Passed in 1988, Prop 98 set a guaranteed percentage of the state’s general fund budget for K-12 and community college education. The measure also established a complicated formula to not only send money to the schools each year, but to make up for what the schools did not receive during particularly dismal budget years.

The makeup money would come to the schools through something called the restoration of the Maintenance Factor. As described by the Legislative Analyst in a primer on Prop 98, “the state has provided less growth in K-14 funding than the growth in the economy. This funding gap is called the maintenance factor. Proposition 98 contains a mechanism to accelerate Proposition 98 spending in future years. This is called restoration of maintenance factor.”

The Legislative Analyst points out in an analysis of the governor’s revised budget that the governor’s choice for calculating the maintenance factor payments ratchets up the minimum guarantee for schools and squeezes other areas of the budget.

The Analyst’s office in its report questions “the reasonableness of an approach that results in the rest of the budget under certain situations not benefiting at all from revenue growth.”

The Analyst proposes an alternative approach to the Maintenance Factor payments used in the past that would essentially split the revenue growth between the schools and other General Fund programs.

How will the legislature, with the majority on the hunt for more spending revenue, react to the governor’s Prop 98 Maintenance Factor restoration plan?

The legislature could opt for following the Legislative Analyst’s advice to change the repayment formula and thus free up money for other programs. But legislators likely would not want to deal with the touchy subject of reducing additional money the governor has earmarked for schools.

Then what? An argument that the school maintenance factor must follow the LAO recommendation to help other budget programs so then taxes should be raised to send additional money to schools? How about a discussion to consider amendments to the way Prop 98 operates squeezing the overall budget?

It would be an important debate. More likely with this legislature we would see the former approach on taxes rather than the latter discussion on amending Prop 98.

These are all possibilities for the Sacramento-San Joaquin River Delta, a water source for 25 million of California’s 38 million people. But if there’s to be a smart deal on the most contentious and complicated issue in California, the most important ingredient isn’t water. It’s sunscreen—the sunscreen that participants in any negotiations should apply to themselves as they head out to look at the affected places firsthand.

If you want tunnels, determine their location while you’re walking along the Sacramento River. If you intend to flood a Delta island to restore habitat, work out the details while meeting on that island. If you’re going to rebuild levees, make those plans while standing on them.

This may sound obvious, but in California it would be novel. The many legislative attempts over the past two generations to devise solutions to California’s water problems share two characteristics: 1) They took place mostly behind closed doors. 2) They failed. Current efforts to enact the Bay Delta Conservation Plan, which combines the proposal for tunnels with habitat restoration and literally hundreds of other ideas, could fall into the same pattern.

So let’s step outside.

Last year, I observed a series of dialogues among representatives of Delta stakeholders—farmers, fishermen, water agencies, environmentalists, and officials of local, state, and federal governments. (Full disclosure: I was hired by the Bay Area-based facilitators of the conversations to write an account of the gatherings.)

The dialogues were constructive, even among people who had spent years fighting with (and suing) one another. But in my observation, what was most useful was the location of the talks—out in the field. As they talked, the stakeholders examined levees in various states of repair, visited an island that would be flooded, and toured Delta farms.

Most surprising was, well, the surprise. All the participants had lived or worked in the Delta, in some cases for their entire lives. But even those who knew the Delta best had seen only parts of the massive estuary and kept remarking upon how the place was even more complex than they knew. At one site, state officials realized they hadn’t recognized how a proposed route for one piece of water infrastructure might separate a farm from its packing house.

One breakthrough came during an informal meeting between five stakeholders, including farmers and state officials, at Steamboat Slough in the North Delta, as everyone stood with a map spread out over the front of a pickup truck. The topic was, in the ears of most Californians, pretty obscure: “setback levees”—moving levees to widen the Delta waterways and help restore endangered fish habitats. But there on Steamboat Slough, this small group noticed that much of the best agricultural land is right near the levees, making setback levees very disruptive and expensive. They agreed it made more sense to focus habitat restoration efforts on the low-lying interiors of islands, where crops are less valuable and flooding is already common.

