Thursday, August 20, 2009

Daily California Watch 12

Yep. It's baaack! Budget woes piled up while the Legislature went into their usual summer three weeks of hiding. They call it recess for a reason. But that's not fair. Many of our elected Representatives use this time to raise cash. Lots of cash.
First SFGate:

Lawmakers, back from recess, must act fast

(08-17) 04:00 PDT Sacramento --

The California Legislature reconvenes today, after a three-week break following a bruising budget battle, to face some of the state's thorniest issues: water, prisons and spending.

In addition to the hundreds of bills, lawmakers will have to figure out what to do about the state's water crisis and how to trim $1.2 billion from prisons. Lawmakers approved cutting prison funds last month but put off identifying the cuts until this month.

Legislators will have only a short time to do this. The deadline for passing bills is Sept. 11, less than a month away.

Another issue guaranteed to polarize the Legislature is state prisons. Lawmakers have to agree to how they will implement a budget cut of $1.2 billion, and they will have to respond to the order by a panel of three federal judges to reduce the state's prison population by 40,000 inmates over the next two years. While that order is likely to be appealed to the U.S. Supreme Court, the court gave the state just 45 days to come up with a plan.

The Legislature was on the cusp of an agreement to reduce the prison population by 27,000 as part of last month's budget deal, but it fell apart after Republicans objected. Every day that goes by costs the state $3 million in savings not realized, or about $100 million a month, according to prison officials.

...

Senate Minority Leader Dennis Hollingsworth, R-Murrieta (Riverside County), echoed Blakeslee on prisons and said he expected some Democrats to side with Republicans on the issue. He also said the current proposals on water did not satisfy him.

"We're seeing more of the same without delivering any more water to farmers in the Central Valley," he said.

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N.B. The "water" issue is a way to get a new revenue stream flowing not more water flowing.

And remember the issue of Taxpayers v. CalPERS?
CalPERS actuary says California's public pension costs are 'unsustainable'
By Ed Mendel, Calpensions, 8/10/09

The CalPERS chief actuary says pension costs are "unsustainable,"
and the giant public employee pension system plans to meet with
stakeholders to discuss the issue.

So, are the critics right: Do overly generous pensions threaten to
eat up too much of state and local government budgets?

An historic stock market crash wiped out a quarter of the CalPERS
investment fund last fiscal year. Some experts are forecasting
limited investment earnings in the years ahead, making it difficult
to replace the losses.

Now "sustainability," a term used in environmental discussions, has
become a common label for a big question about public employee
pensions: Will the current level of benefits be affordable in the
future?
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Ahh yes. there's that weasel word again. sustainable. By now readers should know; sustainable equals higher taxes.

11 comments:

Agent #777 said...

Yes, but let me be the FIRST to ask - are the higher taxes sustainable?

Lex said...

I'd say a combination of higher taxes, tiered benefits, and reduced services. Here is our future, Chicago style.

Larry Littlefield covered the same story today.

Agent #777 said...

I believe someone (Mish or RobDawg or poster at these sites) suggested a 50K cap on annual pension benefits. A cap in that range seems plenty plausible to me - I am surprised it has not been mentioned by someone with some Federal clout. That could go a long way to solve a lot of fiscal ailments.

Peripheral Visionary said...

Pensions are the line in the sand for the unions; they will accept some reduction in various benefits, even in retirement healthcare coverage, but they will fight a reduction in pensions to the death. If politicians want to go after the pensions, they had better be ready for a fight.

Mister B said...

Is there any legal basis for the state cutting pension benefits, short of a bankruptcy?

Bill in NC said...

File bankruptcy and dump all pensions on the PBGC.

That'll get you under $50,000/year!

Rob Dawg said...

The existing obligations of CalPERS are destined for PBGC no matter what.

BJ said...

Here's another one that Sacramento is going for...

http://www.sfgate.com/cgi-bin/article/article?f=/c/a/2009/08/20/BASD19BBUC.DTL

Talk about a boondoggle..
So for all the languages around, a business must supply a translator.. or they will be in violation of this. What about dialects?.. for example, there are well over 40 different dialects of Tagalog.

BJ said...

BTW, on a previous thread..

http://exurbannation.blogspot.com/2009/08/blog-post.html

I wanted to post this but couldn't get the login to work right.. felt that it might have been relevant..

Lex said...

I don't think the PBGC has any responsibilty to public pension plans. The PBGC has its own problems - an estimated $33 billion deficit (source Brookings Institution).

Mr. Outspoken said...

Actually businesses will not have to provide translators. "The measure specifically states that no business will have to provide customer service in a particular language". You just can't force people to or not to speak a language.