Unions’ Assault on Reason Continues

Last month, San Jose’s Democrat mayor Chuck Reed filed paperwork for a statewide ballot measure that would bring some sense and fairness to California’s crazy public employee pension disaster-in-the-making. His idea, co-endorsed by a half dozen other mayors of large California cities (five of them Democrats), is a simple one: Treat public employee unions like private employee unions.

Cities on the brinkSpecifically, his measure, if approved, would lock in benefits already received but would open the door to negotiate changes moving forward. What we’re stuck with may be enough to sink us – about a half trillion dollars of unfunded liability by some accounts – but Reed’s measure could keep us from heaping more and more debt onto our state’s perilous financial condition.

In a bit of diplomacy, Reed asked the unions to meet to discuss the measure. Maybe he thought they would spare California voters the trouble of petition signing and the pain of listening to millions of dollars worth of distorted union commercials opposing the measure. If he thought for a moment public employee unions were ready to start acting responsibly, he couldn’t have been more wrong. In response to his offer, a letter signed by representatives of 17 public employee unions said:

Meaningful dialog can only occur in an environment of trust and sincerity. Your choice, to first introduce this draconian and flawed measure and then invite dialogue, shows a lack of both.

In other words, “Drop dead, Reed!”

What is so flawed about the measure? Well, let’s see what the unions have to say:

As you are well aware, there is a retirement crisis in California.

Yes, we knew that. Over-generous public pensions and benefits are indeed a crisis. A big,  hairy, no-end-in-sight crisis. But that’s not the crisis the unions see.

A study released just this week noted that 42 percent of Americans say that saving money for retirement and paying their bills is not possible; 37 percent say they will never be able to retire, continuing to work until they are sick and die.

Rest assured that not one of those respondents had a CalPERS or CalSTERS pension coming his or her way. No, our public servants masters will be able to retire at 55 or 60 (younger if they’re cops or fire fighters) with a pension that averages over $60,000 a year. The rest of us may work until we get sick and die, but not public employees. Nearly all of them will work until the day they’re fully vested and not a day more.

The unions’ response to reasonable and much-needed curtailment of their gold-plated gravy train is to say they’d like to see all society as loony as they are. They have no plan for attaining this goal, and they are not likely to present a plan anytime soon. they figure all they need, given their history of being able to dupe California’s millions of low-information voters, is a mere flimsy puff of smokescreen just thick enough to divert attention from their greed.

Hopefully even low-information voters are getting smart enough to understand destructive self-interest when they see it. If you know any who aren’t, please send them a copy of Crazifornia.


The Crazifornia Propositions Voter Guide

Uglies, Goodies and Don’t Bother Me’s make the Crazifornia Proposition Voter Guide a Must!

When I was interviewed by The Weekly Standard for an upcoming article about this November’s flock of Crazifornia ballot initiatives, that’s how I categorized them: “Five uglies, four goodies and two don’t bother me’s.” (I’m still not sure how to spell that last one!) Coming up with that summary took hours of research, which you can save yourself with The Crazifornia Propositions Voter Guide.

Here are my recommendations, in ballot order, with those in red being the most critical:

Prop 30 – Ugly

It’s hard to even get by the name of this one – Temporary  Taxes to Fund Education, Guaranteed Local Public Safety Funding – without uttering that most common of election season bromides, “How stupid do they think we are?”

This proposition’s position at the top of the ballot is the result of Gov. Jerry Brown’s strong-arming of the system to gain advantage, and that pretty much sums up this initiative. Its advertising campaign is basically strong-arming, too; picture an image of a sweet classroom teacher with a gun to her head and the slogan, “Pay up or the teacher dies!” Brown could have linked passage of his tax  hike to the jobs of bureaucrats, regulators and tax-collectors instead of teachers, but we know how that would turn out.

If Proposition 30 passes, California will have the highest income taxes of all 50 states, and its already secure ranking as the state with the highest sales tax will become more secure.  California spends three times more per capita on social welfare programs than it should, based on national per capita averages. It doesn’t need more revenue, it needs more disciplined spending. Vote NO.

Current Around the Capital Polling Average: Closing steadily at 50.8 yes, 39.9 no. We might still defeat this one!

