Sacramento’s budget games are both silly and harmful to Californians

By Jon Coupal | California’s budget process has become so warped it would make even Niccolò Machiavelli blush. The annual spending plan was never easy for citizens, the media and even political insiders to understand. But for the last decade, it has been perverted into a wholly political process devoid of transparency.

Sacramento politicians will crow that they have faithfully performed their constitutional duty by passing an “on time” budget. True, the main budget bill (Senate Bill 74) was passed on June 15, just hours before the constitutional deadline. But no one should be fooled into thinking that the technical passage of the budget bill has any real meaning. Ever since 2010, it has become common to enact politically motivated legislation in so-called budget “trailer bills” as a means to avoid public scrutiny.

2010 was the year when the budget process was corrupted by the passage of Proposition 25, ironically titled the “On-Time Budget Act of 2010.” (“Trailer bills” and their cousins, “junior budget bills,” are now passed well after the constitutional deadline of June 15th). Voters were told three things about Prop. 25: First, budgets would now be passed on time; second, the budget process would be transparent; and third, legislators would forfeit their pay if the budget was not passed on time. All three were lies. Moreover, because the primary goal of Proposition 25 was to reduce the vote threshold for passage of the budget bill from two-thirds to a simple majority, it deprives the minority party of any meaningful input or oversight.

Proposition 25 perverted the budget process in three distinct ways. First, since 2010, dozens of bills have been designated as “budget related” which have nothing to do with the budget. These bills frequently have some token appropriation for a nominal amount (e.g. $1,000) in a weak effort to say the legislation is somehow related to the budget. This now means that there really isn’t any budget bill at all but an endless series of bills that are introduced throughout the year.

To read the entire column, please click here.

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ACA25 is wrong for California

By Jon Coupal | Times are strange indeed when the Howard Jarvis Taxpayers Association finds itself fighting on the same side as left-leaning organizations such as Voices for Progress, Common Cause and the ACLU. The saying that politics makes for strange bedfellows is never more true than in times of crisis and confusion.

When the COVID-19 virus descended on California, it caused near panic throughout the state. Because we knew so little, our elected leaders were probably justified in heeding the advice of health officials who recommended strict shelter-in-place orders.

Among the institutions placed on lockdown was the California Legislature. The emergency necessitated immediate action back in March, but on June 10, when lawmakers returned to the Capitol, the California Assembly quickly passed Assembly Constitutional Amendment 25 to address how the legislature would operate during a statewide emergency in the future.

Proving the adage that “haste makes waste,” ACA25 was rushed through the Assembly in only three weeks. By the time transparency advocates were aware of what was happening, they had little opportunity to analyze it or provide meaningful commentary. The proposed constitutional amendment is now pending in the California Senate. Without mincing words, ACA25 lays waste to the notion of legislative transparency.

To read the entire column, please click here.

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Defund the police unions

By John Stossel | Why are incidents of police abuse so common? One reason: Police unions protect the worst cops from being fired.

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State’s ongoing fight over pension obligation bonds

By Jon Coupal | Earlier this year, this column raised the alarm over the resurgence in the use of “pension obligation bonds,” a risky financing method that fell out of favor during the 2008 recession but is now making a comeback.

Fortunately, there is more scrutiny on this form of debt financing than in years past, and taxpayers are starting to take a keen interest in whether POBs are in the best interests of their local governments.

Citizen awareness and improved oversight will be crucial.

To refresh citizens’ understanding of what this is all about, POBs are bonds issued to fund, in whole or in part, the unfunded portion of public pension liabilities by the creation of new debt. It is like paying your Visa bill with your Mastercard.

Advocates of this strategy rely on an assumption that the borrowed money from the sale of bonds, when invested with pension assets in higher-yielding assets, will achieve a rate of return that is greater than the interest rate owed on the borrowed money, which is paid back over the term of the bonds.

A policy reflected in the California Constitution since the 1800s is that government debt should be approved by the voters.  The reason for this is simple — today’s politicians should not be allowed to burden tomorrow’s taxpayers without the consent of those financially obligated for the repayment. Back in 2003, the Howard Jarvis Taxpayers Association sued the state of California for its attempt to issue a statewide POB without voter approval. HJTA prevailed and the POB bond proposal was invalidated.

To read the entire column, please click here.

