Here we go again. As frenzied as the tax-hike obsessives have been in recent months and years, Jerry Brown's weekend warning that the 2012-13 budget is $16 billion short is sure to ramp up their intensity. So get ready for the media/Dem onslaught, folks, and prepare to be reviled. Will Jerry Brown get lots of blame for his $4-billion-in-extra-revenue fantasy that he concocted last June? It's made a dire situation much worse. Will anyone in the media point out that contracts with gov unions that Jerry approved this fiscal year not only continue providing "step" increases for time on the job -- in other words, just for showing up -- but overall pay hikes? Will anyone in the media point out that the people with power in this state have blocked all fundamental reforms -- except the one (prisoner "realignment") that allowed them to shift costs to local governments? No, no and no. Instead, we'll see the usual one-two punch to explain all that is wrong with California. 1. Those damn Republicans who oppose tax hikes are to blame. No. They're. Not. For all the alleged insurmountable obstacles to raising taxes in California, the state has among the nation's highest income, sales and gasoline taxes; and the highest corporate taxes in the West. Property taxes are about average, thanks to Prop. 13. We should be able to live within our means. Most other states can pull this off. Which brings us to the next refrain in the Dem/media litany... 2. Prop. 13 is to blame. It ruined the state. No. It. Didn't. The limit on the annual increases has not prevented property tax revenue from going up by more than population growth and inflation for more than 30 years. Yes, the state may have a screwed-up tax structure. But that's not Prop. 13's fault. That's the fault of the status quoists in Sacramento who like things as they are, no matter what, just with more money from taxpayers. And the incredible thing about Prop. 13 is that it just showed its utility all over again during the housing bubble. Home prices in some markets nearly tripled from 1998 to 2006. Imagine the disruption in the lives of retirees and those living on fixed incomes if their property taxes had gone up that fast. Yet I think I'm the only guy in the California print media who has ever mentioned this. That's incredible, when you think about what that says about media conformity -- and stupidity. How is it not news that Prop. 13 saved millions of people from disaster? Because it doesn't fit the narrative. A more honest narrative might occasionally, yunno, note that the revenue crisis could be alleviated with economic growth, but that the Legislature and the governor only care about the sliver of the private sector economy that includes "green" jobs. A more honest narrative might also note that for the eighth year in a row, the nation's CEOs have rated California as the most business-hostile state. But those narratives will give way to the usual media-Dem juggernaut. Everything can be made right in California with higher taxes, and people who don't support higher taxes are greedy "terrorists." This is one case where I'm rooting for the "terrorists" -- my fellow "terrorists." Tom McClintock saw all this coming in September 2008 in his final major speech to the Legislature: According to the State Controller's reports, last year, our tax structure produced $96 billion in actual revenues - a record year. We budgeted $103 billion and spent $107 billion. In short, our spending exceeded our revenue by $11 billion and exceeded our adopted budget by $4 billion. This year, if the economy gets no worse, we can expect to produce $97 billion in tax revenues. Claims that the revenues will be higher are based on accounting gimmicks that mask the numbers but do not change the underlying reality. .... So I leave the Senate with this warning. I believe that last year's budget pushed this state beyond a fiscal tipping point. The unsustainable growth of spending pushed us beyond a point where neither tax increases nor conventional line item reductions can bring us into balance. ... I believe we have now also passed the point where conventional budget reductions can restore our state's finances. I believe we have now reached the terminal stage of a bureaucratic state where our bureaucracies have become so large and so tangled that they can no longer perform basic functions. "The terminal stage" has been unfolding ever since. What happens to California? It changes in sweeping, fundamental, unprecedented ways. Or it collapses.
