How Can California Reduce the Costs of Incarceration?

California Governor Gavin Newsom has agreed to give state prison correctional officers a 3 percent raise. According to the Legislative Analyst’s Office, there is “no evident justification” for this raise.

recent article in the Sacramento Bee summarizes portions of the LAO report, writing “The last time the state compared state correctional officers’ salaries to their local government counterparts, in 2013, state correctional officers made 40 percent more than officers in county-run jails, according to the LAO analysis,” and, “Since 2013, salary increases for state correctional officers have increased by a compounded 24 percent, according to the LAO.”

Within the LAO report, it is made clear that the rising cost for pensions is a major factor in escalating compensation costs for California’s prison guards. In theory, the cost to provide pension benefits is reasonable. The so-called “normal cost” of a pension is how much you have to pay if your pension system is fully funded. Unfortunately, that’s a big if. Today, the normal cost is only a small fraction of total pension costs. Most of the money going to CalPERS is to pay down their unfunded liability, built up over years of insufficient annual payments, along with lower than projected investment returns, and benefit enhancements that were justified using overly optimistic financial projections. CalPERS, the pension system that serves the California Correctional Officers, is underfunded by at least $138 billion. It is only 71 percent funded.

To see how this translates into the cost of individual pension benefits for California’s prison guards, useful information can be had by downloading raw data for state agencies from the California State Controller’s “public pay” online database. For example, using the most recent available data from the State Controller, in 2017 there were 21,558 prison guards who worked full time that year and were eligible for a “3@50” pension (pension equals three percent, times years worked, times final year base pay – eligibility at age 50). The average base pay for these guards was $87,460. Their average pension cost was $40,061, forty five percent.

State Controller data also offers insight into how much the modest PEPRA reforms of 2013 reduced pension costs, since California’s Dept. of Corrections also had 7,161 prison guards who in 2017 worked full time and were eligible for a “2.5@55” pension – in some cases this reduction was due to PEPRA. Their average base pay was $93,054, and their average pension contribution was $21,716, which equates to 23 percent, only half as much.

It’s easy to rail against the pay and pension benefits collected by public employees in California. And in the case of overpaid, underworked state and local bureaucrats who often are incompetent and indifferent towards business owners and homeowners who are trying in good faith to navigate California’s ridiculously excessive rules and regulations, that ire is appropriate. But before leveling that criticism at California’s correctional officers, one might consider what it takes to manage the criminally insane, or members of international gangs with friends inside and outside of prison, or, for that matter, the general prison population of thieves, thugs, wastrels and predators. If it’s such a cush job, go apply.

Nonetheless, especially when it comes to California’s pensions, something’s got to give. One solution which could be done overnight, without legislation or litigation if the CCPOA would agree, would be to reduce the pension multiplier from 3.0 percent to 2.5 percent for all future work by all correctional officers regardless of hire date. The three percent accrual for work performed to-date would be preserved. This single change could save the state tens of billions.

Government union members need to understand something unequivocally: There is no special interest in California that even approaches government unions in terms of raw political power. With great power comes great responsibility.  Conscientious members of these unions should demand this power is used for the common good.

In the case of the prison guards, that would not only involve a voluntary, and significant concession on the question of pensions, as described. It would involve aggressive political involvement in correcting some huge, and very recent, policy mistakes. To cite just one example, California’s Prop. 47, the so called “get out of jail free” law, needs to be repealed through a ballot initiative. Somehow, the tens of thousands of drug addicts, drunks, and mentally ill who currently constitute the bulk of California’s unsheltered homeless need to be cost-effectively reincarcerated.

California’s prison guards union can and should play a productive role in reforming the laws that prevent society from getting these most problematic of the homeless off the streets. They should then work creatively with legislators and local authorities to figure out how best to help these people. Why can’t state and local mental health professionals in partnership with the Dept. of Corrections build less expensive work camps for nonviolent addicts and alcoholics, where they could dry out and contribute to society? Why does it have to cost $71,000 per year to incarcerate the average prisoner in California? Why are comparable amounts necessary to shelter the homeless? This is ridiculous.