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Police have been looting for years

Escalating salaries, benefits, and pensions for police are crowding out other services

By Joe Mathews | When you hear cops reporting widespread looting in California, you should believe them. Because they are true experts. Indeed, for many decades, the most successful looters in our state have been the police themselves.

Of course, California’s nearly 80,000 sworn officers don’t bother with the small-time grift of stealing electronics during civil unrest. Instead, they prefer to sack the treasuries of the governments that employ them, in both good times and bad.

In communities across our state, the escalating salaries, benefits, and pensions of police are swallowing up municipal budgets—and crowding out the other services, from libraries to summer programs, that poorer Californians depend on most. Over the past 40 years, police spending more than doubled, while parks, recreation, and maintenance budgets remained flat or declined. Police departments are by far the largest piece of any local budget, often consuming at least one-third of the general fund (as in my San Gabriel Valley hometown) and more than half of discretionary revenues.

As policing costs have come to dominate city finances, the police have gained nearly unchecked political power. Police unions, enriched by higher dues from well-paid officers, make the campaign contributions that determine who wins local races. So city council members rarely move to curb the pay or power of police officers who installed them in office. The result is that in many places in California, the city government does not run the police department; the police department runs the city.

This flawed local government structure deserves more attention in our current crisis—because it provides part of the answer to the question Americans are asking: Why does abusive, racist, and deadly police behavior keep happening? The deeper response to that question starts not with Twitter-fueled conspiracy theories about the protestors who have taken over our streets, but rather in recognizing just how thoroughly our police have taken over our city halls.

Police dominance of municipal budgets is a problem all over the country, but it’s most extreme in California. Our 120,000 full-time law enforcement officers—that includes police, sheriffs, and prison guards—are the highest paid in America. California consistently ranks, along with New York and Alaska, among the national leaders in spending on police ($414 per resident, compared to a national average of $354).

Police unions, enriched by higher dues from well-paid officers, make the campaign contributions that determine who wins local races. So city council members rarely move to curb the pay or power of police officers who installed them in office. The result is that in many places in California, the city government does not oversee the police department; the police department oversees the city government.

The peculiarities of California governance have long accentuated police power, as well as its costs. While local budgets were limited by the Prop 13-tax system, the “maintenance of effort” provisions in the state constitution—via Proposition 172, approved by voters in 1993—required local governments to maintain their spending on police and other public safety personnel. So police budgets, constitutionally, were programmed to gobble up ever higher shares of a limited local tax base.

Then things got worse. The full-scale police looting of municipal budgets began 20 years ago, when unions forced changes in pension rules that made it possible for officers to retire as early as age 50, with pensions that would be nearly as high as their salaries. These pension changes were both retroactive and permanent, and included easily-abused rules that allowed cops to maneuver to spike their pensions astronomically. A Los Angeles program allowed police officers to “retire” briefly and pocket part of their pension and salaries in a lump sum; the current LAPD Chief Michel Moore used it to take home $1.27 million.

With cops also receiving generous disability benefits and costly retiree health coverage, cities have experienced a crushing increase in their retirement costs. In effect, California cities are paying for two police forces—the current one and the retired one. And the last decade of recovery did not produce enough new revenues to keep up with these increases in police salaries and retirement benefits. (Firefighter pay and benefits also have taken big bites out of cities).

These escalating police costs add an irony to the current crisis on our streets. Today’s young protestors will get less in local services because they are paying for the unaffordable retirements of the cops who are using tear gas and rubber bullets against them. The police really should be kinder to their benefactors.

In another irony, police response to today’s protests will only add to another rising municipal cost: legal settlements. In recent years, cities have seen multimillion-dollar increases in amounts paid to settle lawsuits over police shootings, use-of-force, and in-custody deaths. Look for the current police-community clashes to produce hundreds of millions of dollars in new settlements, ultimately paid for by the taxpayers suffering under COVID and curfews.

Maddeningly, all the massive increases in police budgets haven’t given us more policing. Most cities have fewer sworn officers than they did in 2008. The lack of personnel was apparent in recent days, as police departments struggled to muster enough officers to protect property from vandalism, arson, and looting.

To be fair, California police are neither irredeemable nor unaware. Police collaborated with their critics to negotiate pioneering state legislation last year that limits police use of force. Some cities, notably Richmond, have transformed police-community relations.