The lesson is that big deals on water will always be nearly impossible, so, if they are to have any chance of success, they must incorporate local knowledge. And, since big deals in California almost always require the ratification of the people, it’s not just dealmakers who should visit the Delta. We Southern Californians are particularly ignorant of where our water comes from. We ought to be informing ourselves.

It only takes an extra hour on your next drive from SoCal to the Bay Area. Campbell Ingram of the Delta Conservancy suggests the following route:

Take I-5 north through Stockton and then west into the Delta on Highway 12. Stop at the Discover the Delta farm stand at the corner of Highway 12 and Highway 160, then head south on 160 over the Antioch Bridge. From there, go west on Highway 4, which connects to I-80 north of Berkeley.

Of course, for those of you who would make water policy, more than a drive-through should be required. To borrow a line from that great water film Chinatown: if you can’t take the water to the negotiations, take the negotiations to the water.

Crossposted on Zocalo Public Square

We are all familiar with the angst associated with the annual budget.  But this year is a cake walk as General Fund revenues are projected to increase by $325 million, accompanied by unanticipated pension savings of over $50 million.

But the Mayor’s budget that was approved by the Budget and Finance Committee last week is hardly balanced as the City once again has failed to provide adequate funding for its two severely underfunded pension plans and our failing infrastructure.  It even assumes that the civilian work force will forego a 5.5% raise in January and contribute 10% to the cost of its very generous health care benefit.

But little attention has been paid to the City’s governmental balance sheet, its $7 billion of debt, and its stated net worth of almost $5 billion.

However, when the balance sheet and net worth are adjusted for undisclosed liabilities of almost $30 billion associated with the City’s two severely underfunded pension plans and its massive deferred maintenance budget, the City’s net worth for its governmental activities shrinks to a NEGATIVE $25 billion.

The City also has significant investment in its “business type activities” that have a stated net worth of almost $17 billion after accounting for almost $18 billion of debt. These revenue generating operations consist of the three proprietary departments (Department of Water and Power, the Port of Los Angeles, and Los Angeles World Airports), the Sewer Department, and the Convention Center, the debt laden albatross.

However, the value of the business type activities needs to be dinged by about $4 billion to account for the DWP’s unfunded pension liability (based on realistic investment rate assumptions), thereby reducing the value of these revenue generating assets to $13 billion.

Overall, while the stated net worth on the City’s books is in excess of $21 billion, it is actually a NEGATIVE $13 billion when adjusted for all the hidden liabilities that our Elected Elite and their financial wizards have conveniently hidden from public view as they try to hide the fact that they have squandered the legacy created over the last two centuries.

Unfortunately, the Mayor, the Budget and Finance Committee, the City Council, and the Controller have their heads in the sand, unwilling to address the City’s pressing financial issues and operating inefficiencies in a realistic manner, fearing the wrath of the campaign funding union leadership and praying that the City will not blow up on their watch.

The fear of insolvency is real.  The City has a negative net worth, has over $25 billion of debt not counting the undisclosed liabilities, a budget that is out of control, and timid leadership that is clueless.

Fortunately, we have Mickey Kantor’s recently formed LA 2020 Commission to investigate the City’s financial situation and to make recommendations on how to stabilize and hopefully improve the City’s perilous financial condition.

The grown-ups on the hopefully independent LA 2020 Commission are also charged with the task of how to create jobs, attract investment and industry, and grow the economy.  But that is an academic exercise if the City does not get its act together, balance its budget, fund its pensions, rationalize its work force, and fix its streets and the rest of its infrastructure.

After all, who wants an insolvent partner?

So Mickey, the budget ball is in your court.

Crossposted on City Watch LA

“California didn’t knowingly vote for centralized power,” said Sen. Lois Wolk, D-Davis, speaking about the passage of Proposition 13 in 1978, as she opened the committee hearing on the bills. Wolk, the committee chairwoman, echoed longtime critics of Prop. 13 that it reduced the ability of local governments to increase taxes, requiring the state government to step in and fund programs.

She said Prop. 13 has been around for more than 30 years, but it was time to change the law which has held property taxes in check since 1978. “Voters today ought to have a say,” she said.

Prop. 13 limited property taxes to 1 percent of the property’s assessed value, plus annual increases of up to 2 percent. When a property changes ownership, the new owner pays 1 percent of the newly assessed value.

