Wednesday, August 25, 2010

Is California Greece or Rome?

Over at Chlorinated Liberty is a great article on the un-seriousness of the California Legislature. "California Burning"
Now 55 days into the new fiscal year, California's Legislature has yet to emerge from its duck-the-heavy work hibernation. As has been customary, Lawmakers would rather tackle trivial legislation than balance the budget.

 They link to Diane Harkey (R-Dana Point), where she points out that the California Legislature just isn't willing to do the hard job of fixing the State of California's budget problems. Over at Red County she says ~
It doesn't take an economist or financial wizard to know that beginning with $84 Billion in revenues and facing $20 Billion dollar annual shortfalls for the next 4-5 years, you can't tax nor cut your way to solvency.  Like any business or household, the state has fixed costs, or expenses that must be paid to stay alive, constitutional and Federal.  If you, as a business or household, continue to buy "extras" and spend more borrowed money, you will never dig out of your financial hole. You must show some discipline and implement a strategic work-out plan, reducing expenses, definitely not increasing future liabilities, and display the ability to repay your debts over time. In other words, exercise discipline and show your creditors that you "get it." Otherwise you face bankruptcy, or for a state, federal receivership or a form of federal debt guarantee.
It seems none of our Legislators want the "bad press" of being the one to say "No!". Assemblywoman Harkey starts her article thus ~

In this highly-charged election year and the age of term limits, the incentive to achieve more than positive "press" is nearly zero.

She goes on to explain what sounds like progress for the State in cutting back spending. But in reality results in a sleight of hand, and an increased obligation California has taken on.

This week, pension reform was approved for six of the state's 21 contract bargaining units (unions). The reform is a step in the right direction, but unfortunately increases our debt obligations in future years.  How does this happen? Probably exactly as occurred in 1999 when SB 400 was approved with 7 voting "no."  SB 400 was the bill that increased pensions in a "boom" year, and estimates are that the state now has $500B in unfunded pension liabilities. (emphasis mine)

In this op-ed at Sign On San Diego, Assemblywoman Harkey breaks down what these "savings" aren't ~
While there is roughly $68 million of general fund savings in 2010-11, that savings is quickly reversed the very next year and increases to $39 million in extra costs by 2012-13. Other fund account costs also increase in out years. Imagine the net negative cash-flow effect magnified when the remaining bargaining units scoop up the “deal.” (emphasis mine)
(The "deal"? Me-too union negotiations where a bargaining unit gets the same deal another bargaining got in their contract.)

Be sure to read both of her excellent articles about how our California Legislature is just not taking their job seriously and needs to face the music now, not down the road.

Then be sure and visit her Facebook page! This is a lady that gets it!

Sunday, August 15, 2010

Be careful what you ask for...

Over at Patterico's Pontifcations Jack Dunphy has this post Starting with Chapter Two ,where he comments on last Friday's Los Angeles Times op-ed piece Lose the Ruling, Attack the Judge ,that the writer puts the cart before the horse.

Dunphy points out that of course, the writer Jon W Davidson likes the decision. After all he is the the legal director of Lambda Legal, the organization that brought the federal lawsuit attacking California’s Proposition 8. But that his reasoning is flawed, as he starts in the middle of the debate. Of course he likes the decision, but he fails to address the background.

Jack Dunphy proposes an alternate title for the op-ed ~

One of the commenter's on Jack Dunphy's piece writes ~ 
“When you don’t win the argument at the ballot box, as indeed advocates for homosexual marriage have failed to win in even a single instance in the 31 times they’ve tried, take the campaign to the more accommodating venue of the courtroom. There, a lone judge, blessed with finely attuned senses denied to both his predecessors and the ignorant proles of the voting public, can discover a constitutional right that mysteriously remained undetected through all our nation’s history. That seems to be the favorite tactic of groups advocating for same-sex marriage.”

The real issue here is not “gay marriage”. It’s the most important issue in all of politics, perhaps in all of life: Who decides?

Are the people the ultimate deciders, or the judges? Is this a country where the people govern themselves, or a country where the people are governed by an unaccountable elite? These are the question the American Revolution was fought to resolve. Clearly, they are still not settled.

— 8/15/2010

Another commenter ~

Had the people voted to accept same sex marriage, I would have accepted it in spite of voting against it. Since this has been imposed by a single judge, who seems to have a political agenda, I will not accept it. The judiciary has usurped the legislative power, and for that matter the executive power, for a long time. It is time to impeach and remove some judges. They serve for life but as a condition are required to conduct themselves in accordance with the Constitution and the laws.

