MOORLACH UPDATE — Dam Problem — February 22, 2017

Last Friday, the Senate voted to approve three bills related to the Memorandums of Understanding (MOU) between the Governor and nearly two-thirds of the State’s employees, through their respective bargaining units. Senate Bills 28, 47 and 48 will cost the General Fund $2.7 billion. But, we don’t have money for roads and dams. What?

I voted against all three of the bills. I even spoke against them. See minute 13 for February 17 at

The Sacramento Bee sends out an electronic “Capitol Alert” that discusses a previous vote that I made in Committee in the first piece below.

In my Friday Floor Speech, I mentioned that we have a “dam problem.” The Canada Free Press provides an editorial in the second piece that brings home this concern (also see MOORLACH UPDATE — Art of the Deal — January 13, 2017 january 13, 2017 john moorlach).

In the third piece, found in the Voice of OC, fruit is found from our efforts last year to utilize Mental Health Services Act funding for psychiatric beds (also see MOORLACH UPDATE — SB 1255 and SB 1273 — July 25, 2016 july 25, 2016 john moorlach).

Capitol Alert

The go-to source for news on California policy and politics

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BY THE NUMBERS: State workers, you’re closer to getting your raises. A package of labor agreements that would give raises to more than half of the state’s workforce cleared the Senate Public Employment and Retirement Committee on Monday. Next year, the agreements likely will swell spending on public employee compensation by about $1 billion. The agreements cover the 96,000 state workers represented by SEIU Local 1000, firefighters in Cal Fire Local 2881 and the state’s blue collar maintenance union, IUOE Local 12, among others. Two Republican lawmakers, John Moorlach and Mike Morrell, voted against the deals in the public employment committee. The package heads to the Senate Committee on Budget and Fiscal Review next, with another vote expected on Thursday.

California is in a crisis. Actually, California has many crises taking place, including a crisis of leadership

Where in the World is Gov. Jerry Brown?

By Katy Grimes

The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football field, in an army, or in an office.Dwight D. Eisenhower


California is in a crisis. Actually, California has many crises taking place, including a crisis of leadership. This lack of leadership has led to glaring misplaced priorities, and now, a crisis of tremendous proportions of aging and severely damaged infrastructure.

Oroville Dam, Levee Breaches, Flooding

The Oroville Dam Spillway hole appears to be much larger than state officials originally let on.

Levees throughout the Central Valley, Carmel Valley, and Northern California, have breached and flooding is forcing residents to evacuate.

And now a large portion of Highway 50 in El Dorado County in the Sierras has collapsed near Bridle Vail Falls.

Where in the world is California Gov. Jerry Brown? The Democratic Governor is missing in action. He hasn’t flown over the Oroville Dam to observe the damage. He hasn’t visited the area to talk to the people fearful of massive flooding. He hasn’t been seen at any of the levee breaks.

Sounding rattled, Brown finally held a press conference on the evening of Feb. 13 at the Office of Emergency Services, two days after 200,000 residents were evacuated near the Oroville Dam, where he asked for federal assistance. It was awkward, particularly following the presidential election, when a defiant Gov. Brown redoubled his promises to protect illegal aliens, invited more refugees to California, and continue his lone fight against climate change, in violation of federal law, and in opposition to President Trump’s stated policies.

“We will protect the precious rights of our people and continue to confront the existential threat of our time—devastating climate change,” Brown said in November. This is Brown’s evangelism, despite how arbitrary and destructive his wealth-redistribution environmental regulations have become.

Another Awkward Moment

Only one week ago, Gov. Jerry Brown’s office submitted a wish list of $100 billion of “key” infrastructure projects for investment statewide, which included raising Folsom Dam to improve flood protection. The list did not specifically list Oroville Dam, but Brown’s pet High Speed Rail project made the list, CNBC reported. “The priority list prepared by California follows calls by President Donald Trump for $1 trillion in infrastructure projects nationwide. Most of the projects on the three-page wish list involve transportation-related projects, such as highways, bridges rail or transit.”