There’s more. Instead of demanding annual raises in an attempt to cope with the cost-of-living in California, why aren’t government unions supporting policies that might lower California’s cost-of-living? Support an overhaul of California’s excessive environmentalist legislation – why does it take six years or more to build an apartment building in California, when it only takes months in other states? Support deregulation of land development, because high-density infill is an exercise in futility unless it’s matched by new construction on open land within this vast, nearly empty state. Support nuclear power, and reform ill-conceived renewables mandates. Et cetera.

California’s prison guards union may wish to think outside the cell.

This article originally appeared on the website of the California Policy Center.

California lawmakers weigh budget proposals to cover health care for illegal immigrants

California lawmakers are weighing proposals this week that would offer government-funded health care to adult illegal immigrants but are at odds over how far to go.

Democratic Gov. Gavin Newsom has proposed $98 million a year to cover low-income illegal immigrants between the ages of 19 and 25, but the state Assembly’s bill would cover all illegal immigrants over the age of 19 living in California – a proposal that would cost an estimated $3.4 billion.

The state Senate, meanwhile, wants to cover adults ages 19 to 25, plus seniors 65 and older. That bill’s sponsor, Sen. Maria Elana Durazo, scoffed at cost concerns, noting the state has a projected $21.5 billion budget surplus.

Of the three million in California who don’t have health insurance, about 1.8 million are illegal immigrants, according to legislative staffers. Nearly half those have incomes low enough to qualify them for the Medi-Cal program. …

Click here to read the full article from Fox News

Use $21 Billion Surplus Instead of Taxing Californians More

California has a record $21.5 billion surplus.

That’s the good news. The bad news is that we have all that money because you are being overtaxed.

Earlier this month, Gov. Gavin Newsom released his revised budget proposal, the largest in California history.

At a staggering $214 billion dollars, the budget is larger than that of most nations and every other state.

The budget also includes a new $140 million tax on water customers to help all Californians have access to clean water.

Clean water is important, and there are a million people in the Central Valley without access to it. But do we need a new tax to pay for it?  Maybe we don’t.

To read the entire column, please click here.

Gov. Newsom Backtracks on Single-Payer Health Care Promises

Twenty months ago, then-Lt. Gov. Gavin Newsom sealed the endorsement of the powerful California Nurses Association in the governor’s race with an impassioned promise to bring single-payer health care to the Golden State.

“There’s no reason to wait around on universal health care and single-payer in California. It’s time to move [Senate Bill] 562. It’s time to get it out of committee,” Newsom told a nurses union conference in September 2017. “If we can’t get it done next year, you have my firm and absolute commitment as your next governor that I will lead the effort to get it done. We will have universal health care in the state of California.”

But now, as Newsom undertakes a “California for All” tour of the state’s largest cities, that ambitious rhetoric has long since given way to more modest proposals – and to attempts to dampen expectations. Instead of the governor reviving Senate Bill 562 – a 2017 measure passed by the Senate that would have committed the state to creating a single-payer system – he now says that’s not feasible without the assistance of the federal government.

Newsom has asked the Trump administration to give California a waiver from federal laws allowing the state to set up its own unique health care system – and for a sum equivalent to the amount the federal government now spends on health care for state residents. Senate Bill 562 died in the Assembly over expectations it would cost about $400 billion a year – double the state’s budget.

Governor risks backlash from fellow Democrats

The May Revise of the 2019-20 state budget that Newsom unveiled last week includes several proposals to expand availability of health care partly subsidized by the state government, in particular raising the income threshold of eligibility up to $73,000 a year. Individuals who make $48,000 a year or more are not eligible for federal subsidies under the Affordable Care Act. But he stopped short of extending Medicaid coverage to unauthorized individuals in California, citing its $3.4 billion cost. And he made no concrete proposals on advancing single-payer beyond previously announced plans to use the newly created state Council on Health Care Delivery Systems to examine how the state could transition to such a system.

