Cisco to Obama: NSA Policies Killing American Technology Companies Selling to Other Nations

The American economy is beginning to take a hit—a big one. When the world found out that President Obama was spying on them, using the NSA, countries and foreign firms started buying NON-American technology. Now that American technology sold overseas goes through the NSA—and they put spying devices and trackers in the new products, our firms understand no one will trust American technology—for good reason.

Now John Chambers, the Cisco CEO, has written Obama, begging him to stop the spying—it will kill American jobs.

“In a letter to President Obama picked up by both The Financial Times and Recode, Chambers pointed to the latest allegations that the National Security Agency intercepted Cisco routers and other equipment in order to secretly install surveillance software. Based on documents leaked by former NSA contractor Edward Snowden, those allegations are described in the new book “No Place to Hide” by reporter Glenn Greenwald, according to Ars Technica.

Referring to an alleged photo of Cisco gear being modified, Chambers told the president that if the allegations are true, then “these actions will undermine confidence in our industry and in the ability of technology companies to deliver products globally.”

nsa fbi obama spying

Cisco CEO asks Obama to control NSA surveillance

The CEO of the networking giant warns that revelations of NSA spying are undermining confidence in the tech industry.

by Lance Whitney, CNET, 5/19/14 

Cisco CEO John Chambers has reached out directly to the president of the United States in response to the latest revelations about NSA snooping.

In a letter to President Obama picked up by both The Financial Times and Recode, Chambers pointed to the latest allegations that the National Security Agency intercepted Cisco routers and other equipment in order to secretly install surveillance software. Based on documents leaked by former NSA contractor Edward Snowden, those allegations are described in the new book “No Place to Hide” by reporter Glenn Greenwald, according to Ars Technica.

Referring to an alleged photo of Cisco gear being modified, Chambers told the president that if the allegations are true, then “these actions will undermine confidence in our industry and in the ability of technology companies to deliver products globally.”

Chambers also said that the revelations of government surveillance have eroded confidence in an open, global Internet and made it difficult for companies to follow the considerations of privacy expected by people in other countries.

“We simply cannot operate this way,” Chambers added. “Our customers trust us to be able to deliver to their doorsteps products that meet the highest standards of integrity and security.”

Chambers lauded the president for certain steps taken so far to try to rein in the NSA. In March, Obama called for an end to the agency’s bulk collection of the phone records of American citizens. But those proposals, if and when approved by Congress, won’t directly address the concerns that NSA surveillance has hurt American corporations trying to do business overseas.

Many companies have complained that the revelations of NSA spying have damaged their reputation in other countries, affecting their bottom line. Some have even been accused of cooperating with the agency to weaken the security of their own products. In the wake of an atmosphere of mistrust, Cisco’s CEO wants the president to do more.

“We are asking your administration to take more steps and a leadership role to ensure that guidelines and reforms are put into place that can be honored around the globe,” Chambers said.

A spokesperson for Cisco confirmed to CNET that the company did send the letter but offered no additional comment, saying that the letter speaks for itself. Caitlin Hayden, a spokeswoman for the National Security Council, told CNET that “we don’t generally comment on the president’s correspondence.”

In a blog posted on May 13, Cisco general counsel Mark Chandler spoke out against the allegations that the NSA installed surveillance software on Cisco equipment.

“We ought to be able to count on the government to then not interfere with the lawful delivery of our products in the form in which we have manufactured them,” Chandler said. “To do otherwise, and to violate legitimate privacy rights of individuals and institutions around the world, undermines confidence in our industry.”

Chandler also offered the following suggestions on what governments should do to restore confidence in the tech industry:

  • Governments should have policies requiring that product security vulnerabilities that are detected be reported promptly to manufacturers for remediation, unless a court finds a compelling reason for a temporary delay. By the same token, governments should not block third parties from reporting such vulnerabilities to manufacturers.
  • Governments should not interfere with the ability of companies to lawfully deliver internet infrastructure as ordered by their customers.
  • Clear standards should be set to protect information outside the United States which belongs to third parties, but are in the custody of subsidiaries of US companies, so that customers worldwide can know the rules that will apply and work with confidence with US suppliers.

 

Drought Pumping Up Costs of Lake Cachuma Water, Forcing 55% Cuts in Delivery

Thanks to government policies the cost of water will go up and the availability of the water is going down. From Santa Barbara County, “As reservoir shrinks, water managers agree to 55 percent, across-the-board reductions in allocations, and customers will pay more.”

What do you think this will do to the family budgets, job availability, price of goods and services? California is already in a Depression—high taxes, high unemployment (when you include those that have dropped out of the job market), a collapsing pension system and $340 billion in debt.

At the same time the Legislature is about to pass a bill that would give government control over the use of groundwater—creating winners and losers—the losers will be the owners of the water that will not be paid for the government taking.

“After more than two years of little rain, Cachuma has shrunk to 36 percent of capacity, and water managers want to ensure that some reservoir supply will be available through 2015 and even into the winter of 2016, if the dry weather drags on.”

ManInWater

Drought Pumping Up Costs of Lake Cachuma Water, Forcing Major Cuts in Delivery

As reservoir shrinks, water managers agree to 55 percent, across-the-board reductions in allocations, and customers will pay more

As California’s drought drags on, Lake Cachuma continues to shrink into the distance, as is evident in this May 14 photo. To ensure the reservoir will be able to deliver on its allocations at least another two years, water agencies have agreed to a 55 percent cut in what they get from the lake. Ratepayers won’t see a similar reduction, however, and instead are expected to pay more.

By Melinda Burns, Mission & State 5/18/14

Faced with a dwindling reservoir and no prospect of rain, water managers on Santa Barbara County’s South Coast have pledged to take a drastic 55 percent cut in their allocations from Lake Cachuma, beginning Oct. 1.

Not since 1990 have local water agencies agreed to across-the-board cutbacks in a severe drought.

It is the largest proposed reduction in the history of the reservoir, the main water source for the South Coast.

After more than two years of little rain, Cachuma has shrunk to 36 percent of capacity, and water managers want to ensure that some reservoir supply will be available through 2015 and even into the winter of 2016, if the dry weather drags on.

“We really had to buckle down and take a lot less water,” said Tom Fayram, deputy director of the county Public Works Department’s Water Resources Division.

Fayram called a meeting with the managers of the Carpinteria Valley, Goleta, Montecito and Santa Barbara water agencies earlier this month.

“If we do get a big rain year,” he said, “then we can change the allocations midstream.”