The Democrat Supermajority in the California Legislature has vowed to increase gas taxes as high as 19. cents per gallon, to pay for backlogged transportation maintenance and repairs. The Governor has proposed to increase gas taxes by 11.5 cents per gallon.

But Wait! That’s not all!

“The Governor has not put real transportation funding in his budget,” Sen. John Moorlach, R-Costa Mesa reported in a recent op ed. “His latest budget mentions $4.2 billion. However, it needs a new revenue source to fund it! If the Governor were serious about fixing the State’s roads, why doesn’t he start allocating some funding to this task? Why not allocate $500 million out of the $122 billion in the general fund budget?”

Instead, Brown continues to focus on climate change issues, which he describes as “existential threats to humanity,” and the election of Donald Trump has made Brown more defiantly stubborn.

In December, Gov. Brown told embattled climate scientists at the American Geophysical Union conference in San Francisco that the state stands ready to lead the charge against climate change if Washington won’t, KQED reported. “We will set the stage,” Brown said. “We will set the example. And whatever Washington thinks they’re doing, California is the future.”

What’s the Plan For California’s Water?

As the Oroville Dam spillway collapses and water threatens to flood the homes and businesses of more than 200,000 north state residents, the 27 water agencies, 23 million people and thousands of acres of farmland dependent on this water are watching their future supply disappear. So, what’s the plan?

Gov. Brown’s “Water for the 21st Century” plan is on his website:

Ensuring safe and sufficient water supplies for the 21st century requires significant investments in our water infrastructure and natural ecosystems. After five decades of divisive wrangling, the time has arrived for the governor to provide real leadership and solve our longstanding water problems. The goal must be to maintain and enhance water supplies for all Californians and take action to restore the Bay-Delta and meet California’s true water needs.

The collapse of the Oroville Dam spillway highlights the need for the Governor to actually make the necessary investments to update the state’s aging dams, bridges, flood control projects, highways and roads, and stop pretending he is prioritizing this. “The time has arrived for the governor to provide real leadership and solve our longstanding water problems…” Where is this leadership?

Meanwhile, Brown is missing in action. He hasn’t flown over the Oroville Dam to observe the damage. He hasn’t visited the area to talk to the people fearful of flooding. He hasn’t sent surrogates to stand in for him.

Instead, Brown continues to hit Californians over the head with his climate change policies, even as the Trump administration makes plans to deconstruct the federal government’s fraudulent climate change regulations.

“Why is it that this Governor only talks about the problems?” Sen. Moorlach asked in his op ed. “He provides no leadership on solving them. We have the worst balance sheet of all 50 states and all I hear from him is how important it is to address global warming?

Where in the world is Gov. Jerry Brown? Your legacy is calling you Governor.

You don’t lead by hitting people over the head—that’s assault, not leadership. Dwight D. Eisenhower






Supervisors Approve Funding for New Mental Health Crisis Facility

By Nick Gerda


Orange County has long had a severe shortage of hospital beds for people experiencing a mental health crisis, particularly children.

Because of that, many patients have to wait more than a day at an unequipped hospital before they can see a psychiatrist, which experts say often worsens the situation.

But progress is expected to come in December, when county officials plan to open a new crisis stabilization facility in Garden Grove to serve up to 22 patients at a time, including youth aged 13 and up.

The 24/7 facility will accept people who are undergoing a psychiatric emergency and at risk of being hospitalized, but can’t wait for an appointment elsewhere. It is scheduled to open on Dec. 1 and serve anyone meeting that criteria who walks in, is dropped off by police, or is referred by an emergency room, according to the county.

Each patient’s stay will limited to just under 24 hours.

County supervisors approved a contract Tuesday with Exodus Recovery, Inc. to operate the facility. The Culver City-based firm is affiliated with St. Joseph’s Hospital and is run by the husband and wife team of David and Luana Murphy. The company runs several mental health facilities in Los Angeles and elsewhere.