The potential for a backlash from Newsom’s own party is clear. Politico reported in March than Newsom believed strongly that leadership on single-payer should be led by “the horseshoe,” an insider’s term for the governor’s unusually shaped office. But having a commission look at the state’s possible courses of action isn’t the dramatic move that fans of Democratic presidential candidates like Sen. Bernie Sanders and Sen. Elizabeth Warren want. A Quinnipiac University poll released in February showed 61 percent of state Democrats back a government-run single-payer system in California.

The California Nurses Association has expressed disappointment with the lack of progress. In February, CNA lobbyist Stephanie Roberson told the Sacramento Bee that it was “baffling” that no state lawmaker had introduced a measure like Senate Bill 562 and said her union strongly believed that incremental improvements in health care access were not enough.

“We can’t, as leaders, just protect what we have because we fundamentally believe that health care is [a] human right,” Roberson said.

This article was originally published by CalWatchdog.com

California’s Private Economy Fuels State Budget Surpluses

Taxes continue to pour into the state treasury, like spring snowmelt into Lake Oroville. Thanks to the engine of California’s private economy – the creativity of business leaders and productivity of employees – and the wealth it creates, Governor Gavin Newsom last week announced that revenues exceeded earlier budget estimates by more than $3 billion, enabling him to propose bolstering reserves, paying down debt, and boosting education spending.

Californians have enjoyed nearly ten years of economic growth, and one of the biggest beneficiaries has been the state budget. Since the depths of the recession the state budget has increased by 82% – that’s more than $95 billion. Compare that to the recession years when the Governor and Legislature were forced to cut tens of billions of dollars in spending.

Today with a healthy budget and continuing prospects for growth, Governor Newsom has set aside $16.5 billion in a rainy-day reserve to hedge against the next economic downturn and continued to boost education spending. In addition he proposes spending more than $9 billion to pay down unfunded pension liabilities and pay off longstanding debts and deferrals.

But what goes up inevitably will come down, and a key responsibility for a chief executive is to look to the future – not only to spread the blessings of prosperity but to protect against shortfalls.

When he released his revised budget proposal last week, Governor Newsom recognized this, insisting that “We need to have a structurally balanced budget because we are entering the end of the beginning of a new phase of economic reality. The headwinds are real.”

The precarious condition of state finances is well known. The top one percent of earners pays nearly half of all income taxes and these taxes provide 70 percent of all General Fund revenues. The Administration forecasts that a moderate recession would reduce state revenues by $70 billion over three years.

The Governor and the Legislature should continue to insist on a savings strategy pioneered by Governor Brown. Top up the budget reserve, reject new taxes, and resist demands to build into the budget new, ongoing spending that will be painful to unwind when the economy slows.

The easiest money to save for a rainy day is money you haven’t committed to ongoing programs.

The good news is that the extra revenues the state receives once the reserve fund is filled are directed to infrastructure, which can be used to help create high paying jobs for skilled workers to improve and upgrade our highways, mass transit, public buildings and flood control facilities. This has the three-fold benefit of providing mobility, safety and public services for residents, creating well-paying jobs for Californians, and budgeting responsibly for the fiscal health of the state.

The budget windfalls should also allay the calls for new or higher taxes, which have proliferated in the early days of the legislative session. The existing state corporate tax rate, combined with the effects from federal tax reform, resulted in a surge of more than a billion dollars of new revenues this year.

 Only a few members of the current Legislature were in Sacramento during the last recession, so it may be understandable that many members call for increases in ongoing programs. But nobody wants to return to the bad-old-days of deep cuts to education and safety net programs. We can help those in need if the private sector continues to thrive and generate tax revenue. Success of the private sector economy provides the foundation for a state budget to provide services to the people of California.

Loren Kaye president of the California Foundation for Commerce and Education.