This Chris Reed fella, writing in the L.A. Daily News, has some good news about the California High-Speed Rail Authority: Why would the [California Teachers Association and the California Federation of Teachers] turn on their normal allies and oppose plans for the bullet train? Because of the growing evidence that Gov. Jerry Brown thinks the only plausible way to fund the project is with the fees that heavy industries pay for the right to pollute under AB 32, the state's landmark 2006 anti-global warming law. The state Legislative Analyst's Office expects the fees from the "cap and trade" system to generate billions of dollars annually -- perhaps as much as $14 billion by 2015. There are plenty of legal precedents that appear to limit how the fees can be used. Since they are gathered to help fight pollution and reduce global warming, state finance officials say the fees must be spent for that purpose. But anyone who expects this argument to inhibit the CTA and the CFT from trying to get their hands on this immense new revenue source is hopelessly naive. .... Lawmakers in Sacramento won't get in the unions' way. Why would they start behaving honestly and ethically now? Read the whole column here. There is a very basic and obvious ploy that the CTA and CFT can use to grab AB 32 fees. Good column. I could read that guy all day and never get tired of his whining.
The L.A. Times' Friday report ... Los Angeles' top budget official raised the specter of bankruptcy on Friday in a sweeping report in which he called for new taxes, major pension reform and possibly layoffs. Chief Administrative Officer Miguel Santana said rising employee costs combined with flat-lining revenues have left the city in a precarious position. Even after reducing its workforce by 4,900 positions in recent years, the city faces a $222-million budget shortfall, he said, a number that is expected to rise to $427 million by 2014-15. “We’re always in crisis mode; we’re always trying to close that shortfall,” Santana said in an interview. Without cuts to the city’s expenditures and gains in its revenue stream, he said, “we’re facing the complete devastation of city services, including public safety.” ... essentially confirms every warning that I've written over the past decade about local governments in California facing ruin because of their control by public employee unions or by bureaucrats whose own pockets are lined by going along with what unions want. The main guy over the past 10 years leading the defense of the status quo has been Steve Maviglio, both as consigliere/spokesman for Assembly speakers and more recently as a gun for hire for public employee unions. Where is Steve now? What do the Californians for Retirement Security have to say for themselves? We can expect the usual palaver about how rollbacks have been negotiated and public employee unions are acting in good faith. But we will hear no explanation that makes the slightest bit of sense about why Maviglio and the powerful forces he represents have blocked pension reform in the Legislature. Their main argument -- that the pension crisis isn't that severe for state government -- is mendacious, but not beyond the pale. But here's what is beyond the pale: The pension crisis is ENORMOUS at the local level. Yet the Maviglians are blocking all pension reform because either a) they fear the changes would be uniform for local and state governments, and state employees don't want to make that many concessions; or b) they don't want to set a precedent of big concessions, even if they only apply to local governments for now. And so Los Angeles, Stockton, San Jose and so many other California cities will go down the drain. The city that has managed to confront its pension crisis head-on with a ballot measure that revolutionizes retirement benefit policies? Well, the Maviglians are attempting to sandbag that city with the assistance of the union tools running the state Public Employment Relations Board. PERB is is trying to subvert San Diego's ballot measure by any means possible. This is just far more evidence of the stupidity and futility of the argument that California Republican lawmakers can compromise their way to either political or policy success in Sacramento. The other side has no interest in compromise and is willing to let Los Angeles slide into anarchy, if necessary, to protect retirement benefits for state workers. Why do Sacramento media types have so much more interest in what they perceive as Republican dysfunction than with how Democrats function? Our state is in a depraved place because of public employee union power, but the Peter Schrags and George Skeltons of the world still insist that Golden State problem No. 1 isn't this fact and how it warps policy debates. Instead, they pretend that the state's biggest problem is that it's not easy to raise taxes -- not that a state with among the nation's very highest income, sales and gasoline taxes can't make ends meet. Sheesh.
