CABPRO Report

Warnings from the Left Coast

by Congressman Tom McClintock, 4th District of California

A generation ago, California exemplified its nickname, “The Golden State.”  State spending was less than half per capita, inflation adjusted, what it is today.  Its debt-service ration was less than a third.  Yet Californians enjoyed one of the finest highway systems in the world and one of the finest public educations systems in the country.  Water and electricity were so cheap that many communities didn’t bother to meter consumption.


Only a few decades have passed, yet California is a dramatically altered place.  The tax burden is one of the heaviest in the nation.  State government consumes the largest portion of personal earnings than at any time in its history and yet can no longer maintain its basic infrastructure. The once legendary California quality of life has declined precipitously and produced an historic first: more people are now moving out of California than are moving in.

One thing – and one thing only – has changed in those years: public policy.  The political Left gradually gained dominance over California’s government and imposed a disastrous agenda of policy changes that are now being replicated at the federal level.


Prior to the 1970’s, California policy aimed at accommodating growth and encouraging prosperity.  These priorities changed radically beginning with the “era of limits” announced by Gov. Jerry Brown.  Conventional public works were branded “growth inducing” and it became state policy to discourage the construction of highways, dams, power plants and housing.


At the same time, public employee unions acquired unprecedented power to coerce public employee membership, automatically direct public employee earnings into union political coffers, and to strike against the public.


Radical environmental restrictions have devastated the agricultural, timber and manufacturing industries, culminating in Gov. Schwarzenegger’s hallmark bill to reduce carbon dioxide emissions 25 percent by 2020 – a goal that can’t be reached even if every automobile in California is junked.

Meanwhile, the state has suffered a radical centralization of revenue collection and decision-making in Sacramento, usurping local prerogatives in every field from education to transportation.  This trend has destroyed local accountability and annually misspends billions of dollars of public funds as Sacramento vainly attempts to force every community into rigid formulae and mandates.


The recall of Gray Davis in 2003 offered California the last chance to avert the fiscal collapse that now appears imminent.  Voters elected Arnold Schwarzenegger on a pledge to “stop the crazy deficit spending,” reduce tax and regulatory burdens, “blow up the boxes,” and “cut up the credit cards.”

Alas, he did exactly the opposite.  He increased the rate of spending that had proven unsustainable under Davis, began an unprecedented borrowing binge that has tripled the state’s debt-service ratio, and has now imposed the biggest tax increase in the state’s history.

As predicted, that tax hike has made the deficit worse.  The recession had reduced the state’s March sales tax collections by 19 percent.  After Schwarzenegger increased the sales tax 13 percent on April 1st, April sales tax revenues plunged by 44 percent.  The Laffer curve is alive and well.

What can California do?  Its credit is stretched to the breaking point and increasing tax rates now produces decreasing tax revenues.  Its deficit vastly exceeds resolution by conventional budget reductions.  There is no line-item labeled “waste,” and the state’s deficit now vastly exceeds the truly obsolete and overlapping programs strewn throughout its budget.


The real savings are in how the state’s money is spent.  California pays $43,000 each year to house a prisoner, while many states get by with half that amount.  An average classroom accounts for more than $300,000 of public resources, but only a fraction actually reaches the students.


Fortunately, California has service-delivery models that once delivered a vastly higher levels of service at vastly lower costs, before it centralized, bureaucratized, unionized and radicalized them.  But tragically, it lacks both the political will and the time required to restore them.


The decline and fall of the California Republic is a morality play in the form of Greek tragedy.  Before dismissing California’s agony as the just price for its hubris and folly, though, heed this warning: Congress is well underway toward imposing the same policies on the rest of the nation.  California is just a little further down that road.

Congressman Tom McClintock represents California’s Fourth Congressional District.  His website address is http://www.mcclintock.house.gov.