The proposed cutbacks are awaiting approval by the U.S. Bureau of Reclamation, which owns the dam at Lake Cachuma on the Santa Ynez River.

But they will not likely translate into 55 percent cutbacks for residents, water managers say, because the South Coast can pump more ground water, draw on state aqueduct water that is banked in other reservoirs, and purchase new supplies.

At the same time, the reductions may affect future development in the City of Goleta, at UC Santa Barbara and in Isla Vista.

Under a ballot measure approved by Goleta Water District customers in 1991, the district is banned from providing new or additional water service “to any property not previously served by the district” unless it is receiving “100 percent of its deliveries normally allowed from the Cachuma Project.”

Records show that about 1,500 new residential units and 1.4 million square feet of commercial space are in construction or under review in Goleta alone.

Even as the South Coast prepares to take less Cachuma water, ratepayers will pay more to get the water delivered.

For the first time since the 1990 drought, water managers say, it will be necessary to pump reservoir water up into the intake tower that normally channels water by gravity flow through the Tecolote Tunnel to the South Coast.

The water level is expected to drop below the intake gate in mid-September.

As an emergency measure, the Cachuma Operation and Maintenance Board, comprised chiefly of South Coast water board directors, is preparing to install pumps on a barge and float a pipeline for more than a half-mile along the surface of the lake to the intake gate.

Including the high cost of electricity to run the pumps, the board estimates that the project will come to nearly $6 million to build and operate through February, and $8 million if the pumping continues through March 2016.

The City of Santa Barbara will draw from reserves to pay its share of the first six months of pumping, or $2.1 million.

Carpinteria, Goleta and Montecito are proposing to borrow money through the Cachuma operation board to cover their share. Goleta will owe $2.4 million, Carpinteria $715,000 and Montecito $674,000.

No one is disputing the need for the emergency pumping project, which is scheduled to go online in September. It was ratified last week by the boards of the Carpinteria Valley and Goleta water districts.

Santa Barbara and the Montecito Water District, which serves Montecito and Summerland, are expected to approve it Tuesday.

“It’s a lifeline for the South Coast,” said Karl Meier, a Montecito Water District engineer. “I don’t know where else you’re going to get water from.”

But the size and cost of the project are raising some eyebrows — and some water bills.

In two communities — Santa Barbara and Carpinteria — the project has been factored into proposed water-rate increases of as much as 100 percent and 10 percent, respectively, for residential customers.

The 1990 project was mostly designed in-house, said Bob Wignot, who performed the work himself as an engineer and then-general manager of the Cachuma operation board. The entire project cost South Coast water customers $769,000 over five-and-a-half months of operations, ending with the “March Miracle” deluge in 1991.

The current pumping project has budgeted $700,000 for consulting fees, including $200,000 for an engineering consultant to supervise the final design.

It will be sized to deliver up to 45 million gallons of water per day, compared to 27 million gallons per day in 1990.

Wignot’s report on the 1990 project notes that a maximum flow of 27 million gallons through the tunnel was large enough to handle the additional demand during the Painted Cave Fire in June 1990.

“I’m kind of blown away by the numbers today,” Wignot said. “Back then, our attitude was, ‘We’re not going to build a Cadillac, we’re going to construct a Chevy.’”

Randall Ward, the current general manager, says the Cachuma operation board chose a pumping capacity of 45 million gallons because the South Coast periodically uses that much water, especially during June and July.

Even with a 55-percent cutback, he says, the system must be able to respond to well failures and wildfires.

“We’re not expecting to pump 45 million gallons 24/7,” Ward said. “It may only operate at that level for a few hours a day. The water agencies all recognize they have extremely viable conservation programs, and from a practical perspective, they will achieve their goals.

“But at the same time, there’s a need to be able to respond to an emergency. I would characterize it as an insurance policy.”

Tom Mosby, general manager of the Montecito Water District, concedes that “the cost of this project is difficult to comprehend when we look at the past.”

But, he said, “It is what it is.”

Last month, the Carpinteria water board asked the Cachuma operation board to consider shifting more of the cost of the large-capacity pumps to the agencies that are most responsible for driving up demand.

“There’s been a growth in peak day demand, and we don’t think we’re the origin of it,” said Charles Hamilton, general manager of the Carpinteria district. “We’re wondering if there is some inequity there.”

Ward says the Cachuma operation board decided to stick with its present formula for cost sharing, which is based on each agency’s reservoir entitlement. At Carpinteria’s request, however, the board agreed that the electrical power costs of delivering the water would be adjusted according to actual use.

At 2 p.m. Monday, Ward will make a presentation on the design of the emergency pumping project to the Cachuma operation board at 3301 Laurel Canyon Road in Santa Barbara.

Once the project has been ratified by all four South Coast agencies, he says, the contractor will start ordering equipment. The project will be designed, built, operated and maintained by Cushman Contracting Corp., the same Santa Barbara firm that built it in 1990.

“Are you sure it’s going to work?” Bill Rosen, president of the Goleta Water District board, asked at a recent meeting.

“It has to work,” Ward said. “I’m certain it will.”

Partially Banning Cars for a Day in Paris Actually Worked–How soon before LA or San Fran tries this?

Barack Obama, Jerry Brown and many Democrats love the high taxes and stringent regulations of Europe. Europe has allowed terrorists open rein on the Continent, while here Democrats allow open borders for illegal aliens. Democrats try to imitate Europeans. Of course Obama foreign policy is like the French—weak, apologetic and harmful to freedom.

Now San Fran and other radical cities have a model, in their effort to end cars in cities. You will have to plan your business and shopping trips based on the last digit of your license plate. Imagine living life based on an arbitrary government regulations. What happens to the employees that work in San Fran will they only show up every other day?

“According to Paris air quality monitor Airparif, keeping odd-numbered cars out of central Paris for a single day made a substantial difference. Within Paris proper, road traffic dropped by 18 percent that day, with drops of 13 percent in the Petite Couronne area that surrounds inner Paris. In the suburbs further beyond, traffic dropped by 10 percent. When compared to the seven days before, all this reduced levels of pollution by PM-10 within the city by 6 percent, with levels 10 percent lower than normal at rush hour on the Beltway. Nitrogen dioxide levels, meanwhile, dropped by 10 percent overall, and by 30 percent on the Beltway at rush hour.”

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Partially Banning Cars for a Day in Paris Actually Worked

Road traffic dropped by 18 percent, and PM-10 pollution dropped by 6 percent.