Ed Mendel continues to break more juicy stories about CalPERS than the rest of the state media combined. Along with the Dans (Weintraub and Borenstein), he will be a first-ballot inductee in the Golden State Pension Coverage Hall of Fame. His latest scoop shows CalPERS officials being more honest than they've ever been, worrying that a big economic downturn could drive the giant pension agency down to just 40 percent of necessary funding. So why does CalPERS keep cranking out the happy talk and disinformation on its calpersresponds.com website? This, as the kids say, is wack. My favorite "myth" cited by CalPERS is that "CalPERS is unsustainable." This post indicates this "myth" was first addressed and allegedly debunked on Sept. 23, 2009, the week the website appears to have been activated. How was it allegedly debunked? With these two lame paragraphs: Fact: As a percentage of payroll, employer contribution rates are returning to the levels of the 1980s. In fiscal years 1979-80, 1980-81, 1981-82, for example, pensions as a percent of payroll for miscellaneous State workers were 19 percent of payroll. View details of State Miscellaneous Tier 1 Rates. Fact: Employer contribution rates have been very stable over the past six years, changing by less than 1 percent of payroll during the past six years, thanks to our rate-smoothing policy. The expected increase in employer rates due to the downturn will increase employer contributions by an average of 1 to 3.7 percent of payroll in 2011-12. View more information on projected increases in employer contribution rates for public agencies. These "facts," of course, don't prove jack. Pensions are unsustainable for many, many of the local governments CalPERS so poorly serves, and this very narrow framing of sustainability as being about broad employer contribution rates is a complete red herring. These "facts" don't change the fact that Stockton, San Jose, Los Angeles, etc., have real crises looming and can't stay the course. But CalPERS follows the Maviglian tactic of focusing almost entirely on state pension problems, which are minor compared to those facing so many cities. Of course, what makes the pension giant's assertion that it's a myth that "CalPERS is unsustainable" so downright hilarious is that the main person responsible for the "CalPERS is unsustainable" shorthand is .... you got it! CalPERS' own actuary! As reported by, who else, Ed Mendel -- and just six weeks before CalPERS declared the claim a myth. This is from a story Ed posted Aug. 12, 2009 about a pension seminar that took an unexpectedly candid turn, perhaps because those in attendance didn't think a reporter was in the room: Ron Seeling, the CalPERS chief actuary, described the process used to “smooth” the rate increases that will be imposed on the 1,500 local government agencies in CalPERS in 2011 in the wake of the stock market crash. Instead of a rate increase of 4 to 20 percent of pay, the smoothing will reduce the rate hike to a more manageable 0.5 to 2 percent of pay. “I don’t want to sugarcoat anything,” Seeling said as he neared the end of his comments. “We are facing decades without significant turnarounds in assets, decades of — what I, my personal words, nobody else’s — unsustainable pension costs of between 25 percent of pay for a miscellaneous plan and 40 to 50 percent of pay for a safety plan (police and firefighters) … unsustainable pension costs. We’ve got to find some other solutions.” How priceless -- CalPERS setting up a website with a primary goal of disavowing its actuary's grim warning as a "myth." As for Ron Seeling, well, you can guess what happened to him. In March 2010, seven months after his declaration that CalPERS was on an "unsustainable" track, he retired. Did CalPERS put out a press release? Nope. The appointment of Seeling's successor three months later? That merited a press release of 413 words about how darn important the job of chief actuary was. LOL. Where have you gone, Ron Seiling-o? A blogger turns his lonely eyes to you (woo woo woo). I'd love to hear the stories Seiling could tell if he were loaded up with sodium pentothal. P.S., 9 p.m., March 24: Please read the comments, folks, so you can enjoy a truly hilarious attempt by a public employee to pretend CalPERS actually has a good investment record, and that only my stupidity prevents me from figuring this out. Just riotously stupid spinning. I guarantee plenty of laughs.