Prop 31 -  Goodie

If the LA Times is against it, we must be for it. This latest effort from California Forward would create a two-year budget cycle for the state in order to reduce end-of-the-session craziness (I doubt the craziness would disappear, but still like the idea of taking more time with budgeting), require the legislature to find off-setting cuts for any new expenditure of $25 million or more, require performance reviews of all state programs, plus a few other good ideas.

The LA Times doesn’t like it because “it could only be revised by another vote of the people.” Exactly! Leave it to the legislature and they’ll be back to their old tricks in no time.  Vote YES, but note that OC Supervisor John Moorlach, a leader in the fight for fiscal responsibility let me know he’s voting no because it “forecloses on the Laffer curve” by limiting the legislature’s ability to enact tax decreases. Like all things from California Forward, 31 is a mixed bag.

Current Around the Capital Polling Average: About one-third are still undecided so this one could still flip. Yes: 30.7, no 37.8

Prop 32: Goodie

Here’s another run at “paycheck protection” or curtailing the power of unions (and corporations) to mandate paycheck deductions used for campaigning and lobbying. Of course, corporations don’t do mandatory payroll deductions for lobbying, so clarity demands saying that this is an effort to curtail union power.

And it needs to be curtailed if California is every going to gain the fiscal sensibility it must gain to become healthy once again. Public employee unions own Sacramento now, as just the two biggest public union funders of lobbying in Sacramento spend more than the pharmaceutical industry, PG&E, Chevron and ATT&T combined.

The unions are spending really big to stop Prop 32, contributing nearly $60 million thus far. Until Charles Munger responded with a $23 million contribution in support, opponents had outraised supporters five to one. They’re still up by about $13 million.Vote YES

Current Around the Capital Polling Average: A long-running dead heat, with 44.4% yes and 43.8% no.  The 11.5% undecided are going to be barraged with ads from both sides.

Prop 33: Don’t bother me

This is Mercury Insurance CEO George Joseph’s second run at insurance regulation tweaking via the ballot box. Last time around (Prop. 17, 2010), Mercury spent about what they’ve spent this time – $17 million – trying to accomplish the same thing, which is to blah, blah, blah, zzzzz.  I figure they figure they’ll make more than $17 million off higher premiums if it passes.

One reason to vote for it is that Harvey Rosenfield is against it. This is a guy who has milked propositions for millions in personal gain, so I lean toward supporting what he opposes. But this kind of junk shouldn’t be clogging our ballots, so Don’t Vote.

Current Around the Capital Polling Average: Holding at 54.8% yes, 33.6% no.

Prop 34: Ugly

Propositions, as you’ll learn in Chapter 1 of Crazifornia, were the Progressive’s wet dream of the early 1900s. Prop 34 shows why, as it would take capital punishment off the table in California, thereby moving the state closer to Europe.

Arguments fly on both sides of this longstanding and controversial issue, but here’s one that works for me: If the death penalty is no longer in a prosecutor’s bag of tricks, the number of plea bargains and confessions will drop dramatically. Even with delays that are far too long before sentencing and execution, the chance of taking up residence on death row remains the penultimate bargaining chip. I don’t want it taken away, and neither should anyone else who puts victims and justice ahead of criminals and legal technicalities. Vote No.

Current Around the Capital Polling Average: Steady and unbelievably tight at 43.9 yes, 44.9 no.

Prop. 35: Don’t bother me

Don’t bother me, but don’t get me wrong. I’m no fan of human trafficking, a subject I wrote passionately about quite frequently in my Cheat-Seeking Missiles days. It’s the sinful side of the human nature played large and its perpetrators will need Christ’s forgiveness; they’re certainly not getting mine.

But why is it on the ballot? Even the inept California legislature has done enough law-passing to discourage the practice and incarcerate the perpetrators. Since it won’t make any difference in the results, Don’t Vote.

Current Around the Capital Polling Average: Yes 79.7%, no 12.3%.

Prop. 36: Goodie

I was all for the first three-strikes proposition, but it turns out that it had unintended consequences, as so many propositions do. Prop 36 corrects this while keeping the intent of the original proposition intact.