Feargus O’Sullivan, City Lab, 5/19/14

An electronic road sign reads “Road traffic forbidden for even-numbered license plates” on the Paris ring road March 17, 2014. (Reuters)

Back in March, air quality in Paris got so awful that the city took some drastic measures.  With weather patterns keeping noxious particulate pollution close to the ground, the city made all public transportation free of charge. The next day, they went one step further, banning all cars with odd-numbered number plates from driving within the city proper. This unprecedented move is now back in the news for a compelling reason: Apparently, it worked.

According to Paris air quality monitor Airparif, keeping odd-numbered cars out of central Paris for a single day made a substantial difference. Within Paris proper, road traffic dropped by 18 percent that day, with drops of 13 percent in the Petite Couronne area that surrounds inner Paris. In the suburbs further beyond, traffic dropped by 10 percent. When compared to the seven days before, all this reduced levels of pollution by PM-10 within the city by 6 percent, with levels 10 percent lower than normal at rush hour on the Beltway. Nitrogen dioxide levels, meanwhile, dropped by 10 percent overall, and by 30 percent on the Beltway at rush hour.

It only took a day to see a significant cut in levels of potentially lethal particulates.

A 6 percent drop may not sound massive, but bear in mind the circumstances in which it happened. This is just a single day of driving restrictions we’re talking about. It took place under weather conditions when (thanks to a combination of very cold air by night and rainless, largely windless sunshine by day) particulates were flurrying around Paris’ lower atmosphere like white flecks around a snow globe, unable to escape. The drop thus happened under conditions when natural dispersion of pollution was especially difficult. Given that conditions had worsened over the preceding week, it’s also likely that the pollution drop from the days immediately before that Monday, March 17, was yet higher than the 6 percent contrast with Monday, March 10. All told, the drop shows the clear benefits to be had from a situation that prioritizes public over private transport.

Cars and trucks are not the only culprits when it comes to air pollution, of course.  While according to this article from Le Monde, 51 percent of overall particulate pollution in the Paris region still comes from road traffic, it’s the region’s industries that create the most PM10 emissions (30 percent of the total). Creating bans or restrictions that hinder individual drivers, without making bigger organizations that are just as responsible pull their weight, would inevitably cause some resentment. As yet, no one has seriously advocated maintaining what was an emergency ban under normal conditions.

The figures released by Airparif do still provide ammunition for the idea of introducing low emissions zones and/or congestion charge zones, as London has. Refusing to target average Joe drivers with legal restrictions inevitably leads to something else: choosing to target average Joe city dwellers with pollution that can and often does slash their life expectancy. It only took a day to see a significant cut in Paris’ levels of potentially lethal particulates. If we saw policies seriously limiting car use within cities, imagine what a huge positive effect it could have on city dwellers’ health.

 

San Francisco to chain stores: Keep out! Consumers Not Allowed to Choose where to Shop

Want to buy that special dress from Nordstrom’s? Need low cost goods from Costco or Wal Mart? How about do it yourself supplies from Home Depot? If you live in San Fran, to get these items, you need to go to Alameda County. These and other national stores are not allowed in pristine San Fran. This is a city that tolerates lifestyles, drugs and high taxes, women get to choose if they want to have a baby, but they are not allowed to choose where they can buy a dress.

Freedom of speech is not part of the famous San Fran tolerance—nor is freedom to shop allowed in this city controlled by politicians and special interests.

“. Many of those separate proposals have made it into the changes recommended by Planning Department staff, which would:

  • Broaden the definition of what constitutes a chain store;
  • Include international locations and entitled locations against the limit of what constitutes a chain store;
  • Add new neighborhoods that require chain stores to get conditional use authorization. They suggest Market Street between 6th Street and Franklin Street;”

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San Francisco to chain stores: Keep out!

San Francisco has used laws to control the location of chain stores, like Subway sandwich shops, since 2004. A new set of proposals might make it even more difficult for chains to open in city neighborhoods.

Eric Young, San Francisco Business Times, 5/19/14

San Francisco may adopt rules that would make it harder for chain stores to open new locations in many areas of the city.

If approved by the city’s Planning Commission, the rule changes would be a victory for neighborhood activists and small businesses that have lobbied to make it harder for so-called ‘formula retail’ to enter neighborhoods.

The city in 2004 began enacting a patchwork system of laws that required chain stores — whether a big-box or a cafe — to get additional approvals to open in certain areas of the city. It also gives competing retailers and residents opportunities to object.

Chain stores are a perennial hot-button issue in San Francisco, and in the last year members of the Board of Supervisors have put forward a raft of proposals to tweak existing rules, mostly to make it tougher for chain stores to open in the city. Many of those separate proposals have made it into the changes recommended by Planning Department staff, which would:

  • Broaden the definition of what constitutes a chain store;
  • Include international locations and entitled locations against the limit of what constitutes a chain store;
  • Add new neighborhoods that require chain stores to get conditional use authorization. They suggest Market Street between 6th Street and Franklin Street;
  • Strengthen review criteria for new chain stores.

In a proposal that would help some small stores that have expanded enough to be deemed chain stores, Planning Department staff recommend increasing the numerical threshold of a chain store to 20 locations, up from 11. That would exclude several local companies such as the Soup Co., Blue Bottle Coffee and Lee’s Deli, which under the 11-unit threshhold were subject to chain-store restrictions.

The proposed changes will be presented to the seven-member Planning Commission on May 22. The commission will be asked to vote on the proposal as soon as June 5.

Planning Department staff said that the proposed changes, taken together, would “retain the existing framework of conditional use authorization, while making some changes to better respond to issues of concern and to facilitate consideration of formula retail uses which enrich a neighborhood.”

Where chain stores are allowed — and where they are not — is an increasingly thorny issue for neighborhoods and shop owners, both big and small.

Small businesses push for expanded formula retail restrictions, which protect their interests. Neighborhood activists also support chain bans, saying homegrown businesses help protect neighborhood character.

Meanwhile big box retailers say that they are ideal candidates to provide jobs and that the marketplace, not regulations, should decide which stores succeed. Some neighborhoods that lack thriving commercial corridors agree, saying that the jobs chain stores can provide contribute to economic vitality.

 

ACLU in San Diego: Quota’s for Questioning—Not Concerned About Finding Criminals

In San Diego the ACLU is more concerned about the color of the skin of a possible perpetrator than they are about crimes being committed. If you read the views of the ACLU carefully, they want a quota system of those allowed to be questioned. The extension of this is that when the maximum number of people of one color or nationality have been questioned and stopped, no more may be asked. What ever happened to common sense and looking for the criminal? Who cares the color of the skin of a criminal—arrest them all, regardless of color.

