Tag Archives: California Budget

Fast Food Owners and Workers Unite to Strengthen Jobs, Business

By Kathryn Slater-Carter and Jon Youngdahl

News headlines often depict the growing economic divide in our nation as a tug of war between workers and business, but in one critical sector of our economy – franchise enterprises — entrepreneurs and workers are both being pushed into economic peril.  Workers and franchise business owners are both being squeezed by giant corporations like McDonald’s, having critical decisions that affect their livelihoods and their dignity forced on them by a faceless corporate headquarters.  Workers and franchise owners alike face retaliation and the loss of their income if they speak out.  For these reasons, both workers and franchise owners are coming together to fight for AB 525 (Holden), a bill that protects jobs by giving franchisees a fair shake so they can keep and grow the businesses they’ve nurtured.

A generation ago, McDonald’s valued its franchisees as partners who built the strength of the brand in communities across the country.  Now, McDonald’s and other corporations built on the franchising model have gone the way of so many other industries that look to post short-term gains rather than build real value, even if it means driving franchise owners and workers into poverty.

Today, franchise agreements are so one-sided, franchisees have virtually no say in the businesses they’ve risked their life savings and dedicated years of their lives to build.  Corporate headquarters control nearly every aspect of the business, can force new and unexpected costs onto franchise owners, and franchise owners can be punished for speaking out or joining with other franchise owners to improve business conditions.  Franchises can even be shut down for arbitrary reasons, as Kathryn Slater-Carter experienced firsthand after working 30 years to build her Bay Area McDonald’s franchise.  

A survey of 1,100 franchise owners released in April found Kathryn’s case is far from an isolated incident.  Dissatisfaction with franchisors — the parent corporations of franchise businesses – is widespread, and retaliation against franchise owners who speak out about problems is frequent.   More than half of franchisees say they can’t earn a living from their business.  Four in 10 reported threats of having their franchise agreements terminated for taking actions they thought were appropriate for their business, and nearly 20% said their franchisor increased the frequency of inspections after the franchisee raised questions or spoke out about problems.

California franchisees and workers are both striving to be a part of California’s economic future and AB 525 brings us one step closer to stabilizing small businesses so they can continue serving the needs of California’s communities and strengthen the jobs that build our economy and provide for families.  

The bill, the Small Business Investment Protection Act, would significantly expand the rights of franchisees and establish stronger protections against unfair termination or nonrenewal of contracts by franchisors.  California workers support the bill because they know when franchisees can make decisions that are in the best interest of their businesses, they can invest in their employees.

Franchise owners and workers want the same thing – a fair shot at the American Dream.  That’s why we’ve formed an unlikely alliance to support AB 525.  By ensuring franchisees have a fair shot at surviving as corporations squeeze more and more from franchisees and workers, AB 525 protects California small businesses and jobs.

Kathryn Slater-Carter was a McDonald’s franchise owner for more than 30 years.  Jon Youngdahl is the Executive Director of the Service Employees International Union (SEIU) California, which includes 700,000 private and public sector workers as members.

New website reveals billionaire’s campaign to dismantle retirement security

by Carolyn Constantino

A new website reveals that Enron-billionaire John Arnold has spent up to $50 million of his own fortune to dismantle retirement plans for firefighters, nurses, teachers and other public employees.

The website – Truth About John Arnold – is sponsored by the National Public Pension Coalition (NPPC) and Californians for Retirement Security and traces the wide financial influence that one billionaire has on public pension fights. John Arnold amassed his fortune as an Enron trader, where he earned an $8 million bonus as the company’s collapse decimated $1.5 billion in public pension assets. Arnold turned his $8 million into billions as a Wall Street hedge fund manager.

Dave Low, California School Employees Association (CSEA) Executive Director and Chairman of Californians for Retirement Security explains,

“John Arnold is the second youngest billionaire in America. John Arnold has decided to spend his billions to take hard earned retirement benefits away from school bus drivers, teachers, nurses, firefighters and other public employees. What is in the heart of someone who, having become one of the richest people on the planet, decides to use that wealth to undermine the retirement security of working class Americans who have dedicated their entire careers to public service?”

Arnold’s spending has touched every facet of anti-retirement campaigning, including tainted research, political advocacy organizations, ballot initiatives, journalism, and the campaign coffers of extreme politicians. He is involved in battles to limit retirement security across the country through his foundation, the Laura and John Arnold Foundation, and his political PAC, Action Now.

