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FlashReport Weblog on California Politics

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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

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 Can California Reduce the Costs of Incarceration?

California Governor Gavin Newsom has agreed to give state prison correctional officers a 3 percent raise. According to the Legislative Analyst’s Office, there is “no evident justification” for this raise.

Arecent articlein theSacramento Beesummarizes portions of the LAO report, writing “The last time the state compared state correctional officers’ salaries to their local government counterparts, in 2013, state correctional officers made 40 percent more than officers in county-run jails, according to the LAO analysis,” and, “Since 2013, salary increases for state correctional officers have increased by a compounded 24 percent, according to the LAO.”

Within theLAO report, it is made clear that the rising cost for pensions is a major factor in escalating compensation costs for California’s prison guards. In theory, the cost to provide pension benefits is reasonable. The so-called “normal cost” of a… Read More

Edward Ring

A Modest Proposal for California from a Public Servant

When I see someone attacking the benefits the Fire Department receives or the Police Department receives, my concern is: Why wouldn’t you expect the same for yourself? We should act as a beacon.” – Mike Mohun, president of the San Ramon Firefighters Union, quoted in theNew York Times, March 2, 2017

There are many compelling reasons to examine this statement by Mr. Mohun, since pension benefits for state and local government workers are consuming ever increasing percentages of tax revenue. For starters, using the term “attack” is unfair. More accurate might be “counter-attack,” since the costs for these pensions are what has become extreme, not our reaction. If these pensions were financially sustainable, California’s citizens would not beunder attack by continuously escalating taxes, and continuously diminishing public services.

But why shouldn’t we expect the same for… Read More

Edward Ring

Average “Full Career” CalPERS Retirement Package Worth $70,000 Per Year

“‘What makes the ‘$100,000 Club’ some magic number denoting abuse other than the claims of anti-pension zealots?’ said Dave Low, chairman of Californians for Retirement Security, a coalition of 1.6 million public workers and retirees.”

This quote from a government union spokesperson, and others, were dutifully collected as part of Orange County Register reporter Teri Sforza’s eminently balanced reporting on the latest pension data, in her August 8th article entitled “The ‘100K Club’ – public retirees with pensions over $100,000 – are a growing group.”

In the article, Sforza’s team evaluated data released byTransparent Californiaon 2015 CalPERS pensions, and reported the number of pensioners receiving $100,000 or more per year was 3.5% of total retirees, up from 2.9% in 2013. That truly does seem like a low percentage, but it ignores two key factors, (1) the total retiree pool includes people who only worked a few years and barely vested a pension, and (2) the total retiree pool includes people… Read More

Katy Grimes

Gov. Brown’s May budget revision balances only by ignoring unfunded liabilities

SACRAMENTO — Balancing the economic realities of the state budget with political influences surely is a challenging task. Unfortunately, in California it is a task which few administrations have managed in recent state history.

Democratic Gov. Jerry Brown announced Tuesday morning that despite a state budget surplus, his May budget revision included projected lower budget figures for fiscal year 2013-14, which begins on July 1, than for the previous fiscal year. The reasons are one-time revenue surges because of federal tax changes that last only one year; and the retroactive part of the Proposition 30 tax increase for 2012.

The result will be less program spending, but with most of the spending increases focused on schools and Medi-Cal.

“We have climbed out of a hole with a Proposition 30 tax,” Brown said, referring to his 2012 initiative which increased taxes on those with incomes exceeding $250,000; and increased sales taxes on everyone. “This is not the time to break out the Champagne,” said Brown, who still called for caution despite an uptick in the state’s revenues.

“I am pleased that for the first time since I was elected to the… Read More

Katy Grimes

Neighborhood Legislature could restore accountability

Big spending on California politics has become one of the state’s largest industries. But the return on investment is lousy.

California’s political system has become so heavily manipulated by labor unions and other big money interests that the system is broken. Legislators have become professional fundraisers instead of managing public policy. And the individual voter no longer has much voice or influence.

It may sound farfetched, but the only way to fix this system is to expand it. California needs more lawmakers.

For democracy to work, it must be representative democracy. It must be a government of, by and for the people.

The Neighborhood Legislature

Last year Assemblywoman Shannon Grove, R-Bakersfield, pushed an initiative for a part-time Legislature. She succeeded in bringing much needed attention to the broken system. And… Read More

Katy Grimes

Prevailing wage scams steal from taxpayers

In what strange world do janitors get paid $45 per hour? In California, the land of the prevailing wage.

The dirty secret is that janitors often are not really getting paid $45 per hour, but the taxpayers are being charged this amount on public works projects.

Designed to help the worker, the prevailing wage was created to set a minimum hourly rate paid on all public works projects, primarily for construction workers. But the classification has been expanded and greatly abused.

One contractor’s saga

I recently met with a Southern California contractor who has owned a final construction cleanup business for more than 25 years. Final cleanup on government construction projects is always the last task in the project, and usually takes place within days of the occupants moving in, depending on the size and scope of the cleanup. The contractor said that the work he and his crews do includes cleaning the construction dust off of walls, washing and polishing floors, cleaning windows and mirrors, power-washing all surfaces, wiping down fixtures and hosing down the roof and parking lots.

He is hired as a subcontractor by large… Read More

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