Despite that, California by no means is a low-property tax state; it’s ranked 14th highest nationally, according to Jon Coupal, President of the Howard Jarvis Taxpayers Association.

Parcel taxes

Senate Constitutional Amendment 3 by Sen. Mark Leno, D-San Francisco, would lower the threshold for school district per-parcel property taxes from two-thirds to 55 percent. “SCA 3 provides parents, teachers and school districts with more local control and much needed flexibility in raising local education funding,” Leno said at the hearing. “The current two-thirds vote requirements for passage of local parcel tax allows a relatively small minority of voters to block a local education funding proposal that may have support of more than a majority of voters.”

All of the support for Leno’s bill came from other government agencies, associations, schools or public employee unions.

However, Leno did not address the influx of $7 billion in new tax revenue from Proposition 30, passed by voters in November, and sold as the fix-all to dwindling state education funds. Prop. 30 increased the income tax on individuals with income of $250,000 or more, and upped the sales tax on everybody in the state.

“We live in a state with the highest marginal tax rate, the highest sales tax, and we are not a low property tax state,” HJTA’s President Jon Coupal told the committee.

Coupal said SCA 3 is a direct assault on Prop. 13 because it makes it easier to increase property taxes above Prop. 13′s cap of 1 percent.

In a recent poll by the HJTA, more than 53 percent of voters oppose the parcel property tax vote change, and only 35 percent support it. Approximately 11 percent were undecided.

“Moreover, a majority of those against don’t just oppose the change — they oppose it strongly. The intensity of opposition to lowering the voting threshold was nearly double what it was for those in support,” the HJTA reported. “Forty percent of voters ‘definitely’ oppose the idea of lowering the vote requirement, while just 21 percent say they would definitely support the change.”

The HJTA also found that opposition to changing the voting threshold was broad-based: 68 percent of Republicans oppose it, along with nearly 53 percent of Decline-to-State voters, while 44 percent of Democrats also oppose it. Fifty percent of Democrat women also oppose the change.

“This poll mirrors what we’ve been hearing from our members who are Democrats, Republicans and Independents. They oppose any further money grab from politicians — whether from Sacramento or the local level — and they oppose it strongly,” said Coupal. “Prop. 13 was established to protect homeowners from outrageous property tax increases, and that includes parcel taxes, which local politicians now want to expand to pay for their local spending.”

“The tax-and-spend lobby has been emboldened by the passage of Prop. 30 and it’s clear that the $50 billion tax hike didn’t sate their thirst for more money,” said Coupal.

In the survey, the question was posed to voters: “Proposition 13 limits California property taxes to one percent of the taxable value of property. Parcel taxes are property taxes above the regular one percent tax and, under Proposition 13, these parcel taxes require a two-thirds vote of local voters to be passed into law. Do you support or oppose lowering the vote requirement for local parcel taxes from two-thirds to 55 percent?”

Taxes, taxes, taxes

In addition to Leno’s SCA 3, HJTA lists the following bills as major threats to property owners. As with SCA 3, the bills were passed by the Senate Governance and Finance Committee Wednesday:

* SCA 4, Sen. Carol Liu, D-La Canada, and SCA 8, Sen. Ellen Corbett, D-San Leandro: “Lowers the threshold for the imposition, extension or increase of local transportation special taxes from the Proposition 13-mandated two-thirds vote to 55%. Most transportation special tax increases consist of very regressive sales tax hikes. These add to the burden of California taxpayers who already pay the highest state sales tax in the nation.”

* SCA 7, Sen. Lois Wolk, D-Davis: “Lowers the threshold from two-thirds to 55% in order to approve a bond to fund public library facilities. Lowering the threshold for school facilities to 55% has already resulted in billions of dollars of additional property tax payments that otherwise would not have been approved by voters.”

* Senate Constitutional Amendment 9, Sen. Ellen Corbett, D—San Leandro: Lowers the threshold from two-thirds to 55% to increase special taxes to fund community and economic development projects.

* SCA 11, Sen. Loni Hancock, D-Berkeley: “Lowers the threshold to 55% to allow for voters representing ANY local government entity to approve a special tax for ANY purpose. This is far and away the broadest application, and thus the most egregious, of these constitutional amendments.