This article was originally published by Fox and Hounds Daily

High-Speed Alternatives to High-Speed Rail

On the campaign trail, California governor Gavin Newsom expressed support for the state’s high-speed rail project, but he’s been more reticent since taking office earlier this year. In February, he proposed to cut back on the plan because it “would cost too much and … take too long,” a welcome note of skepticism, but soon afterward, his staff issued a “clarification” explaining that the governor was simply “refocusing to get a finished product from Bakersfield to Merced,” the first leg of the envisioned rail system.

The high-speed rail project is a disaster, with cost projections ballooning and the anticipated time of a trip from San Francisco to Los Angeles coming in at four hours; an airplane can get you there in one. The practical thing for Newsom to do would be to scrap it entirely, but that’s not politically feasible. He might be better advised to consider a private-market alternative that could satisfy both practical and political considerations: an autonomous autobahn, where, according to Motor Trend writer Mark Rechtin, “vehicles equipped with self-driving technology run in platoons at a constant 120 mph.”

It may be some time before autonomous cars can navigate streets and adapt to all the complexities of urban life, but self-driving freeway travel might not be so far off. It will require better highways, which don’t come cheap in California, where road construction costs 2.5 times the national average, due in large part to costly environmental reviews and pro-union contracts. But even at $7 million a mile for new rural-freeway construction and $11 million per mile for its urban counterpart, the price tag for a California superfast highway, stretching roughly 500 miles — the distance between San Diego and Sacramento — would be only about 5 percent of that of high-speed rail, which current projections put between $70 billion and $120 billion. The model is Germany’s autobahn, “a reliable national highway system that is very safe despite an unrestricted speed limit,” according to state senator John Moorlach of Orange County. Moorlach cites a World Health Organization study that estimates that road traffic deaths-per-mile in Germany are one-third as common as in the United States.

Access to this high-tech superhighway would be strictly controlled. “Only properly inspected smart vehicles with transponders would be permitted,” says Rechtin. With usage limited to qualified automobiles, the cost of building an autonomous autobahn would properly be shouldered by those who drive on it, preferably via tolls. “Who wouldn’t pay an extra $100 (half a plane ticket) to zip along, hands-free, at double the speed of the current I-5, not having to deal with TSA at the airport, and still have access to their own car when they reach their destination?” Rechtin asks. In this scenario, the autobahn would be the car version of an express flyer, with exits and rest stops spaced out at 50-mile intervals to reduce lane-changing.

Moorlach introduced a bill to open such a road earlier this year. In its original language, it required the California Department of Transportation to build “two additional traffic lanes on northbound and southbound Interstate Route 5 and State Route 99,” the major north-south freeway routes in the state, and to “prohibit the imposition of a maximum speed limit for those traffic lanes.” Since amended, the bill now more modestly directs the department to “submit a report that includes policy recommendations to the Legislature and the California Transportation Commission on any potential advantages of the German autobahn system compared to California’s state highway system and on the feasibility of implementing those potential advantages in California.” Moorlach believes that his autobahn project would appeal to the state’s Europhiles in the same way that the Euro-flavored “bullet train” attracted their support.

An autonomous autobahn is not the only alternative to government-run high-speed rail, however. A Florida-based firm, now called Virgin Trains USA after partnering with British billionaire Richard Branson, operates the country’s only private-owned intercity rail line and is moving ahead with a rail project connecting Los Angeles and Las Vegas. Virgin Trains USA is confident that it can keep costs down and make a profit; no one believes that California’s high-speed rail project could do either of those. California policymakers would also be wise to keep an eye on a private-sector rail project in Texas, as well as Elon Musk’s hyperloop proposal.

These initiatives may or may not pan out, but as Pacific Research Institute fellow Bartlett Cleland says, whether the market deems them successes or failures, “the risk will be borne by investors”—not taxpayers. The same can’t be said of California’s high-speed rail; taxpayers may have to cover nearly all its construction costs. It’s time for the Golden State to shelve this unworkable project and start looking at alternatives that might actually succeed in moving people around the state ten years from now.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

This article was originally published by City Journal online

Newsom scraps $16B plan for tunnels to deliver water to Southern California

California Gov. Gavin Newsom has formally abandoned a plan to build two giant tunnels to reroute the state’s water from north to south, an idea pushed by his predecessor, Jerry Brown.