“Lawmakers, workers, and the public at large deserve to know that the funding to dismantle retirement security for firefighters, nurses, teachers and other public employees across the country can be traced back to one source – Enron-billionaire John Arnold,” said Bailey Childers, Executive Director of NPPC.

The truth about John Arnold:

– In 2013, Arnold was the leading financier of former San Jose Mayor Chuck Reed’s failed effort to put a statewide pension-gutting initiative on the ballot.

– Arnold was the lead financier ($150,000) of an effort to end public pensions in Ventura County. A judge declared the effort unconstitutional.

– Arnold spent more than $1 million dollars on a ballot initiative in Phoenix to close the pension system. That effort was defeated by voters in 2014.

– The Laura and John Arnold Foundation underwrote a PBS series called “Pension Peril.” The PBS Ombudsman declared the $3.5 million contribution inappropriate. The grant was returned and the series pulled from the air.

– Arnold underwrites Pew Charitable Trusts’ pension work with a $4.85 million contribution.

Learn more about John Arnold here.

Cross-posted from CSEA.

Child Care Professional: California Budget Cuts Endanger Kids, Communities and Workers

By Elsa Serrano

With California’s unemployment rate at 11 percent, elected leaders should do everything they can to keep parents working and able to support their families. Instead, Gov. Jerry Brown proposed cuts that would devastate child care, leaving tens of thousands of children without a place to go, and forcing parents out of their jobs.

Communities across the state are speaking out against the cuts and arguing for a smart, fair state budget that protects child care. In San Diego, Oxnard, and Santa Maria, Calif., children, parents and child care providers rallied in recent days.

I’m one of them. I stand up and speak out because I’m a child care provider in Oxnard, Calif., and a leader of Child Care Providers United/AFSCME.

I stood with fellow concerned citizens and activists Saturday at the Parque del Sol in Oxnard to protest the outrageous cuts that would hurt the most vulnerable in our community. We came together to send a message to Governor Brown and state lawmakers: Stop the cuts to child care. Child care providers keep California learning and earning.

Since 2008, California has dropped more than 100,000 children from child care services. This year the governor proposed the worst cuts yet: a drop of 30,000 more spaces. That’s in addition to reimbursement rate cuts that will force a large percentage of providers out of business, permanently affecting parent’s ability to access affordable child care.

At the rallies across the state this past week, we chanted and waved signs. We educated the public. We wrote messages on artwork, which we’ll deliver to leaders in Sacramento.

At South San Diego’s rally, Pati Miranda, a San Isidro child care provider spoke for all when saying, “Governor Brown and Sacramento politicians shouldn’t shortchange children’s safety, learning and well-being by destroying child care.”  

Beatriz Pulido, a mother of three in San Diego, spoke about how important quality child care is to her family.  

“Without help from child care providers, I will be forced to quit my job and not be able to continue my education,” Pulido said. “As a single mother, I want to succeed in life and not depend on welfare.”

Tell California state legislators that our kids, our communities and our economy can’t take any more cuts to child care. California families need your support to ensure our children receive quality child care and parents are able to keep working.  Sign our petition today: http://kidsfirstca.onlineactio…  

Elsa Serrano is a child care provider in Oxnard, Calif. and a leader of Child Care Providers United/AFSCME.

Burton To Run For Re-Election as CDP Chair

After some nudging from a list of Democratic activists, longtime San Francisco politician aims to increase stability in Democratic Party

by Brian Leubitz

As you may know, I am a regional director for the state Democratic party.  As a San Franciscan, I have tremendous respect for the work that Sen. John Burton has done for our community and for the state.  He is a progressive that will fight for his beliefs.

But it turns out he knows how to lead a state Democratic party.  He knows how to hire a good team and let them run a solid organization.  Since he assumed control, the party has been in a much better financial situation, has spoken out on issues that it was too timid to discuss before, and oh, by the way, also managed to sweep statewide during a tough election year.

And as somebody who, as a statewide field director, relied heavily on the state Democratic Party’s field operation last year, I know that John Burton and his team know how to mobilize voters and win elections.  It was for these reasons I was glad to sign on to a letter asking him to run again, and equally glad to hear that he’s running again.

California Democratic party chair John Burton, 78, hasn’t officially announced it yet — but he has made the decision to run for another term to lead the party in 2013, the Chronicle has learned.