“This is a big step forward for us,” said Supervisor Andrew Do, who led the effort along with Supervisor Lisa Bartlett.

Bartlett said she hoped to get more of these centers opened up throughout Orange County to help people get “back on their feet” again.

She also credited state Sen. John Moorlach (R-Irvine), who succeeded in getting state officials to clarify in July that state Mental Health Services Act funding can be used for crisis stabilization services.

For decades, the county government has had just one crisis stabilization unit, a 10-bed facility is in Santa Ana. There are also several hundred psychiatric beds at private facilities across Orange County, but they are often full.

In response to the shortage, county supervisors sought and received a $3 million state grant to help establish the Garden Grove facility.

The ongoing costs for patient care will be covered by federal and state dollars, in the case of Medi-Cal patients, and private insurance for people who have private coverage. County officials don’t expect to need any other funding sources.

Under its county contract, Exodus is slated receive $9.1 million in the first year, and $7.4 million per year after.

During Tuesday’s supervisors’ meeting, Jennifer Muir Beuthin, general manager of the Orange County Employees Association, raised concerns about the new facility being run by a private contractor. The Santa Ana facility is run by county employees.

Beuthin said the union full supports the new facility, but pointed out that the county admitted that it hasn’t evaluated why it would be better to outsource than have county employees provide the services.

Other information is missing, she said, like the financial health of contractor, how conflicts of interest would be addressed, and who at the county would be assigned to oversee the contract.

Beuthin pointed to another county health contractor that recently filed for bankruptcy, leaving many residents without care.

“We can’t let this happen again,” she said.

Additionally, she said the county was required to to meet and confer with employees before contracting the new crisis bed jobs to a private sector provider.

Mark Refowitz, director of the county’s Health Care Agency, disputed that there was a need to meet and confer. He said the Garden Grove facility is entirely separate from the Santa Ana facility, and that seven county employees will be added to the Santa Ana facility later this year as part of an expansion.

None of the supervisors nor county staff responded to Beuthin’s other concerns regarding the outsourcing.

Nick Gerda covers county government and Santa Ana for Voice of OC. You can contact him at



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MOORLACH UPDATE — Free Speech Conundrums — February 16, 2017

In this day and age, having a policy that prevents the recording of a community college instructor seems a bit antiquated, especially when so many institutions of higher learning promote the technology in a way to advance learning, like Yale and Stanford. But, a course on human sexuality may find confidential interactions between students and the teacher a little awkward if they are taped. I can understand that. Forget about why one needs a course on this subject in school. But, some privacy requirements may be necessary.

However, what happens when the teacher deviates from the course material that was being paid for through taxpayer funding and student fees for classes? Does an educator have the right to pontificate regularly and at length on current events on a totally different subject matter?

Each of us has opinions on President Trump and have the right to express them freely. But, should school employees who have grading authority be permitted to give personal, invective diatribes that they would not want repeated outside of the classroom, especially on a matter that has nothing to do with what the student is paying for?

I think those who have the responsibility to be campus teachers should stick to their curriculum’s syllabus and leave the pontificating to the editorial page writers. Or go join the students on the soapboxes in the common areas and debate with them there, where they are free to respond without the threat of an adverse grade.

Over the past three months I have been in communication with Orange Coast College President Dennis Harkins. He and I have cultivated a relationship over the years. And, I have known Doug Bennett, a college foundation executive and spokesman, for decades. I am familiar with many of the Coast Community College District’s Board members. I have also talked with former Crew Coach Extraordinaire, former OCC President and CCCD Board member David Grant about this awkward incident. And I have been in contact with a member of the affected family, as all are constituents.

There are two wrongs here. A teacher for a non-career building class strayed from the subject. And a student, in fear of losing a 3.9 GPA decided to protect himself by using a ubiquitous instrument like a cell phone to record the teacher’s off-topic harangues. It only makes sense that a smart student would want some evidence if his grade was modified due to a difference of political opinion, one not related to the subject matter.