Basically, it separates truly heinous offenders from run of the mill bad guys, with the former still subject to life in prison without parole on their third strike and the others not. California spends way too much on prisons for a lot of reasons, one of which is that we simply have too many prisoners. Let’s save some money by letting some bad but not too bad guys do their crime and serve their time. Vote Yes.

Current Around the Capital Polling Average: Yes 71.5%, no 17.3%. It looks like even Californians can agree on this one.

Prop. 37: Ugly

If California’s recent voting trend holds, Prop. 37 will pass because it has a lot of corporate money against it. Yes, a big majority of Californians are anti-business and it shows on proposition votes (and when rich Republicans run for state office, right Meg?). And this one has a lot of corporate money flooding the opposition.

But the current Around the Capital Polling Average indicates that might not happen this time. The yes vote is strong at 56.2%, but the no vote is climbing at 32.7%, and a lot of money will be spent on NO ads in the next two weeks.

It made my ugly list because Prop. 37 is the new Prop. 65.  In other words, it was written by trial lawyers for trial lawyers. Like 1986′s Prop. 65, it has a seed of a good idea. Then it was that people shouldn’t be exposed to carcinogenic chemicals without knowing it; now it’s that they shouldn’t be exposed to genetically engineered foods without knowing it. But like 65 was an elaborate ploy to funnel millions of dollars to trial lawyers (almost $500 million to date, in fact), so is Prop 37.

Don’t be fooled. Prop 37 is not about informative labels for you. It’s about label regulations that are so complex that farmers, processors, manufacturers and retailers are bound to make mistakes. And when they do, they’ll be sued by a pack of legal mutants. Vote NO.

Prop. 38: Ugly

Prop. 38 is another tax increase, but with this one the money is earmarked for schools. Why, if 1988′s Prop. 98 guarantees they’ll get over 40% of the general fund anyway? And why, since all that money has done nothing to lift our schools out of the cellar?

Well, it turns out the state legislature routinely steals Prop. 98 money from schools and rarely pays it back. In Crazifornia, I put the current IOU at $3.6 billion. Surprised?

But what good would even $3.6 billion do? At a luncheon yesterday, political mastermind Dan  Schnur quoted a Harvard study that found it would take $1 trillion a year to raise California schools to mere mediocrity if nothing is done beyond money to improve the system.

So let’s force the schools and the legislature to fix education by not giving the schools more money. Let’s force Sacramento to drop regulations that cost school districts $400 million a year to keep up with. Let’s let classrooms get bigger again because we’ve learned that all we’ve gotten from small classrooms is more mediocre teachers. Vote NO.

Current Around the Capital Polling Average: Yes 42.1%, No 47.0%

Prop. 39: Ugly

This one will pass for sure because it taxes the other guy, and Californians don’t mind taxing the other guy, as they do regularly with smokers, drinkers and millionaires. (Hm, strange company there!)

Be that as it may, there are two things wrong with Prop. 39 that definitely make it ugly. First, it taxes business. Yes, they’re out of state businesses, but Californians are more addicted to taxing business than smokers are to cigarettes, drinkers are to booze and millionaires are to … success. They’ve hit bottom. It’s time for an intervention, not another hit.

Second, about half the money raised – a stunning $500 million a year – will go to “create energy efficiency and green energy jobs” in California. Haven’t we had enough Solyndras and A123′s? Vote NO.

Current Around the Capital Polling Average: No surprise at 54.2% yes and 30.7% no.

Prop. 40: Goodie

Here’s something more rare than a California gnatcatcher eating an elderberry beetle: A GOP-sponsored proposition that’s polling very favorably. But that may be because it’s just the precursor to the really big vote that will follow.

Prop. 40 would subject the California senate district lines drawn by the California Citizens Redistricting Commission to a vote of the people, with interim boundaries for the next state-wide election set by court-appointed officials. California Democrats smartly and unethically took over the Citizens Redistricting Commission so the boundaries need to be redrawn. This proposition will make that vote possible. Vote YES.

Current Around the Capital Polling Average: 44.2% yes and 25.8% no. It should win, but with 30% undecided, it could still go south.

It’s Time for Moneyball in Sacramento

Jerry Brown is no Billy Beane.

