John Moorlach: Sacramento has no clue how to solve housing crisis

Sacramento just doesn’t get it. A housing crisis is not solved with new fees, bonds and local government process overrides.

Let’s talk about housing. KQED provides some of the gory details in a recent piece. But, allow me to elaborate. A quick tip, KQED provides the last act first.

For Senate Bill 3 (and 5), I provided the following abbreviated concerns on the Senate Floor:

  1. Let’s review the housing market over the last 11 years. In Orange County, the median price for a home in 1996 was $221,800. Ten years later, after the subprime mortgage boom (for fun, watch “The Big Short”), the median rose to $739,000. With the Great Recession, the median went down to $498,200 in 2011. And, as of June 2017, it is back to $734,200.
  2. Why the recent resurgence?
    • A slow, but steady rise in job growth.
    • Foreign investors. They came in at the market low as a safe haven.
    • Explaining an increase of all-cash transactions; more than 50% in 2013.
    • This has caused a decrease in home ownership and more renters.
    • Difficulty for developers to obtain entitlements and to build.
    • The other usual suspects, like NIMBYism, CEQA and open space demands.
    • For those lucky enough, try working with the California Coastal Commission.

It makes you wonder, what has Sacramento done to address foreign buyers and entitlement restrictions? And, I can see now why SB 714 (Newman) was removed from the calendar this last week, as it doubles down on taking entitled property for building new homes in the city of Brea and requiring total open space. Boy, this bill was so out of touch, the Democrats had to save the author from himself.  But, I digress.

  1. What is the current dilemma?
    • Americans find the home buying process too overwhelming.
    • They find it too difficult to come up with the down payment.
    • More than other generations, millennials value experiences over ownership.
    • Americans change jobs more often than in previous generations.

With SB 2, Sacramento will be adding to the burdens. Within minutes, the Democrats also voted for AB 166 (Salas), which provides exemptions from the new SB 2 fees. You can’t make this stuff up. And those who qualify are not those going through a foreclosure!

Then I warned them about issuing more debt by sharing the following disturbing data from Moody’s Investors Service. Among the 10 largest states in the nation, California joins Illinois and New York as the three worst in all of the following categories:

  1. Debt to personal income – 4.70%, when the median for all states is 2.50%.
  2. Debt per capita – $2,323, when the median is $1,025.
  3. Debt as a percentage of state GDP – 3.94%, when the median is 2.21%

And the state’s own bond credit rating is a measly AA-, just above Illinois, at BBB+. This means that California will be paying higher interest rates than issuing states with top credit ratings.

If this wasn’t enough of a reason to vote against the bond measures, I also gave a lecture on future budget and balance sheet concerns – a “what’s up?” listing:

  1. A $4 billion bond translates into $225 million per year in payments! Where will this come from?  The Senate approved two such bond bills on Friday.
  2. The annual contributions for CalPERS and CalSTRS are also rising.
  3. The Proposition 98 school funding threshold into the General Fund is also rising.
  4. The minimum wage is rising and will impact the budget by $4 billion per year.
  5. The recent voter approved $9 billion bond for school improvements will impact the General Fund by $500 million per year (no wonder the Governor hasn’t released any tranches).

What does all this mean? In a few short years, the General Fund is screwed. But I put it more politely on the Senate floor, stating that “it will be dramatically impacted. Good luck with that.”

Sacramento so much wants California to be like other blue states that are heading for the fiscal precipice, such as Connecticut, Illinois and New York. And quickly. But, this is the wrong race to be in.

You can bet the governor will sign these bills and the monopoly party will pat themselves on the back for once again dealing with a problem with inappropriate solutions. Tragic.

Political fight continues over California recall rules

vote-buttonsSACRAMENTO – Most recall elections are primarily about electoral politics, as both sides duke it out with the usual broadcast ads and ground campaigns. But the burgeoning Republican effort to recall Orange County’s Democratic Sen. Josh Newman has turned into an inside-the-Capitol political fight as well as a high-profile legal battle. It could be months before the matter is debated in the context of a traditional political campaign.

Newman was elected to the Fullerton-area Senate district last November, winning by fewer than 2,500 votes in a district with nearly even voter registration between the Democratic and Republican parties. Voters there have typically sent Republicans to the Legislature, so Newman’s win was viewed as an upset. It also helped Democrats gain supermajorities in the Legislature, which lets them approve tax increases without any GOP votes.

