Looking to Trump the Cost of the Bullet Train

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

It is more than a coincidence that Gov. Brown invited President Trump to see where the high-speed rail is being built days after a new business report states the cost of the train has soared.

Prior to President Trump making his first presidential visit to California to inspect prototypes of the border wall near San Diego and attend a fundraiser in Beverly Hills, Gov. Brown sent Trump a letter inviting the president to the Central Valley to view areas were “a dozen bridges and viaducts are being built for the nation’s first and only High-Speed rail line.”

Brown is hoping to attach to the president’s expressed desire to improve the nation’s infrastructure. More importantly, he needs the money for a project that is financially spiraling out of control.

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The Meanings of the Latest California Job Numbers

Michael Bernick
Counsel, Duane Morris LLP (SF), whose newest book is the Autism Job Club (second edition, 2018, with R. Holden)

Last Wednesday brought the latest jobs numbers for California, through January of this year. We are now in the 94th month of employment expansion. This is the second longest employment expansion in California since World War II, behind only the 113 month expansion of the later 1960s.

What do the latest numbers mean? Is the employment picture really as good as it seems? What about part time jobs, persistent long term unemployment, or low labor force participation? And when will this employment expansion end?

For these questions and others regarding jobs, we turn to the Labor Market Information Division of the California Employment Development Department, especially its monthly Labor Market Review.

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Schaaf Deserves Our Thanks – and Emulation

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

Oakland Mayor Libby Schaaf, in warning her community about impending ICE raids, didn’t just do the right thing.

She set an example for the rest of California to follow.

Schaaf has spent a great deal of time looking at ICE raids, meeting with ICE, and understanding what’s going on. And she has come to the realization that too many Californians haven’t yet reached: ICE is not a federal law enforcement agency. ICE is a clear and present danger to public safety. The documentation of ICE’s essentially abusive nature is extensive.

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Irvine Study on Prop 47 Disproves Its Own Conclusion

Michele Hanisee
President of the Association of Los Angeles Deputy District Attorneys

A recent study by a University of Irvine professor and a doctoral student purports to examine whether Prop 47 was responsible for the rising crime rate in 2015, the year after its passage. The authors, in what they admitted was a “quasi-experimental” study, invented “a synthetic control group” to compare California’s crime rate to this “synthetic” California.   They concluded that Prop 47 was not responsible for the upticks in crime after its enactment. But a careful analysis of the actual study seems to contradict their conclusion.

The authors led with an initial concession – that there were upticks in crime across California the year after Prop 47 was enacted. No debate there. The study also notes that “California reduced its prison population by 13,000 through Prop 47.” Apparently, no conclusion could be drawn by the authors based on the uptick in crime and the reductions in incarcerations. Common sense would seem to indicate that it means that criminals are getting away with more crime.

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Federal Tax Reform Means More Business Taxes for California

Loren Kaye
President of the California Foundation for Commerce and Education

California’s corporate tax base may increase by up to 12 percent as a result of federal tax reform legislation, according to a study recently released by the State Tax Research Center. This means that revenues from California’s corporate income tax could increase by as much as $1.3 billion – without any action by state lawmakers to increase corporate tax rates or income definitions.

Larger tax revenues will result from the new tax reform law, which limited deductions and changed foreign-tax rules. The federal tax law imposed new restrictions on companies’ ability to deduct interest payments, exchange property without paying capital-gains taxes, deduct some fringe benefits and immediately write off future research costs. At the federal level, those changes were far outweighed by the rate cut.

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The Underrecognized, Undervalued, Underpaid, Unfunded Pension Liabilities

Ed Ring
Ed Ring is the vice president of research policy for the California Policy Center.

“It’s the economy, stupid.”
–  Campaign slogan, Clinton campaign, 1992

To paraphrase America’s 42nd president, when it comes to public sector pensions – their financial health and the policies that govern them – it’s the unfunded liability, stupid.

The misunderstood, obfuscated, unaccountable, underrecognized, undervalued, underpaid, unfunded pension liabilities.

According to CalPERS own data, California’s cities that are part of the CalPERS system will make “normal” contributions this year totaling $1.3 billion. Their “unfunded” contributions will be 41% greater, $1.8 billion. As for counties that participate in CalPERS, this year their “normal” contributions will total $586 million, and their “unfunded” contributions will be 36% greater at $607 million.

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Is California Becoming Another Taiwan?

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

No, California isn’t an island. But it shares a problem with Taiwan: the predicament of the halfway country.

Taiwan is an independent nation—in its ambitions, its economy, its democracy. But many of the world’s countries refuse to recognize it as a separate nation, deferring to mainland China, which claims Taiwan as a possession and responds with threats whenever Taiwan goes its own way.

California shares some aspects of this half-country conundrum. Our state has the ambitions, economic power, and sophisticated government of one of the world’s leading nations. But it remains very much a part of the United States, which responds with threats whenever California goes its own way.

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Red Meat Aside, Immigration Flap Poses Real Issue

Dan Walters
Columnist, CALmatters

That was quite a show that politicians staged in Sacramento last Wednesday.

U.S. Attorney General Jeff Sessions swooped into town to tell an audience of police officials that he was suing the state to overturn three laws aimed at helping millions of undocumented immigrants avoid deportation.

The centerpiece is Senate Bill 54, which puts some limits on law enforcement cooperation with federal immigration officials. The others impose new requirements on employers who face federal demands for employment records and bar local governments from contracting with the feds for housing undocumented immigrants.

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“Strategic Misrepresentation” to Get Voters’ Money

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The headlines keep coming—public projects cost more than anticipated. Promises made to voters are unfulfilled then taxpayers are asked for more to clean up the messes.

Just in the last week or so Californians have read about a housing bond to help the homeless that has not been spent. Another state bond that promised water storage and spending on other water issues seems to be going nowhere. Los Angeles’ Deferred Retirement Option Plan promised to keep veteran police officers and firefighters on the job a few years longer with no additional cost to the city but a Los Angeles Times investigation found that many officers who retire with their pensions and sign up for the program then take disability leave. Essentially, they are not working but take home about twice their previous salary.

Then there is the grand promise of the high-speed rail. Not for the first time, we learned last week that costs are projected to go up and the opening of the rail will be delayed.

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Infrastructure Plan a Mixed Bag

Stuart Waldman
President, Valley Industry & Commerce Association

California Congressional Republicans have gotten themselves into a bit of a pickle. They’ve invested huge amounts of time, money and political capital into an effort to repeal SB 1, the so-called ‘gas tax’ which will allow California to finally fix our roads. Our economy is dependent on our transportation infrastructure, and updating these taxes and fees for the first time in decades seems like a no-brainer.

Proponents of investing our local revenue into roads found an unexpected ally in President Donald Trump, who decried the nation’s crumbling infrastructure during the State of the Union. Recalling “America’s building heritage,” Trump called on Congress to pass an infrastructure bill that would generate $1.5 trillion to rebuild roads, bridges and highways.

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