The Hijacked Public Interest in California

If you consider yourself an environmentalist, and someone who – unlike libertarians – believes in a strong role for government in our lives, it’s hard to watch what has been done to environmentalism and government in California. Environmentalists have been hijacked by the global warming lobby, and our state and local governments have been hijacked by labor unions. And if you don’t accept the premises of California’s environmentalists today – that reducing CO2 emissions is going to address an urgent environmental crisis at the same time as it helps the economy, or the premises of California’s public employee unions – that public employees are NOT over-compensated and therefore we must raise taxes so we can afford to pay them, you may logically conclude that California is akin to an occupied nation.

Notwithstanding the spectacular failure of the Meg Whitman campaign – more on that later – the problem in California politics is simple. The environmentalists get their backing from Wall Street plutocrats, who have correctly identified the opportunity to trade CO2 “emissions credits” and “offset credits” as the biggest opportunity for them to rob from the poor and give to the rich they’ve ever seen. Public sector unions get their backing directly from California’s taxpayers, since these unions pretty much compel California’s public employees to join and pay dues. Estimates of California’s public sector union total political spending reach a half-billion dollars on politics every two year election cycle (ref. Public Sector Unions […] Read More

Fighting Bad Policy With Facts

A couple of months ago in a post entitled “Inflation, Population & Government,” I criticized California Senator Denham for making the following assertion in a press release: “between 1970 and 2010, for every 1 percent increase in population, our [California’s state government] spending has increased 20 percent.” In reality, if you adjust for inflation, that statement should read as follows: “between 1970 and 2010, for every 1 percent increase in population, our [California’s state government] spending has increased 3.4 percent.”

This is still a shocking statistic. California’s state government grew over the past 30 years at 3.4x the rate of population growth. Why make an unbelievable comment – 20x – when the inflation-adjusted indisputable truth is so dramatic?

Here’s another one, just for the record. In today’s Wall Street Journal, one of my favorite writers, George Gilder, has a guest column entitled “California’s Destructive Green Jobs Lobby.” In this column he makes some fundamental points about California’s failure on Nov. 2nd to pass Prop. 23, which would have slowed down implementation of AB32, the “Global Warming Act” passed by their legislature in 2006, and set to take effect in 2012. To paraphrase Gilder:

CO2 is not pollution. Fossil fuel is cheaper and in many respects far cleaner than “alternative energy,” and there is plenty of it available within the borders of the United States. Economic growth depends on basic resources such as energy costing consumers and businesses LESS, not […] Read More

Public Sector Deficits & Global Warming “Mitigation”

About the same time one might belatedly realize that reducing anthropogenic CO2 emissions will do absolutely nothing to alter or avert whatever climate “change” nature may have in store for us, might also be the time to realize the real reason we have chronic government deficits is because we not only have too many government employees, but we pay them too much. Connecting the dots, on July 2nd, 2008 in a post entitled “Breaking Down California’s AB32 Global Warming Act,” I wrote the following:

“Based on the potential of offset sales, carbon fees, and sales of emissions allowances, one may dismiss claims that AB32 will cost California’s government more than it will bring in revenues. AB32 will potentially cause tens of billions of dollars of net cash per year to flow into California’s public sector. Qualifying municipalities that enforce high density may earn carbon offset fees from polluters, based on how many vehicle miles they can calculate they eliminated through high density zoning. AB 2596 sets the stage for this. Redefining public sector jobs to address global warming mitigation may encompass a huge percentage of the public sector workforce, including construction, infrastructure, education, as well as explicitly environmentally focused agencies. Already California’s 400+ cities, 58 counties, and 32 air quality management districts are imposing new global warming related fees. Since global warming mitigation is a specific program – no vote is required to assess these fees. Auctions of emissions allowances to industry […] Read More

Bullet Train Boondoggles

On November 4th California’s “High-Speed Rail Authority” released a press release entitled “Federal Funding for High-Speed Rail Dedicated to the Central Valley.” Apparently an additional $715 million in infrastructure investment is going to be directed to the development of California’s bullet train, bringing the total to $4.3 billion. All of these funds are to be spent on what will be the first segment of the high-speed rail system, running between Merced and Bakersfield.

