California Has a High ‘Near-Poverty’ Rate

From The Sacramento Bee:

California has the nation’s highest rate of poverty — nearly a quarter of its 38 million residents — under an alternative calculation devised by the Census Bureau that takes the cost of living into account.

The state’s official poverty rate, based on a half-century-old formula that doesn’t include cost of living, is about half as high, but still higher than the national rate. And that’s true, as well, in a new statistical category called “near-poverty.”

california empty pockets

More Government Inefficiency

From The Daily Caller:

The Pentagon is set to destroy more than $1 billion worth of ammunition, some of which might still be viable.

The Defense Department’s inventory systems share data ineffectively, so it’s unclear how much of the ammunition could still be useful, according to a Government Accountability Office report obtained by USA Today. The Army and Pentagon acknowledged the inefficient process in a statement, and said an automated process will be a priority in future budgets.

(Read Full Article)

pentagon building

Minimum-Wage Power Play Emerges in San Diego

From U-T San Diego:

As events Wednesday confirmed, San Diegans have to worry City Hall’s biggest policy debate is moving toward an already-orchestrated ending.

The City Council’s Democratic majority has long made clear that its 2014 priority is to increase the minimum wage for workers in San Diego. Council President Todd Gloria said he would offer a framework for the city’s wage policy, then refine it to reflect concerns from labor and business groups, local activists and more. Voter would be asked to OK the proposal in a November ballot initiative.

Last week, Gloria unveiled his plan, which would gradually raise the minimum wage in the city to the oddly specific amount of $13.09 an hour by July 2017. The city’s hourly minimum would be 31 percent higher than the state’s, which will be $10 an hour beginning in 2016.

(Read Full Article)

http://www.dreamstime.com/-image18339786

Obama at a ‘Dead Point’

From Politico:

When the Washington Post-ABC News poll at the end of March showed a very slim plurality supporting Obamacare, Democrats hoped the president’s health care law had finally turned the proverbial corner.

The Post-ABC News poll had support for Obamacare at 49 percent to 48 percent, a finding taken as a possible harbinger of things to come with millions signing up on the exchanges. Then came the Post-ABC poll in April. It had the law underwater again, with 44 percent supporting it and 49 percent opposed, right back where it was in January.

This is consistent with a new Wall Street Journal-NBC News poll that has 36 percent of people considering the health care law a good idea and 46 percent a bad idea, and it’s consistent with the Kaiser poll that has had support for the law at 38 percent to 46 percent the past two months.

(Read Full Article)

Barack Obama

California Loses Another Corporate Giant

“It’s affected a lot of lives.”

“We have very little to do or say about keeping them here [which is] is really disappointing.”

“We try to address the small things, but it still isn’t enough for a major corporation like this.”

“The state of California lost Toyota.”

So lamented Mayor Frank Scotto of Torrance yesterday during a CNBC interview.  The topic of conversation: the recently announced relocation of Toyota’s North American headquarters from Torrance, California to Texas.  The loss of jobs from the stable tax base is simply the tip of a treacherous iceberg.  The company’s move translates into an evaporation of 3,000 high paying middle class jobs, as well as a significant negative multiplier on the local suppliers and ancillary businesses that work with Toyota throughout the city.  To compound matters, Torrance is hard pressed to locate an adequate corporate substitute with the capacity to occupy the soon-to-be vacant office complex previously held by Toyota.  The city must additionally come to grips with the fact Toyota’s relocation translates into the loss of a reliable corporate sponsor and community donor.

At a time when the state’s economy is slowly beginning to recover from the wake of the Great Recession, Sacramento lawmakers continue to ignore the plight of middle class job relocation to states with friendlier business climates – a pattern that only repeats itself.   California, once host to the greatest concentration of aviation companies on the planet, witnessed the migration of its aeronautical design and manufacturing facilities (see Lockheed Martin as one example) in previous decades.  The automakers, which used to have a significant presence in California, were the next to follow suit.  Today the state is in the midst of a new wave of corporate relocations not limited to manufacturing.  Occidental Petroleum, a Los Angeles energy giant, announced earlier this year that it too was moving its headquarters from California to Texas.  Even Hollywood is fighting for survival – after years of commanding the major market share for big budget feature films, production in the state is down immensely over the past decade as tax incentives from alternative jurisdictions make filming elsewhere a more profitable endeavor.

Were it not for the state’s booming technology sector and the recovery in housing, California would undoubtedly be facing dire fiscal straits.

Toyota’s relocation is a snapshot of a looming crisis impacting California businesses.  It is no secret that California is considered by most executives to be among the worst places in the country to conduct business.  Instead of finding ways to work with job creators, the state runs businesses out of town.  To lose premier corporate institutions year after year, (Toyota had been in southern California for the last 30 years), indicates that lawmakers need to change the way they interact with California businesses.

Unsurprisingly, the state that was able to lure Toyota’s corporate offices is Texas. For years Texas has argued that its business friendly, low taxation environment is the perfect fit for California corporations.  They are heeding the call.  If the pattern continues, Texas will not need to poach California businesses much longer, for there will not be any left to lure.