And the LAPD, once a paramilitary citadel, is now a national model of community responsiveness and diversity, with two-thirds of officers now hailing from ethnic or racial minorities. Watching police and protestors up close recently in L.A.’s Fairfax district, I was struck by how the protestors were more male and white than the cops facing them.

But police departments have faced little pressure to surrender any of their local fiscal and political power—until now. Researchers at Black Live Matters are building a strong case for rolling back local police budgets. They successfully targeted Los Angeles Mayor Eric Garcetti’s initial budget proposal, which offered deep cuts in virtually every city program except the LAPD, which got a 7 percent increase. After activists launched a “People’s Budget” to replace police spending with money for the homeless and renters, the mayor announced he would trim the police budget instead. Nationally, some activists even want to end police departments altogether.

That’s unlikely to happen, but California’s system of local government must change so that police no longer dominate our cities. This means empowering citizens to challenge police power in city hall, and perhaps forcing police to work under neighborhood service departments with a broader sense of community needs.

But first, let’s stop the looting.

Joe Mathews writes the Connecting California column for Zócalo Public Square, where this article originally appeared.

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Proposal to prohibit police unions from funding district attorney campaigns doesn’t go far enough

By Joel Fox | One response to the protests over police treatment of black communities is a proposal by some current and former California district attorneys to prohibit candidates running for prosecutor positions from receiving police unions’ donations and endorsements. 

The Los Angeles Times editorially backed the idea arguing, “These unions’ power to raise and dispense large amounts of campaign cash has warped the electoral process.” 

If such a move is seriously considered, then the proposal doesn’t go far enough. The same principle of unions unduly influencing authorities that oversee their work applies to other relationships between public unions and government officials. If police unions should not give to District Attorney candidates, then teachers unions should not endorse and donate to school board candidates; prison guard unions should not give to state legislators; other public sector unions should not campaign for mayors and city council members who set their salaries and working conditions. 

San Francisco District Attorney Chesa Boudin succinctly laid out the reasoning for the California State Bar to remove any conflict of interest of police unions backing prosecutors when he wrote in a statement, “The financial and political support of these unions should not be allowed to influence the decision making.” 

Isn’t that the same roadmap used by teachers’ unions seeking to elect school board members? 

To read the rest of this commentary on CALmatters, please click here.

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Cities need reform, not bailouts

By Jim Righeimer and Bruce Whitaker | The inevitable has happened, restoring our faith in the logic of the universe: the local politicians who supported Gov. Newsom’s shutdown of the California economy now want the governor and the Trump administration to bail them out.

But don’t be fooled. Even if you think killing the economy has been necessary, the coming collapse of government finances has less to do with the virus or the economic shutdown than with crazy government spending that goes back years, even decades. The catastrophe for cities wasn’t created in the past few weeks.

Oh, they’ll tell you it’s all about the virus. Indeed, that’s what the mayors of two Orange County cities recently proclaimed in these very pages. Under the grim-but-hopeful headline “Ensuring the survival of SoCal cities after this pandemic,” mayors Jennifer Fitzgerald of Fullerton and Katrina Foley of Costa Mesa asserted, “The COVID-19 crisis is crushing already cash-strapped California cities.”

The key word is “already.” With a few brief periods of reform, government unions supported the political campaigns of candidates like Fitzgerald and Foley. Once elected, these officials signed off on every new pay and benefits hike proposed by the union leaders who helped them into public office.

We could pick at the facts in their essay — we could point out that the 54 employees Foley claims she’ll have to lay off to are mostly part-time recreational staff.

But these are quibbles. Our key point is that, in the years leading up to economic lockdown, these and other California officials have rubber-stamped pay hikes and pension benefits that their supporters, the public employee unions, demanded of them. Their government finances were unaffordable long before this disaster. The shutdown has only sped up the process of insolvency.

Consider the shameful example of Fullerton’s streets.

To read the rest of this op-ed in the Orange County Register, please click here.

Jim Righeimer was elected to the Costa Mesa City council twice and served from 2010 to 2018.  He was mayor from 2012 to 2014. Bruce Whitaker was first elected to the Fullerton City Council in 2010 and has since been reelected twice. He was mayor in 2013 and 2017.

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1,500 unite outside Fullerton City Hall on Saturday in peaceful protest

By Jessica Benda, Daily Titan | Twelve days after George Floyd’s death, over a thousand people flocked to Fullerton City Hall on Saturday as protests in support of the Black Lives Matter movement continue to sweep the nation.

