California’s Banks: Strong, Safe and Secure

President of the California Bankers Association

This summer there has been an endless flow of news stories across the state that may have given many Californians the mistaken impression that we are in the midst of a financial meltdown, centered on the faltering health of our banks. Headlines following an infrequent bank failure in California this summer asked readers, is your bank next? Is your money safe? While California’s economy is under-performing in part due to fall-out related to failures from the sub-prime mortgage lending situation, the banking industry in California remains strong, safe and secure. In fact, capital levels at California banks are at or near all-time highs, with double the amount of capital today as compared to the last significant economic downturn in the early 1990’s.

First and foremost, customers’ deposits at traditional banking institutions are protected by Federal Deposit Insurance Corporation (FDIC) insurance, up to $100,000 with additional protection for joint accounts and $250,000 on individual retirement accounts. The FDIC has more than $50 billion in assets available to protect depositors, and in the 75-year history of the FDIC, not one cent of customer money in an FDIC-insured bank account has been lost.

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The Coming Initiative Wars Over Budget Reform

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

Legislature leaders came together on a budget deal over the weekend, but reportedly few major reforms in the budget process will be part of the deal.

Get ready for the coming initiative wars over budget reform. I believe frustrated political interests as well as members of the legislature will ask the people to reform the way the system works on the 2010 ballot.

Even if a 2009 special election is called to put forth some constitutional changes created by the legislature and included in the budget deal, big changes on the budget front will probably find their way onto the 2010 ballot by initiative.

Senate President Pro Tem to be Darrell Steinberg has already said he will not go through this type of stalled budget mess again, indicating an initiative is on the horizon to lower the two-thirds vote to pass the budget. Whether there will be included in a budget reform measure, or in a separate measure, a proposal to lower the two-thirds vote requirement to raise taxes is also a possibility.

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Try California, Guys

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)

Call me a homer, but I think it’s rotten form for major California organizations to have retreats and conferences out of state. It’s particularly bad form if you’re say a union that has just launched a recall of the governor, or a group of Republican legislators holding out on approval of the budget.

The California Correctional Peace Officers Assn., whose leaders have filed a notice of recall against Gov. Schwarzenegger, are holding their convention later this month in Las Vegas. I’m sure they got a good rate and will have a good time. But it’s tone deaf for a high-profile union that is demanding a big pay raise to go to Nevada. Earth to the CCPOA boys: your pay doesn’t come out of thin air. It comes from state tax dollars. State tax dollars are generated from economic activity here in California. Thus, it’s borderline obnoxious to help the Nevada budget while seeking to take money from the California budget. If you want a raise and a new contract, why don’t you swing by Carson City and ask the Nevada legislature for one while you’re at it?

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Texas Takes Shine Off Golden State

Charles Crumpley
Editor and Publisher of the San Fernando Valley Business Journal

Got a cowboy hat? Me neither. But it sure looks like more business folks are putting one on and moving to Texas.

That state last week made a big deal about how its economy has taken off in recent years. And it contrasted itself with California.

Actually, it makes sense to compare the two states, since they are the biggest economically and are something of rivals. But the comparison isn’t pretty. While Texans apparently are spending time keeping up with their booming economy, we seem to be blowing time keeping up with the Kardashians.

The Texas study, done by the Texas Public Policy Foundation, compared the two states for the last 10 years. On average, it said, Texas’ real economy grew 4.3 percent a year since 1997; California’s grew 3.7 percent. But Texas has been picking up speed in recent years.

What’s more, real personal income growth was much higher in Texas. Ditto for job growth.

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George Putnam

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

George Putnam, the legendary pioneering newsman and radio talk show host who helped energize the electorate to pass property tax cutting Proposition 13, passed away in Chino on Friday at the age of 94. Putnam was a fixture on Los Angeles television and radio for 50 years in a career that spanned 70 years. He was still working at the mic on his syndicated “Talk Back” radio program up until a few months ago.

Putnam advocated for property tax reform for many years. He offered an open microphone to Prop 13 co-author Howard Jarvis on his program day after day. Putnam once said Jarvis appeared about 50 days in a row at one stretch. In turn, Jarvis credited Putnam, along with fellow talk radio hosts Ray Briem and Hilly Rose with getting the message out on Proposition 13.