The plain-spoken, tough-talking Burton — one of the most battle-scarred of California political veterans — was urged earlier this month to run for another term by a host of party activists and insiders. Their efforts were expressed by two party leaders, CDP regional director for San Francisco Brian Leubitz — who’s also the Calitics blog director — and Alice Huffman, NAACP president, in a letter earlier this month. The group expressed “strong support” of Burton’s next term and urged him to announce his decision for another term.(SF Gate)

The day he was elected as chair, Sen. Burton called on President Obama to bring our troops home from both Iraq and Afghanistan. And he has continued to challenge the Democratic Party to dream big. He’s done well, and the party will be lucky to have him and the strong team that he’s built (and convinced to stick around).

By the way, Burton had some choice words for the Republicans debating in our state right now.  Check that out over the flip.

In Advance of Tonight’s GOP Presidential Debate in California, Democrats Release New Numbers on Job Losses in California Which Would Result From GOP’s Extreme Budget Policies

GOP’s Support of Tea Party Budget Plan Would Cost 931,570 Californians Their Job

Sacramento – In advance of Wednesday night’s GOP Presidential debate at the Reagan Library in Simi Valley, the California Democratic Party released an estimate of the number of jobs which would be lost in California, based on a new analysis conducted by the DNC, as a result of the GOP Presidential candidates support for radical economic policies.

The DNC’s analysis found that just the balanced budget amendment called for in the GOP plan, if in place in 2012, would result in the loss of 9.5 million American jobs including 931,570 jobs right here in California. The loss of so many jobs could blow a hole in the U.S. economy and further damage recovery prospects while adding millions of Americans to the ranks of the jobless.

Statement of California Democratic Party Chairman John Burton:

“Tonight’s debate will be a showcase for an extremist agenda that promises much but ultimately results in more corporate profits for the few and the privileged and more layoffs for Californians struggling to get by. The draconian cuts to Social Security, education, health care, Medicare, infrastructure and job training supported by these Republican candidates would cost millions their job.

Californians are still busy digging their way out of the mess produced by the last bad batch of Republican policies and we don’t need more of the same.”

Link to DNC Report

Proposed Budget Delivers Blow to Law Enforcement and Mortgage Fraud Efforts

By Lynda Gledhill

Press Secretary for Attorney General Kamala D. Harris

Law enforcement, public safety and key anti-gang operations are all at risk under the budget agreed to by Legislative Democrats and Governor Jerry Brown.

The cut of $71 million will wipe out the state’s Bureau of Narcotics Enforcement and the Bureau of Investigation and Intelligence and eliminate more than 55 statewide law enforcement task forces.  These agents and task forces are on the frontlines of the state’s struggle against sophisticated gangs and drug trafficking organizations.  The loss of these task forces, combined with the elimination of DOJ’s role in the state witness protection program, will dramatically undermine recent gains made against gangs in Los Angeles, the Bay Area, and the Central Valley.

Just weeks ago, the Department of Justice and local law enforcement partners arrested 101 gang leaders and members in the Central Valley.  They were members of a notorious prison-based gang with ties to foreign drug cartels, and this operation has crippled their grip on the drug trade flowing through the central part of the state.  The month before, we took down more than 30 members of a transnational gang operating in the Bay Area, seizing over 100 pounds of methamphetamine.

These are operations of statewide significance, which is why the California Police Chiefs Association is pleading for these task forces to be saved.  

But it’s not only gang enforcement that’s losing out.  This proposed cut will eliminate much of the California Mortgage Fraud Strike Force that our office recently launched.  The cut would eliminate nearly every one of the Strike Force’s investigators, cutting off pending investigations and potential cases designed to protect homeowners and hold bad actors in the mortgage industry accountable.  

The last Attorney General fought against these very same cuts.  It was the right decision then and has even more urgency now, as drug cartel and transnational gang activity in California is rising and our homeowners urgently need protection from predators in the mortgage market.  

The cuts should be undone and, at minimum, be unallocated so that the Department of Justice can make decisions on where to cut and how best protect the programs most critical to Californians.

Ideologues in Huntington Beach Reject Pension Savings, Opt for Fire Department Cuts

A periodic update on the Republican war against public employees in the OC

Is Huntington Beach following the Costa Mesa train to Crazy Town, opting for confrontation instead of common sense with their employees?

On Monday, May 2nd, the Huntington Beach City Council, in closed session, voted against a proposal that would save the City almost $1.3 million in pension costs over the next two years and would also create a second pension tier for future public safety employees.