Approximately 1,500 peaceful protesters, including several Cal State Fullerton students, chanted underneath a cloudy sky along the intersection of Highland and Commonwealth avenues. Unlike the protest that occurred at the same intersection on May 30, visible police presence was scarce as the crowd raised up signs and shouted as passing cars honked.

Faith Forcucci-Morris, who organized the event with her husband, Conner, and grew up in Fullerton herself, said that they want to keep pushing for progress.

“The purpose is to honor the Black Lives Matter movement, as well as the Indivisible movement. We need to vote Trump out of office. We need changes to police reform and we need to defund the police and make our community better for everyone,” Forcucci-Morris said. “This is a place that means a lot to me, and instead of leaving for someplace better I want to fix it.”

The Fullerton Police Department, which is right across the street from City Hall, was notified about the event in advance by Forcucci-Morris.

Fullerton Police Sgt. Eric Bridges said that it was a very successful event as there were no arrests made in regards to the protest.

“We at the police department, we are very supportive of people’s First Amendment rights, and we do everything we can to facilitate that. As long as the protesters are peaceful and law-abiding, we have no problem with that and again, we do make every effort to support that,” Bridges said.

Kids and pets also participated in the protest as volunteers handed out water bottles through the crowd.

To read the rest of this story in the Daily Titan, please click here.

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Not the time to gut Proposition 13 and raise taxes

By Jon Coupal | Under California law, proposed initiatives must be presented to the California Legislature in an “informational hearing” open to the public. Legislators do not vote on the proposals because these are initiatives that have already qualified for the ballot. The hearings are mostly for the benefit of policy leaders and the public.

A weekly column by Jon Coupal

Because the infamous “split roll” initiative has now qualified, the Legislature held a hearing in the California Legislature on Thursday. I was pleased to be one of the individuals invited to testify and explain our opposition to the measure, which would remove Proposition 13’s protection from most commercial and industrial properties, sharply raising taxes.

Howard Jarvis Taxpayers Association is California’s largest taxpayer advocacy organization with over 200,000 members. We are strongly opposed to this initiative. First, taxpayers are also consumers, and we know that taxes on businesses have an insidious way of trickling down to consumers in the form of higher prices for goods and services. California’s cost of living is already way above the national average, and we don’t need to add to that burden for residents who are already struggling to pay the bills.

Even if we resolve the health issues related to the COVID-19 pandemic, higher taxes are the last thing California needs. The state already has the highest income tax rate, highest state sales tax, and highest fuel tax. And when cost of living is taken into account, California has the highest poverty rate in the nation. More importantly, California is not even a low property tax state even with Proposition 13. According to the Tax Foundation, California ranks 17th out of 50 states in per capita property tax collections.

Taxpayers are also worried because the proponents of this initiative have openly admitted that raising property taxes on businesses is just the first step in the complete dismantling of Prop. 13.

To read the entire column, please click here.

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Unnecessary spending on retiree health care is crushing California

By David Crane | California has asked Washington for $14 billion in Covid-related support, in addition to the $8 billion already provided by the CARES Act. But because the state, with an annual General Fund of $150 billion, incurs more than $24 billion of annual expenses for pensions and other post-employment benefits (OPEB)—including post-employment subsidies for health insurance—a big chunk of the federal disbursement won’t go to schools, hospitals, or roads.

California’s pension problems are well known, but the OPEB crisis is almost as bad. California pays 100 percent of the health-insurance premiums for retired state employees and 90 percent of the premiums for retirees’ family members. As a result, the state incurs annual OPEB expenses of more than $7 billion. Because the state covers that cost with a combination of cash ($2.7 billion this year) and debt, California’s OPEB deficit is $85 billion, exceeding the amount of the state’s outstanding General Obligation Bonds, which—unlike OPEB debt—were approved by voters. OPEB subsidies for retired employees are not only gold-plated but also largely unnecessary, because California—alone among the states—offers its middle-class residents health-insurance subsidies on top of what they get from Washington. Under that program, individuals earning up to $75,000 per year, and families of four earning up to $150,000 per year, are entitled to support from Sacramento.

Retired state employees whom I know are embarrassed by their OPEB benefits. As early as age 50, they and their dependents get premium-free insurance and prescription-drug coverage; to pay for the largesse, the state diverts money from other programs. No other state offers such a rich OPEB program.

To read the entire column in City Journal, please click here.

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