Tag Archive: California Public Employee Pensions

Feb 19 2013

The California Flap: February 19, 2013

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Jerry BussJerry Buss R.I.P.

The California Legislature is in session.

Today’s schedule is here.

The California Assembly’s Daily File is here and the California State Senate’s is here.

An important deadline to remember:

  • February 22, 2013: Deadline to introduce bills.

Each member of the Assembly and State Senate are allowed to introduce up to 40 bills in this two year legislative session.

On to today’s California headlines:

  • Jerry Buss dies at 80; Lakers owner brought ‘Showtime’ success to L.A. – When Jerry Buss bought the Lakers in 1979, he wanted to build a championship team. He also wanted to put on a show. The new owner gave courtside seats to movie stars. He hired pretty women to dance during timeouts. He spent freely on big stars and encouraged a fast-paced, exuberant style of play. As the Lakers sprinted to one NBA title after another, Buss cut an audacious figure in the stands, an aging playboy in bluejeans, often with a younger woman by his side.
  • California inmates renew demands – California prison inmates housed in the state’s highest-security prison have sent an open letter to Gov. Jerry Brown, threatening hunger strikes and work stoppages if the state does not limit the length of time prisoners can be held in isolation cells. The undated letter, signed by four prisoners housed in segregation at Pelican Bay State Prison, contends California prison officials failed to deliver on promises made to end a series of prison hunger strikes that involved as many as 6,500 inmates in 2011. Giving a July 8 deadline, the inmates ask for an end to indefinite holding of prisoners in Security Housing Units, where they are isolated from other inmates, denied privileges and allowed out of the cell 90 minutes a day.
  • N.J. Gov. Christie in La Jolla, Romney sons join the party – New Jersey Gov. Chris Christie swooped into town last week for a fundraiser in La Jolla that drew about 50 people, including two of Mitt Romney’s sons, Matt and Craig. The robust governor alienated many Mitt Romney supporters by making nice with President Barack Obama in the aftermath of Hurricane Sandy and just days before the November election. The La Jolla conclave came between a similar cash grab in Los Angeles on Monday and one in Santa Barbara on Wednesday. Christie was warmly received here with no rancor stemming from his recent coziness with the president, according to Ron Nehring, vice chair of the county GOP.
  • Battle builds over calculating California Public Employee pensions – Debate is brewing across the state over which types of pay can be counted toward a public worker’s pension — fallout from landmark changes that went into effect this year. The overhaul, signed into law by Gov. Jerry Brown, was intended to slash swelling pension costs by raising the retirement age for new workers and increasing employee pension contributions. The sweeping revision, known as the California Public Employees’ Pension Reform Act of 2013, also limits what’s considered pensionable compensation. This is crucial because it’s aimed to curb pension spiking and other issues that have caused governments to bleed money. However, redefining what types of pay can be used to determine pension amounts has led to at least four legal challenges from labor groups mainly in northern California. And the state’s largest public retirement system, which includes nearly all the cities in San Diego County, has stepped in to offer its interpretation of the term.
  • California’s budget windfall could end soon, officials say – The surge of revenue that showed up unexpectedly in state coffers last month may well be offset by a revenue dip in coming months, according to Gov. Jerry Brown’s administration. The surprise money has been the source of much speculation in the Capitol. Unanticipated tax receipts filled state coffers with more than $5 billion beyond initial projections for January — more tax dollars than are allocated to the entire state university system in a year. The revenue bump was historic. But the question for budget experts was whether lawmakers could begin allocating the windfall toward government programs and tax breaks — or whether the money amounted to an accounting anomaly.
  • California Higher-Ed: Regents Deny Critics a Fair Hearing
  • Will higher taxes on the rich derail California’s economic comeback?
  • Crazifornia: Will it be Gov. Brownout? – With long-time environmentalist Gov. Jerry Brown at California’s helm, green-leaning Democrat super-majorities in both houses of the state legislature and entrenched eco-crats ruling the state’s regulatory agencies, the AES plant is certain to remain shuttered no matter what the summer may bring. The carbon crusaders simply cannot afford to allow a high-profile precedent to undercut the centerpiece of their carbon-fighting battle so early in the auction’s history. So, should brownouts and blackouts return to California this summer, remember this: It wasn’t really problems at the San Onofre nuclear power plant that caused them. It was problems in the thinking of California’s leadership.
  • Manuel Rojas, burrito maestro of El Tepeyac has passed away? – Reports on social media are saying that the proprietor of Manny’s Original El Tepeyac in Boyle Heights has died. KFI News tweeted that employees of the burrito stand on Evergreen Avenue confirmed Rojas’ death. The station notes Rojas is credited with creating the Hollenbeck Burrito: it’s made with pork verde, rice, beans and guacamole and topped with chile verde.
  • Bill would require 3-day wait before California state lawmakers act – Jamming major bills through the Legislature at the last minute with little if any time for review has been an ongoing source of frustration for some lawmakers, especially minority Republicans. The practice has been used often on budget bills, forcing lawmakers to vote on spending issues with long-term consequences without having the ability to actually read what’s in them. That would change under legislation being proposed by two lawmakers. ADVERTISEMENT The identical bills by Democratic Sen. Lois Wolk of Davis and Republican Assemblywoman Kristin Olsen of Modesto would require all legislation to be in print and online 72 hours before it comes to a vote. Both bills would be constitutional amendments and would have to be approved by the voters. To get on the ballot, SCA10 or ACA4 need a two-thirds vote in the Legislature.
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Jan 22 2013

