Mission San Juan Capistrano
Tuesday is the deadline for the California Legislature to pass bills introduced last year out of their house of origin. The Assembly meets at noon, the Senate at 2 p.m.
On to today’s California headlines:
Pension earnings dip amid gloomy forecasts
The nation’s two largest public pension funds last week reported slim annual investment earnings, CalPERS 1.1 percent and CalSTRS 2.3 percent, as experts continue to say hitting their long-term earnings target, 7.75 percent, will be difficult.
While CalPERS reported weak earnings in 2011, a prominent private-sector investment manager, Robert Arnott of Research Affiliates, told the board last week he thinks the most they can expect from stocks and bonds next decade is 4 percent.
Another major investor, Laurence Fink of BlackRock, told the CalPERS board during a similar educational session in 2009 that during the next 15 years: “You’ll be lucky to get 6 percent on your portfolios, maybe 5 percent.”
A Wall Street Journal columnist, Jason Zweig, said last week Warren Buffet’s Berkshire Hathaway pension fund projects a return of 7.1 percent. He said William Bernstein of Efficient Frontier Advisors expects roughly 6.5 percent from stocks.
The court-appointed receiver overseeing California’s prison health care system said Friday the state must keep its promise to spend more than $2 billion for new medical facilities before the federal courts can end an oversight role that has lasted six years.
California committed to spending $750 million to upgrade existing medical facilities, building a new $906 million medical center and converting juvenile lockups at a cost of $817 million. So far, only the new medical center in Stockton is being built.
Receiver J. Clark Kelso told The Associated Press that the state must begin all the upgrades before it should be allowed to retake control of a prison medical system once deemed so poor that it was found to have violated inmates’ constitutional rights. They are his first public comments since a federal judge last week told officials to begin preparing for an end to the receivership.
Gov. Jerry Brown said in an interview airing in Los Angeles today that California’s high-speed rail project will cost far less than the state’s current estimate of nearly $100 billion and that environmental fees paid by carbon producers will be a source of funding.
“It’s not going to be $100 billion,” the Democratic governor said on ABC 7′s Eyewitness Newsmakers program. “That’s way off.”
Brown’s remarks come as his administration prepares revisions to the California High-Speed Rail Authority’s latest business plan. Brown is trying to push the project through an increasingly skeptical Legislature following a series of critical reports.
“Phase 1, I’m trying to redesign it in a way that in and of itself will be justified by the state investment,” Brown said. “We do have other sources of money: For example, cap-and-trade, which is this measure where you make people who produce greenhouse gasses pay certain fees – that will be a source of funding going forward for the high speed rail.”
Brown said, “It’s going to be a lot cheaper than people are saying.”
The annual spending plan Brown released this month included $1 billion in cap-and-trade revenue for programs to reduce greenhouse gas emissions. The budget document lacked detail, however, saying, “Further detail on specific program areas will be developed when there is more certainty of fees received from the Cap and Trade Program.”
Enacting a major change in election law to affect the outcome of one ballot measure is fixing the game.
The attorney general’s office, in concert with the Legislature’s budget analyst, is supposed to provide objective “titles and summaries” for measures that appear on the ballot. The latter agency does its work as it’s supposed to, but in recent years, the attorney general has been giving descriptions positive or negative spins.
The latest examples, under Democratic Attorney General Kamala Harris, are the very positive description of the Brown-sponsored tax- increase measure that unions support and the negative, and even misleading, way two proposed public pension initiatives that unions despise are described. One example: Using “teachers, nurses and peace officers” as examples of who would be affected, rather than garbage collectors or Department of Motor Vehicle clerks.
Harris’ office defends the summaries and insists that political considerations were not involved, but the chosen words clearly make Brown’s measure more palatable to voters and the pension- reform measures more onerous.
It’s using political office to fix the game, and it undermines democracy.
Enjoy your morning!