Power company under pressure to explain actions before California wildfire

Power electricSome victims of California’s worst-ever wildfire are asking why the state’s largest utility didn’t shut off power in areas that were at high risk. The death toll from the Camp Fire is up to 77, and that number is likely to rise.

Nearly 1,000 other people are unaccounted for. In 11 days, the fire has destroyed more than 10,000 homes north of Sacramento, the state’s capital.

Pacific Gas & Electric said two of its power lines failed in areas where the fire broke out a short time before the first flames were reported. It highlighted one failure the day the fire began but then waited more than a week to report the second until more information was available.

PG&E said the fire forecast did not meet the criteria for a “public safety power shutoff.” The cause of the fire is still under investigation. …

Click here to read the full article from CBS News

Sacramento tracking license plates to monitor welfare recipients

Photo courtesy BenFrantzDale, flickr.

Sacramento County officials have been tracking the license plates of welfare recipients in the hopes of catching potential fraud, according to a new report in the Sacramento Bee.

The license plate monitoring program, which the ACLU warned us about, snaps photos of license plates when the cars they are attached to make their way past telephone poles and police cars, letting officials track the location of vehicles. Welfare fraud investigators working with the Sacramento County Department of Human Assistance (DHA) pay $5,000 a year for access to the license plate reader database to track those welfare recipients they suspect of fraud. This isn’t new, either: They’ve been doing it since 2016.

It’s not immediately clear what welfare investigators are even hoping to do with the information they unearth by tracking license plates, but the Sacramento Bee reports the DHA accessed the data over a thousand times in two years. …

Click here to read the full article from Fast Company

California Moves to Prevent Cancer Warnings on Coffee

CoffeeThe State of California is slated to have a public hearing this week over a proposal that would declare coffee poses “no significant risk of cancer.”

The hearing in Sacramento could be the end of a lengthy, statewide debate that began in 2010 when a nonprofit filed a lawsuit against coffee producers regarding a chemical in roasted coffee that has been found to elevate the risk of cancer in rodents.

Earlier this year, Los Angeles County Superior Court Judge Elihu Berle handed down a ruling that said all coffee served in California had to include a cancer warning. As The New York Times reported Wednesday, the World Health Organization retorted in June that evidence was scant in regards to coffee causing cancer.

On Thursday, members of the public will have the opportunity to make their voices heard as California’s Office of Environmental Health Hazard Assessment (OEHHA) tries to pass a rule that says drinking coffee does not carry with it an elevated risk of getting cancer. …

Click here to read the full article from News Max

Sacramento Tax Increase Proposal Represents Statewide Trend

TaxesThe Sacramento City Council vote to place a tax increase on the November ballot is representative of what we’ll see around the state in many localities: a call for more taxes to maintain basic services when in reality the money is needed to meet pension obligations.

In one sense the argument that the money is needed to maintain services is correct. Because greater pension costs will eat into the general funds of local governments, services provided by government will be cut because of reduced revenue. The problem is that officials promoting the tax won’t talk about pensions. 

What’s needed is transparency.

In Sacramento, the city council placed a 1-cent sales tax on the ballot to offset a ½-cent tax that is soon to expire. The new tax will be permanent. The tax is projected to raise $100 million, twice what the temporary tax now brings in. The new money is purportedly for specific projects but money is fungible and can be used where the city needs it—and the city needs to deal with rising pension costs.

(UPDATE: The current tax take from the 1/2-cent tax is actually $36 million. The $50 figure came about because of carryover money from previous year. A full penny is about $72 million. Thanks to Dan Walters at CALmatters for the correct information.)

The city budget speaks of the long-term difficulty Sacramento faces dealing with pension obligations. “The pension cost (normal cost and unfunded liability combined) in the General Fund alone is projected to be $134 million in FY2024/25 when the rate change is completely phased in. This reflects an increase of more than $66.9 million over the eight years which is a 99.6% cost increase from FY2017/18 to FY2024/25.”

Sacramento’s General Fund has increased about 25% from the 2009/10 budget to now from $385.9 million to $484.4 million. Even that steady increase cannot match what is needed to keep pace with the expected pension demands.

A tax increase is a way to meet the obligation but you won’t hear much about that when a campaign is mounted for the tax increase. At the council meeting approving the tax there was talk of maintaining basic services and supporting a plan that would confront multiple problems including homelessness, neighborhood investments, and job issues.

This formula is not exclusive to Sacramento. Many local governments must face pension costs that are burdening their General Funds and are turning to taxpayers for relief. By paying more in taxes the taxpayers have less to contribute to their own retirement costs.

The debate over these taxes should be truthful about the pension monster that is devouring local budgets. Once that happens more attention will be focused on how to deal with the problem.

ditor and Co-Publisher of Fox and Hounds Daily

This article was originally published by Fox and Hounds Daily

The California Legislature passes the pension buck – again

PensionsIn truth, Sacramento politicians are very dependable. You can depend on them to raise your taxes, pass meaningless resolutions attacking President Trump and hurt the private sector by eliminating workplace arbitration and enacting even more burdensome regulations. And finally, they are very dependable in avoiding the most important threats to California’s financial solvency, especially dealing with unfunded pension liabilities.

Much has been written about California’s unfunded pension crisis. By 2024, normal contribution payments by cities and counties to CalPERS are estimated to total nearly $3 billion, and the unfunded contribution payments are estimated to total $5.5 billion. That shortfall of nearly $3 billion a year will continue to increase unless reforms are enacted – soon.