The California Flap: January 22, 2013

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The California Legislature is in session.

Today’s schedule is here.

The California Assembly’s Daily File is here and the California State Senate’s is here.

Some important deadlines to remember:

  • January 25, 2013: Deadline to send bill ideas to the California Legislative Counsel for drafting.
  • February 22, 2013: Deadline to introduce bills.

Each member of the Assembly and State Senate are allowed to introduce up to 40 bills in this two year legislative session.

On to the morning’s California headlines:

  • California engineers question high-speed rail oversight – As California prepares to embark on its largest public works project in decades, a union that represents state engineers is questioning whether all the construction work will be thoroughly scrutinized.Contractors submitted bids this week to design and build the first 30-mile stretch of track for the $68 billion high-speed rail system, which eventually is designed to link Northern and Southern California by trains traveling up to 220 mph. The contract they sign is expected to be for up to $1.8 billion to build the initial segment in the Central Valley.The documents outlining the requirements for the bids say the independent contractor that would design and build the first phase of the project would hire the inspectors charged with testing the work on that segment, running from Madera to Fresno. The inspections would then be submitted to the California High-Speed Rail Authority.Critics, including lawmakers and a state engineers union, say the arrangement could present a conflict…
  • CalPERS nears a record $260 billion in assets – The California Public Employees’ Retirement System is poised to top a record $260 billion in assets, the market value it held before the global financial crisis wiped out more than a third of its wealth.The largest U.S. public pension, with half of its money in publicly traded equities, was worth $253.2 billion on Thursday, or about 97% of the pre-recession high set in October 2007. The fund returned 13% in 2012, about the same gain as the Standard & Poor’s 500-stock index.”A lot of the improvements in portfolio returns is simply reflective of the return of the market,” Chief Investment Officer Joe Dear said. “But there is still an important lesson there, which is that when the crisis was full on, we didn’t drastically reduce our equity exposure.”
  • Tobacco tax hike eyed for 2014 state ballot – Get ready for another round of tobacco tax wars, California initiative style.And count three big reasons for a do-over of the electoral skirmish in 2014: the relatively low level of the existing tax, the narrow margin of the vote in 2012, and the fact that it may now be a fight not over bureaucracy and research but rather college tuition.”I think the right measure, going to the right revenue source is going to be the magic combination,” says Democratic strategist Jason Kinney. “And that’s why I think so many people are looking at it.”
  • Jerry Brown’s budget is a boon to California’s unions – Gov. Jerry Brown continues to pose as an iconoclast who is willing to make the tough choices necessary to keep California afloat, but the budget he released recently is more evidence that he remains the cat’s paw for the state’s public-sector unions.“I want to advance the progressive agenda,” Brown said at the press conference unveiling his supposedly balanced budget, “but consistent with the amount of money people made available … I respect and embrace my role of saying ‘no.’”But he certainly has said yes to union demands. The budget is the culmination of Brown’s campaign to convince Californians to raise taxes on themselves. They complied by approving Proposition 30 to help the school kids, yet Brown has played games with that money — earmarking some of it for union pay hikes as a payback for all that help during the Nov. 6 campaign, according to GOP leaders.