Coaching a bottom-dwelling state – at the bottom of the education, business-friendliness and government efficiency rankings, at the top of taxation, regulation and fleeing residents rankings – Brown is continuing to dole out big money for policies that are past their prime and failing to perform.

Beane, whose Oakland A’s are once again in the Major League playoffs, realized in 2002 he didn’t have enough money to put a team together the old fashioned way, so, as recounted in Michael Lewis’ best-seller, Moneyball, he signed undervalued players other teams overlooked. Each was smartly chosen for on-base percentage, scoring runs, or less measurable qualities like stepping up when the chips are down. Other managers thought Beane was either desperate or insane, or both, but the rag-tag team of forgotten players he assembled became winners.

Beane’s had the ability to see in baseball’s raft of statistics what other managers didn’t. Brown is surrounded by statistics on how California’s various players – agriculture, business, local government, state bureaucracies, pension funds – are performing compared to other states, but he can’t seem to read them. Instead of pursuing government policies that are the parallel of Beane’s brilliant recruiting, he’s doing the governmental counterpart of the Yankees shelling out $18.7 million (prorated down from a contracted $28 million) to get pitcher Roger Clemens back from the Houston Astros in 2007. Clemens made $1 million a start that year, and came to define “worst trade ever” to many baseball buffs by turning in a lackluster 6-6 season.

Proposition 30 is Brown’s Clemens, a high-cost, past-its-prime approach to government that he hopes will lift California out of the cellar. Like Clemens, it costs a lot, with sales and income tax increases of as much as $50 billion over the next seven years. Like Clemens, it too has a strong arm, in this case strong-arming Californians with its threat that if they don’t pay up, the teacher dies. And just like Clemens showed the Yankees, there’s no guarantee it will work as promised.

Moneyball for California

Should Prop 30 fail in November, Brown will have a chance to start playing Moneyball. Here are some ideas for the manager of the major league Sacramento Spenders.

Schools – Schools are the state’s single biggest expense, receiving 43 percent of the General Fund. Half of this largess goes to administrative overhead, because it takes a lot of administrators and $400 million a year to fulfill all the mandates, reports and busy work imposed on school districts by Sacramento. In contrast, just 20 percent of Connecticut’s education budget goes to administrative overhead. California ranks #46 in the most recent “best-educated state” rankings, while Connecticut comes in second.

Then there’s the problem that our teachers are the highest paid in the nation, despite California’s tragically poor education outcomes. The California Teachers Association, which gave almost $50,000 to Brown’s 2010 gubernatorial campaign and has paid out $6.3 million to support Prop 30, does all it can to keep salaries high and performance-based pay a nonstarter.

Moneyball in education would see the elimination of most of state-imposed mandates on public schools, so we could stop paying for thousands of high-priced school administrators. Then, Brown could support a ballot initiative requiring performance-based pay for teachers, and rail against the devious CTA advertising that would attack it. Brown would never do this, of course, but a Governor Billy Beane would.

Pensions – The real reason Brown needs Proposition 30 is to shovel money into the $250 billion to $500 billion hole of unfunded state employee pension liabilities. Brown needs to start managing this problem Moneyball-style. He will get nowhere as long as he dodges dealing with the contracts of existing employees, like he has to date. That’s where the real liability is, so he has to force the rewriting of those contracts, especially when retroactive increases were given, or unions won increases that were completely out of the norm of private sector increases. Costly add-ons, like life-time health insurance for agency directors, need to be prohibited retroactively.

This won’t be easy, but in Crazifornia, I make the case that many public employee contracts can be voided because management negotiators were city administrative employees who would benefit from rank-and-file salary and benefit increases when their own contracts were renewed. Brown should seek to have thousands of these sorts of contracts across the state declared null and void by claiming they are the fruit of criminal racketeering under the federal Racketeer Influenced and Corruption Act (RICO). Brown would never do this, of course, but a Governor Billy Beane would.

Taxes – William Voegeli of Claremont University found that California’s per-capita outlays increased 21.7 percent from the early 1990s to the mid-2000s, compared to an 18.2 percent average increase for the other 49 states. Just cutting back to average, which can hardly be categorized as heartless conservatism, would save California $10.6 billion a year, or enough to close most of the current budget gap – without new taxes. If California’s spending over those years had increased only with inflation and population growth, Voegeli writes in Failed State, “the resulting levels of per-capita government outlays … would have equaled neither Somalia’s nor Mississippi’s, but … Oregon’s, which is rarely considered a hellish paradigm of Social Darwinism.”

