with Victorian mansions, rivers, bridges, farms and orchards. The Jibboom Street bridge served as the morbid final backdrop of the 2013 comedy “Jackass Presents: Bad Grandpa,” which shot in various local areas and purchased 400 hotel rooms at the Hilton Sacramento Arden West.

In their letter, the mayors noted that only one big budget feature was shot entirely in California in 2012.

The state Legislative Analyst’s Office recently criticized film tax credits for creating an “awkward precedent” of giving tax breaks to certain well-connected industries over others.

Nevertheless, Assembly Bill 1839 by Assemblymembers Raul Bocanegra, a Pacoima Democrat, and Mike Gatto, a Los Angeles Democrat, passed the Assembly Revenue and Taxation Committee on Tuesday evening. The vote was unanimous.

Read a PDF of the letter from the mayors.

 

Brown omits funding for transitional kindergarten in May Revise

Walton_High_School_New_ClassroomThe teachers’ unions are going to be very angry at the confused Guv Brown. They thought they owned him. One thing thy really want in money. With money they can buy more legislators. The California Teachers Association, using dues forced from teachers has spent about $.13 million on just one candidate in the Bay Area. The idea of transitional kindergarten is similar to that is the failed Head Start program. All studies done on this multi-billion boondoggle prove that after three years the effect of the program is ZERO.

Transitional kindergarten is to force districts to hire many more teachers—have the unions take part of their paychecks and buy more elected officials. Remember the push to lower class size? Most studies show that is also a waste of time—but cause more teachers to be hired—and more money for the unions. Brown in already facing a $10 billion cash deficit for this years and $340 billion debt—and a collapsing pension system. So even the unions can not be paid off, this year.

Brown also proposed a dramatic increases in contributions toward the California State Teachers’ Retirement System, which is only 67 percent funded and is projected to run out of money to pay teacher pensions. The governor would have teachers, school districts and the state increase their contributions to CalSTRS by a combined $450 million in the first year. The added contributions would increase annually and reach $5 billion, or 35.7 percent of teacher payroll. If enacted, it would eliminate CalSTRS’s unfunded liability in about 30 years.”

Brown omits funding for transitional kindergarten in May Revise

Governor Brown omitted the program funding in May Revise

By Melissa Simon, Times-Standard, 5/14/14

Gov. Jerry Brown’s revised budget, released Tuesday, omits funding for Democrats’ top priority this year: transitional kindergarten, the public school program to ready 4-year-olds for the rigors of elementary school.

Humboldt County Office of Education Superintendent Garry Eagles said he was very pleased that Brown isn’t including transitional kindergarten because it would have diverted money from the K-12 programs.

“In my opinion, this is not the transitional kindergarten program we have now,” Eagles said. “I don’t believe that this model is the best to promote early childhood education – and my office and I are strong proponents of that – and in particular, I don’t believe rural schools and communities would have the capacity to carry out this model.”

Humboldt State University assistant education professor Lyn Scott said a sudden change in funding like this isn’t a wise decision after all the groundwork that has been laid in recent years.

“Any funding changes need to be done in a balanced approach,” Scott said. “I think that keeping focus on the benefits of transitional kindergarten will put pressure on the governor to put it back in the budget.”

Scott said a number of local teachers and principals he works with have been very positive about the benefits of transitional kindergarten.

“Educators in recent years have spent a lot of time developing transitional kindergarten programs for their classrooms, and it wouldn’t be beneficial to now put that back onto the local general funds,” Scott said.

With rosy revenue projections, Brown said he would focus education dollars on repaying money the state borrowed from school districts during the Great Recession and on shoring up the teachers’ pension system. Brown’s revised budget proposes accelerating the repayment schedule of $6.2 billion owed to schools, so that it all would be repaid by the end of the 2014-15 school year. The state had borrowed the money by deferring payments it owed school districts.

Brown also proposed a dramatic increases in contributions toward the California State Teachers’ Retirement System, which is only 67 percent funded and is projected to run out of money to pay teacher pensions. The governor would have teachers, school districts and the state increase their contributions to CalSTRS by a combined $450 million in the first year. The added contributions would increase annually and reach $5 billion, or 35.7 percent of teacher payroll. If enacted, it would eliminate CalSTRS’s unfunded liability in about 30 years.

The governor’s plan projects district contributions rising from 8.25 percent to 19.1 percent of teacher salaries.

“I was surprised that the governor suggested employers – like myself and the districts – increase the percentage going toward teachers’ retirements,” Eagles said. “It’s a big jump and he is asking us to double what we are doing now.”

For next school year, one-quarter of the state’s 4-year-olds will be eligible for state-funded transitional kindergarten. Legislative Democrats have proposed expanding the program to cover all 4-year-olds.

Scott said it’s important to emphasize that the group of students in transitional education classes aren’t a new group of children, but they are just being served in a developmentally appropriate setting.

“These children would’ve been served in kindergarten before the entry date was changed,” Scott said. “What transitional kindergarten did was allow the state to change the entry date but still serve the children that missed the cut-off in age-appropriate classrooms.”

Other highlights of Brown’s education budget include:

Allocating $26.7 million for schools to assess their Internet and network needs and to provide high-speed connections. That network is key to schools participating in the state’s all-electronic annual standardized testing. But the sum is a little more than one-fifth of the amount that the state allocated last year for schools to put into place the new Common Core state standards, which change what and how students learn and how they’re tested.

Allowing schools to count students from poor families only once every three or four years, making it easier for school districts to qualify for supplemental funding to teach low-income students.

Making it easier for schools to offer independent study using computers on campus.