Travis Allen surges to top Republican, #3 overall in Governor’s race!

Travis-Allen-Associated-PressDespite Republican opponent John Cox’s spending over $3 million already in his race for Governor, conservative Assemblyman Travis Allen (R – Huntington Beach) has surged past Cox in a USC statewide poll released today, and is now in the #3 spot over-all in the 2018 race for California Governor, and is the top Republican contender. Allen gained the support of 15% of voters who plan to cast ballots in the primary.  Cox received the support just 11% — and is now in a more distant #5 spot in the race to beat Gavin Newsom.  In the last series of polls, Allen has been consistently gaining percentage support, while Cox has consistently declined, despite spending much more than Allen on consultants and social media advertising for his campaign.  Cox has had trouble convincing Republican volunteer group members to support him in recent weeks, as it was revealed that he did not support the Republican party nominee for President – Donald Trump, in the last election, and instead says he voted for the Libertarian Party nominee, Gary Johnson.

Here are the poll results:

Gavin Newsom (D): 31%

Antonio Villaraigosa (D): 21%

Travis Allen (R): 15%

John Chiang (D): 12%

John Cox (R): 11%

To read the Los Angeles Times story on the USC poll, click here: http://beta.latimes.com/politics/la-pol-ca-latimes-senate-governor-primary-poll-20171109-story.html

 

CA Teachers Pension Fund Weighs Divestment from Gun Retailers

CalSTRS1The California State Teachers’ Retirement System (CalSTRS) is considering a divestment from any retailer that sells guns or ammunition, in the wake of the Oct. 1 mass shooting in Las Vegas.

California State Treasurer John Chiang believes the divestment should focus on retailers that sell “banned military-style assault weapons.”

According to the San Diego Union-Tribune, the case for divestment was pressed by Jason Irvine, a Reno, Nevada, resident whose sister, Jennifer Topaz Irvine, was shot and killed in the Vegas attack. He spoke of having to identify his sister’s body after she was shot and said, “I saw with my own eyes and felt with my hands the carnage these weapons inflict.”

Although weapons do not inflict damage — rather, people who misuse weapons do — Irvine’s words found their mark and CalSTRS investment committee chairman Harry Keiley voiced support for looking into divestment. Kieley said, “This is an issue that we alone cannot solve. At the same time, I don’t think we should sit by idly.”

State Treasurer Chiang approached divestment from the angle of minimizing investments in companies “who business efforts are a risk to public health and safety.” He said, “It would be difficult to argue that battlefield assault weapons and aftermarket accessories designed to rain down bullets don’t fall into this category.”

CalSTRS voted to divest of specific firearm and ammunition manufacturers following the December 14, 2012, attack on gun-free Sandy Hook Elementary. On April 3, 2015, Breitbart News reported that some teachers were outraged to find that the pension was still invested in Bushmaster Firearms over two years after the attack. (Bushmaster is the make of gun Adam Lanza stole and used to kill innocents at the school.)

Pension managers told the angry teachers that divestment is a process that could take years in some cases, and it was still ongoing in 2015.

Now Chiang and others want the fund to undertake divestment “in retail companies that sell the weapons and ammunition.”

AWR Hawkins is the Second Amendment columnist for Breitbart News and host of Bullets with AWR Hawkins, a Breitbart News podcast. He is also the political analyst for Armed American Radio. Follow him on Twitter: @AWRHawkins. Reach him directly at awrhawkins@breitbart.com.

This article was originally published by Breitbart.com/California

Republican joins 2018 race for California governor

As reported by the Fresno Bee:

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

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

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

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

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

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

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

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

Jerry Brown Leveraging Payroll in Scheme that Bankrupted Orange County

May Revise 2017Gov. Jerry Brown and State Treasurer John Chiang plan to tap California’s government payroll accounts to make long-term subsidized loans to the state’s public pension plan in a scheme that hasn’t been tried since it bankrupted Orange County in 1994.

Breitbart News recently reported that although Gov. Brown’s 2017-2018 May Budget Revision trumpeted that California will collect an extra $2.5 billion in capital gains taxes, the same data revealed that sales taxes, which are considered the best measure of the health of the state’s economy, “were revised down by $1.2 billion, reflecting weak cash receipts.”

Deep in the 91-page budget report, Brown also revealed that last year’s 22 percent jump to $279 billion for the retiree pension and lifetime healthcare liabilities will force the state’s annual pension plan contributions to almost double from $5.8 billion this year to $9.2 billion by FY 2023-24.

