Bake Sale Boogie Man

Sometimes government can’t help itself. We pay some of the highest taxes in the nation and receive some of the worst in government service. So it should come as no surprise when government works overtime to prevent you from helping yourself.

At Davis Senior High School in Davis, California, the students have been doing what students throughout our country have done to raise money. They hold fundraisers. Many of these fundraisers are in the form of bake sales, pizza sales etc…The proceeds go to sponsor the myriad of students clubs and activities on campus. But no more.

The Sacramento Bee reports that the school district has prohibited food sales that weren’t prepared by a commercial enterprise. Commercially prepared food also has to be paid for with a check. As one student points out, “Who pays for a slice of pizza with a check?” She’s right. How many students are running around with checkbooks?

NewsFlash: Field poll finds voters are kindly

The most notorious workplace benefits bill of the year, AB 2716, will be considered by a key Senate committee today, and on behalf of supporters, the Field Research Corporation has released a doozy of a poll. By a three-to-one margin, voters support a state law to guarantee that workers receive a minimum number of sick days from their employer. Also, three-quarters of voters “are concerned” about the millions of estimated workers without paid sick days. Moreover, the same 75% – 25% margin finds voters believe paid sick day laws will significantly increase the cost of doing business and the costs will be passed on to customers.

So voters are basically a sympathetic bunch, and when asked they acknowledge that new benefits aren’t free. But the poll doesn’t ask what would be the only useful question: given a choice between a compassionate benefit and certain job losses or pay cuts, which is a higher priority?

Schwarzenegger move not a pay cut, and Chiang’s computers add but don’t subtract

The state employees are marching. The editorial boards are wringing their collective hands. The Controller is standing firm. But guess what — Governor Schwarzenegger’s executive order on state spending issued last Thursday does not cut anybody’s pay.

Typical of the reporting is a story in yesterday’s Sacramento Bee which says, inaccurately, that the Governor instituted “a temporary pay cut.”

If anyone took the time to actually read the executive order, one would discover that it merely orders the Director of the Departments of Finance and Personnel Administration to
“work with the State Controller to develop and implement the necessary mechanisms, including but not limited to pay letters and computer programs, to comply with the California Supreme Court’s White v. Davis opinion to pay federal minimum wage to those nonexempt FLSA employees who did not work any overtime.”

Where Should The Money Go?

Last week service employees at UC Davis defied a court order and went on strike demanding wage increases, service workers are demanding guaranteed overtime pay, a guaranteed step system for salaries, and uniform statewide wages. Basically more money for the work they are doing and promises of more raises in the future on a fixed timetable (the “guaranteed step system”).

There were no allegations of dangerous workplace conditions, no argument about decreased workplace safety, just a demand for higher salaries. To quote Gail Price, the Union Treasurer, in the article, "They won’t give them across-the-board raises like they will the patient care unit. We’re not letting them get away with it anymore."

Why is Government So Expensive?

California and its local governments are facing tough choices this fiscal year—basically cut services to balance the budget or raise taxes dramatically to pay for it. But why?

It turns out that revenue declines are only a small part of the problem. The real answer lies in the fact that the cost of government rises each year without any change in services—it comes in the form of salary increases and benefit increases.

These amounts are largely negotiated in secret and buried in public employee agreements that rarely if ever see the light of day. Does this mean that public employees do not deserve raises? Absolutely not—they should and do receive annual increases.

Most public employees automatically receive a three to five percent “step” increase each year. The raises we hear discussed in the limited public releases about these negotiations are increases on top of these basic increases — the so–called COLA or cost of living adjustment.

For example, in Vallejo, a city which recently filed for bankruptcy protection, some unions were scheduled for 21 percent COLA increases over three years—on top of their regular step increases of 3-5 percent.

Here we go again…

Tuesday, July 1st, California will enter another fiscal year without having approved its budget for next year-again. It has gotten to the point that no one really expects it anymore, but we all moan and complain when it does not happen. The only years we come close are years when there is so much money, everyone’s thirst can be slaked from the fountain of money California’s powerful economy is capable of generating.

And little happens, at least for the first 30 to 90 days because the consequences are delayed by the timing of the billing and payment processes of the state accounting system. No big deal, right? But it IS A BIG DEAL! It shows just how dysfunctional our legislative processes have become.

For voters and workers in the state, it is almost insulting to say, “Go pay your mortgage, balance your checkbook and pay off your credit card bills on $45,000 a year, but don’t get mad at us for not being able to balance a $100 billion budget.” Californians are rightfully incensed.

The real problem at the heart of the budget process is not declining revenues, tax-and-spend liberals, greedy unions, obstructionist conservatives, or cheapskate taxpayers –it is the absence of leadership at the helm of the state. Between the governor and Democrat and Republican leaders, no one is willing to step forward, navigate a wise course and carry the message to the voters.

Vallejo’s Bankruptcy Shows Us What Is Wrong

Vallejo is a poster-child for what is wrong in California’s state and local government finance system.  The city of 117,000 in northern California had been flirting with bankruptcy this entire fiscal year, and was finally forced to declare itself bankrupt after months of failed contract negotiations with the city’s two largest employee unions-police and firefighters.

The city was facing a projected $16 million deficit next year on a budget of some $80 million and had already used up its reserves and almost all possible accounting gimmicks just to get to that point.  Even though the city undertook major service cuts last year and this year, there was still no room to accommodate the reduction in revenues that this year’s real estate collapse has brought on.  And it is not just the economy.  How can this be you might ask?