When rights assured by the Constitution are in conflict, it is the judiciary’s job to protect and define those rights. It is not their job to go searching for “rights” that only apply to specific groups and elevate them over those that apply to all. Our out of control courts are acting as agents of a political agenda, and one that cannot win at the polls. Judges are not gods.

— 8/15/2010

Another comment in reply to a commenter noting that customs have been different in other times and places ~

It doesn’t have to be (and never had to be) THE inflexible rule. What matters is that it has been OUR rule.

We’re not bound by the customs of the Yanomami or the Seljuk Turks. But we in the West DO have our OWN customs, and yes, we’ve been bound by them for thousands of years. (see ancient Rome, that’s 3 millenia ago, and so yes, thousands of years.)

Now it’s certainly true that we might elect to change our rules and customs over time, so… goodness me! Did I just use the word “elect”? Didn’t we in fact hold an election on this very subject?

“One man, one vote” is a pretty principle, if the one man in question just so happens to be a federal judge.

— 8/15/2010

From Time Magazine ~

And to add another twist, at least one constitutional-law scholar in California is suggesting that by trumpeting the issue of standing, Walker has opened a hornet's nest he may have been better off leaving undisturbed. "If the proponents don't have standing to appeal, then it's entirely plausible that the courts will rule that they did not properly have standing to go to trial," Vikram Amar, a law professor at the University of California at Davis, told TIME Thursday evening. "This is an issue he glossed over when he allowed them to intervene in the trial."

Amar says that if the Ninth Circuit agrees with Walker that the proponents don't have standing to appeal, the judges may well decide they shouldn't have been allowed to intervene in the case at all. If they do, he says, they could decide to vacate the trial entirely, sending it back to Walker to start over. The governor and attorney general would be unlikely to intervene — but on the other hand, come November, voters will choose new candidates for both of those offices.

In that event, what happens next is anybody's guess. "We're in uncharted waters here," Amar told TIME. (Read more At Time Magazine)

Patterico has a couple other posts up on this subject, see here which starts ~

I have an upcoming essay about the way in which the value of our votes has been diminished over time. One of the reasons our votes are worth less nowadays is the negation of our votes by liberal federal judges, who issue rulings striking down our laws — sometimes after a trial where the people supposedly charged with defending the law actually disagree with the law.
A comment on this post~

Jerry Brown should be out on his butt for non-feasance of office. He “didn’t feel” it was right? Who the hell asked you?

 — 8/13/2010 
  So, what do we have...a constitutional amendment passed by the voters in California. Undefended by the folks that are charged with defending California and Californians. Declared un-constutitional by a judge finding a "new right" that did not exist before his ruling;changing the meaning of a "word" and an institution that has not ever in our culture included that right. Standing a great chance of being thrown out of court entirely by a higher court since the trial judge says the same folks he gave standing to, he now declares have no standing after he gave them standing in the trial. Or, as Patterico points out his reasoning in his latest post that there is a rather good chance Prop 8 will be vindicated by the US Supreme Court.

  But that final option leaves us with a bigger problem, if it isn't heard on correctness of the grounds of the trial judge's ruling, rather than the correctness of Prop 8

"Are the people the ultimate deciders, or the judges? Is this a country where the people govern themselves, or a country where the people are governed by an unaccountable elite?" 

   No matter your stand on Prop 8 or the ruling, we should all be throughly unhappy with this travesty.

See also Tyranny of the Minority from Saturday's Washington Times

update 8/16/10 Ninth District Issues Interim Stay on Prop 8

Again at Patterico's The increasing worthlessness of your vote.

Saturday, August 14, 2010

Cordoba House vs St Nicholas Greek Orthodox Church

  When the Twin Towers fell on 9/11, right in the shadow of the South Tower stood a tiny historical building. St Nicholas was originally built in 1832 and had served the Greek Orthodox community continuously since 1922. Needless to say this building was completely and immediately destroyed when the South Tower fell. But here we are now with nothing but obfuscation from the NY Port Authority which originally wanted to buy the site and relocated the church a block to the south.  The Church leaders had agreed to the deal, but apparently this land swap currently not in the works.

  George Demos, Republican candidate for the NY1 Congressional District explains~

  Needless to say, it's been 9 years and St Nicholas still has not been able to start working on replacing their building. They have their plans, they have their funding, but the Port Authority refuses to meet with them to approve the rebuilding. The plans (pdf,see pg 15 ) of the Lower Manhattan Development Corporation as of Feb 2007 were to move the church to the corner of Liberty and Greenwich Streets, a little to the south of their original location. At some point last year, that plan and position was withdrawn by the NY Port Authority.

