“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

Deep State: A body of people, typically influential members of government agencies or the military, believed to be involved in the secret manipulation or control of government policy. – Oxford English Dictionary

The term “Deep State” has been around for at least a decade, but it has emerged into common parlancein reference tothe alleged opposition by elements of the U.S. intelligence community to the presidency of Donald Trump. An insightful analyst who has written extensively about the deep state on his blog “Of Two Minds,” is Charles Hugh Smith. In onerecent commentary, Smith created a diagram of the deep state, showing how it encompasses far more than just the intelligence agencies, but constitutes the entire so-called “establishment,” where virtually… Read More

There are two intertwined themes that define unionized government in California. First, funding government retiree pensions will soak up every new source of tax revenue they will ever collect. Second, cloaking new taxes and fees – and new agencies – in the virtuous raiment of environmentalism will deflect criticism and demonize critics. Here’s why:

Now that Democrats have a super-majority in California’s state legislature, expect to see plentiful new taxes to pile onto the$5.0 billion in new state and local taxesthat were approved by voters on November 8th. After all,California’s projected 2017-18 state budgetstill has a $1.6 billion deficit. And that’s nothing. Here is a look what sort of deficit challenges California’s state and local governments are actually facing:

California State/Local Pension Funds Consolidated Est. Funding Status and Required Contributions at Various ROI

… Read More

Ajust released studycalculates the total state and local government debt in California as of June 30, 2015, at over $1.3 trillion. Authored by Marc Joffe and Bill Fletcher at the California Policy Center, thisupdates a similar exercisefrom three years ago that put the June 30, 2012 total at $1.1 trillion. As a percent of GDP, California’s state and local government debt has held steady at around 54 percent.

For a more detailed analysis of how these debt estimates were calculated, read the studies, but here’sa summary of what California’s governments owe as of 6/30/2015:

(1) Bonds and loans – state, cities, counties, school districts, community colleges, special districts, agencies and other authorities – $426 billion.

(2) Unfunded pension obligations (official estimate) – $258 billion.

(3) Other unfunded post-employment benefits, primarily for retiree health insurance – $148 billion.

This total, $832… Read More

Ever since the surprise victory of Donald Trump on November 8th, California’s Democratic leadership have asserted their determination to thwart the Trump agenda. Expect unity and resolve from California’s legislature, where democrats now hold a super-majority in both chambers.

Even before Nov. 8th, California’s legislature was a trend-setting force, enacting laws intended to set an example to the nation. These laws encompass a dizzying array of issues, from mandatinggender-neutral bathroomsin public buildings to officially designating denim as “the state’s official fabric to recognize its role in California history.” But if the economic well-being of working families remains the priority of California lawmakers, California’s legislature isfailing.

This failure only begins with the enactment of… Read More

As reported earlier this month in theLos Angeles Times, California policymakers are expanding their war on “climate change” at the same time as the rest of the nation appears poised to reevaluate these priorities. In particular, California’s legislature has reaffirmed the commitment originally set forth in the 2006 “Global Warming Solutions Act” (AB 32) to reduce the state’s CO2 emissions to 40% below 1990 levels by 2030.

Just exactly how California policymakers intend to do this merits intense discussion and debate.As the Los Angeles Times reporter put it,“The ambitious new goals will require complex regulations on an unprecedented scale, but were approved in Sacramento without a study of possible economic repercussions.”

At the risk of providing actual quantitative facts that may be extraordinarily challenging for members of California’s legislature, most of whom have little or no formal training in finance… Read More

In apress releasefrom theNational Conference On Public Employee Retirement Systems (NCPERS) dated December 19, 2016, theCalifornia Policy Center, and its spinoff online publication,UnionWatch, were bothchosen, for the 2nd year in a row, as one of only 28 “policy and research organizations” that NCPERS has deemed to be “Think Tanks that Undercut Pensions.” Ponder the significance of this excerpt from that same press release: “Under the Code of Conduct,NCPERS urges its corporate members to disclose whether they contribute to these organizations.”

What exactly were the transgressions of the California Policy Center, and UnionWatch, that earned them a place onthis list of undesirables? That earned them an admonition from NCPERS to its corporate members to boycott us, or else? Here is their list of criteria – and, briefly, our response:

How… Read More

On November 8th, Californians approvedProp. 51, authorizing $9.0 billion in new borrowing for construction and upgrades of public schools. Also on November 8th, Californians approved 171 local bond measures, authorizing over $22 billion in additional financing for construction and upgrades of public schools.

This new borrowing is only to construct and upgrade K-12 and community college campuses.Total K-12 enrollmentin California has been stable at around 6.3 million students for over a decade.Community college enrollmentin California is about 2.1 million students. This means that this latest round of borrowing equates to $3,735 per student. And similar sums are thrown at California’s K-12 schools and community colleges for construction and upgrades every two years. What gives?

One of the most obvious problems with voter approved bonds in California is the preference given school bonds.… Read More