“Black people make up 5.8 percent of San Diegans old enough to drive, but they accounted for 12.3 percent of police vehicle stops from January through March. Hispanic people also saw a higher percentage of traffic stops than their share of the population, experiencing 30.3 percent of the stops but making up 26.6 percent of the driving population.

Officers were less likely to stop white and Asian residents. The trends were similar across most police divisions.”

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Racial Data Collected From San Diego Police Traffic Stops Shows Irregularities

By Megan Burks, KPBS, 5/19/14

Based on figures from January through March, San Diego police pulled over blacks and Hispanics at a higher rate than their percentage of the population. The police chief says more analysis is needed to draw conclusions from the data.

The San Diego Police Department has released its first round of racial profiling data since 2001.

Margaret Dooley-Sammuli, policy director for the local chapter of the American Civil Liberties Union, said she sees “dramatic disparities” in the numbers.

Black people make up 5.8 percent of San Diegans old enough to drive, but they accounted for 12.3 percent of police vehicle stops from January through March. Hispanic people also saw a higher percentage of traffic stops than their share of the population, experiencing 30.3 percent of the stops but making up 26.6 percent of the driving population.

Officers were less likely to stop white and Asian residents. The trends were similar across most police divisions.

Police Chief Shelley Zimmerman’s report doesn’t fall on one side or the other of racial profiling claims.

Echoing independent analyses of similar data from 2000 and 2001, Zimmerman writes in her report the department can’t draw conclusions based on the figures because it doesn’t know exactly who is on the road. It needs a demographic benchmark from which to spot irregularities.

The department settled on using estimates from the San Diego Association of Governments for individuals old enough to drive as its benchmark but offered little analysis because of the data’s limitations.

“Although cities often use population figures as an estimated comparison, this is particularly challenging in San Diego, with its proximity to the border, designation as a world tourist destination, major military presence, and other factors not considered in population data,” the report says.

Criminal justice experts have long warned that looking at the raw numbers alone is problematic because they don’t take into account such variables. But the problem in racial profiling research is the traditionally higher crime rates and policing levels in minority communities.

Columbia Law School criminologist Jeffrey Fagan, who crafted a statistical analysis that more accurately assessed racial profiling in New York City, said police officers are right to advise taking their findings with a grain of salt. But he said he and others have set a precedent for working through the sticky variables.

Dooley-Sammuli said she wants to see a stronger commitment to make sense of the numbers in San Diego.

“Although we very much appreciate and recognize the department for making detailed data available to the public, their own analysis of it — to simply dismiss it as inconclusive — is very disappointing,” Dooley-Sammuli said. “There are some serious concerns raised by this data.”

An ACLU analysis of the data centers on searches, not traffic stops. It says black drivers were searched three times more often than white drivers; Hispanics were searched twice as many times. And the searches were less likely to result in an arrest for black and Hispanic residents.

“It appears that there are different searching standards for whites than for African Americans and Latinos,” Dooley-Sammuli said. “That means people who are not breaking the law, who are not being arrested, are being searched.”

The San Diego Police Department did not comment to KPBS on the ACLU’s analysis. But Zimmerman said in the report that the inconclusive nature of the data set won’t deter the department from releasing numbers in the future.

“The San Diego Police Department is absolutely committed to the fair treatment of all members of our community. Building and sustaining trust is essential to furthering our department’s mission and vision,” the report says. “To that end, the department will continue to collect data on vehicle stops.”

The ACLU urged the City Council to demand information on pedestrian stops as well. And Cal State San Marcos criminal justice researcher Karen Glover said the department shouldn’t let up on gathering qualitative data at community meetings.

“My strong sense is that there is another ‘data set’ that needs to be recognized as valid information for the police to get a sense of what the community is experiencing — the narratives of the community,” Glover said.

She said people don’t make up that they are “being oppressed on such a large scale.”

“It just does not happen,” Glover said. “A smart thing for the police to do at this point is to develop a solid multi-tiered response to these racial profiling processes and not merely rely on statistics to understand them.”

Laffer: California’s High-Tax, Big-Government Comedown

Arthur Laffer, creator of the now famous “Laffer Curve” understands California. He spent many years here, trying to let folks understand the bigger the government, the higher the taxes, the less stability for the economy. Years ago he decided he did not want to give Sacramento 10% of his income. So he moved his home and business to Tennessee—low taxes, no income taxes. When he speaks, business people listen.

“The California Teachers Association union is the state’s largest political contributor, having spent $212 million in state races over the past decade on both candidates and propositions. This is more than twice the next-largest political contributor, also a state government employee union.

Public employee unions have had state politics locked down for so long that almost every public employee, past or present, judge or contractor, has benefited directly or indirectly from their actions. And to state the obvious, every opponent of theirs has been punished.”

California has a $10 billion cash deficit, a $340 billion debt. Our confused Guv believes with these numbers he has a balanced budget and a surplus. That is why legislative Democrats beg for more taxes and more government—they do not trust families or businesses. Any wonder productive people and firms are rushing out of the former Golden State?

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California’s High-Tax, Big-Government Comedown

By ARTHUR B. LAFFER, Investors Business Daily, 5/8/14

Anyone who has ever watched Animal Planet should be familiar with migrations. Geese do it, wildebeests and whales do it, turtles do it and, yes, people do it too. To migrate is a natural phenomenon.

What’s interesting about most migrations is their purposes are generally positive: sex, food, sun and other such motivations. “The grass is always greener” is what they say.

For humans and, to a lesser extent, animals, a number of migrations also occur for negative reasons: famine, war, pestilence and, yes, taxes without corresponding benefits.

Population outmigration can be a key marker for a disturbed society with deeply rooted policy flaws. It’s a far better sign of a state’s health to have people lined up on its borders trying to get in than it is to have people lined up on its borders trying to get out.

Over the past 165 years, California has grown at an average annual compound rate of 3.8%. But in recent times it has morphed from being America’s (if not the world’s) greatest people attractor to being a massive population and jobs repellent (see actual population in blue on the chart above).

And there really is no end or solution in sight. If it weren’t for net immigration (people who move from another country to California), California would be a mere shadow of its present size (the population from 1960 on without net immigration is shown in red).

Post-War Boom

To set the stage for the story of today’s California, you should be aware that after World War II, Gov. Earl Warren cut California’s highest marginal income tax rate from an astronomical 15% to 6%, where it remained for well over a decade. He also cut the state’s sales tax rate.