  • California death penalty: Will state follow Arizona, which has resumed executions after a long hiatus? – When Arizona prison officials injected condemned rapist and murderer Richard Stokley with a single, fatal drug dose last month, it marked the state’s sixth execution of the year in the nation’s second busiest death chamber.Now that California voters in November narrowly preserved the death penalty, Arizona’s path could foreshadow the future for this state, where not a single one of the 729 death row inmates have marched to execution in seven years.As in California, interminable legal tangles once shut down Arizona’s death penalty system as the state executed only one inmate, who volunteered to die, from 2001 to 2010. But Arizona emerged from numerous court battles that removed all of the legal roadblocks that remain in California.The result has been 11 executions since October 2010, nearly the number California has carried out since it restored the death penalty in 1978. Significantly, the 9th U.S. Circuit Court of Appeals, often the last word for death penalty appeals in the …
  • Plenty of green carpool stickers remain available in California – Green stickers for plug-in hybrids: 9,022. Limit: 40,000. Expire: Jan. 1, 2015 White stickers for electric vehicles and those running on alternative fuels: 21,770. Limit: None. Expire: Jan. 1, 2015. Yellow stickers for hybrids: 85,000. Ended July 1, 2011.
  • Brown seeks to reshape California’s community colleges – With a slate of bold and controversial budget proposals, Gov. Jerry Brown has placed a renewed focus on the state’s struggling community colleges, the world’s largest system of two-year schools that are often overshadowed by the University of California and Cal State systems.The governor’s recommendations are aimed at keeping community colleges affordable, keeping classes accessible and moving students faster through the system to allow them to graduate or transfer to a four-year university at higher rates. Brown’s spending plan must clear the Legislature, and some college officials have vowed to oppose — or at least try to modify — some portions.
  • Medicare Pricing Delay is Political Win for Amgen, Drug Maker – Just two weeks after pleading guilty in a major federal fraud case, Amgen, the world’s largest biotechnology firm, scored a largely unnoticed coup on Capitol Hill: Lawmakers inserted a paragraph into the “fiscal cliff” bill that did not mention the company by name but strongly favored one of its drugs.The language buried in Section 632 of the law delays a set of Medicare price restraints on a class of drugs that includes Sensipar, a lucrative Amgen pill used by kidney dialysis patients.The provision gives Amgen an additional two years to sell Sensipar without government controls. The news was so welcome that the company’s chief executive quickly relayed it to investment analysts. But it is projected to cost Medicare up to $500 million over that period.
  • Dan Walters: Public debts cloud future for California cities – The tendency among local officials – much like their brethren in the state Capitol – is to make financial commitments with little thought to long-term consequences.That’s how our governments dug themselves into deep budget holes – spending revenue windfalls on new services, giving employees big pension and health care benefits retroactively, and borrowing for grandiose projects without economic viability.Three of California’s cities rode that path into bankruptcy. While one, Vallejo, has emerged, two others, Stockton and San Bernardino, are still ruminating over which creditors will take haircuts.Stockton’s situation is especially egregious because it committed all of those fiscal sins. Its biggest debt is money it borrowed to pay its pension obligations, a double whammy.

    In fact, most public debt in California is in the form of pension promises whose dimensions depend on assumptions of pension fund earnings.

