Santa Monica, California
On to the weekend’s highlights and headlines:
The California Republican Party today voted to endorse a November ballot measure that would allow auto insurers to consider a motorist’s coverage history in setting rates for new customers.
Supporters of the measure, which was filed by the executive director of the Alliance of Insurance Agents & Brokers, say it will allow companies to offer “loyalty discounts” currently only available to existing customers, to motorists who want to switch plans. Critics say it will allow companies to raise rates on Californians who experience a lapse in coverage.
The measure is almost identical to Proposition 17, a failed 2010 initiative bankrolled by insurance giant Mercury General. The company has not contributed to this year’s version.
This weekend’s gathering of the California Republican Party provided another example of how hard it must be for a political party to dig itself out of a deep popularity hole, when every option comes with a downside.
Throw the party’s base supporters some choice red meat… and risk that persuadable voters who tune into the media coverage recoil. But tamp down the fiery rhetoric in hopes of projecting a “kinder, gentler” image… and risk leaving the party faithful full of accusations that moderates are trying to water down the GOP brand.
‘Tis a dilemma to be sure.
It’s a dilemma that has frankly been playing itself out for several years running at the semi-annual (yes, two of them every year) state GOP confabs. This weekend’s gathering, just a short drive south of Pelosiville — er, San Francisco — seemed to find California Republicans trying to do both things, though with a decided tilt to the red meat base strategy.
Greetings from California Republican Party convention live from Burlingame. Or, as we like to call it, the hottest action you can find in Burlingame on a Saturday night. Yes, the bar is low.
But we wanted to tell you about our first chat with GOP U.S. Senate candidate Elizabeth Emken, who lives in Danville. She’s taken on the political equivalent of a suicide mission: She’s aiming to take on U.S. Sen. Dianne Feinstein, who is arguably the most popular politician in California (yes, the bar is low), and has $6.5 million on hand (including $5 mil she loaned herself after the Kindee Durkee scandal.)
As of Dec. 31, Emken had $33,441 on hand.
The average California household’s share of the debt for underfunded state and local government employee pensions comes to about $30,500.
Stanford University studies released last week and in December for the first time aggregate public pension shortfalls statewide. Using moderate assumptions about future investment returns, the unfunded liability is about $379 billion.
Hard-core pension reformers will maintain that the number is much more. Defenders of the status quo will insist it’s significantly less. Before sorting out that dispute, let’s understand what the numbers mean.
Each year public employees work, they increase their future pensions. So, as they work, they and their employers jointly should set aside enough money to cover the additional benefits.
To calculate the contributions, actuaries and pension boards make assumptions about future investment returns and pension costs. Unfortunately, they’ve been wrong.
They have overestimated investment earnings, underestimated pension costs and retroactively added benefits without proper funding. As a result, pension systems across California have huge unfunded liabilities.
Keep in mind that the shortfall is for pension benefits employees already earned. Like salary and health care benefits, it’s a cost that should be paid when labor is performed.
Instead, the shortfall has been converted into debt to be paid off over time, up to 30 years. Government agencies
make those payments, diverting money that would otherwise go for government services. So we’re depriving current and future generations to pay off past labor costs.
Enjoy the Academy Awards and the NBA All-Star game.