In the chart on Page A15, I have plotted California’s population growth relative to the U.S. from 1959 to the present. I have also plotted California’s net domestic in-migration (people who move from state to state) as well.

My choice of 1959 is far from arbitrary. That was the year when Edmund G. (Pat) Brown became governor of California. It was also a year of enormous tax increases in California — no mere coincidence.

As governor in 1965, Brown even proposed raising California’s highest personal income tax rate back up to 15%. But he withdrew that proposal when tax revenues exceeded projections.

After eight years of calamitous government, Ronald Reagan took the helm in 1967 and showed that he too could raise taxes with the best of them, culminating in his 1972 increases on corporate income and sales.

Think of it: From 1958 through 1974, the highest personal income-tax rate in California went from 6% to 11% and the highest corporate tax rate from 5.5% to 9%. Even the sales tax rate went from 4% to 6%.

And these increases were merely the tip of the tax-increase iceberg. California’s population growth went from a 2% premium over U.S. growth to zero in a decade and a half.

‘Son Of Brown’

In 1974, California opted for the sequel to Gov. Brown-the-elder: “Son of Brown,” starring Edmund G. (Jerry) Brown. But the storyline was radically different for the son than it was for the father.

From 1975 through 1982, taxes were lowered. California and Gov. Brown-the-younger were on a roll. Property tax rates were cut and constitutionally limited (June 1978), government spending limits were set (November 1979), the death tax was removed (June 1982) and income taxes were indexed for inflation (1978-79 legislation).

And California boomed as never before. After the passage of Proposition 13 and other tax cuts, the population during the 1980s grew by more than 6.1 million people. Put another way, California imported, net, almost a full San Francisco each and every year and a little more than a Massachusetts over the decade. Not too shabby.

But the years that followed weren’t very attractive.

The California Constitution was amended by Proposition 98 (November 1988) to lock in ultra-high government spending on public education.

Proposition 111 (June 1990) raised gasoline, truck and other taxes. But even more importantly, it eliminated the effectiveness of a limit on state and local spending authored by Prop 13 co-author Paul Gann in 1979.

Then, 1991 brought huge, albeit temporary, increases in income and sales taxes.

Even with the expiration of these temporary tax increases in 1996, the state had been dealt a near-fatal wound, and recovery was shallow and slow. Public employee unions were firmly in control.

In 2003 there was an infamous car tax increase that came on the heels of a subsidized electricity scandal. Gov. Gray Davis was recalled, there was a 1% add-on millionaire’s tax and Arnold Schwarzenegger professed his pro-growth vision of “Kahlifornia.”

But the Terminator himself was shamefully terminated after failing to pass even one of four propositions he put on the ballot in 2005, and he switched sides faster than you can say Jack Robinson.

And so far, the second coming of Gov. Jerry Brown has been the polar opposite of his first eight years.

The links between taxes and population growth, however, aren’t the only public-policy “cause and effect” relationships in a state. Public spending also matters — a lot.

People seem to like good schools, safe neighborhoods, good roads and all the other amenities of life provided by state and local governments. And to receive these public services, it’s pretty obvious you’ve also got to have some taxes.

In California, however, high tax rates don’t correspond to better public services. No matter how much they’re taxed, Californians are the recipients of the short end of the public-service stick. It’s a double whammy: They pay more and get less.

About half (54%) of all state and local public employees in the nation are employed in education. In California there are about 228 full-time equivalent education employees per 10,000 of population. The national average of all states is 281. In fact, California has fewer education employees for its size than all but two states (Nevada and Washington state).

According to the Department of Education’s National Assessment of Educational Progress (NAEP) test scores, California’s schools are the fourth-worst in the nation. And fourth- worst is California’s best performance in more than two decades.

If you think California’s poor educational performance has something to do with inadequate funding levels and underpaid educational employees, you’re wrong: Educational employees are paid more in California than educational employees in any state save New Jersey and Minnesota.

California doesn’t fare much better with other essential services. Its highway employees have the highest pay in the nation, 58% more than the national average.

Government Pays

According to the Reason Foundation’s most recent annual ranking of “Overall Highway Performance,” California has the fourth-worst state highway system, which might have something to do with California employing the fourth-fewest highway personnel per 10,000 population of any state.

Police protection? Here too, California police protection employees are payroll winners and California citizens the losers.

The state pays its police protection employees more than any state — 38% more than the national average — and has 11% fewer police protection employees than the national average.

The average California fire protection employee is paid more than $115,000 a year (64% higher than the national average), while the state has the 15th-fewest fire protection employees per 10,000 of population (20% fewer than the national average).

Topping off these “achievements,” California has the nation’s highest poverty rate.

In the eyes of the Law and the Lord, all people are supposed to be equal. But not in the eyes of California’s tax collectors. High-taxable-income Californians are audited and pursued far more than other residents — especially if they attempt to move out of state. They’re the prey, and California’s government is the predator.

Using IRS data for the tax years 1992 to 2009, we are able to track adjusted-gross-income (AGI) migration from state to state by year for the five mega states: Florida, Texas, Illinois, California and New York.

In the table below I’ve listed by state the total number of tax returns moving into that state (a), out of that state (b), and the number of net in returns (in minus out) (c), the average AGI per in return (d), the average AGI per out return (e), the in-return premium over out-return (f), and the state’s net inflow of total AGI (g).

With high taxes and poor public services, is it any wonder why people and money are leaving California? If it weren’t for the heavy-handed tactics of California’s state IRS, a lot more people and money would have been gone.

But government threats and bureaucratic intimidation only harden people’s resolve to leave. And leave they will. While the state’s economy may wax and wane, California is in a death spiral.

Why am I so pessimistic? Can’t the same democracy that voted these people into office take them right out again? I wish the answer were yes, but it’s not.

Union Control

The California Teachers Association union is the state’s largest political contributor, having spent $212 million in state races over the past decade on both candidates and propositions. This is more than twice the next-largest political contributor, also a state government employee union.

Public employee unions have had state politics locked down for so long that almost every public employee, past or present, judge or contractor, has benefited directly or indirectly from their actions. And to state the obvious, every opponent of theirs has been punished.

Finally, it’s these very same people who also draw the political redistricting boundaries for federal, state and local political races.

Democratic Gov. Davis and the Democratic-controlled state Assembly and Senate redistricted California after the 2000 Census. Including the elections in 2000, there have been 560 regularly scheduled Assembly elections between 2000 and 2012.

After the election of 2000, the Democrats controlled the Assembly 50 to 30. In 2002 the Republicans picked up two out of 80 seats.