Are Kamala Harris' parents proud of her today? Dr. Shyamala Gopalan, a breast cancer specialist, and Stanford University economics professor Donald Harris had Kamala after emigrating to the U.S. from crypto-democracies in India and Jamaica, respectively. Is this what they hoped for from their daughter? That she'd use her law degree to move up the ranks of the state Democratic Party and help maintain California's status as a crypto-democracy? That their child, in her role as the state's attorney general, would betray democracy by writing slanted ballot language that doomed two pension reform measures that polls showed voters loved? The doctor and the prof must be proud. With this act of sabotage, Kamala Harris is now the equivalent of a made man in the mafia that run the Golden State. The sky's the limit now. Who knows how much more Harris can achieve in her chosen role as union tool masquerading as public servant? She's a thug in a dress. But then this is nothing new when it comes to California and public employee pensions, is it? Rank-and-file taxpayers are being abused on a 24-7-365 basis. As I have written before, the title and summary for the pension reform measures that Harris put out are full of red herrings and loaded language, as the California Pension Reform group has detailed: While the Attorney General accurately describes parts of the initiatives, she provides other statements that are either provably false or grossly misleading: 1. “Reduces pension benefits for current and future public employees…" This is an absolutely false statement. The proposals do not change pension benefits for current employees. The proposals simply require current employees to pay more for future benefits and then only if the fund is at risk of not being able to pay the employees the benefits they are due. 2. “… including teachers, nurses, and peace officers, but excluding judges.” The AG selectively lists three positive poll-tested jobs out of thousands of government employee job classifications when both measures apply to all public employees, except constitutionally-protected judges. 3. “Prohibits public retirement systems from providing death or disability benefits to future employees.” The AG includes the words “prohibits” and “death or disability benefits” in the same sentence when our measures actually specifically provide for those benefits. To avoid any confusion about death and disability benefits, both initiatives say: “Sec 12 (d) All government agencies that provide pension or other retirement benefits for their government employees may also separately provide death and disability benefits for the benefit of their government employees, regardless of the date of hire. The cost of such death and disability benefits is not subject to the cost limitations established in this section.” As I noted last month, what's so infuriating about this is that "direct democracy" is the only means that Californians have to do an end run around the unions, green cultists and trial lawyers who control Sacramento. While California may be a liberal-leaning state, when it comes to ballot measures, many of those liberal voters show common sense, and warm, for example, to the argument that a state with high taxes should be able to make ends meet. There are plenty of signs that many of these liberals were quite willing to believe that pensions are far too generous for public employees. But not union thug Kamala Harris. She's in the tank for the union status quo. This is only the start of how the state government is rigged against the interests of regular Californians. For years, the California Public Employees' Retirement System has tried to discredit anyone who questioned its lies about the health of pension programs up and down the state. The main cause of the problems local governments faced? A 1999 state law that led to massive retroactive pension giveaways to hundreds of thousands of public employees. How was it justified? With CalPERS' lies to lawmakers in 1999 that benefits could be sharply increased with no downside to taxpayers. When Arnold tried to name someone to the California State Teachers' Retirement System board in 2006 who wouldn't go along with the fiction that CalSTRS was well-funded, three Democratic state senators blocked the nomination on the grounds that David Crane was, according to the L.A. Times, .... ... too concerned about the burden of pension shortfalls on taxpayers. As I have written before, who took Crane's place? Surprise, surprise. A teacher. How should Californians think about what we face overall? Here's how: We are all Bell. The nightmares destroyng the small city in Los Angeles County, in one way or another, haunt every taxpayer in California. Virtually every local government, every special district, must make decisions about compensation policies that are directly influenced by public employees, and, in many cases, dictated by public employees. Is it any surprise the resulting policies are crazy? For years, education reformers have observed that K-12 school policies seem to be much more about protecting the interests of adult employees than students. With the Kamala Harris-orchestrated destruction of pension reform in California, it's time this thesis be broadened. In Sacramento, state leaders decide on policy in ways that are much more about protecting the interests of public employees than taxpayers in general. Great, just great. Yo, Kamala: Congratulations for continuing this repellent, anti-democratic tradition. If your parents were capable of judging you with the impartial smarts one would expect of a sophisticated cancer doctor or econ professor, they would be puking all over the place. Think about that as you celebrate your ascension to the top ranks of California's union thugs.
