An Extended Lockdown May Devastate California Cities
The COVID-19 pandemic is placing severe fiscal pressure on California cities. Federal aid is unlikely to offset the large losses city managers are anticipating. Before cities enter a state of service insolvency, or even Chapter 9 bankruptcy, California’s state and local governments should reconsider their approach to the coronavirus. The League of California Cities recently […]
California Needs to Reassess Stay-at-Home Orders to Prevent an Economic Tragedy
Before the public health and economic disasters wreaked by the COVID-19 pandemic ruins more lives, California policymakers need to carefully assess the costs of a long-term lockdown and make common sense adjustments. About one-sixth of California workers have filed for unemployment insurance since Gov. Gavin Newsom issued a statewide shelter-at-home order to prevent the spread […]
The High Costs of Affordable Housing
San Francisco has spent decades building, restoring and subsidizing affordable housing as a solution to homelessness, but this approach is surprisingly expensive. Before doubling down on affordable housing by voting for state propositions 1 and 2 as well as city measure C, San Franciscans should consider the hidden costs of this approach. San Francisco already […]
Pensions and Retiree Health Care Costs Contribute to LA Unified’s Fiscal Woes
Today, Reason Foundation released a study of Los Angeles Unified School District (LAUSD) finances. We find that the nation’s second-largest school district faces insolvency largely because its steep legacy costs are being spread across a shrinking student population. With state funding dependent on average daily attendance at LAUSD schools, the district’s revenue falls as students leave the […]
Los Angeles Unified School District Unfunded Retiree Health Benefit Liability Nears $15 Billion
Los Angeles Unified School District has $15 billion in unfunded retiree health care obligations, amounting to over $30,000 per student, according to a new actuarial report commissioned by the district and obtained by Reason. The cost of servicing this large “Other Post-Employment Benefit’ or OPEB liability significantly reduces funds available for instruction in the nation’s second-largest school district. […]
Cities Worry About Climate Change in Court, not so Much When Talking to Investors
Multiple cities and counties along the California Coast are suing big oil companies over their role in climate change. Because global warming is raising sea levels, the local governments contend that they will face staggering costs from flooding and/or from measures they will have to take to prevent flooding. To anyone worried about climate change, […]
Berkeley, Blockchain and Pensions
The City of Berkeley is working on a plan to issue a cryptocurrency municipal bond to fund affordable housing. A February 7th press release said the city was working with municipal finance startup Neighborly.com and Cal’s Berkeley Blockchain Initiative to “develop a first-of-its-kind tokenized municipal bond compliant with all regulatory requirements.” While this new innovation […]
Are Pension Trusts the Answer to California Local Government Pension Problems
Many California cities and counties are living interesting times, experiencing rising revenue together with skyrocketing pension bills. Although required pension contributions usually rise in response to bear markets, today they are escalating just as stock indexes reach new highs. The reason is that CalPERS and other systems are taking advantage of today’s relatively benign investment […]
Rapidly growing hyperloop industry offers alternative to California high-speed rail
Since Elon Musk introduced hyperloop in 2012, several startups have been formed to commercialize the technology. Hyperloop is a 21st century approach to intercity travel in which pods fly through sealed, low pressure tubes at speeds of up to 760mph. Although a large amount of hyperloop research is occurring in California, our state government is ignoring it while […]
Auditor Report a Reminder that UC Compensation is Out of Control
Last week’s report from State Auditor Elaine Howell reveals some disturbing budgeting and compensation practices at the University of California’s Office of the President (UCOP). But the problem isn’t just limited to UCOP; it is a systemwide phenomenon. We have previously reported that Robert Reich makes close to $300,000 annually to teach one class at […]