On May 3rd, Council Member Devin Dwyer was telling city employees that if they hadn’t been there very long, they should start looking for another job. He also said that negotiations with the Fire Association had broken down, only to be quickly  corrected by a representative of that group, who expressed an interest in continuing to talk.

Welcome to the wonderful world of Orange County right wing politics, where ambitious young pols like Don Hansen and Matt Harper seem poised to try to get some of the publicity that Jim Righeimer has been garnering in Costa Mesa. Term limits will open up an Assembly, State Senate and County Supervisor seat, and the players want to be seen as pension fighters and union busters to appeal to the hard core of Republican primary voters.

Pictured is the Women’s Club Fire one of four major fires among a total of 36 fire calls in Huntington Beach in April. During the last two weeks, Huntington Beach also had a fatal fire, a fire where 2 victims were rescued with a ladder from a second story window, and a multi-million dollar home fire.

As Mayor Pro Tem Don Hansen said on his Facebook page during the election,

“Let’s take our city back! If you see a police car or fire truck on the mail – that’s code for “union owned” We need taxpayer advocates not union puppets now more than ever!”

Mailers supporting Hansen’s endorsed candidates echoed the attacks on public safety employees and particularly their pensions.

After three months of bargaining, the Huntington Beach Fire Association thought they had a deal that would save Huntington Beach $640,000 a year over each of the next two years. The proposed side letter to their existing agreement would also change the retirement formula for new hires to lower pension costs in the future. After three months of negotiations with staff, Fire Association President Darrin Witt felt that “we had met all of the Council’s goals set out in the strategic planning session at the beginning of the year.”

Instead of taking two scheduled raises, one of which had already been postponed for 18 months,  sworn fire officers would apply that money to their pensions, increasing their pension contribution from 2.25% of their income to 6.75% of their income.

In return, the Firefighters asked for guaranteed staffing levels so that they wouldn’t have to cut the number of paramedics and engine companies that were available to respond to emergencies.  

As the Council kept moving the goalposts, the paramedics and fire fighters included a budget trigger which would void the guaranteed staffing levels if revenues drop, expenses rise unexpectedly, or if CalPERS increases pension rates.

Monday,  May 2, in closed session, the Huntington Beach City Council voted against the savings, moving instead towards further service cuts that would increase response times. Cutting the budget could mean service cuts that might idle one of the eight paramedic engines or one of the two ladder trucks. Budget cuts could also reduce availability of one of the cross-staffed specialized engines. Do you cut one of the paramedic engines which respond to over 12,000 9-1-1 Medical calls a year, or partially idle one of the two ladder trucks which have the ability to put firemen at roof level for the 375 structure fires a year and which also carry additional equipment like the “Jaws of Life”?

Even without more personnel cuts to HB Fire, the annexation of Sunset Beach, coupled with fewer available units for mutual aid in surrounding cities, will put pressure on response times in Huntington Beach. The Fire Department has already reduced six full time employees, including a Batallion Chief, after the City’s revenues dropped substantially during the Great Recession.  

In  neighboring Costa Mesa, it is  Mayor Pro Tem Jim Righeimer who pushes the party line, with staunch ideologue Steve Mensinger at his side, and a bumbling, ineffectual Mayor following along.  Their hasty decision to issue layoffs to half the City has made Costa Mesa a laboratory for right wing political experiments in California, with clear results as the continued exodus of police officers, firefighters and management is crippling the City.

In HB, it’s Mayor Pro Tem Don Hansen calling the shots, with Republican Central Committee member Matt Harper, and former Central Committee member Devin Dwyer as comrades. All three are close allies  of party boss Scott Baugh, a lobbyist and perennial meddler in Surf City politics.  Joe Carchio plays the role of bumbling, ineffectual Mayor, whose deal to become Mayor a year ahead of schedule has been repeatedly questioned.

left to right, Mayor Pro Tem Don Hansen, Council Members Matt Harper and Devin Dwyer

Don Hansen, his Red County buddy Chip Hanlon, and their Tea Party allies were big losers in the 2010 election. Two Team Hansen candidates who paid Hansen’s wife’s consulting business, Red Zone Strategies, lost in the 2010 election.  Measure O, an initiative which would have shifted money away from public safety, also lost decisively.

Hansen, Harper, and Dwyer are seen as the core who have walked away from the deal that would reduce the City’s current and future pension costs, forcing service cuts instead of compromise.