In this particular case, if the school is going to punish the student, it should also punish the teacher. If the student is suspended, ask the teacher to take a time out, too. I would suggest a semester-long sabbatical. Cool off. Take up rowing. Learn to conduct yourself in a manner that reflects how you would want to be treated. Write a paper on how you will bite your tongue on non-subject matters. Apologize to the students of all three of the classes that had to endure the personal invective. And, apologize to a good number of the citizens that underwrite community college payrolls and bond payments by printing it in a local paper.

This was not a comfortable experience for all of the parties involved. And it has been an anxious three months for all of us. But, the sad conclusion appears to be that political hate speech is protected, not in a personal situation – for which every American has the right – but in the classroom where the students are captive subjects. And that is a very disappointing lesson provided by a highly regarded institution in our community.

There, now that state employees are allowed to give their thoughts on the passing parade, you’ve got mine. And, thank the OC Register, in the first piece below, for opening the door.

Caleb O’Neil: Chapman University has a crew team, although it is more of a club sport there. UCI also has a team. Maybe one of these two campuses would love to have a straight-A student like you enrolled at their campus? Or, you can go to Vanguard University of Southern California or Concordia University in Irvine. But, there, both without a crew program, you will not be able to rock the boat.

The second piece opens another component of free speech, and that is the supposed free press. Well, it isn’t so free. When I served as the Orange County Treasurer-Tax Collector, we were required to place public notice ads for escheatments and tax-defaulted real estate.

You had to be five years behind on real property tax payments before your real estate could be auctioned off. This means that you probably had no mortgage and didn’t really want the land any more. You had already received certified mail from me and one-third of you lived outside of the Orange County (nowhere near the circulation footprint of a local newspaper).

These ads are not cheap and are a significant cost in the Department’s budget. Well, newspapers rely on advertising revenue to survive. And, they do not want to relinquish this revenue source. Consequently, through your property taxes, you are subsidizing the local paper that is utilized to print these public notices for one or more days.

The second piece below, from the Monterey County Weekly, is honest about it. As the only former county Treasurer-Tax Collector in the legislature, I was approached to possibly by my former colleagues to author a bill that would simply offer an option – after the approval by the Board of Supervisors – of having an abbreviated announcement in the newspaper directing interested parties to a specific website maintained by the county with all of the pertinent information now published in newspapers or at three public places in each township within a county.

This proposal tries to be more transparent with public data and reduce government costs, but it may be bad for the newspapers’ bottom line, even though they would still be carrying the information in their papers. It is a little hypocritical for a newspaper’s editorial page to complain about the many who suckle on government funding, only to be guilty of doing it, too.

Being opposed by an interest group that purchases ink by the barrel could make for a very interesting legislative effort should I decide to actually introduce the bill. But, I’ve always enjoyed taking on powerful forces. Friday evening is the deadline for legislators to submit their final bills.

Orange Coast College student suspended for secret recording speaks out


COSTA MESA – An Orange Coast College student who faces a suspension for secretly filming a teacher in class making anti-Donald Trump comments filed an appeal Wednesday with the school.

Flanked by his attorney and students who came out in support, Caleb O’Neil, 19, spoke publicly about his experience for the first time during a news conference at the Costa Mesa college.

"I pulled my phone out, because I was honestly scared that I would have repercussions with my grades because she knew I was a Trump supporter," said O’Neil, a freshman who often wore pro-Trump attire to school.

“I thought Olga was a good teacher,” O’Neil said of instructor Olga Perez Stable Cox.

But when she began speaking, one week after the election of Donald Trump, of a divided nation and cast the election as an assault, he said he felt threatened.

School officials say O’Neil violated the Orange Coast College Community District’s Student Code of Conduct against unauthorized recording and use of an electronic device in the classroom.