A few years ago, when I worked as CFO for a short line railroad, I learned of a term familiar to railroad professionals, “foamer,” which is used to describe rail enthusiasts whose interest in everything having to do with locomotives, rolling stock and track, matched that of rock star groupies. But pleasing the foamers – and the foreign corporations who will gobble up most of the borrowed government loot that gets sunk into high-speed rail – is not reason enough to direct money at this project.

A commenter on a previous post here said something very insightful – “if we’re going to spend money we don’t have, let’s at least spend it on things we can see.” He was referring to the folly of using deficit stimulus money simply to continue to pay over-market compensation to government employees. But I would take that a step further. If you are going to spend money you don’t have, at least spend it on […] Read More

Widespread Voter Fraud?

During the 2004 Presidential election there were allegations of voter fraud; the 2000 Presidential election was alleged to have been “stolen” by the Republicans. If you go further back in history, you can point to evidence the Democratic machine in Chicago manipulated election results to throw the 1960 Presidential election victory to Kennedy. A close reading of American history would reveal election fraud as a challenge to our democracy from the very beginning, and in every decade since then. So it shouldn’t be any surprise that we’re seeing it now.

What is a surprise is the opportunities for voter fraud, in this age of biometric identification technology and total information awareness, are actually greater than ever. Using California as an example, here are some of the reasons why:

Voters are not required to present a verifiable photo identification when they vote, nor when they register to vote. I personally experienced this when I went to my polling place on November 2nd, and once they had asked me my name and had me sign next to my name on the rolls of registered voters in that precinct, I asked them “aren’t you going to ask me for an identification?” They said no, that it was not required and they don’t do it.

Voters are able to vote by mail. This causes a variety of problems – first, it precludes anyone showing an identification, and second, it prolongs vote counts after the election as workers tabulate the ballots. And the greater the […] Read More

California’s Initiative Ecosystem

Only one initiative in the history of California passed without requiring professional signature gatherers to qualify it; that was the legendary Proposition 13 enacted in 1978 to lower property tax rates. But the lack of funds to take an initiative from concept to ballot to voter-approved law doesn’t discourage initiative proponents from filing them. In California, for a few hundred dollars, anyone can file a state initiative with the Secretary of State, wherein they will have 150 days to gather the required signatures – allowing for an inevitable percentage of disallowed signatures, an initiative that will amend California’s constitution will require (allowing for the inevitable percentage of unverifiable submissions) about 1,000,000 signatures. You can view California’s latest and greatest initiative filings here: Initiatives and Referenda Cleared for Circulation. For more on how to file an initiative, read “Laws governing the initiative process in California,” and “California signature requirements.”

California’s initiative laws have created a political ecosystem, where simply reviewing the dozens, or even hundreds of initiatives that have been filed provides an insightful glimpse into what sentiments roil the body politic. Some of them are the product of fringe groups and fanatics, others are clearly the product of serious and measured analysis, still others are spawned by powerful special interests, often filed as warning shots.

There are currently only six initiatives cleared for circulation that haven’t expired, plus ten more that […] Read More

Pension Reform Options

Not present on the ballot this year in California is an initiative to reformulate pension benefits for state and local government employees. The subject of dozens of posts, public employee pensions are financially unsustainable and grossly inequitable. The reasons for those assertions have been fully explored in previous posts, so the purpose of this post is not to reiterate those reasons, but to enumerate some of the key reforms that would, if they were all enacted, bring pension benefits for public sector employees down to a level that would be financially sustainable while still preserving the defined benefit option. In some cases, these reforms would have to be implemented not via an initiative amendment, but via municipal bankruptcy court – but if they were included in an initiative, it would provide a roadmap for bankruptcy courts to follow. Here goes:

(1) Lower annual pension accrual to 1999 levels for new hires: The public sector pension formula for all new hires would be based, as before, on accruing a percentage of final salary for each year worked. For public safety employees this percent would be reduced from 3.0% per year to 2.0% per year. For all other employees, this percent would be reduced from 2.0% per year to 1.25% per year.