  But Cordoba House gets fast tracked...

  Then we get from our President (emphasis mine)~

But let me be clear: as a citizen, and as President, I believe that Muslims have the same right to practice their religion as anyone else in this country. That includes the right to build a place of worship and a community center on private property in lower Manhattan, in accordance with local laws and ordinances. This is America, and our commitment to religious freedom must be unshakeable. The principle that people of all faiths are welcome in this country, and will not be treated differently by their government, is essential to who we are. The writ of our Founders must endure.
  So, what about the Greek Orthodox Mr President? Is your "commitment to religious freedom" unshakeable here too? They can't even get St Nicholas rebuilt in nine years time, with no solution to that problem in the near foreseeable future. What about their "right to  build a place of worship"? To not be "treated differently by their government"? It seems they are definitely being treated "differently by their government" than a group that plans on groundbreaking ceremonies in a year's time, and doesn't even own the property they want to build on!

Tuesday, August 10, 2010

Sacred Cows and Fixing California's Budget Woes Part 2

Even more on the sacred cows in the California Budget ~

 Let's look at CalFire...From the California Legislative Analyst's Office ~

Initially, CalFire’s mission was the prevention and suppression of wildland fires in undeveloped areas. Over time, however, there has been considerable “mission creep” and the department now spends considerable time and resources protecting homes in SRAs from wildfire, as well as responding to medical emergencies and other non-wildfire calls.

   So, CalFire as a part of CDF or the California Department of Forestry, was to manage undeveloped wildland areas. Yeah, times and job descriptions change. Fire Departments across the country now spend on average 6% of their time fighting fires, and most of the balance goes to medical emergency response. CalFire is no different, and I'm sure most of their time goes to "other non-wildfire calls."

Sacred Cow? You bet! Who would ever say they didn't like fire fighters? But does that give CalFire the right to be totally unaccountable to the people of the State of California? I don't think so...

CalFire collects and spends over $2B every year from the Fed's(National Forest coverage and large wildland fire suppression), California counties, and cities it contracts with. Then they still get an additional $2M from the General Fund with a proposed additional $200,000 increase this year, PLUS they now want a SECOND Emergency Fund created. (about $238 million in the 2010-2011 budget year and about $480 million per year thereafter)

A new Emergency Fund(ERI ~ Emergency Response Initiative) created by "taxing" (being called a "fee" by the Governor's office!) every homeowner’s and commercial property owner’s insurance policy 4.8% (this of course will never show on "The Budget"...).This AFTER the state's Legislative Analyst's Office has said there are serious abuses by CalFire of the "old" Emergency Fund (E-Fund), and that the way the governor wants to fund this new "fee" won't fly. It's still there in the proposed Budget months after the LAO said it would have to be changed.

   Abuses by CalFire of the E-Fund  CalFire's day-to-day operations are supposedly financed out of revenues collected from contracted users, and General Fund monies.The E-Fund monies are to be use to cover large wildfire fighting expenses such as overtime, additional staff, and fire fighting costs that are not considered day-to-day. The Legislature has oversight of how CalFire budgets the use of their money thru the General Budget process. First 24hr responses to wildfire incidents are to be considered day-to-day costs; the seasonal Tahoe CalFire station is fully funded from the E-Fund, whether they fight a fire or not. Staffing is considered 3 full-time fire fighters to each engine, per General Budget requirements. CalFire has been "staffing" four fire fighters to an engine, and charging that additional salary to the E-Fund. Half of CalFire's aviation fleet(11 helicopters) is charged to the E-Fund, a DC-10 firefighting plane is fully charged to the E-Fund year-round. Whether they ever are used to fight a fire or not. CalFire also wants an additional $150M to replace all of their helicopters in the next six years.

  While any of these expenses might be justified out of General Fund monies, the problem is there is no Legislative oversight of how and when the Emergency Funds are being spent. The systemic over-use by CalFire policy of the E-Fund makes it unaccountable to the Legislature, and an additional emergency fund with no oversight makes it insane! CalFire is spending funds that the Legislature has no control over and is asking for more.They have no incentive to keep costs down, as there is no effective oversight on how they spend the State's money. CalFire decides how they spend money. This is neither in the State's best interest, nor the way it is supposed to work according to the California Constitution. The Legislature is supposed to control CalFire's spending. As the LAO says ~

Current E-Fund Budgeting Practice at Odds With Original Legislative Intent.