(Ben Everard is a contributor to California Political Review. Originally published on California Political Review.)

Why Average Pension Numbers Are Misleadingly Low

Public pension systems in California, most notably CalPERS and CalSTRS, are quick to cite their average pension amount as evidence that their pension benefits are reasonable. In addition to the pension plans themselves, many defenders of public pension plans will cite these averages themselves when attempting to counter claims that pension benefits have become excessive in recent years.

There are three very important factors that need to be accounted for when computing a raw average and using this value as an indication for what a public employee can expect to receive in retirement benefits.

Reason #1 – Failing to Adjust for Years of Service Worked

The biggest and most widely documented factor is overlooking years of service. Most analyses of average benefits include the implicit assumption that the pension benefit cited is for a full career (30 years or more) of service.

Including the pension amounts of those who have not worked a full career produces an average value that is much lower than what those who have worked a full career are receiving. Since a full-career employee is the benchmark used in measuring the equity of pension benefits, it is only appropriate to use the data that reflects that.

Reason #2 – Failing to Account for Beneficiaries

Many pension plans maintain their records in a way that makes the most sense for processing payments, but are incredibly misleading when used to calculate average pension amounts. The case of beneficiaries is a prime example of this. When a public employee qualifies for a pension, there are set guidelines for each plan depending on how beneficiaries are treated, but most plans default to the surviving spouse. In many cases, the retiree can designate additional beneficiaries as well.

So when calculating average pension amounts, if beneficiaries aren’t accurately identified and segregated from active service retirement amounts, the resulting average will be skewed downward. This is because any beneficiary payment will always be a portion of the full retirement amount, which will be incorrectly treated as if it were its own separate benefit amount. An example found onTransparentcalifornia.com illustrates this effect.

In the San Jose Police and Fire Pension Plan, there is no distinction between beneficiary and active service retirees. Consider, however, the following case of multiple beneficiaries. An individual with a retirement year of 2007 and years of service value of 25.02 received a $76,120 pension amount in 2013. Two more entries share the last name of this individual, as well as identical years of service and year of retirement but both only received $7,100 in 2012. As it is inconceivable that a San Jose police or fire retiree could retire with 25 years of service and receive an annual pension of just $7,100, these three separate entries – $76,120, $7,100, and $7,100 – are all components of one pension. So in this case, even when screening to isolate averages for pensioners with 25+ years of service, a $90,320 pension for one individual would impact the averages as three separate pensions of $30,107.

Reason #3 – The Same Pension Amount Reported in Fragmented Parts

Another potential error is when one employee’s pension is reported in fragmented parts, to account for either a divorced spouse receiving a portion of their pension, or even in cases where the retiree changed departments and received a pension amount under two or more different formulas. As indicated above, for every instance this occurs the pension amount will be reported at least 50% lower than its true value in raw average calculations.

Conclusion

It is entirely reasonable for pension plans to keep their payment records in a format that is most efficient and accurate for them. The observations made above are in no way suggesting that any of the data made available by the various plans is compiled in an intentionally misleading way. However, it is the responsibility of anyone who uses pension averages in their arguments, either for or against pension reform, to accurately interpret this data. Public relations professionals who represent pension systems and public sector unions often ignore reasons why pension benefits are far more generous than the statistics they come up with would indicate.

As demonstrated above, when it comes to frequently cited average pension amounts, there is much more to the story than it would appear at first glance. 

(Robert Fellner is a researcher at the Nevada Policy Research Institute (NPRI) and joined the Institute in December 2013. Robert is currently working on the largest privately funded state and local government payroll and pensions records project in California history, TransparentCalifornia, a joint venture of the California Public Policy Center and NPRI. Originally published on Union Watch.)

Kerry’s Apology


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California’s 1990s Culture Revisited in Two Bills

From The Sacramento Bee:

Although not apparent at the time, the 1990s were a pivotal period in the cultural and political history of California.

A severe recession at the onset of the decade, resulting from the end of the Cold War and the subsequent decline of the state’s once-immensedefense industry, prompted a mass exodus from the state.

Well over a million people, mostly white and many former defense industry workers and their families, left for more prosperous locales. Their departure changed the socioeconomic makeup of whole communities, particularly defense industry bastions in Southern California, as immigrants from other nations moved in.

California

More White House Benghazi Spin

From The Daily Caller:

A White House spokeswoman says critics are “politicizing” evidence showing that her colleagues politicized the government’s reaction to the deadly September 2012 jihadi attack on the U.S. compound in Benghazi, Libya.

“Unlike those who insist on politicizing the events in Benghazi, our focus remains on ensuring that a tragedy like this isn’t repeated in Libya or anywhere else in the world,” Bernadette Meehan, a flack for the National Security Council, said April 29.

Meehan’s claim likely presages the White House’s spin of a newly released Sept. 14 White House email chain.

(Read Full Article)

Jay Carney Press Secretary

Toyota driven out of CA

James Lacy, author of “Taxifornia: Liberals’ Laboratory to Bankrupt America,” explains how high taxes and onerous regulations drove Toyota to uproot and move its headquarters to Texas.