Newsom had signaled the move in his State of the State address in February but made it official Thursday by asking state agencies to withdraw existing permits for the project and start over with plans for a single tunnel

“I do not support the twin tunnels,” Newsom, a former lieutenant governor and San Francisco mayor, has said. “But we can build on the important work that’s already been done.”

California has already spent $240 million developing the project, according to state Department of Water Resources Director Karla Nemeth. She told The Associated Press that some of that work will inform the new approach. …

Click here to read the full article from Fox News

L.A. Politicians Want to Spend Bullet Train Funds

In a sign of frustration over the state’s transportation priorities, several board members with the high-profile Los Angeles County Metropolitan Transportation Authority have made the argument that it makes far more sense to use money that Gov. Gavin Newsom wants to spend on a bullet train route in the Central Valley on Los Angeles-area projects instead.

Newsom made international headlines in February when he pulled backfrom predecessors Jerry Brown’s and Arnold Schwarzenegger’s commitment to have the California High-Speed Rail Agency build a statewide high-speed rail network. Instead of continuing to try to secure all the funds needed for the $77 billion project, Newsom said the state should focus on completing a 110-mile segment from Merced to Bakersfield that is expected to cost $12.2 billion.

Five L.A. Metro board members – Hilda Solis and Kathryn Barger, both Los Angeles County supervisors, Inglewood Mayor James Butts, Los Angeles Councilman Paul Krekorian and Glendale Mayor Ara Najarian – think that’s a bad idea.

At a recent Metro board committee meeting, Solis said that “many, many projects” in the Los Angeles region would be more helpful in meeting state transportation goals.

In a motion they crafted for the Metro board’s consideration, they wrote that the Central Valley segment “has little value for public transportation and limited greenhouse gas reductions. Regional rail transit improvements in the Los Angeles region would be more cost effective with more substantial mobility benefits.”

The Curbed Los Angeles website reported that the five decided not to ask the full Metro board to endorse the motion, evidently after being reassured that the state would help fund some of the local projects that Solis had praised. But the sharp criticism from five board members of Metro – one of the nation’s largest transportation agencies, serving 10 million people in a 1,400-square-mile region – is a powerful reminder that even with Newsom’s scaled-back version, the state’s bullet-train project faces considerable skepticism.

Cost, viability of Central Valley segment questioned

The Central Valley route faces two of the same key criticisms that the statewide project did under Brown.

Its initial cost estimate of $6 billion has more than doubled, just as the statewide plan’s cost soared from $34 billion to $77 billion.

Under Proposition 1A, the 2008 ballot measure providing $9.95 billion in bond funding for the project, every segment is supposed to generate enough revenue to be self-supporting, with taxpayer subsidies banned. But assumptions that linking Merced, population 83,000, with Bakersfield, population 380,000, will lead to ridership that is heavy enough to cover the cost of bullet-train operations is tough to square with the fact that presently, there are only six conventional train trips daily between the cities with an average ticket price of $27.

Questionable assumptions about ridership have been common from the state rail authority. For example, in 2015, the Los Angeles Times reported that the authority projected annual ridership of up to 31 million passengers after the Los Angeles-San Francisco route was complete. That’s about the same number of annual riders as Amtrak, which operates in 46 states.

On Wednesday, the rail authority is expected to release more detailed plans from the Newsom administration for the Merced-Bakersfield segment.

This article was originally published by CalWatchdog.com

Gov. Newsom’s progress on his key policy promises for California

In his first 100 days in office, California Gov. Gavin Newsom quickly set about launching parts of the progressive agenda he promised during his campaign.

On the day Newsom was sworn into office, the Democrat vowed to expand Medi-Cal coverage for immigrants in the country illegally and drive down the high cost of prescription drugs.