After Newman cast a deciding vote in favor of legislation that raises the gasoline tax by 12 cents a gallon and increases vehicle license fees, former San Diego councilman Carl DeMaio, a Republican, started a campaign to boot Newman from the Senate. State Democratic leaders claim that some recall backers misled voters into thinking the recall will repeal the transportation-tax hike, so they struck back with a measure they say is about upholding the integrity of the recall process.

They passed a bill earlier this summer that retroactively changes the state’s long-standing recall-election rules by adding months to the certification timeline. It primarily gives voters 30 days to rescind their recall-petition signatures. Republicans say the new law has nothing to do with recall integrity, but is a transparent attempt to delay the election until the June 2018 primary when Democrats are expected to fare better at the polls. They accuse the Democrats of rigging the election rules to help Newman.

The governor signed Senate Bill 96 in June, but the state’s Third District Court of Appeal put portions of it on hold earlier this month, ruling that it violates the single-subject rule requiring legislation to deal with only one topic. The court, however, didn’t halt the Democratic effort to slow the recall drive. After they returned from summer recess, legislators again used a trailer bill, which is supposedly reserved for budgetary clean-up language, to quickly pass a measure to again rewrite recall election law to help Newman survive a coming vote.

Signed into law by Gov. Jerry Brown, Senate Bill 117 seeks “to eliminate any issue as to whether the changes to recall petition procedures made by Senate Bill 96 are enacted in violation of the single subject rule” by expressing “the intent of the Legislature to repeal those provisions and reenact them in this act, which embraces only the subject of elections.”

After the bill became law, the Howard Jarvis Taxpayers Association and several voters again filed a lawsuit against Democratic Secretary of State Alex Padilla and the state Legislature to strike down the new law, which they say is unconstitutional.

The original lawsuit argues that “the attempted retroactive interference in a recall process that has already commenced for the express purpose of nullifying, through unreasonable delay, petitioners’ constitutionally-vested right, violates both due process and equal protection of the law.”

The new lawsuit says the new law “should not be permitted to prohibit (the secretary of state) from performing his ministerial duty, which at this point is the simple process of signing his name to a certificate to confirm what everyone knows, and indeed what the Respondent’s office has acknowledged: that the recall petition is sufficient to compel an immediate election.”

It also contends that the law should properly have been passed on a two-thirds vote rather than as majority-vote trailer bill. “While SB117 purported to address the single-subject problem of its predecessor,” the lawsuit argues, “the new bill does so in another unconstitutional vehicle – a ‘spot-bill’ designated as ‘related to the budget in the budget bill.’” But when the budget was adopted, “SB117 was not even identified as one of the budget-related trailer bills” and “had no substantive content.”

If the court rules in the group’s favor, Democrats could still appeal the decision to the California Supreme Court. Win or lose, the Democrats appear to be getting their way – using their fearsome political muscle to delay a recall of one of their senators. It’s the rare election case where the courts have as much influence as the voters.

Steven Greenhut is a Sacramento-based journalist. Write to him at stevengreenhut@gmail.com.

This article was originally published by CalWatchdog.com

Orange County fire captain rakes in over $500,000 thanks to soaring overtime pay

A $245,350 overtime payout — the 13th largest of the more than 1.3 million public workers surveyed statewide — boosted Orange County Fire Authority (OCFA) captain Gregory Bradshaw’s total compensation to $508,495 last year, an amount more than four times greater than his $116,846 salary.

While Bradshaw was OCFA’s top earner, his fellow fire captains weren’t too far behind, with the average fire captain having received $301,791 in pay and benefits last year — according to an analysis of freshly released 2016 salary data published on TransparentCalifornia.com.

In 2014, an OCFA board member expressed frustration over “an accounting gimmick used to generate significant overtime costs,” according to an Orange County Register report.

While the Board’s concerns led to the implementation of an overtime cap effective April 1, 2015, overtime pay continued to rise nonetheless — with last year’s $47 million expenditure representing a more than 18 percent increase from the previous year.

The continued growth in overtime pay was also evident on an individual employee basis: The 44 OCFA employees who received overtime pay in excess of $100,000 last year represent a nearly threefold increase from the previous year, when there were only 15 employees who earned that much.

