Author: Steven Greenhut

Cross-posted at CalWatchdog.

California has become such a basket case that outsiders are starting to parachute in and report on the tales of woe from our deficit-racked, economically stagnant and politically dysfunctional state. It makes for good reading for a broader audience, and the reporters can enjoy themselves at the beach or at the mountains while they wag their finger at us foolish Californians.

Unfortunately, these critiques usually end up regurgitating conventional liberal wisdom, which certainly was the case in a ballyhooed recent story in the Economist.

The British publication’s cover story on California, “Where it all went wrong,” pins the state’s woes on direct democracy and on one initiative in particular – 1978?s tax-limiting Proposition 13. While the lengthy feature included incisive details and offered a handful of interesting ideas, it was one of the most intellectually dishonest investigations I’ve read in a while.

How does one look at California and its woes without mentioning the power of the state’s public employee unions, which control the Legislature and have driven spending on their members’ pay and benefits to unsustainable levels? How do you not focus on Democratic dominance of virtually every level of government?

Cross-posted at City Journal.

In Sacramento, Governor Jerry Brown is planning to close California’s $26.6 billion structural deficit through spending cuts and tax extensions. Opposition has been spirited but less contentious than expected, probably because of the size of the budget hole. But one item of Brown’s plan—something that would save about $1.7 billion annually—has generated heated debates between local officials and the new administration. The governor has proposed eliminating California’s approximately 400 redevelopment agencies (RDAs).

In theory, RDAs spearhead blight removal. In fact, they divert billions of dollars from traditional services, such as schools, parks, and firefighting; use eminent domain to seize property for favored developers; and run up California’s debt to pay those developers to construct projects of dubious public value, such as stadiums and big-box stores. Most Californians have long been unaware that these agencies exist. As the activist group Municipal Officials for Redevelopment Reform puts it, RDAs constitute an “unknown government” that “consumes 12 percent of all property taxes statewide,” is “supported by a powerful Sacramento lobby,” and is “backed by an army of lawyers, consultants, bond brokers and land developers.”

Cross-posted at CalWatchdog.

California’s Democratic leaders would have you believe that our state’s budget has been cut to the bone. They contend that the state’s never-ending budget deficit—currently estimated at more than $28 billion over 18 months—is the inevitable result of an unusually bad economy, and that more revenue is needed to avoid devastating service cuts. This is a false choice—there remains fat to cut in California’s budget, if politicians are willing to overcome union objections to doing so.

Governor-elect Jerry Brown (D) held a budget briefing earlier this month and fiscal conservatives took heart that the new governor was dealing forthrightly with dismal budget realities.

However, there’s no mistaking that Brown and his Democratic colleagues featured at the briefing (Senate President Pro Tem Darrell Steinberg, Assembly Speaker John Perez, Controller John Chiang and Treasurer Bill Lockyer) view higher taxes as the prime solution to California’s problem. Perez, a former union organizer, said as much at the meeting. Steinberg, a close union ally, repeatedly voiced his concern about the effect of budget cuts on the state’s public employees.

The briefing was designed to show that California can no longer afford the sort of one-time budget-balancing gimmicks tried in the past. That much is true. There are no more revenues to shuffle around redevelopment agencies, no more federal revenues that will backfill gaping holes in the budget, no more opportunities to accelerate the collection of personal income and corporate taxes. In fact, Brown’s presentation noted that 75 percent to 85 percent of the predicted savings from short-term budget solutions over the last three years did not materialize.

Cross-posted at CalWatchdog.

A pension reform organization has released a draft initiative plan for the 2012 ballot that would require public employees to pay half their retirement benefit costs, mandate defined contribution plans for new employees, significantly limit public pension benefits and require public employers to fully fund all pension and retiree medical benefit plans by 2020. The initiative will impose stringent new rules on the governance structure of public pension plans.

Sponsored by Californian Pension Reform, the initiative would apply to all public agencies in the state of California. “The last time we tried to reform pensions, the unions convinced everyone that the benefit changes we sought could best be negotiated at the bargaining table,” explained CPR President Marcia Fritz, the head of a Citrus Heights accounting firm. “We’ve seen a little  movement in this direction, but mostly it’s been done to avoid public scrutiny. The unions have offered few changes that would begin to fix a half-trillion-dollar unfunded pension liability problem.  In fact, they’ve actively tried to stop even modest pension reform efforts at the local level. So it’s time to take this matter to the state’s voters.”

Cross posted CalWatchdog.com

Those of us who applauded the national backlash against the Obama administration’s big-government overreach have been straining to find good news in California, which defied the national trends by electing a slate of liberal Democrats and approving an initiative that makes it easier for the state’s Democrats to raise taxes and pass budgets without Republican help.

To make matters more depressing, a much-celebrated city initiative in San Francisco to rein in the crushing costs of pensions was handily defeated on Tuesday. The city’s progressive Democratic public defender, Jeff Adachi, sponsored Proposition B because public employee pensions were sapping the life out of other programs. I saw a grand opportunity to build a coalition between conservatives/libertarians and old-fashioned liberals who understand that lush and underfunded pensions threaten their values, too.

Cross posted www.calwatchdog.com.   

The media have been providing serious reporting about a "UC Berkeley" study https:> showing that public employees earn a total salary and benefit package that’s about the same as those in the private sector. This counter-intuitive study is being championed by government advocates as a rebuttal to the public upset over public pay and pension scandals in cities such as Bell and San Diego.

Cross posted at CalWatchdog.com

We got the heads up earlier that the governor had negotiated a
blockbuster pension deal with four public employee unions, but now we
see that this is no sort of deal. As the Bee reported, "Newly hired patrol officers and firefighters would come in under a
new pension formula that would allow them to retire at age 55 with 3
percent of the average of their highest three years of pay multiplied
by  their years of service up to 90 percent of that average wage.

Current  employees can retire at age 50. New and existing employees in
all  four groups would increase their pension contributions to the
California Public Employees’ Retirement System from the current 5
percent of their pay to 10 percent."

These are minor concessions that will have absolutely no effect on the
coming pension tsunami for retired public employees, many of whom are
members of the $100,000 Pension Club.