Council Member Joe Shaw, elected in 2010 without support from the fire union, refused to comment on what happened during closed session, but indicated that he strongly supported the recommendations which the City received from their pension consultant, John Bartel.

“We hired an expert who recommended that we work towards a second, lower pension tier for all new hires and move toward getting employees to pick up a greater share of their pensions while holding salaries down. That is exactly what the Fire Association proposed, and it could have been a model for our negotiations with all of our employees.”

The public needs to see this choice debated in public, not hidden behind closed doors. Writing at Chip Hanlon’s Red County, Don Hansen seemed to agree as he expressed his love for country music

One effective strategy is to adopt a set of financial policies that are debated publicly.  These policies are set to guide the labor negotiations prior to commencement.  For example, you could adopt a policy that says “The goal of all labor negotiations will be to increase the employee’s contribution to pension costs.”  In Huntington Beach, we recently gave direction to negotiate the elimination of pending salary increases by the end of February. By taking a public vote in a meeting keenly observed by many of the union leaders, it sends a signal that there is a solid vote for such a solution.

By setting a more transparent policy goal prior to the commencement of labor negotiations, elected officials become more accountable to the ultimate result. Further, if your community leaders are not committed to fiscally sustainable labor policy their position will be publicly vetted as well. The economic consequences of these decisions are too great to keep them hidden.

Because no one knows what goes on behind closed doors.

There are three simple questions for the Council Members who rejected the Fire Department’s concessions.

What policy are you advancing by refusing exactly the type of pension reform that your own expert recommends?

When are you going to have the public debate on whether the residents and businesses in Huntington Beach want to sacrifice response times for your ideology?

Are you looking for sustainable budget solutions or just pandering to Republican primary voters so you can get some of the attention that Jim Righeimer has been hogging?

As the California Democratic Party Convention Begins, What of the Death Penalty?

Well, the California Democratic Party Convention is set to begin in a few hours, and I am just shoving the last of my items into my bag as I get ready to head to Sacramento.  For the most part, the convention will be fairly unified.  Democrats are thankful for their electoral success in 2010’s elections, but what issues might arise?  Well, there’s always the budget, but there is one other issue rearing its head as we head into it.

A new David Binder Research poll is showing that a strong majority of voters now supports converting all of our death penalty sentences to life without the possibility of parole (LWOP):

A recent statewide survey of 800 high propensity voters conducted by David Binder Research showed a strong  63% support for converting all current death row sentences to life imprisonment without any possibility of parole  in order to save the state $1 billion dollars in five years, where the money saved would be required to pay for  public education and law enforcement. Notably, support for this idea to convert all of the death row sentences to save the state a billion dollars over five years receives support from all political parties and from across all regions of the state. This idea appears to be the type of solution voters are looking for politicians to develop, but this idea in particular is one that political figures have so far overlooked.  

This is likely to come up throughout the convention, but not likely from the podium.  However, grassroots support for a signal of agreement with this poll has been bouncing around over the last few days and weeks. I’m interested to see where the question goes from here.

I’ll be focusing much of my communications on Twitter, check my Twitter feed here.

UPDATE: On a somewhat related note, Governor Brown is actually letting the parole board do its job rather than what Govs. Davis and Schwarzenegger did by blocking pretty much every parole.  We can’t really begin to address the prison mess without prioritizing for dangers criminals.

Illinois Ends the Death Penalty-a Wake-up Call for California

The end of Illinois’ death penalty comes at a time when more and more people express the view that the death penalty is ineffective, costly, and unjust. A slew of recent editorials and opinion pieces have highlighted the enormous problems with the death penalty in California in particular.  As these editorials and op eds show, it is time for California to cut this: the death penalty.

An editorial recently published in The San Jose Mercury, Pasadena Star News, Long Beach Telegram, and other papers, calls on Governor Brown to convert all death sentences to life imprisonment without any possibility of parole to the death penalty, to save the state $1 billion over the next five years. As these editorials point out, the money now wasted on the death penalty could be better spent to fund education and invest in public safety. Yet, at a time of financial crisis, the Governor and lawmakers are instead choosing to cut public safety, as well as healthcare and education, while remaining on track to spend $1 billion on the death penalty in five years.  

“This,” the editorial says, “is fiscal insanity.”