Best answer for THIS sacred cow? Break it up! Give it back to the counties(about half of California's counties use CalFire as their County Fire Department, as they were told it would be cheaper for them to contract it out to CalFire). More local control (or effectively ANY control), and the State would only have to pay each county for coverage of State Responsibility Areas, instead of supporting 6,000 State fire fighters and 56* fire stations(yeah, that’s all there are!) to the tune of over $200B,220M projected for this year alone! Plus whatever Emergency Fund(s) that CalFire is currently wasting. A win for everybody! Less cost to the State, more monies for the Counties. Only one that loses is the State Firefighters Union...(you know, those folks collecting $60 every pay period above and beyond regular dues to do the political PR work to keep CalFire as an unaccountable, untouchable sacred cow)

More to come. There are over 400 State agencies to highlight abuses in...

* 8/12/10 correction there are apparently 205 stations. but you get a different number depending on which gov. page you are on...

Sacred Cows and Fixing California's Budget Woes

   I got into a discussion today regarding an article at the SacBee about the State furloughs.

One of the commenters had written this ~

   My answer to this ~
   "What? You think the sacred cows will ever be touched by this? Never gonna happen!

   Besides furloughs are designed to hurt the public, with the extra added value of hurting the least paid state employees...

   Best thing the Gov and Legislature could do is kill the 20% increases to every department that is now listed in the proposed budget (it will take you days to read through and get a general understanding, sorry!). Start by making them use the same amount of money they had budgeted for last year. And then go back and cut out any excesses"

  Which got me thinking even more...which got me digging around again in the Governor's proposed budget...which led to this post ~

   A good example of the duplicity in the budget is shown in the budget summary (PDF. See pages 4 and 5). Take just K-12 funding. The Governor would have you believe that K-12 is taking a 2.1% hit on funding(Oh! The kids!!). Turns out that is only from general fund monies(the ones that show on the budget, and have to be voted on by the Legislature) All together, the budget summary plans for K-12 to spend $35,898M for 2010-2011. That's $19M more than 2009-2010. Why are local schools having to cut their budgets again?

   Or to continue on this line what about Higher Ed? How is it a system than is charging over 205 thousand students (UC undergrad/grad student population 2009) an average of $12,255 per year, not counting room and board or transportation (that's on average another $13,000, a good percentage of which goes to UC), not able to operate in the black? That's $2,512,275,000 a year they are taking in. But they still want an additional $12,928M to use from the California Budget. And then there's the Lease Revenue Bonds... UC wants $59M this year alone from this off the Budget source, and that's not even talking about the huge list of replacement/repairs they want the state to pay for. It's just two new buildings on one campus.They're making CalFire look like pikers in asking for $800,000M to repair/replace 56 fire stations in the state. The Governor asked for 3 of these stations to get Lease Revenue Bonds for the work this budget cycle. (short primer on Lease Revenue Bonds at the bottom, for those who are interested)

   And then there's the Endowment Funds. The UC Regents control over $16,700B in Endowment Funds plus an additional $8B yearly from private support such as their individual Campus Foundations. Then there are uncountable special private endowments such as the UC Davis/DeLeuse Family Endowment for one, with a funding of over $1M. I'm guessing you could spend weeks and months running down all the many private endowments that are not controlled by the UC Regents! While it is understandable that endowments do not spend principal, you would think that there should be enough there to fund a very large portion of the UC budget. Apparently you would be thinking wrong

  Another income source for UC is patent and invention licensing agreements. The UC system took in $130B in 2008 alone on everything from medical devices to new strains of strawberries. They also receive over $2B yearly in Federally funded research grants. Their Medical facilities also bring in approximately one fourth of the UC operating budget.

  Can someone really answer why the UC system needs state funding at all at this point in time and especially why they need an additional 20% over last years budget?

    Revenue Lease Bonds. Say the state wants to replace a building. They do this by mortgaging that building to themselves, same as in Monopoly, they turn the card over, and the money magically appears. This gives them "capital" for an on average 30 year construction loan. Then they turn that mortgage"card" into a bond, and then that "card" disappears along with the debt never to be seen again on the Budget, as the Lease Revenue Bonds are not considered "Constitutional Debt". These bonds are then sold to pay off their "debt" at a higher rate than a normal California bond, making then currently little better than junk bonds and paying on average 4% to the buyer. They end up costing the state something like $1. for every $3. borrowed. We can only guess at how much the State owes in total for these bonds...
"If that were to be true, shouldn't ALL state employees be furloughed and not picked on based on favoritism, cough CHP, cough, CDF, cough"

Update 8/30/10 Cal-Poly Auxillary Funds While it's not a bad idea for the UC, USC to have these funds, once again we have no idea how much money the California University system uses or how much money does the State really have to spend to fund for these colleges? Can't tell...