12/23/2024

News

Commentary: Another reminder that there’s no free lunch

It’s doubtful whether more than a relative handful of Californians have heard of the Unemployment Insurance Fund. It is, however, one of state government’s largest activities – and a case study in political mismanagement. Currently, California employers pay about $6 billion in payroll taxes into the UIF each year. And currently, the state Employment Development Department annually pays almost that much to jobless workers. Superficially, that would appear to be a sustainable equation, but in reality, it’s not. During periods of high payrolls and low unemployment, such as this one, the UIF should be building reserves that could cope with an economic downturn, when claims for jobless benefits increase. That’s the way it used to work – until political expediency and recession undid it.

Read More

As gas taxes jump, motorists may wonder where they’re going

The package, which also includes some extra automotive fees, is expected to raise more than $5 billion a year for transportation projects, most of which are aimed at catching up on long-delayed maintenance work.

That’s one of the tricky aspects of the situation. To build public support, backers of the package hinted—but did not promise—that it would do something about the state’s worst-in-the-nation roadway congestion, but in fact it will do little, if anything, to relieve traffic jams.

Most of the proposed improvements won’t be obvious, like expanding a freeway would be, and motorists may wonder whether they are getting something tangible for the extra money they are paying.

Read More

Half-a-loaf ‘solutions’ consume energy, fall short

Money from a new tax on real estate transactions and a state bond issue will, by official estimates, result in 77,000 new housing units over five years when merged with funds from nonprofit groups, private investors and tax credits for low-income projects.

That’s less than 20 percent of the state’s projected need for additional housing over that period – and it could be years before any of the promised new housing is available. The regulatory fast-tracking in other bills could go further toward filling the need, but no one knows for certain.

Meanwhile, the new tax on real estate paperwork and new mandates to use “prevailing wages” in projects would actually make new housing development even more expensive.

The housing package continues a syndrome one might call “half-a-loafism.”

Read More

California legislators grant ‘great exceptions’ to laws others must obey

Brown has, instead, continued the recent practice of giving big projects with heavyweight support – especially major sports venues – full or partial exemptions from CEQA procedures. The current session, in fact, has still another proposed CEQA break for a proposed arena in Inglewood for the Los Angeles Clippers, which were recently purchased by Steve Ballmer, the billionaire former Microsoft CEO. Meanwhile, another bill would prohibit developers who run afoul of CEQA red tape from seeking project approvals via local ballot measures, as many have done. Tellingly, construction unions that use CEQA as a bludgeon are prime sponsors of the bill. It’s another indication that instead of fiddling with CEQA, and probably making it worse, Brown and the Legislature should overhaul it. If, as Brown says, it is truly “the Lord’s work,” then why aren’t they doing it?

Read More

Accountability depends on transparency, which is under siege

And then there’s the Public Records Act, California’s landmark law giving the public, mostly via news media, access to official documents, with some exceptions. Unfortunately, the list of PRA exceptions seems to be growing as legislators, who are not inclined toward openness in the first place, protect their fellow officials and/or do the bidding of powerful interests. The current session has had 79 bills involving the PRA. While most of the proposals amount to innocuous boilerplate, the Legislature is moving those that create more exceptions and blocking those that would expand access.

Read More

They come hat in hand for California’s ‘green’ money

It should come as no surprise that when the California Legislature recently began the process of divvying up proceeds from the state’s cap-and-trade auctions, a cavalcade of local officials, community activists and lobbyists rushed to Sacramento, with hands out.

Billions of dollars burning a hole in the state’s pocket has that effect on people, and the competition is fierce. Appeals from advocates to fund pet projects were spread over two days in late August, in windowless rooms before sometimes distracted officials. The requests are for cash for electric vehicles, to create green spaces, even for machines to cut pollution from cow manure.

Brevity is prized in this legislative equivalent of speed dating, which plays out in front of committees in the Senate and Assembly. There’s scant time to make the case for your cause. Talk too much, and you risk irritating the panelists. Nobody wants the stink eye from the people with the purse strings.

Read More

Could uptick in California crime make it a political issue again?

The state’s prison population has declined by more than one-fourth to comply with federal court orders, in part by diverting low-level felons into local jails via “realignment.”

Law enforcement officials and prosecutors generally opposed the new leniency, warning that putting fewer miscreants behind bars would inevitably increase crime. And the latest state crime report may point in that direction.

While property crimes such as burglary and car theft have continued to decline, down 1.9 percent between 2011 and 2016, violent crimes have spiked, up 7.4 percent during that period, with “aggravated assault” seeing the biggest jump.

Read More

Californians: Here’s why your housing costs are so high

Half the state’s households struggle to afford the roof over their heads. Homeownership—once a staple of the California dream—is at its lowest rate since World War II. Nearly 70 percent of poor Californians see the majority of their paychecks go immediately to escalating rents.

This month, state lawmakers are debating a long-delayed housing package. Here’s what you need to know about one of California’s most vexing issues.