According to legendary psychoanalyst Erik Erikson, a crucial stage of individual development comes from ages 5 to 13, as kids begin to develop complex interpretive skills and moral values and learn the importance of being industrious and serious of purpose. They leave childish fantasy, stubbornness and denial behind, adjusting to the world as it really is. Which brings me to Senate President Darrell Steinberg: Was he locked in a pantry from age 5 to 13? In asserting that only the "far right" want profound changes to public employee pensions, Steinberg is displaying a level of fantasy and denial more appropriate to a kindergartner than a powerful political leader. Yo, Darrell: A December PPIC poll shows 68 percent of the public backs switching new public employees to 401(k)-type benefits -- including 64 percent of public employees! This is from the O.C. Register account of the poll: On changing the pension systems for new employees from guaranteed payouts (as we have now) to a defined contribution system similar to a 401(k) plan, 68 percent of adults said yes, and so did 64 percent of public employees. In recent years, this public embrace of fundamental pension changes has been fueled by scandals, local and state budget crises, and envy. But a strong case for huge changes exists even without these factors, because a closer look at the rationales for taxpayer-punishing defined-benefit pensions for public employees shows they no longer remotely hold up,. The old theory rationalizing the generous pensions was that they were necessary because public employees were paid so little they couldn't save for retirement. USA Today and other journalistic groups have long since obliterated that claim: The newspaper probe relied on 2009 data (that) showed that federal civil servants received average pay and benefits of $123,049 while private workers made $61,051 in total compensation. ... federal civilian employees received an average salary of $81,258 and benefits worth $41,791. Private-sector workers got $50,462 in pay and $10,589 in benefits. Officials from public employee unions and some economists dismiss the compensation comparisons. They say the gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out many lower-paying jobs to the private sector. Another report by USA Today focused on salaries alone. It compared the 2008 pay for 40 occupations that exist in both the federal government and private sector, as defined by the Bureau of Labor Statistics data. Federal employees earned an average salary of $67,691 while private workers, in the same mix of jobs were paid an average $60,046. That’s a difference of $7,645. And they got an average of four times as much in benefits. Similar studies at the state level have shown similar apples-to-apples gaps between public pay and the private sector. So what have apologists for the pension status quo done? They've changed their main argument to the claim that government agencies would suffer a mass brain drain of talented employees if pay were frozen and benefits reduced for public employees. But this is bunk, as I wrote in 2009: With the exception of law enforcement officers and a handful of niche positions, there is no market demand for public employees. Nor are these employees clamoring to leave. The Bureau of Labor Statistics reports job turnover is tiny in the public sector compared with the private sector. The truth that's waiting to be discovered is that public employee pay in nearly every category could be frozen for years, with new hires being given standard 401(k)-style private sector benefits, with no disruptions for local and state governments. In Orange County, after its 1994 bankruptcy, de facto pay freezes were in place for years. Did county workers flee? No, not at all. Because there was no demand for those workers -- and because even after years without raises, even in the booming late 1990s, county workers were content because their compensation was really, really good and they didn't think they could do as well elsewhere. Once all this is on the table, it becomes obvious that in California, public employee compensation is first and foremost a function of public employee union political power. It is not a coincidence that the most powerful political force in the Golden State is the California Teachers Association and that our teachers are the second-highest-paid in of any state. Yet Steinberg says only the "far right" wants to change this sad state of affairs -- this status quo that distorts how California is run to the benefit of government employees and the detriment of everyone else. But then that's what the former union attorney has to say if he wants to keep his job as one of the main tax collectors for the union state. Peddling fantasy and living in denial amount to job requirements for the president of the California Senate.