Brown warned that deteriorating tax trends and mushrooming pension payments put California at risk of suffering a catastrophic $20 billion deficit in a “moderate recession.”

But according to the Los Angeles Times, Brown apparently has convinced State Treasurer and fellow Democrat John Chiang to bail out a big piece of the state’s rising pension costs for the next 12 years by making a $6 billion loan at a highly-subsidized interest rate from the Treasury’s $76.5 Billion “Pooled Money Investment Account” (PMIA).

The PMIA has traditionally served as a money-market fund for the state’s general fund, agencies, counties, and cities to invest short-term cash, including payroll accounts. According to the PMIA’s September 2016 audit, the fund earns only a 0.88 percent current yield, because it provides overnight cash liquidity to depositors by investing in U.S. Treasurys and agencies, plus high-quality repurchase agreements, certificates of deposit, and commercial paper with an average maturity of 185 days (about 6 months).

The last time a state or local treasurer running a government money market fund participated in this type of “borrowing short and lending long” scheme was Orange County’s Bob Citron.

The OC Treasurer was celebrated as a genius by local political leaders for making almost $1.3 billion in excess profits over an 9-year period by investing $7 billion of county and local government short term and payroll cash in longer term 5-year U.S. Treasury Bonds. Unfortunately, Citron’s fund suffered a $2.3 billion loss in 1994 and “the OC” filed the largest Chapter 9 municipal bankruptcy in history.

The resulting scandal and huge loss of taxpayers’ funds caused the Securities & Exchange Commission to adopt Rule 33-7320, which severely restricts money-market mutual funds from leveraging principal risk by “borrowing short and lending long.”

But under U.S. constitutional state sovereignty, the SEC has no jurisdiction over any funds managed by the Treasurer of the State of California.

Treasurer Chiang claims he supports the pension loan, because the CalPERS pension plan will pay his PMIA the more favorable yield of a 2-year Treasury Note, currently yielding 1.21 percent. But that means the PMIA is being asked to make a highly subsidized loan, since the current yield on an equivalent 12-year California General Obligation bond is 2.23 percent, or about 85 percent higher.

This piece was originally published by Breitbart.com/California

Will Federal Law Kill California’s Secure Choice Retirement Scheme?

kevin de leon 2An unprecedented state law meant to create 401(k)-style retirement accounts for millions of private-sector workers in California now faces a daunting obstacle to ever being implemented: one of the most powerful federal laws on the books.

Under the state law establishing the California Secure Choice Retirement Savings Program, after it is phased in, all companies with five or more workers which do not have retirement benefits eventually would have to withhold 3 percent of worker pay and send it to the state government, with the funds to be invested in safe financial instruments such as U.S. treasuries. Workers could opt out.

The proposal was championed by state Senate President Kevin de León (pictured), D-Los Angeles, with strong support from state Treasurer John Chiang. They depicted it as crucial to helping 7 million Californians working in jobs without retirement benefits to prepare for retirement.

But the Republican-controlled Congress recently passed, and President Trump subsequently signed, a law overturning an orderissued last August by the Obama administration’s Department of Labor that exempted Secure Choice-type programs from the Employee Retirement Income Security Act (ERISA), a landmark 1974 law that established strict standards for retirement plans and their management. This erased legal concerns raised by pension lawyers aware of ERISA’s intricacies.

Yet at a news conference last week, de León and Chiang downplayed the significance of the lost ERISA exemption. They said they had only sought the federal action in response to concerns raised by the California Chamber of Commerce and the California Manufacturers and Technology Association – not because of a concern that Secure Choice would be subject to ERISA.

That’s not the conclusion one would be likely to gather after reading the language of Senate Bill 1234, the de León bill establishing Secure Choice that was signed by Gov. Jerry Brown in September. It makes specific reference to the ERISA exemption: “The United States Department of Labor has finalized a regulation setting forth a safe harbor for savings arrangements established by states for nongovernmental employees for the purposes of the federal Employee Retirement Income Security Act.”

And it says the Secure Choice governing board “shall not implement the program … if it is determined that the program is an employee benefit plan under the federal Employee Retirement Income Security Act” – which it now appears to be.

