Author: Steven Greenhut

S.F. Establishment Hits Pension Reform

Crossposted CalWatchDog To outsiders, liberal San Francisco may seem preoccupied with leftist protesters occupying prime real estate in the Financial District or with debating proper restaurant etiquette

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Will unions now thank Wall Street?

Cross-posted at CalWatchdog.

Last week, I was a witness on a mock trial at Freedom Fest, in which public employee unions were in the dock over the detrimental effect of their pensions on the public treasury. It was a fun event, designed to debate and discuss the role of public employee unions in the current fiscal situation, but the union officials who questioned me and made their case kept coming back to the same argument.

Wall Street is evil. That’s what they say, basically. They deny that the routine six-figure pensions have anything to do with any fiscal problems suffered by cities and states. They deny that pensions are too high. They insist that public employees remain underpaid. They deny the obvious numbers about unfunded pension liabilities. The whole problem is in their view due to Wall Street greed, which sunk the economy and reduced the rates of return that kept sustaining the pensions their members receive.

Now, the unions are crowing over new reports that CalPERS and CalSTRS have recorded huge gains in the last fiscal year based on their stock-market investments. They now claim that there is no pension crisis and that we can go back to business as usual. But even the Bee report shows the following: “Yet the two systems, like many public pensions around the country, remain underfunded and are still feeling the effects of the market crash of 2008. Officials said it will be difficult to duplicate the latest investment results in the coming years, and both funds are likely to continue looking to taxpayers for higher contributions.”

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Attack on the Initiative Process

Originally published in the Orange County Register

California legislators – who seem unable to come up with an honest balanced budget, who always pursue tax increases and who won’t pass even modest reforms to the state’s unfunded pension system or to anything else, for that matter – want to blame the government’s problems on voters, rather than themselves.

Several bills, some of which are likely to pass, would gut the initiative and referendum process, or at least make that process far more burdensome. The ultimate goal: eliminating the main vehicle Californians have to reform a government that will not be reformed by elected officials, thus leaving us completely at the mercy of legislators and the liberal interest groups that control them.

In this June 10, 2010 file photo, Assemblyman Mike Gatto, D- Los Angeles, center, receives congratulations from Assemblyman Jerry Hill, D-San Mateo, left, after he was sworn-in to the state Assembly at the Capitol in Sacramento, Calif. Gatto was critical of Controller John Chiang’s decision to not pay members of the Legislature for not approving a balanced budget by the June 15 deadline.

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Proving the Redevelopment Rule

Cross-posted at City Journal.

Doug Tessitor is the mayor of Glendora, a city in Los Angeles County. He’s a self-described conservative and dead certain that preserving California’s redevelopment agencies (RDAs) is essential to his city’s fiscal health. In a pair of recent online columns, Tessitor mounted an impassioned defense of redevelopment in response to my City Journal article depicting the agencies as a “secret government” that runs up debt, abuses eminent domain, and doles out subsidies to favored developers. Tessitor’s response is worth rebutting, not because his arguments are exceptional but because they echo those of other California Republicans who defend redevelopment.

One of Democratic governor Jerry Brown’s few good ideas so far has been his proposal to shut down the RDAs as part of an effort to close a massive budget gap. Democrats in the state assembly tend to favor redevelopment, with its big-government, central-planning tools, but they backed Brown in order to shave about $1.7 billion from the budget. Republicans often complain about redevelopment’s abuses of property rights, but they blocked Brown’s plan, with only one Republican—longtime redevelopment foe Chris Norby of Fullerton—joining Democrats in April to support the measure, which fell one vote shy of passage. It might return for another vote. When I confronted several of the Republicans about their votes, I kept hearing the same rationale: they don’t like central planning, these Republicans say, but redevelopment works in their communities. (The abuses I described take place only in other cities, apparently.)

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