Nearly 100,000 private sector jobs were created in California last month, the best month-over-month jobs performance of the California economy in years. Most sectors showed strength, especially construction, information, business services and tourism. Only two sectors showed minor declines – state government and retail trade.

California’s unemployment rate, from a different survey and seasonally adjusted, fell from 12.4% to 12.2% in February. But this change should be viewed cautiously. Most of the drop in the unemployment rate was attributable to a drop in the labor force, and only to a lesser extent to an increase in employment. Growth in the labor force over the next several years, both from natural increase and from discouraged workers returning, will further dampen the decrease in overall unemployment rates.

However, regional differences still strongly characterize California. On a seasonally unadjusted basis coastal counties’ aggregate unemployment rate was 11.5% while inland counties’ rate was 15.7%. Coastal counties saw their aggregate rate drop by nearly a half percentage point last month, while inland counties’ aggregate unemployment rate fell by only two-tenths of a percentage point.

I wish government were smaller and more efficient. But I’m
not a spending limit kind of guy. I’m old-fashioned and prefer to be governed
by human beings. Spending limits are formulas, and I can’t call up a spending
limit, ask a spending limit a question, write a letter to a spending limit, or
give money to a spending limit’s opponents.

But
Republicans want a spending limit. No matter how much Gov. Jerry Brown and the
Democrats whine, Republicans have power in California’s governing system to
make demands at budget time. So if there’s a deal between GOP legislators and
the governor, there may be a spending limit in it. And if there’s not, some on
the right are readying a spending limit initiative for the ballot.

It’s a good thing I can type. It’s hard for me to talk, what with these broken teeth.

You see, I have to drive on L.A.’s roads. And if you drive a car in Los Angeles – or ride a bicycle or motorcycle – you also may have cracked teeth or a bitten, swollen tongue. That’s what happens when you hit a half-dozen potholes on the way to work.

Potholes? What am I saying? I mean, what am I typing? These are more like craters, trenches, cave openings. I’ll bet the streets of Benghazi are in better condition.

All the rainy weather we’ve had, combined with all the money the city of Los Angeles doesn’t have, means we’re left with the worst street conditions since, well, maybe since asphalt was pulled out of the La Brea Tar Pits and spread onto dirt roads.

This perspective on the California Budget, written by Debra Saunders, was published today in the San Francisco Chronicle.

In Sacramento, the knee-jerk response to any crisis is to blame the Republicans. But if Gov. Jerry Brown and Democratic legislative leaders can’t cut a deal to win the two GOP votes in the Assembly and two in the Senate needed to qualify Brown’s tax-increase extension for the June ballot, Democrats must take their share of responsibility for fudging a deal.

First, there’s the original sin: Brown’s decision to stake his budget package on a do-over ballot measure that voters rejected by a 2-1 margin in 2009. Brown knew when he plotted this strategy that it would be career suicide for Republicans to vote for the sort of tax increases that he himself dared not advocate when he ran for governor.

Now the Dems have to give the GOP something in return.

While Governor Brown
was acknowledging yesterday that pension reform is a
possible element of a budget solution, a bipartisan, independent state
commission released a report charting a bold path for
pension reforms that would create both short- and long-term budget savings.

The Little Hoover
Commission, of which I’m a member, unanimously adopted Public Pensions for
Retirement Security, calling for Legislative action to establish the legal
authority to allow state and local governments to freeze pension benefits for
current workers, and allowing those workers to accrue future benefits under
more sustainable pension plans.

After ten months of
public hearings and background research, Commissioners concluded that
California’s pension crisis cannot be solved without addressing the obligations
of current employees, many of whom have accrued generous benefits augmented
during the go-go years of the dot.com and real estate bubbles.

This piece was co-authored by Dr. Wallace Walrod, Vice President of Economic Development & Research, Orange County Business Council.

I serve on a local business advisory committee to the South
Coast Air Quality Management District-folks charged with clearing the air for
better health and visibility. 

They’ve done a good job over the last 40 years.  The air quality of Southern California has
gotten much better even with major population growth and economic
development. 

But there is always one more rule to impose, one more
particulate to regulate, one more greenhouse gas to consider-it’s government’s
job to do that-and one more business fails to grow or simply folds under the
weight and cost of compliance.  Not just air
quality but add the tens of thousands of regulations, fees and taxes coming out
of numerous local, state and federal agencies today.  And millions of folks out of work, a stagnant
economy in California, and a bottom-ranking on any objective list as the
nation’s "worst place to do business."

Recently, Steven Greenhut of Cal Watch Dog wrote in the Orange County Register on why Carl’s Jr.’s parent company, CKE, is likely going to move its headquarters from Carpenteria to Texas. It was a fascinating insight into what companies are seeing in the business climate of California and why they do not feel this state is business friendly. The article came from a speech CKE CEO Andrew Puzder gave to the California Chamber of Commerce recently.

In the speech Puzder stated that it costs CKE Restaurants $250,000 more to build a restaurant in California than one in Texas, and that once a restaurant is built in California, the labor laws are incredibly restrictive. For example, California’s rigid work rules classify managers as regular employees. They are mandated to work a maximum of eight hours a day and take breaks at specific times of their shift. So when a busload of tourists comes into a CKE restaurant, if the manager is on a break, he or she must sit there and do nothing, rather than do their job.

No sooner had word leaked out that the governor and Republican legislators were working on a five year spending cap as a compliment to the five year tax extension plan than Jon Coupal of the Howard Jarvis Taxpayers Association filed a proposed initiative with the Attorney General’s office for a hard spending limit. Spending is limited under the HJTA plan, but the term of the law is not.

The effectiveness of a five year spending limit is suspect. Projections are that the state will not have a lot of excess revenue over the next five years. The goal of a spending limit, beyond the obvious effort to control spending, is to reassure Wall Street and the bonding agencies that California is taking concrete steps to deal with it’s budget problems in the long term.

The HJTA approach does that.

When Hollywood produces a sequel, it is because the first film was a hit. This spring’s Budget Deficit IV, starring the City of Los Angeles, does not fall into that category. What started out as a PG rated show three years ago and gained little attention has turned into a horror movie that should scare every resident and taxpayer of Los Angeles.

Some of the actors in Budget Deficit IV would like to make us believe that while the plot is heavy with drama, calling it a horror movie is simply crying wolf. They assert that the villain in Budget Deficit I, II, III and IV is a character called the Great Recession and that if we are just patient, that villain will be swept away as the economy improves. Miguel Santana, L.A.’s City Administrative Officer, says that portrayal of the current budget deficit would be fiction.

Speaking to a group of L.A. Area Chamber members last Friday, Santana said the actual numbers for the past four years and the financial projections for the next four years tell a sobering story about a budget crisis that would have unfolded even without the Great Recession. Santana points to a long-term trend line of increased expenses for personnel, programs and retiree benefits that surely and steadily increased the City’s budget obligations every year and laid the foundation for a budget deficit even when the economy was growing robustly. The budget deficit tsunami is rushing in on Mayor Villaraigosa, members of the L.A. City Council and citizens of Los Angeles, and we can no longer avoid tough cost-cutting decisions.