ERISA expert notes scope of landmark 1974 law

However, de León and Chiang cited a 2016 opinion from the K&L Gates law firm that sees no ERISA compliance problem. But the opinion is based on an earlier version of the bill – not the measure that passed and seemed built on the assumption that Secure Choice was only legal with the ERISA exemption.

In a March analysis released as the bill to overturn the exemption was advancing through Congress, the National Public Pension Coalition’s program manager, Tyler Bond, suggested courts might rescue Secure Choice-type laws by deciding ERISA doesn’t apply. But Bond’s background is as a communications specialist, not the law.

Michael A. McKuin, a Palm Desert lawyer who specializes in ERISA, notes on his website the long history of courts broadly interpreting ERISA’s scope because of the law’s sweeping language: “The provisions of … this chapter shall supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan.”

McKuin writes: “In determining whether a plan is governed by ERISA, courts have generally followed the approach of the Eleventh Circuit in Donovan v. Dillingham, 688 F.2d 1367 (11th Cir. 1982) (en banc). Under the Dillingham test, an ERISA plan exists if a reasonable person can ascertain: (1) the intended benefits, (2) intended beneficiaries, (3) the source of financing, and (4) the procedures for receiving benefits. … The purported plan need not be formal or written to qualify as an ERISA benefit plan, but rather, the court must look to the ‘surrounding circumstances’ to see if the four factors have been met.”

“As a practical matter, it does not take much to satisfy the test and Courts will generally find the existence of an ERISA plan even where no such plan is wanted by anyone,” McKuin writes – unless the plan has the “safe harbor” specifically mentioned in SB 1234’s ballot language.

This piece was originally published by CalWatchdog.com

California Advances Private Sector Retirement Plan Without Feds

As reported by KQED:

California officials vowed to move ahead with a retirement savings program for the state’s private sector workers, a day after losing the federal government’s support for the initiative.

Senate President Pro Tem Kevin de Leon and State Treasurer John Chiang said [last week] that the state will still enact the Secure Choice program, authorized last year, that will create retirement accounts for nearly 6.8 million Californians. De Leon criticized opponents of the plan as representing the interests of large banks and brokerage firms.

“California will move forward with Secure Choice with or without Washington’s blessing,” said de Leon, who authored the legislation that created the program. “We will put the future and well-being of our workers over Wall Street greed any day of the week.”

California’s program would automatically enroll private sector workers into a state-run retirement program. Unless they opted out, employees would contribute 3 percent of their earnings and a state board would oversee and invest the funds. …

Click here to read the full article

Treasurer John Chiang to Run for Governor in 2018

As reported by the Associated Press:

SACRAMENTO — California Treasurer John Chiang announced Tuesday that he will begin raising money to run for governor in 2018, marking an early start to his bid to become the state’s first Asian chief executive.

Chiang, a Democrat, emphasized his experience managing the state’s cash and pledged to “build the best California” that fulfills the aspirations of voters.

“I put greater accountability and transparency into the state’s finances. … Frankly that’s how you protect education, that’s how you protect health care, that’s how you protect other essential services,” Chiang told The Associated Press. “You can’t blindside people at the very end.”

Chiang’s announcement was not a surprise; he’s been saying for …

Click here to read the full story

 

CA Threatened by Massive Unfunded Liabilities

Despite a concerted effort from Gov. Jerry Brown to keep California from slipping back into the financial abyss, the state’s finances remain threatened by massive unfunded obligations.

“It’s California’s debt and liabilities that are concerning financial analysts, particularly the state’s rapidly growing unfunded retiree health care costs, which grew more than 80 percent over the past decade. California has promised $74 billion more in health and dental benefits to current and retired state workers than the state has put aside,” the San Francisco Chronicle reported.

Adding to the concern, new reporting rules have cast new light on local debt burdens. Changes issued by the Governmental Accounting Standards Board caused California governments to begin reporting “pension debts differently in their 2015 financial statements, which is becoming a wake-up call,” Reason noted. “Medical costs and other non-pension benefits will be accounted for differently in the 2017-2018 fiscal year. As a result, localities are facing much larger pension debts than previously reported.”

Observers have also had their eye on final developments in the case of one of California’s municipal canaries in the pension coal mine. “The bankrupt city of San Bernardino, California, said in a court filing […] it had reached a tentative agreement with the creditor holding its pension obligation bonds on how the debt would be treated in the city’s plan to exit bankruptcy but did not provide details,” according to Reuters.