California’s pension crisis exists in large part due to the very nature of defined-benefit plans. Unlike defined-contribution plans, where the taxpayers’ obligation to each public employee ends with every pay period, defined-benefit plans depend on a projection of future investment returns. And therein lies the problem. California has been horribly wrong in its application of assumed rates of return, leading to hundreds of billions in unfunded liabilities.

And this shortfall is occurring in good economic times when the state of California is relatively flush. A recession will quickly expose this short-sighted thinking, yet the Legislature continues to believe that local municipalities will continue to pass regressive sales tax increases to bail themselves out. Already, 24 cities have sales tax rates at or over 9.5 percent, and more cities are destined to join them.

To read the entire column, please click here.

California is about to start spending billions for new reservoirs

California took a big step Friday toward launching a new multibillion-dollar wave of reservoir construction.

After being accused of being overly tightfisted with taxpayer dollars, the California Water Commission released updated plans for allocating nearly $2.6 billion in bond fundsapproved by voters during the depths of the drought. The money will help fund eight reservoirs and other water-storage projects, including the sprawling Sites Reservoir in the Sacramento Valley and a small groundwater “bank” in south Sacramento County.

In its new blueprint, which remains tentative, the Water Commission nearly triples the amount of money it will spend compared to a preliminary allocation it put out in February.

With climate change expected to diminish the Sierra Nevada snowpack, the new reservoirs are seen as a way of bolstering California’s ability to store water. Sites, a $5.2 billion project straddling the Glenn-Colusa county line, and the $2.7 billion Temperance Flat reservoir east of Fresno would become the two largest reservoirs built in California since Jerry Brown’s first stint as governor in the 1970s. …

Click here to read the full article from the Sacramento Bee

Senate fellow harassment shows how bad Sacramento culture was

One of the most dramatic moments in the far-reaching fallout from last fall’s revelations about Hollywood producer Harvey Weinstein’s appalling history of sexual misconduct came on Oct. 16 with the release of a letter signed by more than 140 women who worked or had worked in Sacramento. The letter condemned a state Capitol in which men “leveraged their power and positions” to create a culture in which sexual harassment was taken for granted — all but a routine part of the job.

One claim that really illustrated the scope of the problem was the case of a 23-year-old aspiring legislative staffer who worked last year for then-state Sen. Tony Mendoza, D-Artesia, as part of the California Senate Fellows program, which is run in partnership with Sacramento State University. The woman told David Pacheco, director of the fellows program since 2005, that Mendoza had invited her to his home on at least two occasions to “review résumés” and had invited her to come to his hotel room. But the Sacramento Bee reported in November that instead of Pacheco notifying officials at Sacramento State of this awful conduct — as required by university policy — he advised the fellow not to take immediate action to leave the office and noted that she may yet get a job with Mendoza.

This is stomach-turning. Instead of acting decisively to protect a young woman in his charge, Pacheco’s first instinct was not just to look away from gross behavior by Mendoza toward the woman but to see a situation where she went to work for the lawmaker as something positive. …

Click here to read the full article from the San Diego Union-Tribune

After billions in tax increases, Californians deserve a tax cut

TaxesFor millions of Californians, the state has been rendered unaffordable because of foolish and counter-productive policies emanating from Sacramento. A shocking one-third of California renters spend at least half of their take-home pay on rent, and only 40 percent can afford to purchase a median-priced home. Little wonder, then, that one in five Californians lives in poverty — the highest poverty rate in the nation.

Small businesses are struggling as well. Nationwide, nearly ten percent of new entrepreneurs start from at or below the poverty line, but according to the Institute for Justice, California is third worst in terms of burdensome licensing laws.

At every moment of every day, Californians are taxed. We have the highest personal income, sales, and gas taxes in the nation. Even though Sacramento is sitting on a $4.6 billion budget surplus, high state taxes are continuing to gouge hard working Californians. In fact, over $15 billion in annual tax increases have been enacted since Gov. Brown took the reins in 2010.

Thankfully, there is a better way to improve the lives of all Californians.

Taxpayers, small businesses, families, homeowners and renters can finally get some relief through the California Competitiveness and Innovation Act (AB1922), which was recently introduced in the state Legislature and is supported by the Howard Jarvis Taxpayers Association. …

Click here to read the full article from the Orange County Register

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.

Who Runs Our Government?

Many years ago, it became clear to many of us that Sacramento had two parties, the Republican Party and the Union Party. It is amazing how many bills are approved that incrementally give unions, both public and private, more and more territory over management or nonunion private sector businesses.  It’s a testimony to their effectiveness, that such a small portion of the work force can control so much influence. Now that they have so much influence, that the changes they seek are no longer incremental.  In fact, they are swinging for the fences and seem to be closing in on wholesale ownership of the state.  They will use their power to the fullest, following the dictum of “more.” They are proving that they are “the Daddy” around the Capitol.

The most egregious example this year is AB1250. Almost every newspaper in California has opined against this bill. Consequently, it was reported that it has become a two-year bill. Yet, we have been told that AB1250 may come back to the Senate floor today or tomorrow for a vote (also see MOORLACH UPDATE — AB 1250 OC Opposition — September 5, 2017 MOORLACH UPDATE — AB 1250 Labor Dominance — July 13, 2017 MOORLACH UPDATE — AB 1250 Labor Dominance — July 13, 2017 ).

With this shadow hanging over the Legislature, I submitted one last editorial in opposition and it was published by Fox & Hounds.