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Aug 20 2012

Two Weeks to Go in California Legislative Session

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Dan Walters in the above video looks at the last ten days of the California Legislative session.

What issues will be taken up besides the 200 plus bills already being considered?

Public employee pension reform will be tossed a bone with a reduction of “airtime” in order to satisfy some of Governor Brown’s concerns about passing his tax increase measure, California Proposition 30, in November.

The trial lawyers would love to change MICRA and up the medical/dental malpractice pain and suffering damages limits. This may get some serious reform with limits being increased to satiate the lawyers. It will also force more physicians and dentists to retire or leave California.

The big unions and Governor Brown will probably try to reverse the reforms Arnold Schwarzenegger enacted on Workman’s Compensation Insurance. This will mean increased costs for employers.

Most of these end of term measures will only exacerbate California’s state budget deficit, hurt the business climate and the push for tax increases to sort everything out will drive the narrative going into the Fall election season.

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Aug 16 2012

Flap’s California Morning Collection: August 16, 2012

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California Aqueduct

Good Thursday morning!

The California Legislature is in session.  Today’s schedule is here.

The California Assembly’s Daily File is here and the California State Senate’s here.

On to today’s California headlines:

Jerry Brown, his dog Sutter in tow, kicks off Prop. 30 campaign

Flanked by education and labor leaders, dozens of schoolchildren and his dog, Sutter, Gov. Jerry Brown formally kicked off his campaign Wednesday for Proposition 30, the measure on the November ballot that would raise taxes on state sales and incomes of more than $250,000.

Brown used a Sacramento high school as the backdrop for the event, calling Proposition 30 a choice about whether Californians want to provide more funding for schools. In vintage Brown style, he quoted from the New Testament to make his pitch to voters, urging them to ask the state’s wealthiest residents to pay higher taxes to boost education spending.

“To those who much has been given, much will be required,” he said quoting from the Gospel of Luke, saying the state’s highest earners “now have an opportunity to give back.”

Brown was joined by his dog, Sutter, decked out in a red vest covered with Yes on 30 stickers for the event.

Under a budget signed by Brown earlier this year, public schools would face about $5 billion in cuts if the measure is rejected by voters. The state’s two public university systems would each face an additional $250-million reduction.

Assembly speaker vows action on public pensions, ‘regulatory reform’

Assembly Speaker John A. Perez (D-Los Angeles) said Wednesday that the Legislature would end its two-year session this month by passing measures to overhaul the state’s public pension system and enact a series of “regulatory reforms” to make California more attractive to businesses.

He said he hopes that a combination of “smart cuts and smart investments” will spur voters to approve billions of dollars in tax hikes in November to balance the state’s books.

Speaking at a Capitol news conference, Perez boasted about past achievements — delivering on-time state budgets, approving funding for California’s high-speed rail project, passing protections for homeowners from foreclosure and aggressive bank practices — but provided few details about some of largest items on the legislative agenda in the final weeks of the session.

On pensions, he pledged to deliver “comprehensive action” that goes above and beyond the 12-point plan proposed by Gov. Jerry Brown, but he declined to discuss specifics. On business regulations, he said lawmakers would likely consider legislation as part of “an ongoing effort to modernize our regulatory system so that it more accurately reflects real-world realities.”

California meter maids making nearly $100,000

 

Money pours in to defeat food labeling ballot measure

An initiative on the November ballot that would change the way packaged foods are labeled is shaping up like a battle between a tiny health food store and a big box grocery.

Proposition 37 would require new labeling on foods made with genetically-engineered ingredients. That would include just about every processed food that is not organic. As of yesterday, supporters have raised $2.4 million while opponents have raised $25 million – about ten times as much.

A list of supporters reads like the aisle of your local health food store: Eden Foods, Nature’s Path, Amy’s Kitchen, Lundberg Family Farms, Dr. Bronner’s Magic Soap.

A list of opponents is like a stroll through Safeway or WalMart: Pepsi, Coca-Cola, Ocean Spray, Nestle, Kellogg’s, Hershey’s, Sara Lee, General Mills.