Crossposted on CalWatchDog

Judge Thomas Wills ruled Friday that Measure R violated the contract clause of the state constitution, reaffirming the view that pensions promised on the date of hire are a “vested right” that can’t be cut without providing a new benefit of equal value.

In a tough week for the measure‘s backers, the Pacific Grove city council voted 5-to-0 Wednesday to seek a court ruling on the legality of a follow-up measure to roll back police pensions, rather than put the plan on the ballot as the council did with Measure R.

“It’s a constant battle down here,” said Daniel Davis, who worked on both measures. He is a former two-term councilman of Pacific Grove, a city with 15,000 residents located between Monterey and Pebble Beach.

The only pension measure listed so far this year by Ballotpedia was approved by Los Angeles voters in March. Sworn police officers transferring from general services to the police department will be allowed to purchase pension-boosting service credits.

Pensions moved into the spotlight after a deep recession and stock market crash. As other programs were hit by painful budget cuts, pensions stood out — not only untouchable, but often with costs projected to grow at an alarming rate.

All eight local pension measures on the November 2010 ballot were approved, except one in San Francisco. A union-backed alternative to a second pension initiative by Public Defender Jeff Adachi helped Ed Lee win election as San Francisco mayor in 2011.

In Los Angeles voters approved a modest union-backed measure in March 2011. After briefly gathering signatures last fall, former Mayor Richard Riordan dropped an initiative to switch new Los Angeles hires to a 401(k)-style plan.

The wave may have peaked last June when voters in San Diego and San Jose approved widely watched measures. In different ways, both aim to do what some say is needed to get big savings quickly: cut pensions earned by current workers in the future.

The state Public Employment Relations Board (PERB) upheld labor complaints that the measures in San Diego, San Jose and Pacific Grove violated state labor law requiring bargaining.

The board filed an unsuccessful lawsuit to prevent a vote on the San Diego measure. An administrative law judge ruled in February that former Mayor Jerry Sanders should have bargained before putting an initiative on the ballot, triggering a court battle.

“PERB forgets that citizen initiatives are constitutional rights in California,” said the city attorney, Jan Goldsmith. The initiative was placed on the ballot by the signatures of 120,000 registered voters and received 66 percent of the vote.

Now all new hires, except police, are receiving 401(k)-style individual invest plans instead of pensions. The initiative requires the city to begin labor bargaining with the initial position of freezing pay used to calculate pensions through June 30, 2018.

The provision can be overridden by a vote of six of the eight city council members. If a union agrees to freeze pensionable pay, an individual might sue. If the city imposes a freeze after lengthy bargaining, a union might sue.

San Jose was hit in March by a PERB complaint of bargaining violations and providing inaccurate information to unions. A hearing on the issues before an administrative law judge is pending.

“What PERB thinks about what happened is irrelevant,” Mayor Chuck Reed told the San Jose Mercury News. “The voters have already spoken.”

Pending approval by the IRS is a cost-cutting provision in the initiative that would give current workers an option: earn a lower pension in the future or increase their contributions by up to 16 percent of pay or until half the unfunded liability is covered.

If this provision is overturned, the measure calls for equivalent city savings through a pay cut.

A half dozen labor lawsuits against the measure have been consolidated in superior court for a trial July 22 expected to last five days. A hearing is scheduled June 7 on a city motion that the lawsuits have no merit and should be dismissed.

Some of the pension issue in Pacific Grove and San Diego is based on the argument that they are among the 121 California cities operating under their own charters, not general state law used by the other 361 cities.

Davis criticized Pacific Grove officials for failing to defend Measure R on the grounds that “statutory vested pension rights were expressly prohibited by the city in its original charter up to and including” the approval of the first CalPERS contract in 1957.

The city attorney, David Laredo, argued in a 2009 memo that the distinction of being a charter city is unlikely to affect pension vested-rights case law based on contract clauses in the state and federal constitutions.

Much of the oral argument made last week by the attorney representing the city, Steve Berliner, was that several unions have agreed to the Measure R cap on city pension contributions to CalPERS of no more than 10 percent of pay.

He said the police union that filed the suit might agree to benefits, such as a pay bonus, that would offset employees paying the part of the employer contribution above the 10 percent cap.