Burdening Brown

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

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

CalPERS, the fund at the center of the ongoing pensions controversy, remained a sticking point. Its refusal to secure higher servicing payments created “a heavy political lift from Brown,” as the Contra Costa Times wrote in an editorial. “If CalPERS had required higher payments, he could have simply planned for it in his state budget. Without the requirement, he must persuade the Legislature to free the money.” Amid the recession, its funded ratio, the board wrote, “plummeted to 61 percent” in two years. “If that happened today, it would be devastating.”

“CalPERS is especially vulnerable because it assumes it can earn returns of 7.5 percent annually. To try to hit that target, it must make aggressive investments. In other words, it must take risk, which comes with upside potential and downside dangers. The higher the investment target, the greater the exposure in a down market.”

Bond struggles

One of Brown’s would-be replacements in the governor’s mansion, state treasurer John Chiang, has sought to shift expectations around California’s budgetary reliance on bond measures. Bond use has “risen substantially in California, with the state’s reliance on borrowing for infrastructure resulting in 1 of every 2 dollars spent on those projects going to pay interest,” the Chronicle noted, citing figures from the Department of Finance. But although Chiang suggested earlier this month that the state should “rethink” its use of bonds, Chiang has embarked “on a national tour this month aimed at seducing investors with an environmentally friendly investment alternative,” according to the San Jose Mercury News. “Chiang wants to plant a full-fledged green bond market. Individuals and institutions, such as mutual funds and hedge funds, will have the opportunity to invest. The bonds promise to appeal to environmentally minded investors, as well as those looking to diversify portfolios overly dependent on fossil fuels — in case future climate change regulations sprout up.”

But in a sign of the inertia and perverse incentives that critics often associate with entrenched bureaucracies, the bonds have been built to stretch beyond their narrowly tailored confines if given the right kind of tug. “Instead of rules, green bond issuers rely on a set of nonbinding guidelines called the Green Bond Principles, drafted by an international group of issuers and investors,” the Mercury News noted. “The lack of third-party monitoring means issuers can label almost anything a green bond. If the bonds’ popularity outstrips the number of green projects, issuers could have an incentive to label bonds as green, even when they’re not.”

Originally published by CalWatchdog.com

Attorney General Reins In Shady Bond Practices

School bond studyIt’s not often that taxpayers get good news, especially in tax-happy California. Even more surprising is when the good news is an official opinion from the state’s Attorney General, someone not normally associated with friendly treatment to taxpayers.

Last November, this column noted that local governments, especially school districts, were prone to engage in questionable campaign activity to secure an unfair advantage in bond elections. Although it is illegal for officials to use public resources (including public funds) to urge a vote for or against a political issue, consultants frequently advise tax proponents to wage one-sided “informational” campaigns. This includes sending out material stating all the good things a bond or tax measure will do, but usually they stop just short of violating the law by telling people how to vote. (Howard Jarvis Taxpayers Association has had multiple successes in obtaining court injunctions against school districts that cross the line into advocacy, but by the time the court rules, the political damage has already been done.) And to top it all off, the “consultants” compensated with taxpayer dollars are frequently given financial incentives if they win.

Fortunately, the incestuous behavior of school districts with political consultants and bond salesmen received a long overdue slap down last week. The opinion, in response to several questions proffered by California’s Controller John Chiang, covers many activities taxpayers have been complaining about for years. As noted in the opinion, “Bond elections typically involve a range of pre-election activities, which can include: conducting opinion surveys to evaluate voters’ attitudes toward a bond issue; developing a financial plan; determining appropriate bond issuance size and tax rates; drafting documents needed to place a bond measure on the ballot; conducting a public-information program; training staff to inform the community about funding needs and bond financing; preparing a tax-rate statement for the voter pamphlet; providing information to the election campaign; conducting informational workshops; and preparing the ballot question itself.

“Although district staff may be able to provide some or all of these functions, it is common for districts to contract with private vendors to perform or support them [and a] practice has developed within the municipal financing industry whereby investment bankers, financial consultants, and bond attorneys (collectively referred to here as ‘municipal finance firms’ or ‘firms’) offer to contract with a school district to provide the pre-election services that the district seeks. Under such an arrangement, the firm agrees to provide the pre-election services at no, or reduced, charge to the district in exchange for the district’s promise to select the firm as its contractor to provide post-election bond services, if the bonds are approved by the voters.”