Concerns about the number of innocent people sentenced to death also continue to grow. Many editorials praising Illinois for ending the death penalty, including one by the Register Guard of Oregon, noted that at least 20 people had been wrongly sentenced to death in that state alone.  A recent editorial in the LA Times observes that many other states, including California, have also mistakenly sentenced innocent men and women to death.  An editorial published in the Vallejo Times-Herald elaborates:

In just the five states that have abolished capital punishment in the last quarter century, 27 innocent lives were spared when it was learned they had been wrongly convicted. There's no way to determine how many were wrongly killed by the state.

More disturbing is that in the 34 states that still have the death penalty, more than 100 Death Row inmates have been freed. …

DNA, while an effective exoneration tool, is not helpful in many cases where such evidence plays no role. We don't know how many condemned inmates who proclaim their innocence actually are, but the system's inherent flaws indicate the strong possibility they exist. Any system that permits even one innocent man to die should be abolished.

California’s death penalty is also a hollow promise to victims. Because we don’t want to execute an innocent person, courts carefully review each death sentence, resulting in a long and cumbersome process that takes, on average, 25 years. As a result, the family members of murder victims are dragged through decades of painful court proceedings that, 99% of the time, do not end in an execution. Recently, the LA Times published an editorial written by retired Superior Court Judge Donald McCartin.  McCartin, who presided over 10 murder cases in which he sentenced someone to die, said:

I am deeply angered by the fact that our system of laws has become so complex and convoluted that it makes mockery of decisions I once believed promised resolution for the family members of victims.

The only way to end the charade, McCartin concluded, is to end the death penalty:

It's time to stop playing the killing game. Let's use the hundreds of millions of dollars we'll save to protect some of those essential services now threatened with death. Let's stop asking people like me to lie to those victim's family members.

Aqeela Sherrills, whose son was murdered, and Judy Kerr, whose brother was murdered, echoed these sentiments in recent op eds. Noting that the state has cut funding for victims services, while maintaining spending on the death penalty, Kerr said:

There must be room for justice for victims in our budget. The death penalty is not where we will find it. Real justice comes from protecting each other and helping victims rebuild their lives after the devastating loss of a loved one. Instead of cutting funding for victims' services, cut this: the death penalty.

Illinois rightly concluded that the death penalty cannot be fixed but must be replaced with life without the possibility of parole, and redirected the money that had been wasted on the death penalty to victims’ services and law enforcement.  Ask Governor Brown to do the same: cut the death penalty today.
Natasha Minsker is death penalty policy director for the ACLU of Northern California.

Lessons from the Texas Budget

Its never good news to hear a state has a budget deficit. But this recent article in The Economist made me a little happy for a couple of reasons. One, I was really tired of hearing conservatives (like Meg Whitman in 2010) praise Texas as a model for California. So hopefully that won’t happen again. Two, its a vindication that California is not broken just because were lazy or some other variety of insults hurled our way from the other 49.  It shows that regardless of the economic system, the bipartisan consensus was over-reliance on a massive bubble.  

Many, if not all, will argue my view that the left’s model of government-as-charity is unsustainable.  But the the progressive case against the conservative model of government-as-corporation has been proven with the demise of Texas’s “economic miracle.”  So there are a few lessons here, and most demonstrate why Texas and California can’t be compared now or in the future.

1) The Dutch Disease.  California is the third largest oil producer but due to our economy and size we are not an energy exporter. An oil tax exactly modelled on the one in Texas would generate revenue but cannot be a large enough cash stream to support our state.  Texas is still over-reliant on its energy sector. It will receive a windfall with the current mideast crisis of the day. Don’t be surprised if this contributes to a recovery and is used as proof that the Texas Model “works.”  California conversely will suffer economically due to high gas prices. People should be aware that the ups and downs of the energy market don’t demonstrate which system is better only that both systems are not properly buffered for it.

2) Environment. An issue conservatives cringe at in California and abhor in Texas. But the thing is, our mild climate and natural beauty can’t be found or replicated in Texas. As oil is to that state, the environment is a resource to us. Its a strong enough resource in fact that the wealthy will continue to live here regardless of the tax situation (much like they live in France).  

3) Taxes. Our environment opens the door to higher taxes on the wealthy as long as its packaged as the price to live here. But it doesn’t open the door to high taxes on ALL corporations. Companies that are high tech and want to attract people that want to live the California lifestyle can afford those taxes. Companies that require low-cost labor and are face stronger market competition (the non-Apples) cannot.   Texas does grow more low-cost labor jobs and manufacturing. Granted there is not a high margin on that production but high-end producers that California is known for cannot employ all of us. Both no-taxes Texas and higher taxes California are too broad brush. A more nuanced corporate tax code may be needed.