Brown would never attack spending in this way, nor would he do many other smart Moneyball approaches to fixing our lumbering disaster of a state, which is why his governorship will ultimately fail.


Journalists Join Anti-Prop 32 Fight

When news broke Friday afternoon that a group tied to the Koch Brothers donated $4 million to the effort to pass Proposition 32 this November, key California political reporters were quick to pass along the story to their readers. Well, part of the story, anyway.

The Los Angeles “Gropinator” Times, keeping its long history for left-biased political reporting solidly intact, was typical.  Its Sacramento-based PolitiCal reporter Anthony York made the tie to the Koch brothers the top of his story, leading with this:  “A group with ties to the conservative billionaire Koch brothers has dropped $4 million to pass a ballot measure that would severely limit the political activity of labor unions.”

Quickly establishing that the Koch brothers are billionaires (the terrible 1%) and conservatives (aren’t all greedy capitalists?), York also noted the proposition’s potential impact on labor unions, while failing to mention it imposes on corporations similar restrictions against soliciting funds and spending them on political purposes.

But those are not the worst aspects of York’s story.  Rather, it’s that he made no effort to put the Koch contribution into perspective. The $4 million contribution to the California Future Fund for Free Markets (not to the Yes on 32 Committee itself) increased total contributions in support of Prop 32 to $7.2 million. Opponents have raised five times that, $35.8 million as of September 12.  The California Teachers Association alone has contributed $16 million to defeat the measure.

CTA collects $1,000 a year from each of its 340,000 members to fund its political efforts.  That’s enough to earn the union the #1 rank in the California Fair Political Practices Commission’s study, “Big Money Talks,” which ranked California’s special interest organizations by their total campaign contributions and lobbying expenses from January 2000 to December 2009. The $211.8 million CTA spent during that period was nearly twice the amount of the second-place contributor, the California State Council of Service Employees, and nearly five-and-a-half times greater than what the top-spending pro-business group, the California Chamber of Commerce, spent.

So, wouldn’t CTA’s $16 million contribution to the No on 32 side merit a mention by York? Apparently not. Nor did it appear in a story on the Koch contribution by Joe Ortiz, author of the State Worker blog at the Sacramento Bee. Ortiz’ failure to mention the “no” side of the Prop 32 story follows a September 12 story in which he did acknowledge the funding discrepancy, but included a detailed list of only the Yes on 32 contributors, depriving his readers of a similar list of the proposition’s opponents.

The Associated Press story on the contribution, which was picked up by multiple media outlets throughout the state, parroted Ortiz’ story so it also failed to report who’s funding the No on 32 effort.

With California’s primary media outlets conducting journalistic misconduct, the No on 32 side ended up faring very well on the Koch contribution story. This reinforces the theory I espouse in my book “Crazifornia, Tales from the Tarnished State” that the PEER Axis – Progressives, Environmentalists, Educators and Reporters – have worked together very effectively for more than a century to keep California firmly in the Progressives’ grip.

In this case, Progressives in and out of the Legislature created the mess Prop 32 seeks to mend, and are funding the campaign to oppose it, with educators leading the way. Reporters, which I define more broadly as all aspects of the media from newspapers to Hollywood, are doing what they can to defeat the measure by slanting their coverage. The environmentalists are largely on the sidelines in this particular battle, but will assuredly vote as a block against Prop 32.

Ironically, in California’s most Progressive-dominated major city, San Francisco, the Chronicle’s Politics Blog writer Joe Garofoli broke the PEER mold, responsibly reporting the vast contributions gulf between the two sides. (He pegged No on 32 contributions at $28 million instead of $35.8 million, however.)

No matter. Look for San Franciscans to follow their long PEER tradition as their vote on Prop 32 this November will no doubt lead all California counties in the percentage of votes cast against responsible reform.

From RINO to Redux

(Please read this post at The Daily Caller, since they’re interested in how much traffic their authors generate. Thanks!)