Transparent California’s research director Robert Fellner noted an alarming trend where a handful of employees who had received overtime in excess of their regular salary in the preceding years actually increased their overtime pay in 2016, after the cap was in place.

“Several employees who were already more than doubling their salary from overtime pay actually saw an increase after the cap took effect — which suggests that cap might need to be tightened a bit.”

To explore the full OCFA dataset as well as historical data dating back to 2011, please click here.

Orange County cities

Transparent California — the state’s largest and most accurate public pay database — recently added 2016 pay data for 411 California cities and 49 counties.

The site now features 2016 data from every Orange County city but Placentia — which has not yet replied to a public records request for this information.

“It is disheartening that Placentia has not yet responded to our records request, but we very much appreciate the professionalism of all the other Orange County governments who facilitated our request in a prompt manner.”

Overtime pay up 19% at Anaheim

The City of Anaheim was home to the 5 largest overtime payouts of any Orange County city surveyed:

  • Fire Engineer III Brian Pollema’s $204,458 OT pay boosted his total compensation to $403,528.
  • Fire Fighter III Daniel Lambert’s $186,228 OT pay boosted his total compensation to $357,184.
  • Fire Engineer III David Shimogawa’s $163,325 OT pay boosted his total compensation to $338,937.
  • Fire Captain Mark Dunn’s $157,673 OT pay boosted his total compensation to $372,496.
  • Senior Electrical Utility Inspector Kenneth Heffernan’s $155,356 OT pay boosted his total compensation to $300,917.

Of the 148 California cities with at least $1 million in overtime pay surveyed, the average year over year increase in overtime pay was 5 percent.

Anaheim’s 19 percent increase in overtime pay was the most of any Orange County city and the 13th largest statewide.

The next four cities with the largest overtime pay increases in Orange County were:

  • Buena Park: 18.5 percent, 14th largest statewide.
  • Irvine: 17 percent, 17th largest statewide.
  • Costa Mesa: 17 percent, 21st largest statewide.
  • Fullerton: 14 percent, 30th largest statewide.

Orange County pay data

In 2015, the only Orange County worker to make over $400,000 in pay and benefits was Sheriff Sandra Hutchens, who received total compensation of $400,214.

The 2016 county payroll data reveals 11 workers making over $400,000 — with two county psychiatrists topping $500,000 apiece.

Total compensation at the county experienced a much milder increase, however, rising only 3 percent to just under $2 billion last year.

To view the complete datasets in a searchable and downloadable format, please visit www.TransparentCalifornia.com.

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

Laguna Beach becomes first city in Orange County to ban smoking in town

As reported by the Orange County Register:

LAGUNA BEACH — The only place people will be allowed to smoke in this resort town will be inside their homes and cars.

On Tuesday, May 9, the City Council voted unanimously to expand its ban on smoking that already covers beaches and parks.

The new ordinance bans smoking throughout the city, including on sidewalks, bike paths, alleys and in parking structures. The ordinance is the first such restrictive ban in Orange County. It will go into effect after a second reading in 30 days.

The ban also applies to vapes and e-cigarettes. Last summer, Gov. Jerry Brown signed a package of tobacco bills that included these devices in the state’s smoking ban restriction. The ban would also apply to smoking marijuana in the same places tobacco smoking is prohibited. …

Click here to read the full article

$84,000 a year now qualifies as low income in Orange County

As reported by the Orange County Register:

A family of four with an annual income of $84,450 or less now qualifies as low income in Orange County.

A single person living alone qualifies as low income if he or she earns $58,450 or less a year.

Orange County has the fifth-highest income threshold in the nation, according to new income limits released last month by the U.S. Department of Housing and Urban Development.

Government and private agencies use HUD’s income calculations to determine eligibility for a wide variety of assistance programs, ranging from rent subsidy vouchers and public housing to mortgage assistance. While low-income families qualify for some programs, others are limited to households earning far less, with limits as low as $31,300 for a family of four.

