How to Restore Financial Sustainability to Public Pensions

The report from the League of California Cities includes a section entitled “What Cities Can Do Today.” This section merits a read between the lines: . . . 2 – “Consider local ballot measures to enhance revenues: Some cities have been successful in passing a measure to increase revenues. Others have been unsuccessful. Given that […]

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Too many kids are failing in California, and so is the education establishment

High school graduation rates have traditionally been a barometer of student success, as well as a measure of the quality of school systems. The members of California’s education establishment have been high-fiving each other over the state’s on-time high school graduation rate reaching 83.2 percent in 2016. But a peak behind the curtain reveals some […]

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California Government Pension Contributions Required to Double by 2024 – Best Case

The employer contribution to California’s state and local government pension systems will double, from $31 billion in 2018 to $59 billion by 2024. This estimate is based on aggregating official projections of cost increases issued by CalPERS to their participating agencies, and extrapolating those projections show the overall impact on all of California’s 87 government […]

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Get up to speed: 10 hot topics that will shape California campaigns in 2018

In fact, expect to hear more political chatter of all kinds as Californians gear up to select a governor, lieutenant governor, attorney general and other statewide constitutional officers; new Assembly members (all of them) and state senators (just half); members of Congress including a U.S. senator; and a yet-to-be-determined number of ballot propositions that may claim to remedy the housing crisis, fix healthcare policy and repeal the new gas tax, for starters. 

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California ports celebrate a merry Christmas

The logistics of Christmas morning are immensely complex and immensely important to California, which for decades has been the primary portal for the goods that Asia exports in huge quantities to America.

That’s especially true in Southern California, whose twin ports of Los Angeles and Long Beach have become vital economic powerhouses since the virtual collapse of the region’s aerospace industry in the 1990s.

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In California’s wildfires, a looming threat to climate goals

Beyond the devastation and personal tragedy of the fires that have ravaged California in recent months, another disaster looms: an alarming uptick in unhealthy air and the sudden release of the carbon dioxide that drives climate change. As millions of acres burn in a cycle of longer and more intense fire seasons, the extensive efforts of industry and regulators to protect the environment can be partly undone in one firestorm. 

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The ironic cause of our greenhouse gas decline

Julie Cart, the environmental writer for CALmatters who covered Brown’s European sojourn, delved into the report’s data and discovered that the major reason for last year’s drop in emissions wasn’t cap-and-trade, or any other state action. Rather, it occurred because unusually heavy winter rain and snow storms allowed utilities to depend less on generating electricity by burning fossil fuels and more on hydroelectric power from dams in California and other states.

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Could California be seeing onset of recession?

Last year was a very good one for the state’s economy. The 3.3 percent gain in economic output in 2016 was more than double that of the nation as a whole and one of the highest of any state.

However, California stumbled during the first half of 2017. California’s increase was an anemic six tenths of one percent in the first quarter compared to the same period of 2016, and 2.1 percent in the second quarter, well below the national rate and ranking 35th in the nation.

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California’s emissions dip—but climate policies get less credit than the weather

According to analyses from the air board and independent experts, last year’s emissions drops came about not because of technological breakthroughs or drastic pollution reductions from oil refineries or other industries, nor did the lauded cap-and-trade program make a signifiant difference. 

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Latest academic tests underscore California’s education crisis

The more important data point is that with essentially no gains in 2017, fewer than half of California’s children are meeting English standards and fewer than 38 percent in math.

That should be seen as a major crisis, but when one looks at the numbers for black and Latino kids, and those classified as poor or “English learners,” they even more shameful.

While three-quarters of Asian students and two-thirds of whites hit the competency mark in English, fewer than a third of black students and just over a third of Latinos did. For poor kids, it was 35.5 percent and for English learners, a minuscule 12.1 percent.

The scores on mathematics were even worse, just 37.6 percent overall, 19 percent for blacks and 25.2 percent for Latinos. The best spin state schools Supt. Tom Torlakson could muster was

The best spin state schools Supt. Tom Torlakson could muster was a weak “I’m pleased we retained our gains,” followed by a rationalization that “these tests are far more rigorous and realistic than the previous paper and pencil tests.”

The low achievement of disadvantaged children is obviously important for their individual futures, but what makes it critical to the state as a whole is that they are about 60 percent of the state’s K-12 students.