For the next six years there wasn’t a single seat that changed hands. In the Obama sweep of 2008, the Democrats picked up four seats and the Republicans picked up one, leaving the Democrats in charge 51 to 29.

In the election of 2010, the Democrats picked up one more seat, giving them a 52 to 28 majority. But after the redistricting of 2011, the Democrats extended their majority to 55-25 in the election of 2012.

It’s hard to imagine how the people of California can ever win when amoral politicians set the rules to perpetuate themselves, force state employees to pay dues that are then used for political purposes, appoint their own judges, pay off their supporters, punish their opponents and hire ringers to fight their fights. We need a miracle.

• Laffer is chairman of Laffer Associates, was an adviser to President Reagan and is co-author of “An Inquiry into the Nature and Causes of the Wealth of States.”
 

When Will Los Angeles Based DirecTV Move to AT&T Based Dallas?

Toyota left Los Angeles for a suburb of Dallas. Numerous other firms have already gone to the Lone Star State. The value of companies go up by leaving California for Texas, thanks to our high taxes rates and the Texas government refusal to tax incomes or corporations. That adds about 10% to a worker’s paycheck and a company’s bottom line.

In about a year DirecTV, headquartered in the Los Angeles, will have its’ company ownership bought by AT&T, headquartered in Dallas. AT&T will be able to add to the profitability of its acquisition by moving the headquarters and much of its work to Dallas. This will be another example of California policies killing off jobs and revenues—and hope.

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AT&T to acquire DirecTV in a deal valued at nearly $50 billion

Lance Murray, Dallas Business Journal, 5/19/14

Dallas-based AT&T Inc. announced Sunday afternoon that it intends to acquire DirecTV in deal estimated to be about $50 billion in value.

The boards of both companies met Sunday to approve the deal in which AT&T (NYSE: T) AT&T will buy DirecTV in a stock-and-cash transaction for $95 per share based on AT&T’s Friday closing price, AT&T said Sunday. DirecTV shareholders will receive $28.50 per share in cash and $66.50 per share in AT&T stock, AT&T said.

El Segundo, California-based DirecTV is the second leading satellite television providers in the United States and Latin America.

“This is a unique opportunity that will redefine the video entertainment industry and create a company able to offer new bundles and deliver content to consumers across multiple screens – mobile devices, TVs, laptops, cars and even airplanes. At the same time, it creates immediate and long-term value for our shareholders,” Randall Stephenson, AT&T Chairman and CEO said in a release. “DIRECTV is the best option for us because they have the premier brand in pay TV, the best content relationships, and a fast-growing Latin American business. DIRECTV is a great fit with AT&T and together we’ll be able to enhance innovation and provide customers new competitive choices for what they want in mobile, video and broadband services. We look forward to welcoming DIRECTV’s talented people to the AT&T family.”

The deal will create a pay television giant with roughly 26 million subscribers, comparable in size to where Comcast will be once it completes its pending $45 billion acquisition of Time Warner Cable.

Once the deal closes, AT&T said it is committed to:

  • 15 million customer locations to get more high-speed broadband competition, mostly in rural locations where AT&T doesn’t provide high-speed broadband service.
  • It will offer stand-along broadband for customers who only want a broadband service and may choose to consume video through an over-the-top (OTT) services such as Netflix or Hulu. AT&T, the combined company will offer stand-alone wireline broadband service at speeds of at least 6 Mbps (where feasible) in areas where AT&T offers wireline IP broadband service today at guaranteed prices for three years after closing.
  • DirecTV’s TV service will continue to be available on a stand-alone basis at nationwide package prices that are the same for all customers, AT&T said, no matter where the customer lives, for at least three years after the deal closes.
  • The combined company will continued commitment for three years after closing to the FCC’s Open Internet protections — net neutrality — established in 2010, regardless of of whether the FCC re-establishes those protections for other industry participants following a court of appeals vacating those rules.
  • The deal will not change AT&T’s plans to participate in the FCC’s planned spectrum auctions later this year and in 2015.

Ventura Accused of Stifling Good Samaritans

Government loves monopolies. They prefer to control schools, roads, libraries—then tell the public what they are allowed to do. In this case, a church has created a welfare program for the homeless and the needy in the city of Ventura. Food, clothing and other essential were provided, by private people under the auspices of a church. That is true charity. Now the city of Ventura is showing that Scrooge exists year round, not just at Christmas.
Ventura is trying to stop the church from doing well. Bah humbug!
“The city asked the church to apply for a new permit in 2012, claiming that the previous permit covered worship but not Harbor’s social services for the homeless.
     Since the church had been running the ministry for four years, it claims it was “confused” by the request, but reapplied in early 2013 “in the spirit of cooperation,” and paid the $7,200 application fee.
     Months later, the city Planning Commission denied the permit. The City Council deadlocked after the church appealed, so the Planning Commission decision was allowed to stand.”

250px-Poor_mother_and_children,_California_1936_by_Dorothea_Lange

Ventura Accused of Stifling Good Samaritans

By MATT REYNOLDS, Court House News, 5/19/14

         

 
Forcing the church to close its doors on the homeless violates its religious freedom, the church says.
Some people who live near the church don’t like the outreach program, viewing it as a nuisance in an area that includes a local school and park.
“For me, it’s a matter of safety,” Tracy Strong told the Ventura County Star last year. “My point of view is, safety trumps religion.”
The city asked the church to apply for a new permit in 2012, claiming that the previous permit covered worship but not Harbor’s social services for the homeless.
Since the church had been running the ministry for four years, it claims it was “confused” by the request, but reapplied in early 2013 “in the spirit of cooperation,” and paid the $7,200 application fee.
Months later, the city Planning Commission denied the permit. The City Council deadlocked after the church appealed, so the Planning Commission decision was allowed to stand.
The church was told that it would have to end the program or move, according to the complaint.
“Ministering to the poor, both spiritually and physically, has been and continues to be a central tenet of the church’s doctrine, faith, and practice,” the complaint states. “By forcing Harbor to discontinue its ministry to the poor, the city has substantially burdened the church’s religious exercise without a legally justifiable reason, in violation of RLUIPA [Religious Land Use and Institutionalized Persons Act] and the First Amendment.”
Harbor claims that Ventura “never reached the question of whether the denial was the least restrictive means of furthering a compelling governmental interest.”
The church says it does not have enough money to move. And even if it did, and it decided to move, it could take months to find a new home, secure new permits, and complete renovations or construction work, the lawsuit states.
“In the meantime, Harbor’s congregants need a church. If the church simply shuts its doors, its congregants will have nowhere to go,” the complaint states.
The church seeks declaratory judgment that the permit it has is sufficient for it to run the outreach program.
It is represented by James Sonne of the Stanford Law School Religious Liberty Clinic.
Ventura’s estimated median household income in 2011 was $62,971, according to city-data.com, 10 percent above the statewide median of $57,287.
Its median house or condo value that year was $401,100, about 13 percent higher than the statewide median of $355,600.
It is 52 percent white, 34 percent and Latino and 2 percent African American, according to city-data.