Record-high rents and home prices are driving up Southern California income limits. Orange County apartment rents, for example, increased 20 percent over the past seven years, while the median sale price of an Orange County house has jumped 40 percent. …

Click here to read the full article

The OC GOP’s Delicate Dance in the Age of Trump

As reported by the Voice of OC:

It wasn’t long ago that if you were looking for harsh rhetoric and hardline policies on immigration, you need look no further than Orange County.

Republican officials in the “reddest county in America” were not at all shy about deriding our porous borders and condemning those who advocate for amnesty for people in this country illegally.

Consider Costa Mesa Councilman Allan Mansoor, who gained both notoriety and criticism in the latter half of the last decade for his extreme positions, including pushing in 2010 a city council resolution to declare Costa Mesa a “rule of law” city committed to ending illegal immigration.

Mansoor had such a high profile on the issue that he was named an honorary member of the Minuteman Project, a radical anti-illegal immigration group founded by Laguna Niguel resident Jim Gilchrist.

And while Mansoor may have been among loudest local voices, he was certainly not alone. …

Click here to read the full article

Trump Reality Sets in for California Republicans

As reported by the L.A. Daily News:

Even though it was presumptive and even though the result appeared to be a foregone conclusion for some time, it became unofficially official for Republicans Thursday — Donald Trump reached the delegate total needed to become the Republican presidential nominee.

Jim Lacy missed being able to congratulate Trump in person by just one day.

The at-large California delegate from Orange County met him backstage at the candidate’s Anaheim rally Wednesday, got to shake his hand and told him “You’re the man” before posing for a photo.

“I was hoping I could’ve been the delegate that put him over the top when winning California,” Lacy said. “But I was still delighted with the news.”

Trump, the man who built his …

Click here to read the full story

Great Idea: Put Price Tag on Ballot Measures

Would you commit to buy a car, a house or even a jacket without knowing the price? Unless you are a member of the 1 percent, chances are, you want to know what it will cost you before you make a purchase.

But what about ballot measures that can cost every citizen hundreds or even thousands of dollars? At the state level, the Legislative Analyst’s Office has the responsibility to provide a “fiscal impact” analysis – that is, information to voters as to the costs to taxpayers of passing a proposition.

But this isn’t currently required at the local level. And those backing attractive sounding, but costly, measures like it that way. They prefer to keep the public in the dark. If a county measure promises to create new parks in every neighborhood, it may sound great, but taxpayers should know what it will cost them before they cast a vote.

Orange County Supervisor Andrew Do takes the oath of office from his wife, Cheri Pham, as he stands with his daughters, Ilene Do, center, and Rhiannon Do, during the start of the Board of Supervisors meeting on Tuesday in Santa Ana. ///ADDITIONAL INFORMATION: Slug: doswearingin.0204.jag, Day: Tuesday, February 3, 2015 (2/3/15), Time: 9:45:15 AM, Location: Santa Ana, California - Andrew Do - JEFF GRITCHEN, STAFF PHOTOGRAPHER

Orange County Supervisor Andrew Do

Orange County Supervisor Andrew Do deserves credit for proposing a measure that would require a cost analysis by the county’s Auditor Controller for all county initiatives, and his colleagues deserve praise for agreeing to place it on the June ballot for voter approval.

The big question is why every local tax raising entity is not required to provide a non-partisan cost analysis for their sponsored ballot measures as well as those placed on the ballot through the initiative process.

Skeptics say that requiring a cost analysis might deter voters from approving a worthy measure, for example one relating to public safety. This argument was dismissed by Supervisor Todd Spitzer, who pointed out that voters are much more likely to vote no on an ill-defined ballot measure if they are not told what it will cost.

In our country we are going through a political process where the public is expressing its support for plain speaking. There is resentment toward members of the political class who equivocate and use insider terms that many find confusing.

So let’s be blunt. A significant number of local ballot measures are designed to provide an advantage to those inside government, including politicians, bureaucrats and other employees and/or special interests. Requiring a non-partisan analysis would provide voters, who will be stuck with the bill, another tool to evaluate a ballot measure. They can then do a cost/benefit analysis, the same as they would do before making a major family or business spending commitment.

So while Supervisor Do should be thanked for promoting openness in government, why  are there so few of our local representatives throughout the state taking a similar stand for full disclosure to voters of the full cost of measures they are asked to approve?

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.