Enjoy your morning!

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Jul 30 2012

Flap’s California Morning Collection: July 30, 2012

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Marina Del Rey, California

Good Monday morning!

The California Legislature is not in session for a summer recess.

The California Assembly has adjourned until August 6, 2012 and the California State Senate is also in adjournment.

The California Assembly’s Daily File is here and the California State Senate’s here.

On to today’s California headlines:

California Democratic Party endorses Jerry Brown tax initiative

The California Democratic Party has made its support of Gov. Jerry Brown’s tax initiative official.

The party’s executive board voted to endorse Proposition 30 at a weekend meeting in Anaheim. The measure would generate an estimated $8.5 billion in revenues assumed in the current state budget by temporarily raising income taxes on high earners and enacting a quarter percent hike in the state sales tax.

The board voted to oppose a rival tax initiative backed by civil rights attorney Molly Munger and the California State PTA. Proposition 38 would raise income taxes on a sliding scale for most Californians, sending the bulk of the revenues to schools and early childhood development programs.

Are public pensions following IRS tax-delay rules?

The IRS is taking a new look at whether public pension systems qualify for tax deferrals, raising questions about nonprofit charter schools in CalSTRS and county systems using “excess” earnings to fund retiree health care.

Taxes on employer-employee contributions to pension systems and their investment earnings can be avoided until retirees are paid. But if the rules are not followed, the IRS can change the tax status and impose fines and penalties.

As public pension funding problems surfaced during the economic downturn, the U.S. Internal Revenue Service began encouraging retirement systems to seek compliance reviews and make voluntary changes.

Some large systems, such as the California State Teachers Retirement System, have not had full tax reviews in recent decades, relying instead on IRS approval of specific issues.

(The giant California Public Employees Retirement System and the University of California Retirement System did not respond to queries last week about the status of their tax compliance reviews.)

Last April, CalSTRS said in a letter to the IRS that a proposed new rule, aimed at excluding non-government employees from public pensions, could make more than 10,000 charter school employees now in CalSTRS ineligible for the retirement system.

Bay Area to Sin City? Las Vegas bullet train backers gamble on record loan

Call it the bachelor or bachelorette party of tomorrow: you and your friends sipping cocktails aboard a futuristic train as it whips travelers across the desert to Las Vegas.

You might have to wait awhile, but it’s not such a long shot. Lost in the fractious debate over California high-speed rail is a separate, little-publicized plan for a second bullet train that would connect the Golden State with Sin City. Private developers are wagering on the Vegas train, hoping the Obama administration in coming weeks provides a record rail loan to kick-start construction on the $8 billion-plus train line that could someday connect to California’s much-debated high-speed railroad near Los Angeles.

The vision for the 150 mph party train is as audacious as the gaudy casinos, shows and night life that attract 1.5 million visits to Vegas from the Bay Area each year. Partyers could pay the equivalent of a pricey plane ticket and step onto the Las Vegas Strip in less than 1 1/2 hours from Southern California.

“Consider the train an extension of Las Vegas,” said project COO Andrew Mack. “We definitely want to create that type of environment where they can sit back and relax.”

California’s newest city withering on fiscal vine

The jagged foothills, withered pastures and a web of horse trails along the Santa Ana River give the state’s newest city a hint of the Wild West. Jurupa Valley’s money troubles, though, are pure modern-day California.

Jurupa Valley may be broke in a year, even though the city is so new that it has no permanent employees, no generous employee pension plan and runs City Hall out of a leased strip-mall storefront next to the Lucky Wok Chinese restaurant.

Without a financial rescue, the city will have to shut its doors, sending the mishmash of Jurupa Valley communities back into the ether of unincorporated Riverside County.Unlike San Bernardino, Stockton and Mammoth Lakes, California cities that have all reached the brink of insolvency in recent weeks, Jurupa Valley’s money troubles are not of its own making. They are Sacramento’s fault.

Enjoy your morning!

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