The Attorney General first concluded what should already be obvious: “A school or community college district violates California constitutional and statutory prohibitions against using public funds to advocate passage of a bond measure by contracting with a person or entity for services related to a bond election campaign if the pre-election services may be fairly characterized as campaign activity.”

But the A.G. went on to conclude more specifically that “a school or community college district violates prohibitions against using public funds to advocate passage of a bond measure if the district enters into an agreement with a municipal finance firm under which the district obtains pre-election services (of any sort) in return for guaranteeing the firm an exclusive contract to provide bond-sale services if the election is successful, under circumstances where (a) the district enters into the agreement for the purpose (sole or partial) of inducing the firm to support the contemplated bond-election campaign or (b) the firm’s fee for the bond-sale services is inflated to account for the firm’s campaign contributions and the district fails to take reasonable steps to ensure the fee was not inflated.”

Admittedly, there’s a lot to unwrap here. But the upshot is that taxpayers should not be forced to finance a political campaign to raise taxes.

Obviously, there are times when the legitimate capital needs of a school district justify a request to voters to assume debt in the form of a school bond. But the process should be driven by actual educational needs, not the desire of consultants and the bond industry to make a fast buck.

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

New eClaim System Makes It Easier to Reclaim Your Property From CA Government

California’s chief fiscal officer is making it easier to reclaim private property held by the state.

State Controller Betty T. Yee announced earlier this month an expansion of the eClaim feature for the state’s unclaimed property program. Property owners will now be eligible to submit their claims for property valued up to $5,000 using the controller’s streamlined paperless electronic claim process.

“The eClaim process is simple, efficient, and can be completed in a couple of minutes,” Yee said in a press release. “An increased threshold of $5,000 will allow many more Californians to claim lost or forgotten property online and quickly receive a check in the mail.”

Unclaimed Property: Your Money Held by the State

Under state law, when there’s been no activity on an account for three years, financial institutions are obliged to report this unclaimed property to the California Controller’s Office. In turn, the controller holds the funds until it is claimed by the owner. The most common types of unclaimed properties are bank accounts, stocks, bonds, uncashed checks, wages, life insurance benefits and safe deposit box contents.

Among the biggest problems facing the state’s unclaimed property program: a lack of public awareness about where people can find their old property. Most people don’t realize they’re owed money from a forgotten insurance settlement or an abandoned stock dividend.

However, for those owners aware of the program, obtaining the necessary paperwork to prove ownership can be costly and time-consuming. Many find the hassle of paperwork not worth a small dollar amount.

Unclaimed Property: eClaim created by Chiang

To address the paperwork hassle problem, in January 2014, then-Controller John Chiang created the eClaim feature to expedite the return process for properties valued at less than $500. Later that year, Chaing increased the value to $1,000. In total, more than 315,000 properties have been returned through the Controller’s eClaim feature.

Screen Shot 2015-11-20 at 10.35.42 AMThe state currently holds more than $8 billion in unclaimed property that rightfully belongs to more than 32 million people and businesses. More than three-quarters of unclaimed properties are estimated to be eligible for the new expanded eClaim feature. Yee says that by increasing the threshold to $5,000, she’ll be able to return another $9.4 million per year.

Among those who could benefit from the eClaim feature is billionaire hedge fund manager turned environmental activist Tom Steyer. The former hedge fund manager has three unclaimed properties, each valued at less than $50, dating back to his time as founder of the San Francisco-basedFarallon Capital Management.

LAO Report: State Can Do More

For decades, the state has made it difficult for owners to obtain their property. From 1990-2007, state law prohibited the Controller’s office from contacting approximately 80 percent of owners.

Earlier this year, the state Legislative Analyst’s Office released a report critical of the state’s unclaimed property system. The state could do a better job of finding owners, the report concluded, instead of passively waiting for the cash to be claimed.

It also argued that the state has a conflict of interest in managing the program.

“In particular, because property not reunited with owners becomes state General Fund revenue, the unclaimed property law creates an incentive for the state to reunite less property with owners,” the report found. “Now generating over $400 million in annual revenue, unclaimed property is the state General Fund’s fifth-largest revenue source. This has created tension between two opposing program identities — unclaimed property as a consumer protection program and as a source of General Fund revenue.”

Unclaimed Property: How to Search for Unclaimed Property

To find out if you have unclaimed property held by the state, go to www.claimit.ca.gov.

Originally published by CalWatchdog.com