I have never enjoyed reading a Capitol Alert more that Tuesday's item about Darrell Steinberg and John Perez suing to prevent the state controller's office from being able to make state lawmakers honor the clear intent of Proposition 25 and forfeit pay if they could pass a budget on a simple majority vote but didn't do so by June 15. Why do I enjoy it so? Because it blows the lid off the phony media narrative that the Republicans in the Legislature are the bad guys for not agreeing to raise taxes to fund a broken status quo. This story shows the true bad guys are the ones in charge -- the ones who hold taxpayers in contempt and whose main job is to serve as tax collectors for the union state, enablers of trial lawyers and enforcers for the green cultists in the Bay Area and West L.A. That Prop. 25 was a union power grab has been obvious from day one. It was placed directly on the ballot by Democratic lawmakers and its biggest supporters were public and private union groups and a trial lawyers front group. The campaign ads that began running in late summer 2010 presented it as an attack on the nincompoops running Sacramento who could never pass a budget on time -- ads that were crafted by the nincompoops running Sacramento. They used their own unpopularity as a lever to change the course of state politics. But why would the people running Sacramento do this if it could mean that their lawmaker lackeys might actually lose money as a result? Because Steinberg, Perez, the CTA, the CFT, AFCSME, SEIU, etc., never imagined that anyone who mattered would ever take the intent of Prop. 25 seriously. Remember, all Prop. 25 says is this: Provides that if the Legislature fails to pass a budget bill by June 15, all members of the Legislature will permanently forfeit any reimbursement for salary and expenses for every day until the day the Legislature passes a budget bill. The Legislature passes fake budgets every year, so lawmakers, unions and trial lawyers figured all they would have to do is pass another one by June 15 and that would suffice, even if it were a complete joke. And this time they could pass a budget that was even faker than normal, because they wouldn't need any Republican votes to reach the old two-thirds threshold. But Controller John Chiang wouldn't go along with this shell game on taxpayers and rejected a fraud of a budget put forward by the Legislature, leading to Tuesday's lawsuit. Steinberg and Perez, you see, can't have any fairness, honesty, accountability, integrity or honor in their Sacramento. They've got a long and pathetic tradition to uphold. And now this long and pathetic tradition is on full view. I concede that there is a very real chance that Steinberg and Perez will win in court. They have a very poorly written initiative to target with no defined enforcement mechanism -- just as they knew when they placed it on the ballot. But, of course, the principled thing to do would be to say, "Hey, this is a real problem -- if it's not the controller's office role to protect taxpayers, we still need to have someone independent decide whether we're passing real budgets or sham budgets." Instead, we see a masquerade of principle. "We believe those actions exceeded the authority of the controller's office," Assembly Speaker John A. Pérez said. "This is fundamentally an issue of separation of powers.'' No, John, it's not. Fundamentally, this is about how Sacramento is run to benefit a small core of Democratic interest groups -- unions, trial lawyers, greens -- and no one else. This group manipulates the political process to preserve the appearance it's crusading for "social justice," responsible environmentalism and the greater good. This scam is executed with the aid of a supplicating media who never notice how public employees fare so much better than the poor, the blind and the disabled whenever there is a state budget crunch, and who never notice that the state's grandiose green policies are regressive assaults on the poor that sharply increase energy costs while not actually doing a thing to reduce global warming. I look forward to seeing how George Skelton interprets Steinberg's and Perez's Prop. 25 betrayal through his Republicans-and-low-taxes-are-the-problem prism, or through the mentality on display in his still mind-boggling column noting that he didn't know anyone who didn't believe that Jerry Brown should have lied to voters and reneged on his promise not to seek tax hikes without a public vote. I look forward to Dan Morain explaining that it is no big deal that lies were used to sell Prop. 25 to the public, just as he argued it is no big deal that lies were used to sell the bullet train atrocity. The Sacramento pundits have their role and -- for the most part -- they're sticking to it. To paraphrase H.L. Mencken, no one will go broke underestimating how much they're in the tank for the status quo. Mencken also wrote that government, in its essence, amounted to "organized exploitation." If only the Sage of Baltimore could have been the Sage of Sacramento. In Sacramento, the sages run cover for exploitation. Great, just great.