Keeping an eye on California’s evolving demographics

by CABPRO Staff

While we folks are diligently carrying on with the business of creating, supporting and enjoying our lives and families, our state of California, or at least the central and southern portions of it, continues to evolve into an annex of neighboring Mexico. In the supermarket the other day, while contemplating the English/Spanish labeling on a bottle of detergent, we were reminded of a recent article about how illegal immigration from south of the border continues to damage our America, in particular, our California (Alex Alexiev, “Catching Up To Mexico: Illegal immigration is depleting California’s human capital and ravaging its economy,” National Review, Aug. 24, 2009, pp. 22-24). It is understandable that manufacturers and retailers would want their product labeling to appeal to all potential customers out there, but it is symptomatic of the problem that there are enough Spanish-only speakers out there that they feel it necessitates bilingual labeling. We went in search of some infobytes:

According to the Pew Hispanic Center (http://pewhispanic.org), California has the largest Hispanic population in the U.S.  More than 13 million Hispanics live in California, which is 30% of all Hispanics in the country.  The population of California is 36% Hispanic, the second highest Hispanic population share in the nation behind New Mexico with 45%. There are over 5 million eligible (over 18 years) Hispanic voters in California, which represents 23% of all eligible voters, or the third highest in the country behind New Mexico with 38% and Texas with 25%. 9% of the 2008 California electorate was Hispanic, up from 8% in 2004.  In the 2008 presidential election, California Hispanics voted Democratic (67%) over Republican (31%) by greater than 2 to 1.

Some enlightening California public education statistics may be found at http://dq.cde.ca.gov/dataquest.  In school year 2008-09, out of a total California K-12 enrollment of 6,252,031 students, 3,064,614 or 49.02% were Hispanic or Latino, while 1,741,664 or 27.86% were white. In Los Angeles County, 62.6% of K-12 students are Hispanic. In the Los Angeles Unified School District, 73% of K-12 students are Hispanic. For the same school year, for all California K-12  “English Learners,” students who are being taught English as a second language in their public school (total number is 1,285,545) 84.9% gave Spanish as their native language; the next highest group was Vietnamese at 2.4%.


Whether here legally or illegally, Spanish-speaking immigrants from south of the U.S. border are far less assimilated into American culture than  the millions of immigrants from all over the world who have formed  our country over the centuries. According to a study by the  Manhattan Institute for Policy Research (www.manhattan-institute.org/html/cr_53.htm, Civic Report No. 53, May, 2008,    “Measuring Immigrant Assimilation in the United States”), Mexicans, among all immigrant groups, are the slowest to assimilate into American culture. On demographic evolution in California and its consequences, in addition to the above noted National Review article, Victor Davis Hanson’s book Mexifornia: A State of Becoming (Encounter Books, 2003) is essential reading. Professor Hanson grew up, lives and teaches in California’s central valley and has observed the immigration of Mexicans into the state all his life. In it, Hanson writes: “Since roughly 1970, the evolving concept of multiculturalism – which holds that Western civilization merits no special consideration inasmuch as all cultures are of equal merit – has proved to be the force multiplier of illegal immigration from Mexico. It turns a stubborn problem of assimilation into a social tragedy stretching across generations. Almost every well-intended and enlightened gesture designed to help immigrants in the last three decades – de facto open borders, bilingual education, new state welfare programs, the affirmation of a hyphenated identity, a sweeping revisionism in southwestern American history – has either failed to ensure economic parity or thwarted the processes of assimilation.” (pp. 5-6)

Our current border and immigration laws need to be enforced and beefed up now. Employers must take responsibility for those they are hiring. Taxpayer-funded public services must cease to be extended to undocumented aliens; taking care of illegals is a large part of why California is almost bankrupt. If jobs and public services were not provided to them, the flow of folks from south of the border would slow to a trickle.

Why So Many Czars?

by James Winfield

With all these “Czars” surrounding the President, you have to wonder who is really running things there at the White House.  I’m no expert, but I was under the impression that cabinet members were the ones charged with advising the Commander in Chief.  Supposedly, these cabinet members go through a vetting process which examines the applicant’s background, current/past associations, loyalties, et cetera.  Why wouldn’t we want the President’s right (and left) hand people investigated to confirm where their loyalties really lie?  Each czar is hand selected by the President, and is exempt from any formal vetting procedures.  It seems that Obama is creating a second advisory body made up of people so radical they would never have a chance of appointment if put through a normal hearing or public interview process.

I take the appointment of so many unconfirmed advisors as deliberate circumvention of our checks and balances system, with the aim of achieving a specific agenda.  Recently, some of the more radical czars have had their questionable backgrounds outed by a small number of news sources.  Anyone who believes the personal histories of these people were unknown to Obama, or that they’ve somehow changed their tunes since being appointed probably also believed Bill Clinton back in 1998.

