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FlashReport Weblog on California Politics

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Jon Fleischman

FlashReport Interview with Arnie Steinberg on the defeat of Prop 16

I’ve known Arnold Steinberg for more than twenty years, and he had been involved in political campaigns and causes long before we became acquainted, and developed our longtime friendship.

We decided to ask Arnold Steinberg, who was involved in early 1995 in the early stages of what became Proposition 209 and then became that campaign’s strategist and chief consultant. He reprised that dual role in creating and overseeing the campaign against Proposition 16. Steinberg, whose roots are deep within the conservative and libertarian movement, has been involved forRead More

Edward Ring

How Much Will YOUR City Pay CalPERS in a Down Economy?

When evaluating the financial challenges facing California’s state and local public employee pension funds, a compelling question to consider is just how much more will they demand from their clients in the next economic downturn?

It’s noteworthy that CalPERS still hasn’t issued their actuarial analyses for the period ending 6/30/2018, even though a year ago, the 6/30/2017 analyses were available. Could it be related to the fact that the DJIA index on 10/01/2018 was 26,447 and as of midday 10/01/2019 it sits at 26,599? Between 6/30/2018 and 6/30/2019, did CalPERS have a bad year? And what does that mean?

What is alarming in the case of CalPERS and other public sector pension funds is the relentless and steep rate increases they’re already demanding from their participating employers. Equally alarming is the legal and political power CalPERS wields to force payment of these rate increases even after municipal bankruptcies where other long-term debt obligations are diminished if not completely… Read More

Edward Ring

Local and State Initiatives – The Future of Policy in California?

Grassroots activists in California point to the initiative process as a potent and underutilized last resort, capable of ushering in sweeping reforms. They’re right, but the initiative process is equally available to California’s progressives, backed by powerful special interests. And while the activist reformers talk, the progressives act.

How else to explain the hundreds of local ballot initiatives that are marketed to voters in California’s cities and counties every time there’s an election, which in aggregate soak taxpayers for billions in new taxes every year? In November 2016, out of224 local tax proposals, voters approved over 70 percent, adding $2.9 billion in new taxes. In November 2018, out of259 local tax measures, voters approved another estimated $1.6 billion per year in new taxes.

The vast majority of these tax measures are sponsored by special interests who stand to gain from their passage. In fact, many if not most local tax… Read More

Edward Ring

The Real Reason Behind the Drive to Unionize Charter Schools

Want to know another reason California’s teachers unions are desperate to unionize charter schools? They want the leverage to force these schools to participate in CalSTRS, because CalSTRS charges all its participants the same pension contribution rates.

This is a truly amazing, grotesquely unfair, astonishing scam. It means that new schools have to pay for the every financial mistake that CalSTRS ever made, and they’ve made plenty. CalSTRS is only64 percent funded. CalSTRS is $107 billion in debt – that’s $238,000 peractive member. Better get more active members!

Even CalPERS, the largest public employee pension system in the U.S., and one that has engaged in its own share ofaccounting gimmicks, doesn’t make its financially responsible participants pay for the negligence of its financially irresponsible participants. Every… Read More

Edward Ring

City of Richmond Faces Pension Stress

Pick a city in California. Pick a county in California. Odds are, they could be the topic of this analysis instead of Richmond. But Richmond is the focus of arecent analysispublished inReasonentitled “Richmond, California’s Finances Remain Shaky,” and that work provides solid data from which to take a deeper look at what’s truly driving their financial challenges: compensation and pensions.

To summarize theReasonanalysis, their mostrecent financial statementsinclude the following excerpt from the auditor’s comments: “If deficit spending continues in the funds that continue to borrow from the General Fund and other funds, it reduces the likelihood that the City will be able to continue as a going concern.”

In plain English, what the auditor is saying is that the City of Richmond is spending more than they’re taking in, and they’re at risk of running out of cash. Reason’s senior policy analyst and the author of the report, Marc Joffe, writes: “Richmond’s… Read More

Edward Ring

Will Unions Promote Defined Contribution Plans the Way They Promote Pensions?

The virtue of a defined contribution plan is that once the employer has made their contribution, the employer’s obligation is fulfilled. The employee’s retirement benefit is based on a “defined” contribution – typically some fixed percentage of their base pay – that money is invested, and the retiree lives on the accumulated savings and interest. Often, with the same amount invested, these plans can offer participants a more lucrative retirement than a pension.

Given the potential of defined contribution plans to sometimes outperform pensions, why are public employee unions seemingly focused almost exclusively onthe alternative, the so-called “defined benefit” pension? Far more common in the public sector, these defined benefit plans offer the retiree a guaranteed “defined” amount in the form of fixed payments for as long as they live, usually adjusted upwards each year for inflation. What the employer has to contribute to the fund is undefined and fluctuates as needed to maintain those promised payments.

The problem, however, with defined benefits is they were sold as costing taxpayers very little,… Read More

Edward Ring

How “Release Time” Causes Taxpayers to Fund Government Unions

Based on an estimated total membership of 1.1 million and average dues per member of around $700, California’s public sector unions collect andspend approximately $800 millionper year. The impact of the June 2018 decision by the U.S. Supreme Court in the caseJanus vs AFSCMEmay havechopped around $50 millionoff that annual total, by eliminating the union’s ability to collect agency fees from non-members. Nonetheless, California’s public sector unions still collect a stupefying amount of money every year, and remain one of the most powerful special interests in the state.

The long-term impact of theJanusdecision has yet to be felt. Will California’s public sector unions slowly lose membership? Or will they retain or even grow their membership by being more accountable to their members, or, equally likely, by continuing to make quitting the union an exercise in bureaucratic futility so… Read More

Edward Ring

A Strategy to Transform California in One Election

As a statewide political force, California’s conservative voters are disenfranchised. Almost now politicians holding state office speak for conservatives, almost no court rulings favor conservatives, and nearly everywhere, conservative values are discredited or ignored by a hostile press. But California’s political landscape could be poised for dramatic shifts. Even now, after more than a decade of national economic expansion that has especially favored California’s high tech industries, the negative consequences of liberal political dominance are increasingly visible.

By now every voter in California knows that something is wrong. Failing schools. Out of control homelessness. Millions living in poverty. Bad roads. Water shortages. Ridiculously expensive electricity, gasoline, utilities, even food. Overpriced homes. Regressive taxes. Punitive regulations that specifically target small businesses. We’ve heard this litany again and again. It’s true. And there are solutions.

Today Californian voters might reject liberal governance if they were offered candidates offering a new political agenda designed to rescue California’s schools and lower the cost of… Read More

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