The news that the alleged geniuses who run CalPERS had a poor investment record in 2011 drew a strikingly tone-deaf response from master Dem spinner Steve Maviglio, who Tweeted, "@CalPERS +1.1% in 2011. How'd your 40lk (or should I say, 201k) do (minus expenses to Wall St.)?" Boy, Steve, in an era where local govs across the state are threatened by insolvency because of pension costs, that's really reassuring. Maviglio is playing with fire here -- because the more one looks at CalPERS, the more it looks like a corrupt institution. No, I'm not talking about the fact that it's now involved in a pay-to-play corruption scandal involving former top executives. I'm talking about how whether returns are good or bad, CalPERS showers its workers with bonuses -- self-dealing of the most obvious sort. If this is legal, it shouldn't be. This is from an AP report in September 2010: As its investment portfolio was losing nearly a quarter of its value, the country's largest public pension fund doled out six-figure bonuses and substantial raises to its top employees, an analysis by The Associated Press has found. ... CalPERS' plunging value came as stock values tumbled around the world, the state's economy suffered its worst decline in decades and basic state services faced severe budget cuts. Virtually all of CalPERS' investment managers were awarded bonuses of more than $10,000 each, with several earning bonuses of more than $100,000 during the 2008-09 fiscal year. The cash awards were distributed as the fund lost $59 billion. ... Bonuses also were paid to employees who are not part of the fund's investment team, including a public affairs officer who received bonuses of nearly $19,000 a year two years in a row and a human resources executive who received bonuses topping $16,000 both years. The number of CalPERS executives making $200,000 a year or more rose from 13 to 15 over the two-year period. Those employees received an average salary raise of 12 percent and an average bonus of $115,705 in the 2007-08 fiscal year and $63,311 in 2008-09, according to the AP's inquiry into CalPERS compensation. So if the bonuses flowed when CalPERS lost $59 billion -- a flack even got a $19k gift! -- who knows how much CalPERS will give away when it made 1.1 percent in 2010? Remember, the people who come up with these pay policies are those who benefit from them. This is obscene. This is CalPERS. This is California. I'm sure Maviglio will send out indignant Tweets about this sad state of affairs. Not.
Thirteen years ago, the California Legislature approved SB 400, the measure that paved the way for mass retroactive pension spiking not just for state employees but for local governments up and down the Golden State. It was approved based on disinformation provided by CalPERS that suggested there would be little long-term cost to taxpayers because the stock market boom would never end. Now the sponsors of two ballot measures that aim to clean up this debacle are being screwed over by tendentious, dishonest ballot descriptions put out by Attorney General Kamala Harris. It has never been more obvious that the California political establishment amounts to a union front. Democracy in the Golden State has just been waterboarded -- again. The title and summer Harris put out are full of red herrings and loaded language, as the California Pension Reform group details: While the Attorney General accurately describes parts of the initiatives, she provides other statements that are either provably false or grossly misleading: 1. “Reduces pension benefits for current and future public employees…” This is an absolutely false statement. The proposals do not change pension benefits for current employees. The proposals simply require current employees to pay more for future benefits and then only if the fund is at risk of not being able to pay the employees the benefits they are due. 2. “… including teachers, nurses, and peace officers, but excluding judges.” The AG selectively lists three positive poll-tested jobs out of thousands of government employee job classifications when both measures apply to all public employees, except constitutionally-protected judges. 3. “Prohibits public retirement systems from providing death or disability benefits to future employees.” The AG includes the words “prohibits” and “death or disability benefits” in the same sentence when our measures actually specifically provide for those benefits. To avoid any confusion about death and disability benefits, both initiatives say: “Sec 12 (d) All government agencies that provide pension or other retirement benefits for their government employees may also separately provide death and disability benefits for the benefit of their government employees, regardless of the date of hire. The cost of such death and disability benefits is not subject to the cost limitations established in this section.” What's so infuriating about this is that "direct democracy" is the only means that Californians have to do an end run around the unions, green cultists and trial lawyers who control Sacramento. While California may be a liberal-leaning state, when it comes to ballot measures, many of those liberal voters show common sense, and warm, for example, to the argument that a state with high taxes should be able to make ends meet. There are plenty of signs that many of