4) Education.  As the article points out, Texas aims to entice intellectual talent with no income taxes and more jobs instead of growing it natively with its education system. Its definetely a cheaper way to go, but is it sustainable? California’s education system currently relies on its upper institutions to draw talent and hopes that its lifestyle and environment will keep them after graduation. I think California is the model to bet on, not (just) because of state pride, but Texas opens itself up to a race to the bottom situation.

5) Jobs.  The Texas Model trumpets no income taxes and uses this to draw talent from across the nation. California, often called (incorrectly) the highest taxed state, uses taxes to provide services that higher educated/higher income people come to expect – well maintained roads, good schools, beautiful parks etc.  The Texas job numbers were high last year but it appears that those were primarily lower-income jobs (some numbers said 2/3rds of all jobs created). Of course those are important jobs but not revenue generators or economic growth contributors like high tech. Bottomline, Texas plans to attract the lowest bidder (those that don’t want to pay taxes). Like Wal-mart shoppers they don’t expect frills or high quality products and services. California is like  (insert expensive store of your choice, I won’t play favorites) it gives you high end stuff and you expect to enjoy the experience not get the deal and rush out.  But unquestionably its expensive, Californians need to decide which “store” do we want to be?

I have some thoughts on the issue but open it to all, what is California to do next?

Why Republicans Really Wouldn’t Compromise

And no, it’s not their fear of seeing their heads on a stick. And don’t believe that the ransom list had anything to do with their real issues. Restoring 23 million in cuts to rural state fairs? Please.

Republicans never wanted to agree to pension reform because it was the only single issue where the public agrees with them.

If Republicans were at all serious abut solving problems, they would have jumped at the deal that Jerry Brown had negotiated.

There was a  significant package of reforms agreed to by the Brown Administration that would have made a huge dent in California’s pensions problem. And let’s make it clear that there is no crisis but there are some serious problems, particularly with the unsustainable costs of public safety pensions for local governments.

The package that Brown had agreed to would have made major progress towards reducing long-term pension costs and bringing some of the worst-hit pension funds into balance quickly. Judging from the Republicans’ release of their ransom demands, here are the pension areas where there was agreement;

o No purchases of Air-Time (Admin: OK)

o Highest 5-year average. (Admin: Highest 3 year average, with CalSTRS exception for 25 years of service)

o Base pay [salary only – no vacation, overtime, car allowance, uniform allowance, etc.] used for determining final retirement benefits. (Admin: Base benefits on regular, recurring pay)

o No Double-Dipping /Revolving Door (Admin: Allow retired annuitants (cost effective for state), but forbid drawing a full-time salary and a pension from the same employer).

o Cap Final pension amount (Admin: Ok w/Cap of $106K w/COLA – same as Social Security – and additional 12.4% for non-SS employees.)

The biggest of these, if applied statewide, would be the use of regular recurring pay without overtime in calculating pensions rather than adding in overtime. A pension cap would also save real money, and move higher-paid employees into a hybrid plan if they wanted to maintain their income in retirement. Rank and file workers and teachers are protected. Overly generous benefits for public safety come back down.

So why wouldn’t Republicans agree to fix the biggest problem?

The answer is very easy. Anger about overly generous public employee pensions is the only single issue where the Republicans’ messaging polls well.

Without pensions as a rallying cry, Republicans are left with a series of positions that are wildly unpopular with Californians;

   Gutting environmental regulation and increasing off shore drilling

   Bigger tax breaks for the largest corporations at the expense of small business

   Massive cut backs to public education and public safety

   Maintaining a judicial-prison-industrial complex that most Californians want to cut

   Immigrant bashing

Republicans could have eliminated the most obvious form of waste and corruption, redevelopment agencies and enterprise zones. While both of these have supporters, and occasionally have great results, they are tremendously inefficient and frequently just result in a race between cities as to who can come up with the worst deal for taxpayers as they scramble to lure big box retailers, auto malls, the hotels near convention centers, and businesses located in nearby cities.

The savings that local governments would have had on pension reforms would have more than made up for any of their losses from new pet redevelopment projects.

Cynical Republican politicians have never wanted to eliminate waste or corruption or reform pensions. They only want to be able to win enough elections to exercise a minority veto power over what most Californians want.