Judge Wills said police have had no contract since 2010, and the city did not show the court a benefit offsetting the contribution cap. Unless given something of comparable value, he said, employees have a vested right to the pensions promised when hired.

In addition, the judge ruled, the measure is invalid because a decision about employee compensation is delegated to voters, violating a provision in the city charter giving the city council the power to set compensation.

The San Diego city council unanimously voted to sue the city pension system in 2010 to force compliance with a 1954 amendment to the city charter requiring the city and employees to contribute “substantially equal” amounts to the pension fund.

The San Diego City Employees Retirement System contends that the “substantially equal” provision applies to the “normal cost” of pensions earned during a year, not the $2.3 billion “unfunded liability” resulting from investment gains and losses.

Mayor Bob Filner last month urged the city attorney, Goldsmith, to drop the lawsuit. The mayor called the suit a “loser” that has cost the city pension system $3.2 million in legal fees, the U-T San Diego newspaper reported.

Goldsmith said the city position is supported by an outside legal expert and a 1983 state Supreme Court decision. After a judge granted a union request to move the trial to Los Angeles, the city got a reversal from an appeals court. A trial is scheduled July 9.

In Pacific Grove, the new initiative would roll back a police pension increase in 2002. The initiative says the city council was not told of a recently discovered CalPERS report showing the higher pensions would sharply increase city pension costs.

Like many other cities, Pacific Grove adopted a major trend-setting pension increase given the Highway Patrol in legislation sponsored by the California Public Employees Retirement System, SB 400 in 1999.

A 17-page CalPERS brochure told legislators SB 400 would not increase state costs. The lawmakers were not shown a CalPERS actuarial forecast that accurately predicted how much costs would soar if investment earnings faltered.

Actuaries estimated that if investment earnings during the next decade hit the target assumed by CalPERS at the time, 8.25 percent, state pension costs would be $679 million in 2010.

That’s well below the $1.2 billion state pension cost in 1997 before a booming stock market prompted CalPERS to give employers a contribution “holiday,” dropping the state payment in 2000 to $160 million.

What lawmakers weren’t shown, as SB 400 sailed through the Legislature with little opposition, was a CalPERS actuarial forecast that state costs would be $3.9 billion in 2010 if earnings averaged 4.4 percent during the decade.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune.

Crossposted on Calpensions

Unfortunately, “Believe in Something Bigger” is the slogan of the California lottery.

The ads are for Powerball, specifically. They include some very clever radio ads with “California Dreamin’” playing in the background, and a series of posters and billboards around the state that say, “Believe.”

Even the notion of big change and belief has been put in service to the fantasy that wealth will fall from the sky.

Of course, this is the thinking that drives not only the lottery but also the leaders and people of this state. We’ll be bailed out by that surge of revenues or economic boom around the corner. Or another Gold Rush.

Such belief is so durable that it’s crowded out thought, and planning for the future.

And we’ve wasted so much time that the gambling lobby is seizing perfectly good reform slogans.

These milestones became reality because of strong research and development programs and a collaborative work environment that brought together motivated and skilled people from diverse backgrounds. Wouldn’t it be great if all Angelenos got the government they deserved, one that is as creative and innovative when it came to developing and implementing policies that foster economic and income growth, and the creation of quality jobs?  

Angelenos do not lack for great ideas. Throughout the past few decades, members of Los Angeles’ government, civic, business, labor, nonprofit and academic communities have come together to develop a handful of reports that have laid out a series of specific recommendations that city hall should take to optimize its economic assets to help responsibly grow the economy, create quality jobs and produce a better quality of life for all.

A handful of these initiatives are currently underway. Mayor Villaraigosa’s 30/10 plan to accelerate the Los Angeles Metropolitan Transportation Authority’s building of 12 major public rail lines in 10 years, not 30, stands out as one of our region’s most innovative ideas. City hall’s recent advancement of plans to modernize LAX’s ground transportation system and north runway, and the building out of one of two much needed rail lines to the port of Los Angeles, are also critical. (Both were approved for advancement by the city council in the last two weeks.) Other notable proposals will strengthen the governance and operating structure at the Los Angeles Convention Center and the creation of a new citywide economic development structure.