these liberals were quite willing to believe that pensions are far too generous for public employees. But when the arguments are framed with the mendacity shown by Kamala Harris, direct democracy is taken hostage by the powers that occupy Sacramento. Remember, the primary argument made a half-century ago for generous pensions for public employees was that their pay was so poor they would never be able to save enough money for their retirement. Now apples-to-apples comparisons done by the federal government, USA Today and plenty of other analysts show that this disparity is either nonexistent or that public employees make more than private employees with similar jobs. Union advocates don't concede this is true. But they do see the need to offer additional arguments. So what did they come up with? The "brain drain" argument that without generous pensions, governments would hemorrhage workers to other employers. This is bunk. WIth the exception of law enforcement, there is no market demand for public employees, which is why federal labor stats show tiny turnover in the public sector. But the dishonesty and the mendacity doesn't end there. The debates over public employee pensions are rigged and manipulated in every possible way, starting with the basic numbers. As I wrote in the L.A. Daily News last summer ... As daunting as official estimates of unfunded liabilities may be, plenty of experts think the actual liabilities are far higher. A 2010 Stanford University study asserted that the three largest state pension funds could be underwater by more than $500 billion, but that unrealistically rosy projections of long-term earnings made the problem seem much smaller. And even the smaller problem that pension funds admit to is often deceptively minimized by a practice known as "smoothing," in which the funds put off sharp increases in the assessments they charge local government clients - done to promote the illusion all is well with pension finances. Liberal defenders of the California status quo like Timesman George Skelton often dismiss Republican or conservative or libertarian concerns by saying the public just doesn't agree with you, so shut up. But when it comes to pathetic power plays like this, that's just not true. The L.A. Times' own poll shows vast support for pension changes. But the political-media establishment in Sacramento doesn't care what the public wants, just what the public employee unions want. And so we see atrocities like Kamala Harris' assault on pension reform. This isn't democracy. This is California politics as usual -- "puke politics," in Bill Lockyer's phrase. Our nominal governor is Jerry Brown. Our real governor may as well be Steve Maviglio.
I've whined for years about how poor a job California media have done in reporting on UC tuition issues. Every increase is depicted as an assault on students from low-income families. That's bunk, at least if they sign up for an extremely generous program that is well-promoted on UC campuses, if not in the broader state media. Pretty much alone among state reporters in consistently mentioning this program is Nanette Asimov of the San Francisco Chronicle. Her article today once again points out realities that just about no one else in the California print media ever brings up. Alarmed that many qualified students from families earning incomes of between $80,000 and $140,000 can't afford to go to the public university, campus officials announced a unique price break Wednesday. UC Berkeley will become the first public campus in the nation to offer a discount to middle-class students who don't otherwise qualify for financial aid, they said. Beginning next fall, thousands of families in that income bracket will pay just 15 percent of their earnings rather than the full, in-state price of $32,634 that one year of school now costs. That amount includes tuition, room, board, books and other fees. For a family earning $100,000, the price would plunge to $15,000 under the program. Here's the catch: As with all financial aid programs, the campus will contribute all but $8,000 of the difference. Students will be expected to cough up that amount, perhaps by working at a campus job or obtaining a loan, "so they have some skin in the game," campus spokesman Dan Mogulof said. That would bring the parents' and student's combined contribution to $23,000. Even so, the deal shaves off 11 to 61 percent of a family's bill - depending on income - when the student's cost is figured in. Out-of-state families will get the same price break, but only on the in-state amount. They will still have to pay the additional $22,878 fee required of non-Californians. "We're trying to do the very best we can so that every qualified student will be able to attend UC Berkeley," Chancellor Robert Birgeneau said. "This program is necessary." The economic crisis has sent the University of California's price tag soaring, and middle-class students across all UC campuses have suffered more than low-income students in some ways because they don't qualify for financial aid. I know I do a lot of whining about the California media, but I don't think I'm off-base, especially on this issue. Whenever I mention the UC Blue & Gold program to people, they're shocked. They're so used to the media narrative of poor college kids being beaten up by regents and lawmakers. It's garbage.