 

Why school choice is a civil rights issue

Being able to eat at any restaurant is a civil rights issue. Being able to travel and sit anywhere, is a civil rights issue. Getting a job, enrolling in a school, getting a job—regardless of color—are all civil rights issues. What is even more important as a civil rights issue is giving children, of any color, the right to a quality education.

I would say those that oppose school choice are like the Southern governors in the 1960’s and 1950’s that stood in the school entrance not allowing black children into a classroom. Bigots come in all sizes and in all era’s. Now we have bigots closing the doors to quality education—mostly led by unions. Children should be first. Allow quality education for all. Stop the special interests control of our government schools.

According to a 2011 study, more than 40% of black students were assigned to schools that are underperforming, and they are much less likely to graduate high school. Among high school graduates in 2010, just 52% of black males and 58% of Hispanic males completed high school in four years, compared to 78% of white males.

That’s why education remains a civil rights issue — the civil rights issue of our time, and it demands action from all of us.”

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Why school choice is a civil rights issue

By Reince Priebus, Op-Ed for CNN, 5/19/14

  This weekend marks the 60th anniversary of the Supreme Court’s decision in Brown v. Board of Education, a unanimous ruling that declared school segregation unconstitutional and affirmed the principle that in America, all children, regardless of their race, should have equal access to a quality education.

Integration, long overdue, did not happen overnight. President Dwight D. Eisenhower had to deploy the 101st Airborne and federalize the Arkansas National Guard to enforce the integration of Little Rock’s Central High School. Nine years after Brown, Alabama’s governor, George Wallace, was still promising “segregation forever” as he blocked the entrance to the University of Alabama.

Thankfully, the days of police physically blocking the school doorway to keep out minority students are behind us. But the fight for equal opportunity in education lives on.

According to a 2011 study, more than 40% of black students were assigned to schools that are underperforming, and they are much less likely to graduate high school. Among high school graduates in 2010, just 52% of black males and 58% of Hispanic males completed high school in four years, compared to 78% of white males.

That’s why education remains a civil rights issue — the civil rights issue of our time, and it demands action from all of us.

Fighting for school choice is one of the ways to take action. For most students today, their neighborhood or zip code determines their school. That means some kids, by no fault of their own, are forced into a failing school. They don’t have a choice.

That’s not equal opportunity, and it’s not fair. No parent wants to see his or her child languish in a bad school. Parents want what’s best for their children, and that’s why Republicans believe they should have the ability to choose the right school for their children. That’s why the Republican Party is the party of school choice.

School choice takes many forms. In some places, it means opening charter schools, which have greater flexibility to adapt to the unique needs of their students. In other places, it means allowing students in one public school to attend a different public school. It means having alternatives like magnet schools and virtual schools and protecting parents’ right to home school. And it can also mean giving students in underperforming schools scholarships to attend a private school.

For example, under the leadership of Gov. Bobby Jindal, Louisiana established the Louisiana Scholarship Program, which gives funds to low-income students to escape underperforming schools and attend a better private school. More than 90% of students using the program are minority students.

In the District of Columbia, a similar program supported by Republicans in Congress is also getting results. It’s also extremely popular among D.C. families. A Department of Education study found that students enrolled in the D.C. Opportunity Scholarship Program had a 91% graduation rate. That’s more than 20 percentage points above the graduation rate for those who didn’t receive a scholarship.

When a D.C. student named Tiffany, who’s now in college, was asked what an Opportunity Scholarship meant for her, she recounted that after applying, “I started praying every day because I didn’t want to go to a neighborhood school.” School choice meets an urgent need — and can be an answer to kids’ prayers.

By empowering parents over bureaucrats, school choice challenges all schools to do better.

When parents can choose among various options for their children, it produces competition. Competition breeds innovation, and that in turn leads all schools to improve and find ways to serve the needs of their students. When Florida enacted a school choice program under Gov. Jeb Bush, schools across the state improved.

Despite its merits, though, there are those who oppose school choice. Some haven’t taken the time to see the profound difference it can make. But too many of them, especially those school choice opponents in elected office, are more concerned about what the special interests want. Groups such as teachers’ unions will go to great lengths to fight school choice. That’s because they’re looking out for adults, not for our kids.

It’s hard to understand why so many in the other party, including the Obama administration, oppose proven school choice programs like those in Louisiana or in the District of Columbia, whether their opposition takes the form of lawsuits, legislation, or misinformation.

Opposition is nothing new. The Milwaukee Parental Choice Program, the first of its kind, has endured legal challenges from those who wanted to maintain the unacceptable status quo. As a lawyer in Wisconsin, I was part of the legal team that defended the program. School choice won in court, but my experience reminds me that we won’t be able to fix our schools without a fight.

That fight happens in cities, state capitals, and Washington. This month, the U.S. House of Representatives, led by Republicans, passed legislation to expand charter school options. Sen. Tim Scott recently introduced the CHOICE Act, and other Republican senators, including Rand Paul, Marco Rubio, Pat Toomey and Lamar Alexander, have offered proposals in the Senate to expand school choice. Hopefully, Democrats in the Senate and the White House will come on board.

School choice doesn’t solve every problem, but it has proven tremendously effective in raising graduation rates and achievement levels for low-income and minority students. It has offered alternatives for students, including those with disabilities, whose needs weren’t met in their local schools.

And by empowering parents over bureaucrats, school choice challenges all schools to do better — helping all of our kids.

We uphold the legacy of Brown best when we continue the work of tearing down barriers to educational opportunity. As former President George W. Bush said recently, “Education in America is no longer legally separate, but it is still not effectively equal.”

Until equal opportunity in education is a reality for all kids — of all races, of all backgrounds, of all abilities — our work isn’t done.

Will Judge Save Stockton Taxpayers From SECOND Bankruptcy?