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California has big stake in Tesla’s new car, and it may get bigger

California’s politicians and civic leaders have portrayed Tesla as the crown jewel of the state’s efforts to build a new economy for the 21st century while dramatically reducing carbon emissions. Gov. Jerry Brown has set a goal of having 1.5 million battery- or hydrogen-powered “zero emission vehicles” or ZEVs on California roads by 2025, roughly five times their current numbers, with ZEVs being 15 percent of all new car sales by then. Toward that end, the state has been an indirect investor in Tesla through corporate tax breaks and direct subsidies to purchasers of its cars. Tesla has also benefited handsomely by selling credits to other automakers in lieu of their meeting state quotas for making and selling ZEVs. If Tesla doesn’t deliver on its ambitious production and sales goals for Model 3 and finally become profitable, it will not only be a huge setback for Musk and other stockholders, but for the politicians who are also betting on its success.

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Dan Walters: Bureaucratic bungling on Oroville Dam bodes ill for future projects

Slowly – but surely – we are learning that the near-catastrophic failure of Oroville Dam’s main spillway wasn’t truly caused by weather, even though the state claims that in seeking federal aid for repairs. Rather, it resulted from poor engineering and construction when the nation’s highest dam was rising more than a half-century ago as the centerpiece of the State Water Project, and poor maintenance since its completion. The latest evidence is a huge report by a team of engineering experts, headed by Robert Bea and Tony Johnson of the University of California’s Center for Catastrophic Risk Management. It concluded that the dam’s fundamental flaws were compounded by decades of neglect by the state Department of Water Resources (DWR) and the Division of Safety of Dams (DSOD). . . .But there’s an even more pertinent question raised by the Bea-Johnson study – whether the state is even capable of competently building and maintaining huge public works projects. One recalls the more recent example of the San Francisco-Oakland Bay Bridge, one third of which was replaced after the 1989 Loma Prieta earthquake revealed the section’s flaws. It not only took a quarter-century to design and build the futuristic replacement, but costs wound up four times their original estimate and after it was completed, it was revealed that there were major construction flaws that the Department of Transportation didn’t disclose but investigative journalism by The Sacramento Bee exposed. When asked about it, Brown infamously replied, “Shit happens.”

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Dan Walters: Will California politicians really address housing crisis or settle for tokenism?

Simple arithmetic reveals why permit streamlining is critical. The state says we need 180,000 new units of housing a year, but we’re building only 100,000 now. Closing that 80,000-unit gap would require more than $26 billion a year in additional investment at the average cost of $332,000 per unit for lower-end housing cited in Brown’s budget. Under even the best circumstances, therefore, the state could provide only a tiny fraction of the needed money, so making it easier for private and non-profit money to flow into actual construction is the most vital element of any package. The major pitfall is that faced with the difficult politics, Brown and legislators will settle for a token response – throwing a few billion dollars at the problem that won’t make even a small dent and failing to enact the regulatory reforms. That not only would ignore the most vital issue, but would allow politicians to claim a face-saving, undeserved victory, much as they did for a roadway improvement package that covers only a fraction of the unmet need.

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Dan Walters: California Legislature’s union-backed bills undermine collective bargaining

Meanwhile, the 1999 nurse staffing law has spawned annual efforts by other California unions to bypass collective bargaining and pursue working condition goals via political decree from a Legislature whose majority Democrats are closely aligned with labor. Two bills moving through the Legislature this year are examples of the syndrome, one affecting dialysis clinics that treat kidney failure patients by periodically filtering wastes from their blood, and the other affecting private ambulance companies. Union advocates contend, as the CNA did in 1999, that they would safeguard patients and, therefore, justify the bypassing of contract negotiations. However, both would also directly raise employers’ costs and indirectly tilt future labor negotiations by taking key financial items off the table. Not surprisingly, therefore, employers oppose them as gratuitous and unrealistically rigid and argue that they will eventually increase medical costs borne by patients and their insurers and/or restrict access to medical services.

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Dan Walters: State’s ‘balanced and progressive’ budget carries big risks for taxpayers

Borrowing to make the extra payment would not reduce the state’s overall debt, obviously. Brown contends that it would save money in the long run, because the interest paid on the loan would be less than the projected growth of pension debt.

It’s quite similar to the “pension obligation bonds” that local governments have floated, hoping to come out ahead via arbitrage, but they have sometimes backfired, and Brown is betting $6 billion that CalPERS can achieve its 7 percent annual earnings goal despite what the governor describes as “poor investment returns.” Even if this fiscal gimmick works as hoped, the state’s retirement debt will continue to grow.

The state’s regular payments to CalPERS fall way short of what would be needed to keep the debt from growing, much less pay it down. Overall, CalPERS has less than two-thirds of the money it needs to cover all pension commitments.

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