Originally published by the Howard Jarvis Taxpayers Association

American Workers Subsidizing Unions With Tax Dollars

In St. Charles, IL, a teacher is paid $141,105 not to teach. In Philadelphia, “ghost employees” who don’t do work for the state collect benefits from the state. In Kalamazoo, MI a former teacher is collecting a government pension of $85,903 a year even though he didn’t teach his last 14 years, but instead worked as a union employee.

Called “release time,” or “official time” at the federal level, it’s a practice that allows public employees to conduct union business during working hours without loss of pay. These activities include negotiating contracts, lobbying, processing grievances, and attending union meetings and conferences.

According to Trey Kovacs, a policy analyst at the Competitive Enterprise Institute, this racket has cost the federal government about $1 billion since 1998. Between 2008 and 2011, the fraud has increased from 2.9 million hours at a cost of $121 million to 3.4 million hours at a cost of $155 million.

School boards, which frequently consist of members bought and paid for by the teachers unions, are particularly guilty of this crime against the taxpayer. In CA, where the California Teachers Association wields great power, the situation is particularly egregious. Typically this scam is written into collective bargaining contracts and comes in different flavors. Sometimes the school district will pay for the cost of a sub if the teacher/union employee needs to do work for the union. In Los Angeles, page 6 of the teacher contract states that the United Teachers of Los Angeles “may request the release of designated employees from their regular duties with no loss of pay for the purpose of attending to UTLA matters, with the expense of the substitute or replacement to be borne by UTLA.”

Sounds fair, right? But it’s not.

The substitute invariably makes a lot less than the teacher/union employee and the taxpayer is sucking up the difference in pay. The teacher is also racking up pension time, (which is taxpayer-subsidized), while doing union work. And of course the students lose out by having frequent subs, who often are nothing more than placeholders.

In other districts, the union gets a completely free pass. Page 15 of Orange County’s Fountain Valley School District contract reads, “The Association (union) President or designee may utilize one (1) day per week for Association business. The District shall bear the cost of the substitutes.” So a classroom teacher of 15 years, who doubles as union president, makes an$89,731 yearly salary, or $485 a day. The taxpayer is also paying $100 a day for a sub which brings the total to $585 for one day of union business per week. Repeated over the 38 week teaching year, the taxpayer is on the hook for $22,230. And that amount does not include the thousands of dollars the employer (ultimately the taxpayer) has to pay for contributions to the teacher/union leader’s retirement fund, health benefits, unemployment insurance and workers compensation.

With over a thousand school districts in the state doing business like Los Angeles and Fountain Valley, we are talking about serious larceny.

Not everyone has rolled over and accepted this criminal arrangement. Jim Gibson, a former Marine Corps Captain who had sat on the Vista Unified School District board for 13 years, was outraged at the fraudulent set-up and decided to act. He initiated a lawsuit against the Vista Teachers Association in 2011, using a section of the California education code to make his case:

The governing board of a school district shall grant to any employee, upon request, a leave of absence without loss of compensation for the purpose of enabling the employee to serve as an elected officer of any local school district public employee organization, or any statewide or national public employee organization with which the local organization is affiliated.

… Following the school district’s payment of the employee for the leave of absence, the school district shall be reimbursed by the employee organization of which the employee is an elected officer for all compensation paid the employee on account of the leave.Reimbursement by the employee organization shall be made within 10 days after its receipt of the school district’s certification of payment of compensation to the employee. (Emphasis added.)

Gibson and the school district won the case.  All monies paid to do union business were ordered to be repaid by the union to the district. This ruling should have had ramifications statewide, but clearly it hasn’t. And things won’t change until enough citizens rise up and put an end to it.

What can be done?

One way to stop the criminal practice of taxpayer-supported “release time” would be to open collective bargaining negotiations to the public. That kind of sunlight would go a long way toward disinfecting wounds inflicted by unions and compliant school board members.

More than anything, citizens need to get involved. Examine the part of your local teacher union contract that is headed Organizational Security, Association Rights or (Name of local union) Rights. Ask your local school board president how the district deals with this policy. Go to school board meetings and ask questions about the contract wording and ask for verification that that district actually lives up to the contract. Talk to your friends, family, neighbors and your kid’s teacher. Talk to the media if necessary.

If we the people don’t care enough to stop it, union orchestrated taxpayer theft will go on unabated.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.