Notwithstanding the fact that “adjustable defined benefits” might constitute an oxymoron, as a concept it represents the only way that defined benefit plans can be sustained. Rather than throwing new employees into individual 401K plans, while they effectively subsidize legacy defined benefits for veteran employees and retirees, why not adjust defined benefits down to a financially sustainable level and let everyone participate?

Let’s set aside for a moment the debate over whether or not defined benefit plans are just fine the way they are, and can survive with merely incremental refinements – eliminating spiking, raising contributions a bit, bumping the retirement age a few years. Those solutions buy time, but unless the investment market roars for another 30 years, they will not solve the problem. And in the context of equitable policy, that debate is moot, because if these plans are just fine, than nobody should object to reforms that will make benefits adjustable if and when they are no longer fine.

Three good examples of how adjustable defined benefits can be implemented are the proposed “… Read More

“No one wants the inconvenience associated with transportation workers taking action, but the District is leaving these workers little choice.This is about the middle class. We want the public to know what’s going on,” Tonisson said. – Alex Tonisson, co-chair,Golden Gate Bridge Labor Coalition,SF Appeal, July 24, 2014

If you were receiving a pay and benefits package that averaged $125,678 per year (ref.Transparent California), in exchange for working a37.5 hour week, would you feel exploited? What if along with that, you got13 paid holidays per year, five weeks annual paid vacation (ref.MOU, page 20), and 12 paid… Read More

“I see a beautiful city and a brilliant people rising from this abyss.”

– Charles Dickens, Tale of Two Cities

Traveling through suburban Detroit, a sprawling city of 143 square miles whose population has dropped from nearly two million to less than 700,000, you can often imagine you are in rural Tennessee. Rutted narrow roads bend past groves of cottonwood, oak and silver maple. Deer and jack rabbits forage in tall grass. Until you pass a burned out ruin of a home, not yet removed, obscured by greenery, it is difficult to imagine that these neighborhoods once were filled with homes, set 35 feet apart and carpeting the land for mile after mile.

According to the so-called “right wing propaganda machine,” the tale of Detroit’s demise is attributed to the unchecked power of labor unions. Private sector unions were inflexible in the face of foreign competition, driving Detroit’s auto industry into irreversible decline. Public sector unions gobbled up every dime of taxpayer revenue they could bully and intimidate politicians into granting, further straining the finances of an already imploding city. Financially unsustainable… Read More

The Orange County Board of Supervisors has tentatively approved a transparency ordinance, known as COIN (for Civic Openness In Negotiations) that would require negotiations with government employee unions to be open to the public. Boy, do they need it.

The current negotiations between the sheriffs’ union and the Orange County Board of Supervisors are a perfect example of why COIN is needed. On Friday, after two years of secret negotiations with the Sheriffs’ union, the proposed terms of the contract being offered by the union were revealed to the public for the first time. And now the Board proposes to take a final vote this Tuesday!

That’s right, fellow taxpayers. We get one business day to review the complex business deal that will bind our County for years to come, and then our elected officials will vote.

This not nearly enough time for the taxpayers, who are going to be on the hook for these salaries and pensions, to understand the costs of what is being offered or fully weigh in. Which is, of course, the point of keeping the details secret until the last minute. Secret negotiations, followed by sudden and final votes, is how business has always… Read More

California has one of the highest costs of living in the United States. California also is one of the most inhospitable places to run a business in the United States. And despite being blessed with abundant energy and an innovative tradition that ought to render the supply of all basic resources abundant and cheap, California has artificially created shortages of energy, land and water, and a crumbling, inadequate transportation and public utility infrastructure.

The reason for these policy failures is because the people who run California are the public sector unions who control the machinery of government, the career aspirations of government bureaucrats, the electoral fate of politicians, and the regulatory environment of the business community. To make it work, these unions have exempted government workers, along with compliant corporations and those who are wealthy enough to be indifferent, from the hardships their policies have created for everyone else.

Here’s just a taste of what California’s middle class, too rich to qualify for government handouts and too poor to be indifferent, has to endure compared to the rest of the United States:… Read More

Before anyone gets out the balloons and starts celebrating theHarris vs. Quinndecision too much, step back, sober up, and reflect on the scope of what happened, and where it puts us in this war. To use a WWII analogy, we just won the Battle of Britain. The Luftwaffe no longer dominates the skies over London. That’s significant. This is, perhaps, as Churchill once said, “the end of the beginning.” But from Al Alamein to Stalingrad to the Beaches of Normandy, our ultimate destiny still hangs in the balance.

To carry this metaphor further, California today might be compared to Nazi occupied Europe in 1941, where the possibility of liberation was years in the future, if ever. While across America the forces of freedom celebrate what is indeed a strategic victory, in California, an occupying army continues to build their own 21st century version of Fortress Europa.

To appreciate the undiminished political supremacy public employee unions still have in Sacramento, the State Senate Public Employment and Retirement Committee hearing on June 23 provides… Read More

“The rare problem of high pensions going to top public executives was solved last year by state legislation. Pensions will now be based on the salary cap for Social Security taxes: $117,000… The highly exaggerated “unfunded liability” problem is resolving as the stock market and tax revenues recover from the recession.The Ventura County Taxpayer Association’s “reform” scheme was hatched as a Wall Street scam to convert well-managed public pension portfolios into thousands of individual IRA’s. These are more dependent on mutual funds and lose more of their value to broker’s fees…” – Excerpt fromrecent commenton UnionWatch Editorial “Pension Reform Comes to Ventura County.”

Using Ventura County as an example, it would be instructive to respond in detail to this comment. Because Ventura County’s pension system is, relatively speaking, one of the more financially stable systems in California, and because the benefits they pay their… Read More

It’s no secret that Californians pay more in taxes than those in neighboring states. We’re at the top of the charts when it comes to the state sales tax, our corporate tax rates are the highest in the west, and drivers here pay one of the steepest gas taxes in the country. Yet, despite these facts, some in Sacramento don’t think these taxes are enough.

Their primary target is undoing the taxpayer protections put in place by voters over three decades ago through Proposition 13. Passed in 1978 when inflation… Read More