(2) Lower annual pension accrual to 1999 levels going forward for existing hires: Current employees would, for all years remaining in their public sector career, accrue their retirement benefit at the new reduced percentage rate. Current employees would retain the […] Read More

California 2010 Ballot Propositions

Having received at least two dozen “voter guides” from “associations” representing public sector employees, and perhaps 2 or 3 from taxpayer groups – on much cheaper paper, much smaller formats, much lower weight – it seems like it would be useful to make a quick run-through of some of the critical voter initiatives on California’s ballot.

CIV FI’s California 2010 Ballot Proposition Voter Guide

Prop. 19 to legalize marijuana – who cares? The big money behind this proposition is based on the premise that people who smoke marijuana will support it, and that people who smoke marijuana will vote if this measure is on the ballot, and that people who smoke marijuana are young voters who (currently) tend to vote Democratic. Proponents of Prop. 19 who are backing it for this reason – and all the recent big money coming in to support this initiative are only concerned about this, not anyone’s rights to get stoned or any supposed tax revenue to be collected – need to be careful what they wish for. If this measure passes the Obama administration will be forced to crack down on California’s medical marijuana industry, which will alienate not only the marijuana smoking crowd, but pretty much every young person or libertarian leaning older person in America. 2012, anyone? CIV FI takes no position on this initiative.

Prop. 20 to form an independent commission to redraw California’s federal congressional districts – YES. A few years ago, a similar measure passed to redraw state legislative […] Read More

Public Employee Compensation

A recently released study sponsored by U.C. Berkeley’s “Institute for Research on Labor and Employment,” authored by Sylvia Allegretto and Jeffrey Keefe, entitled “The Truth about Public Employees in California: They are Neither Overpaid nor Overcompensated,” contains its conclusion in its title, but whether or not this study is presenting the “truth” or not is worthy of further discussion.

According to this study, “the wages received by California public employees are about 7% lower, on average, than wages received by comparable private sector workers; however, public employees do receive more generous benefits. An apples to apples comparison, or one that controls for education, experience, and other factors that may influence pay, reveals no significant difference in the level of employee compensation costs…”

While the study goes on to explain the variables they evaluate in order to arrive at an “apples to apples” comparison, it never actually estimates the actual amount of wage disparity between the average compensation packages for California’s public employees compared to California’s private sector employees, so here goes:

Using California’s Employment Development Department’s recent report “Labor Market Trends,” (ref. figure 1) it is evident there are 2.4 million Federal, State and Local employees in California, 12.2 million full-time private sector employees who work for an employer, and another 1.4 million “self-employed” private sector workers. Worker compensation as reported by the Bureau of Labor Statistics don’t include estimates for California’s […] Read More

California’s Proposition 23

Back in 2006 California’s Governor Schwarzenegger signed AB 32, the “Global Warming Act,” which set the goal of reducing California’s “greenhouse gas emissions” to 1990 levels by 2020. The bill was set to become implemented in 2012, and for the past few years, the bureaucrats at the California Air Resources Board have been working feverishly to come up with specific regulations. What they have produced is a monstrosity.

To start to come to grips with what AB 32 is going to do to California, read CARB’s own material, their “Climate Change Scoping Plan,” their “Updated Economic Analysis of California’s Climate Change Scoping Plan,” and their “ENERGY 2020 Model Inputs and Assumptions.” You can get an attempt at a summary if you read the post “Implementing California’s Global Warming Act.”

Since the most recent publicized polling results indicate that voters are split roughly 50/50 on Prop. 23 (ref. the Sept. 24th LA Times article “Proposition 23 poll shows a dead heat among California voters“), it is worthwhile to examine the arguments against Prop. 23 that are currently bombarding voters. A good place to review these arguments would be on the “fact sheet” put forward by the group “Californians to Stop the Dirty Energy Proposition.” […] Read More