The issue of property tax reform was one Putnam adopted well before any modern day property tax measure appeared on the ballot. In 1957 he helped conduct a rally at the Los Angeles Coliseum against high property taxes, although he once told me the organizers could have picked a better venue. Six thousand protestors looked lost in the cavernous arena. “If you’re going to impress people, for God’s sake, put it in a small area so that it overwhelms the room,” Putnam said.

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Poll: Things Looking Up for the GOP

Partner, Public Opinion Strategies

Public Opinion Strategies just completed our own national poll, surveying 800 likely voters between September 6-8, 2008. It has a margin of error of +/- 3.5%.

This piece was primarily written by my Partners Neil Newhouse and Glen Bolger in our Virginia office. I have made some additions to reflect some of my thinking and have included numbers reflective of the Pacific Region of the Country, which, by our definition, is Washington, Oregon and California.

We wanted to share our thoughts on the data and its implications for GOP candidates in the Fall.

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The MediCal Meltdown

Cydney Fox
Past President of the California Academy of Audiology

The MediCal system, which provides health care for the uninsured, is about to implode. I have been a medical provider for 30 plus years in California, and have seen the meltdown of the system first hand.

Of course, money is a big problem, but it is only one issue in a long list of difficulties: lack of reimbursement for services; non-timely payments to medical providers that extend over 2 years; administrative bureaucratic hassles; paperwork nightmares; medical management by non-medical people; and medical management by medical professionals who have never examined the patient. It is no wonder that so many medical and allied health professionals are stampeding out of the system.

Here’s just one example of the bureaucratic hassles. I moved to a different medical suite in the same complex and had to change my MediCal paperwork. That required filling out a form consisting of 32 pages and, even though I’m already in the system, I was denied four times over the course of a year-and-a-half because it was claimed that I didn’t fill in answers to the bureaucracy’s satisfaction. But my information was already in the system, except for the new address.

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New Homes are a Minnow in the Carbon Footprint Sea

Robert Rivinius
Executive Director, Family Business Association

Two important studies just released conclude that new homes already exceed the state’s ambitious 2020 greenhouse gas emission reductions requirements. The studies show that new homes are not part of the greenhouse gas problem, but rather are part of the solution.

The benchmark for the state’s landmark Global Warming Solutions Act (AB 32) is the home built in 1990, and homes built today are far more energy-efficient. If AB 32’s ambitious goals are to be met, the focus must be on retrofitting the existing housing stock.

The residential sector accounts for only 14 per cent of the state’s total emissions, far behind transportation (41 per cent) and industrial (25 per cent). In a state with nearly 13.3 million housing units, new housing is adding less than one percent to the total housing stock each year, and because the new homes are so energy-efficient, emissions from those new homes make up just one-tenth of one percent of the state’s total annual GHG emissions.

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NFL Football in LA next season?

Chandra Sharma
Political Communications, Redistricting and New Media Strategist

In June, I wrote about Los Angeles developer Ed Roski’s effort to lure an NFL team to Los Angeles, centered around a plan to build a state-of-the-art, 75,000 seat outdoor stadium in the City of Industry.

The promise of the NFL’s return to the Los Angeles market has been fleeting since the tandem departure of the Rams and Raiders in 1994 (coincidentally, due to the fact that neither team was able to secure a proper venue in the Los Angeles area at the time despite assurances to the contrary),

In 1999, Los Angeles even managed to fumble away the rights to an expansion team that had been promised to them by the NFL, due in no small part to that same inability to construct a suitable stadium – that expansion team was quickly lost to Houston, who jumped at the chance to steal away the would-be LA franchise and quickly built Reliant Stadium, one of the world’s finest sports venues, for the team that would become the Houston Texans.

In my earlier post, I wrote that “Several proposals for new football stadiums in the greater Los Angleles area have come and gone over the past twenty years, but none has appeared to be quite as refined or thought out as that put forth by Roski.”

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They have some ‘splainin to do

Loren Kaye
President of the California Foundation for Commerce and Education

The Education Establishment has announced their intent to sue the State Board of Education for adopting an 8th grade Algebra 1 requirement.

I say bring it on! It’s about time that the state’s school leaders – school board members and administrators – go on the record in sworn testimony as to why they cannot and should not teach algebra to 8th graders.

In 2007, California’s eighth graders ranked 44th in the nation in mathematics achievement. Internationally, eighth graders in the United States are outperformed in mathematics by their counterparts in Singapore, South Korea, Hong Kong, Taiwan and Japan, as well as Belgium, the Netherlands, Estonia and Hungary.

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