Read More

Dan Walters: California’s big pension fund sees better return, but not out of the woods

It’s apparent that the 11.2 percent return, as welcome as it may be, did not result from any CalPERS investment acumen. As a recent Wall Street Journal article points out, it reflected what was happening across the spectrum of pension funds, thanks to a booming stock market, and, in fact, fell short of the 12.4 percent median return for such funds calculated by Wilshire Trust Universe Comparison Service.

It would take years of double-digit returns to narrow CalPERS’ pension debt, now more than a quarter-trillion dollars, and reach the 80 percent funded level deemed to be minimally sufficient.

The more likely scenario is that the gap between what it needs and what it has will continue to languish, and even grow, even though CalPERS continues to ramp up mandatory “contributions” from state and local governments – or more accurately their taxpayers. Those inflows have more than doubled in recent years, hitting cities especially hard because they devote so much of their budgets to highly paid police and fire staffs that have the most lavish, and therefore most expensive, pension promises.

Read More

Dan Walters: Why does California have the nation’s highest poverty level?

Direct efforts to relieve poverty via raising minimum wages, providing an earned income tax credit and expanding other public benefits certainly have marginal effects. But the latest reports indicate that in the long run, holding down costs for housing and other living costs, making education more available and effective, and encouraging private investment in more and better jobs are vital if California is to escape the ignominy of having the nation’s highest level of poverty.

Read More

California’s war over public schools moves to a new front

Under the law, passed late in the Barack Obama presidency but now enforced by Donald Trump’s regime, the state is supposed to tell Washington how it will spend $2.5 billion in federal funds to improve outcomes for poor kids who make up the majority of California’s six-plus million public school students. The plan being readied for adoption by the school board would give the feds minimal information, basically just filling in the blanks as required but offering little detail. State officials say they are wary of giving more specifics because they don’t know yet how Trump’s Department of Education will enforce the new law. . . . It would be difficult to overstate the importance of the underlying issue. Roughly 60 percent of California’s K-12 public school students are considered at risk, and it goes as high as 100 percent in some districts. Those 3.5-plus million kids are our future and if they are not adequately educated we all will pay the price in crime, social dislocation and economic stagnation. Brown and those he appoints seem unwilling to make sure that the extra money he championed is actually spent on those kids, and in a manner that does improve their academic outcomes. Therefore, it falls on the education reform and civil rights organizations to stand up for them.

Read More

Marin County gets another smug reprieve from housing quotas

A constant tenet of Marin County’s guiding ethos is resistance to growth, manifesting itself in a kind of environmental apartheid. Under the guise of preserving a serene environment, Marin County’s residents and politicians use every means possible to avoid building new housing that would allow more population growth, particularly low- or moderate-income dwellings. They’ve been remarkably successful. Between 1969 and 2015, while California’s population was doubling, Marin County’s grew by just 28.4 percent. . . . When California’s housing shortfall became acute and the state government started getting serious about the housing quotas it had been assigning to communities, Marin County’s assemblyman, Democrat Marc Levine, carried a 2014 bill to exempt it from quotas until 2023, arguing that Marin needed more time to get it right. However, without waiting for a scheduled report on the county’s progress on meeting its housing quotas, Levine persuaded legislative leaders last month to insert into a budget “trailer bill” (Senate Bill 106) a brief passage that extends Marin County’s exemption from quotas for an additional five years, until 2028.

Read More

California workers’ compensation system plagued by high costs and fraud

Under “workers’ compensation,” enacted in 1914, workers would give up their right to sue employers for injuries and in return, employers would be obligated to pay for medical care and provide cash benefits while disabled employees recuperated. Today, work comp, as it’s dubbed, is a huge program – well over $20 billion a year – whose operating rules are a source of perennial political jousting. . . . However, it still left California employers with – by far – the nation’s highest work comp burden. The 2016 annual survey of costs by the Oregon Department of Consumer and Business Services kept California in the No. 1 spot with an average cost of 3.24 percent of payroll for work comp insurance, 76 percent above the national average. Obviously, working in California is not inherently more dangerous than in other states, and cash benefits to disabled California workers are not out of line, so the enormous cost differential must be rooted in the system itself, which explains why its rules are the subject of constant political infighting. One factor in those costs is what officials say is an enormous amount of fraud, concentrated in Southern California. Last year, the Center for Investigative Reporting reviewed work comp fraud cases that had been prosecuted and reported that they totaled more than $1 billion. But authorities believe that prosecutions merely are the tip of the iceberg.

Read More

Why some experts say a court just created a new pathway to “tax” Californians

Those words—contained within a decision affirming the constitutionality of California’s policy of charging polluters—are causing a stir among some state budget experts, who wonder if the ruling could be used to could pry loose constitutional constraints that have long restricted lawmakers’ ability to increase taxes.

Read More

Jerry Brown on subsidiarity, meritocracy and fads in education

Having witnessed teaching “fads” since the 1950s and running charter schools as Oakland mayor, Gov. Jerry Brown doesn’t expect his own key education policy — called the Local Control Funding Formula — to close the academic performance gap between African Americans and Latinos and other student groups.

Read More