Stockton is a bankrupt city, in part because of mismanagement and the high cost of the collapsing pension system. While all creditors are taken a massive cut and will be paid pennies on the dollar. But, CalPRS is going to get 100& of what is owed—yet a bond company is being offered $94,000 for $35 million in bonds (not a typo). Worse, the city has decided to make no reforms in the pension system, while paying one hundred cents on the dollar to CalPRS.

Now a judge may be the only official with common sense in this case.

“A federal bankruptcy judge, looking at several options, could rule in the Stockton bankruptcy that pensions can be cut, possibly clarifying whether CalPERS has special protection as an arm of state government.

A judge in the Detroit bankruptcy has already ruled that pensions can be cut like any other contract debt. Ballots mailed to Detroit employees, retirees and bondholders last week would approve negotiated cuts or, if rejected, risk having deeper cuts imposed.”

calpers

Stockton bankruptcy judge looks at pension cuts

Ed Mendel, CalPensions, 5/19/14

A federal bankruptcy judge, looking at several options, could rule in the Stockton bankruptcy that pensions can be cut, possibly clarifying whether CalPERS has special protection as an arm of state government.

A judge in the Detroit bankruptcy has already ruled that pensions can be cut like any other contract debt. Ballots mailed to Detroit employees, retirees and bondholders last week would approve negotiated cuts or, if rejected, risk having deeper cuts imposed.

In a filing this month backing a retiree appeal of Detroit’s eligibility for bankruptcy, CalPERS argued that, unlike the city-run Detroit pension system, its an “arm of the state” operating under state laws protected in municipal bankruptcies.

The CalPERS filing said the court ruling in the Detroit bankruptcy nullifies part of the federal bankruptcy law, section 903, that “expressly preserves a state’s laws governing its creatures not withstanding the filing of a chapter 9 (bankruptcy) petition.”

U.S. Bankruptcy Judge Christopher Klein said last week during a four-day trial on the Stockton plan to exit bankruptcy, continued until June 4, that the pension issue is a “festering sore” for California.

“It’s conceivable I could conclude that (Stockton’s) CalPERS contract could be impaired and the (financial reorganization) plan not be confirmed,” Klein said, according to a report in the Stockton Record newspaper.

“Or I might conclude the CalPERS contract can be impaired, but in this case the decision (by the city) not to do so made sense. Or I could decide CalPERS can’t be impaired because of California law. That’s what’s going on in my brain. This is an opportunity to get to the bottom of it.”

Stockton was forced into a rare exit-plan trial when talks under a court-appointed mediator led to debt-cutting agreements with all major creditors except two Franklin bond funds, who say they would only get $350,000 for a bond debt now worth $37 million.

A turnaround consultant hired by Franklin suggested in a report filed in March that Stockton could fall back into insolvency if the city’s largest debt, “unsustainably high” pension costs, are not reduced in bankruptcy.

Klein said before the trial he wanted to be sure that Stockton would not face a second bankruptcy if growing pension costs are not addressed. He mentioned reports that Vallejo has budget problems after emerging from bankruptcy without touching pensions.

A Wall Street credit-rating agency, Moody’s, said in February that without pension relief Vallejo and the two California cities currently in bankruptcy, Stockton and San Bernardino, are at risk of returning to insolvency.

Vallejo officials said they considered trying to cut pension debt, but did not after CalPERS threatened a costly legal battle. The Stockton plan does not cut pensions, saying they are needed to be competitive in the job market, particularly for police.

The employee share of cuts in the exit plan is staff and pay cuts, lower pensions for new hires under a statewide reform and the elimination of retiree health care, a $544 million long-term debt replaced by a one-time payment of $5 million.

Judge Klein upheld Stockton’s immediate cut in retiree health care after filing for bankruptcy in June 2012, noting that the result may be “tragic hardships for individuals” before claims are addressed in an exit plan.

The judge’s retiree health care ruling cited a part of the federal bankruptcy law, section 904, that prevents the court from interfering with the “governmental powers” and “property or revenues” of the debtor.

In his opening remarks last week, the attorney for Franklin, James Johnston, said the evidence will show that Stockton can pay Franklin even “after paying in full its largest unfunded liability,” pensions expected to take 18.5 percent of the budget by 2019.

Johnston said the Stockton plan has a 15 percent budget reserve, a $2 million contingency fund and available public facility fees. He said the Franklin loan collateral, two golf courses and a park, is worth $15 million not the low value assigned by the city.

Not mentioning Vallejo, the Franklin attorney said the turnaround expert, Charles Moore, would show that the Stockton exit plan to pay pension debt in full is not consistent with the minimal payment of the Franklin debt.

“It’s not a feasibility issue but a fundamental issue of consistency,” Johnston told the court.

Late in the second day of the trial, the judge said he had some questions for the California Public Employees Retirement System. “If I just rubber-stamp plans, I might as well just be a potted plant,” Klein said, the Record reported.

David Lamoureux, CalPERS deputy chief actuary, who had given a deposition but was not scheduled to testify, told the court on the third day about basic CalPERS operations, including how pensions can be cut outside of bankruptcy.

If a CalPERS contract with a local government is terminated, CalPERS calculates the debt or “unfunded liability” that must be paid to cover the pensions promised plan members in the future.

After the payment, CalPERS becomes responsible for the pension debt and cannot get more money from the local government employer if funds fall short as pensions are paid during the life spans of the plan members.

So CalPERS uses a low investment earnings forecast to discount the future debt of terminated plans, 2.98 percent rather than the usual 7.5 percent. If the two Stockton plans were terminated now, CalPERS would ask the city to pay about $1.6 billion.

If a city cannot pay all of the debt owed for a terminated plan, the CalPERS board has the power to evenly cut pensions to an amount that would be covered by what the city was able to pay.

But after the payment has been made and responsibility for the plan shifts from the city to CalPERS, if the terminated pool falls short the funds of all of the state and local government plans in the system could be used to cover the shortfall.

The terminated pool is financially healthy as of June 30, 2012, with members from about 90 small plans and $178 million in assets to cover $84 million in future pension obligations.

Lamoureux said there are two ways a CalPERS plan can be terminated: at the request of the government employer, which takes effect a year later, or by action of CalPERS if plans do not make their required contributions, effective 60 days later.

San Bernardino did not make CalPERS payments for a year, owing $17 million before resuming payments last July. Skipped payments by a big plan may be one reason CalPERS lowered its discount rate for terminated plans from 4.82 percent to 2.98 percent.

Last week CalPERS agreed to delay an August hearing on its appeal of San Bernardino’s eligibility for bankruptcy, saying in a joint filing with the city that the delay is “critical to the success of the ongoing mediation,” the San Bernardino Sun reported.