Pension Costs are Crowding Out Salaries

Stephen Eide
Senior Fellow at the Manhattan Institute and author of the recent report “California Crowd-Out: How Rising Retirement Benefit Costs Threaten Municipal Services.”

In my recent report “California Crowd-Out: How Rising Retirement Benefit Costs Threaten Municipal Services,” I document how rising public pension costs continue to deprive vital public services of funding. There’s only so much room in state and local budgets. When pension costs rise at a rate above revenues, taxpayers can expect less in terms of basic infrastructure maintenance, public safety, education, and quality-of-life services such as parks and libraries.

But it’s not only taxpayers who are getting a raw deal here. The status quo on pensions is not great for public workers, either.

California local government employees’ salaries grew 4.6 percentage points slower than private sector workers’ salaries over the past fifteen years. Same labor market, different takehome pay experiences.

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Improving the Movement of Freight. Why Should We Care? Part II

Billie Greer
President, Southern California Leadership Council

My commentary, posted nearly a year ago, spoke to the critical need to fund the repair and upgrade of the system that moves goods through California and the nation, given that international trade is one of the most important drivers of the state’s economy and that competitors, both in the U.S. and abroad, are flexing their muscles. If shippers cannot get their goods to the marketplace quickly and efficiently, they’ll pursue other options at California’s expense. Today’s column looks at some pending remedies to the challenge.

It’s not a pretty sight. The American Society of Civil Engineers have given America’s national bridges and rail system a grade of C+, our ports – a C, our roads – a D. Overall grade for the entire infrastructure system – a miserable D+.

So what to do?

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Uber Technology Makes Me Feel Safe

Brisemae Long
Uber Driver Partner

It is no secret that transportation methods are changing for many Californians. No longer are people choosing outdated ways and means to get around town, but instead, they are now relying on the ease, availability and safety of ridesharing apps like Uber. The popularity of ridesharing apps is growing – not only for riders, but more and more people are choosing to become driver partners as well. In fact, in the Bay Area alone, more than 20,000 people now drive for Uber.

Take me for example. As a driver partner with Uber for nearly a year, it has been a great experience, a wonderful way to supplement my income and allowed for me to be a stay-at-home mom. Before becoming a driver partner, I worked in accounts payable. Once my daughter was born, I realized that I wanted to spend more time with her so I decided to leave my job. However, funds quickly became scarce, and I realized that I needed to help support my family. So, my dad suggested becoming a driver partner with Uber because of the flexible schedule, and I’ve been driving ever since.

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Can the GOP learn from California?

Fox and Hounds Daily Editors

In his Washington Post column, E. J. Dionne Jr. comments on the California GOP and suggests what happened here politically can happen across America. He also interviews state GOP chairman Jim Brulte about his attempt to turn things around for California Republicans. The full column is here.

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CA Fwd Report Highlights Revenue Options For Investments In Education And Infrastructure

Justin Ewers
Deputy Director of Policy and Communications for the California Economic Summit

As the recovery lifts California out of a decade of financial crises, the state’s inherent economic strengths and lingering fiscal weaknesses are being revealed. Jobs are coming back, bringing a new wave of tax revenues with them. But in twenty counties—mostly inland—double-digit unemployment and a scarcity of skilled workers still cloud the horizon.

State leaders, meanwhile, are being confronted with tough questions about how to avoid the fiscal pitfalls of the past—and what it will take to build a sturdier foundation for lasting prosperity.

A report released today by California Forward for consideration by the California Economic Summit takes aim at these challenges, highlighting a set of investments in human capital and infrastructure that will be essential to growing economic opportunity across the state—and identifying a range of options for funding them. The report, Where California needs to invest—and how to pay for it, is the second installment in CA Fwd’s Financing the Future series, an effort to broaden the public conversation about the stability, adequacy, and equity of the state’s revenue system. (The first chapter is available here.)

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Prevailing Wage: Good for the Middle Class, and the Bottom Line

Samantha Draper
Researcher with Smart Cities Prevail, a non-profit organization dedicated to providing complete and accurate information on prevailing wage

On public construction, some have questioned whether or not prevailing wage is good policy, but a new study just published by Smart Cities Prevail shows that California’s economy gains as many as 17,500 jobs from the state policy.

The debate has taken many forms ranging from the passage of a law known as SB 7 that was designed to encourage more charter cities to pay prevailing wage on public works projects, to various efforts – usually backed by out of town lobbyists – to convince cities to charter in order to eliminate prevailing wage locally.

SB 7 was recently upheld by a California court and more charter cities across the state are now choosing prevailing wage and local residents are enjoying the benefits.  On this past Election Day three cities from the central coast to San Diego County rejected charters by resounding margins that would have eliminated prevailing wage, and the middle class jobs that are proven to come with it.

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The Shell Game: You Lose!

George Runner
Member of the California State Board of Equalization, District 1

Democrats in the California Legislature seem to be facing the reality that the fire tax they passed with the Governor’s help in 2011 is unfair. Californians who live in rural areas rely on a range of public services from multiple levels of government to combat fires. These residents already pay taxes to fund essential fire services.

The original fire fee was a scheme Governor Brown came up with after diverting about $90 million a year in fire prevention funds to help “balance” the state budget. Residents have gained nothing since this shell game passed. Not a dime of fire fee revenues can be used for actual fire suppression — trucks, planes or hoses. The funds can only be used for “prevention” efforts, which seem to be few and far between.

However, instead of simply repealing this onerous fire prevention fee, Democrats now want to replace a really bad policy with an even worse one.

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Don’t Rush to Make New Law

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

Politicians often overreact to news items, rushing to propose laws to prevent future occurrences of a situation or grab the limelight when problems will go away on their own. Recent instances: A proposal for a constitutional amendment to prohibit banning of the United States flag from state colleges and university property; and offering changes to the initiative process because of the filing of an anti-gay initiative.

In early March, the UC Irvine Legislative Student Council voted to take down all flags, including the American flag in the student lounge, claiming the banners could be compared to hate speech.

Soon after, the Executive Cabinet of the Associated Students reversed the council’s decision, but not before state Sen. Janet Nguyen, R-Garden Grove, called a press conference to announce a proposed constitutional amendment to prohibit state-funded colleges and universities from banning the flag of the United States of America on school property.

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Waiting for the Legislature

Chris Bertelli
Public Affairs and Communications Consultant in Sacramento

The issue of teacher tenure and performance was reprised this week thanks to a new poll by the LA Times and the University of Southern California. The education-focussed poll revealed that seven in ten voters believe the current system of tenure needs changing and more than eight in ten think decisions on teacher retention should involve aspects of teacher performance, not just seniority as the current system dictates.

Astute capitol-watcher John Myers at KQED reported on this poll in light of last summer’s Vergara ruling on teacher tenure and dismissal statutes, where a judge struck down wide swaths of California’s teacher tenure and dismissal rules. Myers noted it was “fascinating” that in light of Vergara and the recent overwhelming public support for reforming the teaching profession, nothing was happening in the legislature in response. Unfortunately for those with a stake in seeing these laws fixed, the legislature’s inaction is less fascinating than it is typical.

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A Woman Running for President

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

Not that woman! Judith Rhodes, Governor of California.

OK, here’s the disclaimer – this is a shameless self-promotion for my new novel, The Mark on Eve.

A spell cast by an 18th century witch has condemned Eve Hale to an endless life. Centuries later, her secret could unravel and doom the election of the first female president when Eve dives in front of an assassin’s bullet to save the candidate’s life.

The respected Kirkus Reviews wrote of The Mark on Eve:

“…wholly satisfying ending. An intriguing novel…”

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