Today, Arnold Schwarzenegger signs his last gubernatorial documents and spiffs up the governor’s office so he can get his security deposit back as the next tenant prepares to move in tomorrow.

The man who promised his charisma was sufficient to break down the boxes that hobble Sacramento leaves the place with all its boxes intact, and more than a few new boxes to boot – they’re just painted a greener shade of regulatory over-kill.  As it turns out, the Schwarzenegger legacy isn’t governmental and budgetary reform; it’s AB 32 and SB 375, California’s hysterical global warming twins, and the passel of business-strangling regulations spawned in their wake.  The incoming governor is apparently intent on protecting Schwarzenegger’s green legacy with the appointment of John Laird, co-author of AB 32, as Secretary of Natural Resources, ensuring that natural resources, not resourceful humans, will continue to be the focus of California state government.  The leftist YubaNet.com declared the Laird appointment “sets off green fireworks,” adding:

On the first day of the New Year, Governor Brown showed that he is committed to a green agenda by appointing John Laird as the Secretary of Resources. … From waste reducer to wildlife protector Laird is sure to make 2011 a great year for the environment.

But California’s regulatory crusade to coddle the environment without care for the cost is not going to be the focus for Jerry Brown, as much as he might like it to be – it’s going to be the budget, debt and the ever-less-sustainable public employee pension funding gaps.  If Jerry Brown is going to succeed on that score, he’s eventually going to have to take on the public employee unions he empowered in the 1970s when he signed the law giving them truly impressive collective bargaining rights.

It was the unions that terminated the Terminator.  When Schwarzenegger put four mostly sensible reform initiatives on a special election ballot in 2005, he was handily disposed of by the unions, particularly the California Teachers Association, which mortgaged its headquarters to buy even more anti-Schwarzenegger ads.  By most accounts, Brown is also plotting a special election strategy to fix the budgetary mess.  First, he will get a budget through Sacramento (now, thanks to Proposition 25, requiring only the votes of the Legislature’s Democrats) that will include sweeping cuts in spending for popular state services, then he will call a special election and ask the voters to do what even the state’s all-powerful Democrats don’t have enough votes to accomplish:  raise taxes and fees.

He should be able to count on union support for the higher taxes, but the voter’s mid-term rejection of Prop 21’s “park tax” and their approval of Prop 22’s and Prop 26’s restrictions on Sacramento’s non-tax revenue generation tricks indicates Brown’s going to have a tough time pulling off a special election win.  Even if he does – and especially if he doesn’t – he’s still going to have to deal with pension reform if he has any hope of fixing the state’s fiscal mess.  Meaningful reform seems just about impossible under Brown, as Orange County Register opinion columnist Mark Landsbaum wrote today:

Considering their clout, if public employee unions had a better candidate to run for governor, wouldn’t they have run him? Why didn’t they? Because Jerry Brown’s candidacy was their dream come true.

California’s future will be anything but golden unless Brown pulls off a “Nixon goes to China” with the state’s public employee unions and brokers sweeping and significant changes to public employee benefits.  Tweaking at pension formulas isn’t going to be enough.  Even the wholesale selling out of younger public employees by older pension-rich ones isn’t going to pull California out of the hole.  No, dialing back California’s half-trillion-dollar unfunded pension liability before the state’s finances collapse entirely is going to take the kind of reform that will pose a threat to the future clout of the very public employee unions that swept Brown into office.

Can he do it?  I don’t think so.  His appointments thus far, while still few in number, indicate that the Jerry Brown we’re getting is the Jerry Brown we feared we’d get – Moonbeam Redux.  He will use the Democrat’s complete control of Sacramento and the money and influence of his union benefactors to do everything he can to protect the status quo, because unlike where Sacramento was when he first came into office on the heels of Ronald Reagan, Sacramento today is exactly as he would like it to be – fat with government jobs and programs, committed to environmental over-regulation, and firmly in the hands of the unions he knows and loves.

Jerry Brown’s real challenge arises from the fact that the status quo will be impossible to protect unless the state’s businesses shake off the national recession and the state’s obsession with business-flogging and somehow begin to generate more jobs and more tax payments.   Short of that unlikely salvation, it’s anyone’s guess how Brown will succeed in keeping his benefactors happy while dodging California’s looming fiscal black hole.