With today’s lingering 11.3 percent unemployment rate city hall and our soon to be newly elected mayor and city councilmembers must keep this momentum going.

The Los Angeles Coalition for the Economy & Jobs has developed an “issues scorecard” to do just that. We believe the introduction of such a tool will better monitor our city’s current economic policy priorities, while further identifying additional recommendations that have been proposed throughout the years by the region’s business and civic leaders, the current mayoral and city council candidates, as well as recommendations from lost studies gathering dust on city hall bookshelves. The scorecard is available at www.thelacoalition.com. Please check back for future updates.

As you will see, the scorecard is a living document and it is our expectation that its contents will keep a spotlight on where our public officials stand and what they plan to do about these priorities. In addition, the scorecard should help engage more Angelenos in holding city hall more accountable to fostering a proactive government that contributes to a more vibrant economy.

After their swearing in on July 1, our city’s newly elected public officials will face many challenges and opportunities, but none will be greater than determining and fully enacting pro-jobs policies that will foster economic growth and a healthy tax base to support the city services Angelenos demand and deserve.

Whether you are building a rocket to Mars or an electric car, making a movie, or just work and live in Southern California, everyone has a role to play in contributing to the ultimate success of the region.

Let’s keep score and elect, monitor and push public leaders who will seize upon these recommendations and fully implement them to return our city to its rightful place as a metropolitan region known, not only for its natural beauty, but also for its ability to lead in the 21st century economy.

Proposition 65, passed by voters in 1986, was meant to protect citizens from exposure to harmful chemicals via a system of warning notices, and penalties for dangerous exposures and unauthorized releases.  Today, that list includes over 800 chemicals and the list grows each and every year.  Unfortunately, over time, the effort to limit exposure to dangerous chemicals has become a parody and burden with limited and even negative benefits to consumers.

As an example of the absurdity of the law, I had to train our factory workers about the dangers of sand.  I had a seven page long MSDS sheet on sand.  That is because sand can pose a inhalation risk if it is used in a sandblaster.  But, here is how Prop. 65, good intentions notwithstanding, went awry.  I had to label sand as dangerous and train our workers as to the hazards even though we were not using the sand in a sandblasting operation.  We were primarily using sand, in a non-hazardous way, to mix with cement in order to make concrete!

Moreover, the tests manufacturers must use to avoid being sued by private sector attorneys for Prop. 65 violations are ridiculous.  They subject rats to extreme exposure levels in laboratory settings using what is referred to as the maximum tolerated dose in order to determine toxicity levels.  What does this mean?  They expose the rat to a level of exposure just short of a lethal dose and on that basis, determine if the chemical presents any risks.  Then they extrapolate the data as if to suggest the same chemical exposure presents a toxic threat to humans.  However, the whole test is flawed because no human could possibly ever be exposed to the same levels of toxicity as the rat in the laboratory setting.  The tests typically project 70 years of continued, maximum exposure to full scale contact or ingestion with a chemical, whereas, in reality, no human can realistically expect to be exposed to anything more than a trace amount in the course of their lifetime.

The truth?  The dose makes the poison.  For example, one aspirin is good for heart health, two make a headache go away, but taking twenty aspirin is lethal.  Did you know that table salt is toxic?  So is toothpaste!  To learn the horrors of your daily brush with death, read the fine print warning on your tube about swallowing toothpaste!  Of course, even drinking water is toxic!  Virtually anything in excess can be toxic and that is exactly the point that Prop. 65 fails to recognize.

Here in California, we have now begun to ban beneficial chemicals that actually preserve public health because manufacturers are afraid to get sued over trace amounts of chemicals that present no harm whatsoever to consumers.

Governor Brown is right to say Proposition 65 needs to be amended.  Let’s hope he has more success in this endeavor than he did in reforming CEQA!

Andy Caldwell is a guest editorialist with the Santa Barbara News Press, the Executive Director of COLAB, and the host of the Andy Caldwell Radio Show.  This column first appeared in the Santa Barbara News Press.  For more information visit www.colabsbc.org.

In past years, the annual May Budget Revision  has reflected the need for spending adjustments, usually reductions.  The final budget normally reflects which programs will survive. Important decisions, to be sure, but the same type of rhetoric each year.