Here are a couple of my favorite picks from Obama’s long list of czars:

Cass Sunstein - Regulatory Czar
I’ve mentioned Mr. Sunstein in past articles, and I list him here as well because I find him to be one of the more dangerous advisors.  Along with advocating the reinstitution of the “fairness doctrine” and moderation of internet content, Sunstein has also expressed the need to change the interpretation of the Bill of Rights by the year 2020.  The Second Bill of Rights, as he calls it, would provide: the right to a job, the right to earn a wage providing clothing, food and recreation, the right to sell products at a return sufficient to provide a decent living, the right to compete in a market free from unfair competition, the right to a home, the right to medical care and good health, the right to protection from the economic hardships of old age, sickness, accidents and unemployment, and finally, the right to an education.

John Holdren - Science Czar
Suggests that forced sterilization and abortion would be acceptable under national crisis circumstances.  Assuming that “global warming” grows to a level where it threatens the nations population, Holdren states the Constitution supports the above under the guise of a sustainable well-being of the population.  Again, humans are guilty of destroying Earth and we must sacrifice ourselves to… sustain ourselves…?

These two are just an example of the radicalism which is growing in our government.  Barack Obama said himself during the 2008 presidential campaign, “Judge me by the people with whom I surround myself with.”  Coincidence, or did he know all along?

James Winfield is a resident of Sacramento County and regularly comments at his Ordinary Impressions: ordinaryimpressions.blogspot.com

Wacko Environmentalism Killing More California Jobs

by CABPRO Staff

Two years ago, Federal District Judge Oliver Wanger (U. S. District Court, Eastern District of California) imposed restrictions on how much California’s state water authority can pump out of the Sacramento River, on the grounds that the water pumps were drawing in and killing the endangered delta smelt, in violation of the federal Endangered Species Act. The delta smelt is a blue, 2-inch long fish native to California’s Sacramento River delta. The pumps supply millions of Californian farms, businesses and consumers with water.

Restricting the pumping of water may be good for the delta smelt, but they are killing jobs for Californians. As a result of the restrictions, thousands of acres of farmland in the once fertile western San Joaquin Valley, are drying up, 85,000 Californian farmers and laborers are out of work, and whole towns are dying. In Mendota, a century-old farming town west of Fresno, unemployment has reached 41 percent. In nearby Firebaugh, the unemployment rate has reached 40 percent. Overall, the pump restrictions are expected to cost California’s agriculture industry upwards of $500 million per year, indefinitely.

There are thousands of human victims of modern environmentalism, a movement that increasingly ignores the human costs of its efforts. What was once a movement dedicated to serving humanity and grounded in reason has gradually morphed into an ideological crusade grounded in hysteria. And what was once a campaign to improve the quality of life of humans is now fighting to improve the quality of life of fish — at the expense of humans.

Isn't this insane?

If it were truly about saving the delta smelt why not just install filters on the Sacramento River’s water pumps.  This would save most, but not all, of the delta smelt, and would save California’s farms and farmers from economic destruction.  But it isn't about saving the delta smelt but about environmental radicalism intruding further to control every aspect of our lives.  Time to replace California's Legislature and the US Congress radicals with common sense business and people minded folks who know what it takes to put food on the table.

Solutions to Public Employee Pension Plan Crisis

by Michael McDaniel

Now is the time to focus on solutions to our public employee pension plan crisis.  As The Union has highlighted in months past, our local government agencies are burdened with insane amounts of debt associated with our public employee pension programs. Years of mismanagement by our local and state elected officials, overpowering employee unions, mismanagement by CalPERS, and poor investment markets have left us to battle this emergency. With inaction the debt will continue to balloon.

It is estimated that The County of Nevada’s Miscellaneous Employee pension plan [which does not include public safety employees] is under funded by $87,866,218.  To put this amount into prospective, the total expected operating budget for Nevada County for 2009/2010 totals approximately $185,000,000 and total tax revenues are expected to be shy of $43,000,000 in 2009/2010.  I estimate that the pension plan promises total $248,063,046, while the actual amount available to fulfill such promises at approximately $160,196,828. Which means the pension fund for Nevada County “Miscellaneous Employees” is only 64.6% funded (or 35.4% underfunded-the goal is to be 100% funded).  On our current course, our debt will only continue to grow.  

