Expect to hear a lot more pronouncements from state and local government officials about the need for tax increases, cuts to public services, or both.

CalPERS, the huge pension fund that serves most California government employees, has announced it is raising its rates, a move that will cost employers – taxpayers that is – up to 50% more. For some local governments already on shaky financial footing, this may be the nudge that sends them down the bankruptcy road already traveled by Vallejo, Stockton and San Bernardino.

CalPERS is currently only 70% funded and the Board justified the increase, which amounts to billions of dollars annually, based on estimates that without increased revenue, there is an even chance that the major pension plans could fall below 50% funding… Read More

When it comes to the rise in retiree benefit costs throughout California, many people tend to focus on unfunded public employee pension plans. But they often don’t realize that non-pension benefits account for a growing portion of the state’s unfunded retiree benefit obligations.

Indeed, the state’s officially reported unfunded liability for all retiree benefits is a staggering $181.2 billion. Of this total, the state’s non-pension unfunded liability stands at $63.9 billion, more than a third. And retiree healthcare accounts for the vast majority of these “other post-employment benefits” (OPEBs).

Last week California Common Sense (CACS) released a… Read More

In the lingo of Twitter, California’s new State Assemblyman Rocky Chavez gleefully posted the following status update on a bill he’s sponsoring:

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AB 13 – my bill to grant #Veterans in-state tuition – just passed out of Asm. Vets Affairs Committee! Next stop, Assembly Approps

I found this Tweet rather unsettling. As I see it, this Rocky Chavez bill is a bad start for our new San Diego County GOP Assemblyman — elected last year to a safe, gerrymandered Republican district.

If one is a Republican in the CA state legislature, it’s hard to get any… Read More

California enacted a relatively modest “enterprise zone” law 30 years ago, and maintains a $700 million program, which manages a few geographic areas where businesses can receive tax breaks for hiring disadvantaged workers in locations where high-unemployment is persistent. Enterprise zones are a good idea to give incentive to businesses and build new investments and value in communities that would not otherwise receive attention. Emboldened by more recent Democratic electoral gains in the Legislature, and a Governor who says he wants to “reform” the meager enterprise zone program, the California Labor Federation, which despises the program, now argues that 61 percent of the program’s credits go to very large corporations, and therefore it should be “reformed”. A new bill they are behind, Senate Bill 434, would require employers to pay $16 per hour in the zones, which is twice the minimum wage of $8, and more-or-less kills off the incentive for companies investing in blighted communities – which is inherent in the idea behind enterprise zones in the first place! Craig Johnson, president of the California Association of Enterprise… Read More

Holy understatement Batman! California is more than $127 billion in the red!

The California State Auditor recently released a report detailing California’s “net worth” as a state.

California is $127.2 billion upside down.

Holy helplessness Batman!

The Assembly Republicans California Budget Fact Check project explains: “As is a common annual practice in the business world, the Auditor totaled up all of the state’s unrestricted assets and income, and then compared them against the state’s liabilities to determine net worth. Factoring all of these things together, California had a negative net worth of $127.2 billion in 2011-12.”

Holy dilemma Batman!

The Budget Fact Check… Read More

Justice delayed is justice denied.

That’s what Californians are learning as courtrooms and courthouses up and down the state are shuttered due to budget cuts and a history of underfunding our judicial system’s core services.

San Bernardino County suffers from the largest shortage of judges in the state thanks in part to an outdated funding formula that doesn’t take the County’s vast size, population growth or caseload increases into account. According to the most recent judicial needs study conducted by the Judicial Council, San Bernardino County should have 156 judges to handle the workload, yet the state only allots the County 91 positions and only funds 86 of those spots.

The state has closed courtrooms and courthouses in the County, and three more courthouses are on the chopping block. These court closures will force crime victims, witnesses, law enforcement… Read More

Like it or not, Californians must work 114 days this year to pay federal, state and local taxes—that’s four more days than last year.

Although the average American celebrates Tax Freedom Day on April 18, Californians must wait nearly a week longer—until April 24—to join the celebration.

Tax Freedom Day, calculated annually by the Tax Foundation, is the day Americans have earned enough money to pay their annual tax obligations at the federal, state and local levels. This year’s national Tax Freedom Day is five days later than last year.

California’s Tax Freedom Day is four days later than last year and eight days later than two years ago. Compared to other states, our Tax Freedom Day is now the sixth latest in the nation, up from eleventh last year. Only Connecticut, New York, New Jersey, Massachusetts and Illinois have later dates.

As bad as California’s rank is this year, the Legislature seems intent on making it even worse. It’s churning out so many new taxes and fees it’s hard for the experts to keep up, let alone the average California taxpayer.

Although the Tax Foundation considered the impact of Propositions 30 and 39,… Read More

Ding dong! Could CARB be dead?

The Pacific Legal Foundation filed a lawsuit yesterday against the California Air Resources Board challenging California’s cap and trade regulation.

The cap and trade program was created by CARB ostensibly as part of AB 32, California’s Global Warming Solutions Act of 2006.

“The regulation creates a quarterly auction program requiring many California employers to bid significant amounts of money for the privilege of continuing to emit carbon dioxide — or be faced with closing their doors in California, laying off their employees, and moving their businesses to other states,” the PLF explained in a press statement.

The PLF said the lawsuit challenges the auction process “as an unconstitutional state tax because it was not enacted by two-thirds majorities in both chambers of the Legislature, as required for new taxes by the California Constitution (Proposition 13 and Proposition 26).”

“The California Constitution is crystal clear that new state taxes require at least two-thirds approval… Read More