This year, Governor Brown made it much more than just a budget revision. He made it about the way California makes decisions. The concept of true governance reform permeated today’s Budget Revision, and Governor Brown was pushing it. The theme you heard is that Sacramento may not know best. More on that in a moment.

As California Forward’s Jim Mayer opined last week, “Lawmakers should treat the $4.6 billion as “one time” money, as opposed to a permanent growth in revenue. Why? Because that’s probably what it is.”

That’s what the Governor said, acknowledging the next 14 months are unknown, as witnessed by him proposing an essentially flat budget.  The economy is fragile and these revenues realized this spring probably won’t return. So the Governor is holding the line on spending.

The best way to increase state revenues, of course, is to create more middle class jobs. The Governor understands that as well as anyone. And given the complexity of California’s economy, which is really a series of regional economies, California Forward and the California Stewardship Network have been gathering local leaders and business people in 16 different regions around the state to discuss what needs to happen in order to increase jobs and improve the state’s ability to compete in a global economy. These findings will be shared at the California Economic Summit in Los Angeles  in November.

At many of those meetings has been the Governor’s own head of Business and Economic Development, Kish Rajan, who has been listening to these local leaders talk about the need for regulatory reform, better workforce preparation and infrastructure investment.

“Working with regional leaders, Kish Rajan and others who have the goal of creating more middle class jobs for California is the very heart of our work,” said Susan Lovenburg, who leads the Economic Summit for California Forward.

Now about this governance reform, the Governor is pressing for spending decisions to be made at the local level, by school districts when it comes to education and by counties when it comes to public safety realignment.

“In education, local accountability provisions are strengthened to ensure that district expenditures further the education of students from low-income families, English learners and foster youth,” said Fred Silva, senior fiscal policy advisor for California Forward.

And for public safety realignment and the implementation of AB 109, the Governor understood that counties probably weren’t given enough resources to ensure an efficient result in moving low-risk offenders to the counties.

“We’ve been working with counties on implementing AB 109,” said Mayer. “The extra funding acknowledges the importance of this work and can help bolster developing and sharing data that can make informed decisions about how to best make realignment work first for public safety and then in other major areas as well.”

Is this a real sea change in governance in California? It’s too early to tell. But the message from Governor Brown seemed clear today. More decision making at the local level is a good thing.

Hard to argue with that.

Crossposted on California Forward Reporting

Jonathan Horn, in a May 8^th  U-T San Diego article, www.utsandiego.com, says that the new airline has been trying for 3 years to get certification to begin service.  “The new holdup comes less than a month after the proposed airline and the FAA worked out what the federal agency had called major issues with its initial application to operate.”

A May 2^nd letter from Keith Ballenger, an assistant manager for the flight standards division, to owner Ted Vallas states: “At this time we regret to inform you that we are temporarily suspending the certification of California Pacific Airlines.  While the furlough of Federal Aviation Administration employees has been suspended, the FAA is still under sequestration.  This has directly impacted our ability to build our certification team.”

“Build our certification team”?  They don’t already have a certification team?  The letter goes on to say that the FAA would re-evaluate whether it has the resources to work on the application every 45 days.

John Selvaggio, hired in March as the airline’s CEO, said they are continuing to meet with the FAA to try to speed things up.  The airline’s first plane, a 72 seat regional jet, was leased in July, 2012 and sat at the airport for months at a cost of $200,000 per month.  The company recently subleased the plane to Honeywell in Phoenix to stop some of the bleeding.

California Pacific Airlines would, I believe, be the first regional airline to to serve North San Diego County from Palomar Airport and plans to fly to San Jose, Oakland, Sacramento, Las Vegas, Phoenix and, eventually, Cabo San Lucas, Mexico.  As such, it would provide a much needed alternative to the larger and more congested San Diego, Orange County and Los Angeles airports.

It may be a local issue but it is symptomatic of a larger national problem.  There is no organization in the world that can’t absorb a 2% budget cut without reducing critical mission services.  What did 92 year old Ted Vallas do to offend our increasingly tyrannical regime?  Did he donate to the wrong party?  I sincerely hope that everyone who reads this will contact their representatives in Washington and raise hell.