We owe it to our current and past public employees to fix this problem in a manner which also respects us taxpayers. We should not look to bankruptcy or hyperinflation as remedies for this mess.  Without action, this predicament will play out in one of two ways (if not a combination of the two): taxes will soar and/or public employee pension benefits will fall short of the promised benefit.  Again, without action, taxes will dramatically increase and/or public employee benefits will be “renegotiated” (read lowered).  This is our best case destiny if no action is taken.  

Current employees, supervisors and taxpayers are on the same team. This “sinking ship” does not allow the luxury of finger pointing or name calling- we are all in the same boat. Now is the time to isolate and solve this crisis: together.

Some possible solutions include:
Updating retirement packages for new hires to a 401k style program
Increase the probation periods before new employees become eligible
Raising retirement age for new hires
 Using a lower assumed rate of return (currently a net after expense of 7.75% annually is assumed- have you averaged such a return the last few years?)
Offer hybrid pension plans that combine elements of both defined benefit and defined contribution plans.
Not filling “open” positions
 Privatizing typical agency tasks
 Decreasing the cost of living adjustment to existing plans

Most of the aforementioned solutions require action by our State and Federal lawmakers.  Current California state laws and regulations prevent local elected officials from taking action.  It is imperative that our state legislators provide changes to current rules and regulations before our local government agencies can make serious attempts at solving this crisis.  I urge you to contact your state legislators and local elected officials and request that they lead this fight.

I hope to write follow-up letters to update you on the progress we are making in this fight.
This catastrophe is staring us ALL in the face (note: The City of Grass Valley has the same dragon to slay).  We need material changes, now, to solve this crisis.

Michael McDaniel is a 6th generation Nevada County native and Executive Director of Sierra Environmental Studies Foundation (SESF).s

"Cost of State Regulations on California Small Businesses Study"

Recently CABPRO received the below letter from California Assemblyman Dan Logue, 3rd District, alerting us and other members of the Economic Recovery Group about a study which had been sitting in Governor Arnold Schwarzenegger's office for close to a year and a half.  The study titled "Cost of State Regulations on California Small Businesses Study"  can be downloaded here by clicking here: Download CA Small Business Study ~ September 2009.pages.  The study finds that the total cost of regulation to the State of California is $492.994 billion which is almost five times the State's general fund budget, and almost a third of the State's gross product.  The cost of regulation results in an employment loss of 3.8 million jobs which is a tenth of the State's population. Since small business constitute 99.2% of all employer businesses in California, and all of non-employer business, the regulatory cost is borne almost completely by small business.  This study provides the most comprehensive and complete analysis of the total regulatory burden in California.  We encourage everyone doing business in California to click on the above link to download the report and then contact your California Assemblyman and State Senator asking them to support Assemblyman Dan Logue and his Economic Recover Group which is trying to save California. Oppressive regulations are destroying California and it's time to say NO to the special interests which have been controlling this state for decades.

••••••••••••••••••••••••••••

ECONOMIC RECOVERY
RESTORE CALIFORNIA

ASSEMBLYMAN DAN LOGUE
September 17, 2009

Members of the Economic Recovery Group,

In 2006, Assembly Bill 2330 (authored by Assemblyman Juan Arambula, I-Fresno), was passed which required a study to be completed and returned to the legislature on the cost of state regulations on small business in California.  This study was completed and turned into the Governor’s office in December 2008 and held there, despite repeated efforts to have it delivered to the legislators, which the bill required.

No study has ever been conducted in California demonstrating the costs of regulatory burdens on small business, despite the fact that small businesses provide the majority of Californians with jobs.  In fact, “small businesses continue to bear a disproportionate share of the federal regulatory burden,” according to the U.S. Small Business Administration.

On September 1, I met with a member of the Governor’s staff about the disclosure of the report, and requested a copy from him.  I was told that it would be released.

Today we received the following email from a member of the Governor’s office:

“We are in the process of finalizing our internal procedure for release of the report, pursuant to both my pledge to the Assemblyman [Dan Logue] as well as the NFIB’s recent PRA request.  I suspect the report will be available today or tomorrow.”

This is a time when Californian’s need jobs more than ever, and this study will be revealing as to why business may be struggling.  I will keep you updated as to the progress made in obtaining this report.

Sincerely,

Dan Logue, Assemblyman, 3rd District