Professor Barnhardt: “So it was only when your world was threatened with destruction that you became what you are now?”Klaatu: “Yes.”Professor Barnhardt: “Well that’s where we are. You say we’re on the brink of destruction and you’re right. But it’s only on the brink that people find the will to change. Only at the precipice do we evolve.” -The Day the Earth Stood Still, 2008

One might paraphrase Professor Barnhardt’s plea, excerpted from the 2008 movie potboiler “The Day the Earth Stood Still,” to suggest that pension plans will evolve once it is clear to a sufficient number of participants that they are truly on the precipice.

In the private sector, where fewer laws shield employers and their workers from financial reality, evolution is well under way. And what has emerged is is a mutation of the Defined Benefit Plan that preserves many of its virtues, while avoiding most of the financial risks. Being pioneered by the east coast actuarial consulting firm,Cheiron, Adjustable Pension Plans can be structured in various ways, but all of them share certain… Read More

Better late than never, California lawmakers seem to be waking up to the reality that the illegal “Fire Prevention Fee” they enacted nearly two years ago is a complete fiasco. Even so, they are refusing to repeal it. Instead they are scheming up ways to replace the tax with yet another tax that’s even bigger than the first.

Where else but Sacramento would someone think the answer to a bad tax is to replace it with one even worse?

Assemblyman Wes Chesbro, who represents many rural taxpayers on California’s North Coast, is leading the charge to reinvent and expand the fire fee. His proposal (AB 468) would replace the fire fee with a 4.8 percent “surcharge” on all insured homeowners and businesses in the State of California, regardless of location.

A similar concept was proposed by Governor Schwarzenegger in 2009 but was rejected by the Legislature.

These payments, averaging $48 per policy and totaling an estimated $480 million per year, would find their way to a “Disaster Management, Preparedness, and Assistance Fund.” The fund would benefit bureaucracies, like Cal Fire, that are involved in the state’s disaster preparedness… Read More

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Sacramento Mayor Kevin Johnson has fallen out of touch with the economic interests and responsibilities of taxpayers and current NBA players. The impending relocation of the of the Sacramento Kings to Seattle led to the former professional basketball player to assist in the drafting of a new arena proposal in hopes of keeping the team in within the Golden State. Unfortunately, the proposal calls for the city to contribute $258 million in taxpayer dollars that they essentially do not have. Not only does Sacramento not have the money, but taxpayers voted against a similar proposal just a few short years ago.

Mayor Johnson is desperately trying to keep the Kings in California despite the fact that the city’s taxpayers don’t want to spend public funds to finance a vacuum project and the players are susceptible to the highest tax rates in the U.S. And that’s all before paying “jock taxes” on income earned for away-games and other various expenses.

As a former three time NBA All-Star, one would think Mayor Johnson would better understand the tax burden… Read More

When I happily endorsed my friend of a quarter-century, Celeste Greig, for re-election as President of the California Republican Assembly I told her that I would pen something for her here on the FlashReport. On more than one occasion I have sat down in front of my computer to do just that. But each time I have found that writing an endorsement column for Celeste is not as easy as I would like. No, not because of reservations about Celeste. Celeste is a great person, a good leader for the CRA, and you’ll read more about my thoughts about Celeste below. This piece has been difficult to write because you cannot really talk about a candidate for CRA President without a candid discussion about the state of the CRA today.

… Read More

It is fitting that on Tax Day, April 15th, those who seek to destroy Proposition 13 have now revealed their intentions.

We already knew about all the bills currently pending in the California Legislature that would weaken Proposition 13, either by lowering the two-thirds vote for most local taxes or by taking away Proposition 13’s protections for business owners. Businesses – large and small – have benefited in the same manner as homeowners from the modest tax rates and the certainty Prop 13 provides.

The “conventional wisdom” in Sacramento has been that attacks on Proposition 13 shouldn’t be taken too seriously because even most Democrats know that direct attacks would be overreaching. But in this case, “conventional wisdom” possesses neither convention nor wisdom.

The fact is that the attacks are coming and they are coming soon.

In the Senate, there are several proposed constitutional amendments to lower the two thirds vote for special taxes which would make it far too easy for local governments to impose a plethora of “parcel taxes.”

A problem for the tax and spend lobby is that the polls suggest that these… Read More

In 2012, the state Legislature passed 80 budget “spot” bills — empty bills with no details. Such measures just sit on a shelf and await last-minute bill language, then are put forward for late-night passage on the last day of the budget session.

These are often the most controversial bills of each session. When lawmakers use them to avoid the legislative process, which requires committee hearings for all bills, it is clear that their goal is to avoid transparency and public involvement.

This has long been the norm. It has arguably been encouraged since the 2010 adoption of Propositions 25 and 26 into the state Constitution, allowing the Legislature to pass a budget on a simple majority vote and requiring a supermajority vote to pass fees and taxes by the Legislature, respectively. Lawmakers routinely take major policy changes and potential tax increases and drop them in trailer bill language.

Gorell and other Assembly Republicans target ‘waste, fraud and abuse’

To counter this practice, Assembly Republicans are pushing budget reform and transparency measures.… Read More

In November 2008, 52.7% of California voters approved Proposition 1A, which authorized the state to borrow $9.95 billion for the “Safe, Reliable High-Speed Passenger Train for the 21st Century” by selling bonds to investors. Support has slipped since then.

A 2011 Field Poll and a 2012 USC/L.A. Times poll showed 59% of California voters would reject Proposition 1A if put back on the ballot. A 2013 Public Policy Institute of California poll indicates that 54% of likely voters outright “oppose” the high-speed rail project as it stands now.

Frankly, these polling results are astonishing. Why does a significant minority of Californians STILL support California High-Speed Rail after all of its financial and management fiascoes?

Well, there’s a sizeable group of Californians who regard high-speed rail as an evolutionary step toward enlightened collectivism. Another group recognizes it as an opportunity to make a lot of money off of taxpayers through its design, engineering, construction, or operation.

Their minds are made up. That leaves another group of California voters who still support high-speed rail but don’t have an… Read More

Today, it appears the California Senate will reconfirm Malcolm Dougherty, the director of Caltrans. This will be done after only one Senate hearing, where instead of asking Dougherty to answer for the giant problems in his agency, lawmakers were silent or complimentary.

What timing. I hope Senators are paying attention today. Because yesterday, the Metropolitan Transportation Commission announced the opening of the new San Francisco-Oakland Bay Bridge may be delayed a few more weeks or even months. The latest delay of the 10-year construction project is due to the discovery of more than 30 faulty giant bolts holding the bridge together — apparently they need to be replaced before the bridge can open to the public.

Under construction for more than a decade, the Bay Bridge project has not only taken much longer to build than planned, cost overruns have escalated the total… Read More