Since then, Newsom has also promised to expand paid family leave, tax credits for low-income workers and early childhood education. He vowed to modernize the state Department of Motor Vehicles, crack down on cities that refused to plan for adequate housing and retool California’s high-speed rail system, which has been plagued by cost overruns.

Newsom also worked behind the scenes to help settle the teachers’ strike in Los Angeles, inflamed California’s feud with President Trump by pulling national guard troops from the U.S.-Mexico border and traveled to Washington, New York and El Salvador.

Susan Kennedy, who served as chief of staff to Gov. Arnold Schwarzenegger and cabinet secretary to Gov. Gray Davis, said one of the most significant moments of Newsom’s first 100 days was his decision to impose a moratorium on the death penalty, for which he won the praise of criminal justice advocates and drew the ire of death penalty supporters, who said the governor defied the will of California voters who refused to abolish the death penalty in a 2016 statewide vote. …

Click here to read the full article from the L.A. Times

Central Valley Angered by Newsom’s Bullet-Train Plans


High speed rail constructionGov. Gavin Newsom’s announcement in his State of the State speech in February that he didn’t believe California had the resources to complete its $77 billion statewide bullet-train project produced a backlash that Newsom didn’t seem to expect. Within hours after the speech, his aides said the media was inaccurately reporting that Newsom’s only commitment was to build a $12.2 billion, 119-mile high-speed link between Merced and Bakersfield in the Central Valley and nothing more. They said he remained a supporter of the full project.

But nearly two months later, the initial reaction to Newsom’s speech remains the enduring takeaway for most Capitol watchers: He’s off the bullet train bandwagon. Building unions and green lawmakers who believe in the statewide project’s potential to help in the fight against climate change remain among the most upset.

Yet easily the most intense reaction is in the area where Newsom still wants the project to proceed: the Central Valley.

Coverage from The Bakersfield Californian, the Los Angeles Times and small newspapers in the region reflect anger over how the valley has been treated. Valuable farmland and family homes have been acquired with eminent domain for a project that no longer will link the area with the rest of the state – despite promises from Govs. Arnold Schwarzenegger and Jerry Brown.

‘My mouth was just open with shock’

“I don’t want to talk political because I don’t do it very well,” Fairmead resident Vickie Ortiz told the Times. “But you know, you had a governor that was pushing-pushing-pushing for the high-speed train, and we started getting used to the idea that we can’t stop a train but maybe we can use it to help the community. But then you get another governor and he says: ‘No, I don’t want to do that any more.’ My mouth was just open with shock.”

In the Antelope Valley Press, retiree Bill Deaver, a former official in the Federal Railroad Administration, blasted the “politics and ignorance” of project critics who he blamed for Newsom’s decision.

“Politicians used [high-speed rail] to score political points rather than supporting something that will be able to handle huge increases in traffic projected in coming years. That sort of behavior is one of the biggest barriers to progress.”

Newsom’s decision didn’t surprise some in the Central Valley who never believed a statewide bullet train would get built. “People lost their homes and businesses. And for what?” Visalia farmer Randy Van Eyk told the Times.

Some see commitment to help region

But other remarks the governor made about the Central Valley have resonated more positively – and created an expectation that he will do more than past governors to help the region.

“The people of the Central Valley endure the worst air pollution in America as well as some of the longest commutes. And they have suffered too many years of neglect from policymakers here in Sacramento. They deserve better,” Newsom said in the same speech in which he outlined his views on the bullet-train project’s future.

Bakersfield Californian columnist Robert Price said if Newsom was serious, he should help Kern County diversify its economy away from “two industries under assault in the Central Valley: agriculture and, especially, oil and gas.”

Anna Smith, another columnist for the Californian, also said Newsom should promote economic diversification. But she also called on him to address the Central Valley’s social ills, including “high rates of illiteracy and obesity, lack of access to quality education and health care (especially in rural communities), water contamination and extreme poverty.”

This article was originally published by CalWatchdog.com