O’Neil is suspended for a full semester and the summer term. Before being readmitted, he must write a letter of apology to Cox and a three-page, double-spaced essay explaining his actions and provide his analysis of the aftermath.

The sanctions are “excessive and discriminatory,” said Bill Becker, O’Neil’s attorney and the president of Freedom X, a nonprofit dedicated to preserving religious and conservative freedom of expression.

O’Neil, 19, is a competitive rower and said chose Orange Coast College so he could join its male varsity rowing team. He is attending classes during the appeal.

Orange County Republican Chairman Fred M. Whitaker on Wednesday called the college officials’ decision “abhorrent” and said it “clearly affirms their disdain for one of our nation’s most cherished freedoms: freedom of speech."

Last December, Whitaker and nine California elected leaders – including Sen. Janet Nguyen and Sen. John Moorlach – sent a letter to the college’s president, Dennis Harkins, discouraging disciplinary action, which would send “a disturbing message that students who don’t fall in line are at risk of administrative retribution.”

Contact the writer: rkopetman and Twitter@roxanakopetman

The Buzz


Flip to the back of many newspapers, including the Weekly, and you come upon public notices – small type announcing things like public meetings, properties in foreclosure, delinquent taxpayers. State Sen. John Moorlach, R-Costa Mesa, plans to introduce a bill that would authorize tax collectors to post public notices on their websites, rather than in newspapers. The California Newspaper Publishers Association is fighting Moorlach’s proposal, partly because it’s bad for the bottom line, but also, as CNPA General Counsel Jim Ewert says, it’s bad public policy: “What these notices are for is to get information out to the public about occurrences the public is going to have a strong interest in.”


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MOORLACH UPDATE — Proposition 64 — February 15, 2017

As a former income tax return preparer, I am really bothered by the underground economy. This is where individuals are paid cash under the table and do not fully report their taxable income for income tax and self-employment tax purposes. It’s a haven for dead-beat dads who do not pay child support to their former spouses. It’s also a haven for undocumented individuals (although they now seem to have a very special status with the majority of the Legislature, so I apologize for even mentioning this segment of our population).

With the recent legalization of marijuana, the Senate Governance and Finance Committee, on which I serve, held a hearing yesterday on the implementation of Proposition 64. In my November election recommendations I opposed Prop. 64 and observed that: This is not working in the state of Colorado (see MOORLACH UPDATE — SB 32 and Propositions — September 18, 2016 september 18, 2016 john moorlach).

Lo and behold, our first witness was none other than the Governor of Colorado, John Hickenlooper. As my sister and her family of six are residents of this wonderful state, I just had to do a quick selfie.

Because marijuana, both medicinal and recreational, is considered a Schedule 1 drug by the Federal government, this industry is prohibited, in most circumstances, from utilizing a bank account. Depositing large sums of cash is considered money laundering.

Medical marijuana dispensaries are currently paying sales tax, but in large all-cash payments. Cultivators and distributors will now be charged excise taxes, as well.
They need access to bank accounts to transact business with the state, as large cash payments are a high risk proposition. And, with bank accounts, there will be a history of business expenditures, including paychecks with appropriate withholdings. I’m sure the current situation allows this industry to make cash payments, which are not reported for income tax purposes, and thus being part of the underground economy.

Since this industry wants to come clean, then the Federal government should assist in this transition. It has much more to gain, than it has to lose.

The Associated Press covers the hearing in the piece below, which has been picked up by numerous newspapers around the nation.

Colorado Governor Talks Pot Challenges in California Capitol

Colorado Gov. John Hickenlooper is telling California lawmakers to set standards for edible marijuana goods and driving under the influence of cannabis as soon as possible to avoid repeating mistakes his state made when it legalized recreational pot.

By SOPHIA BOLLAG, Associated Press

SACRAMENTO, Calif. (AP) — Colorado Gov. John Hickenlooper told California state senators Tuesday to set standards for edible marijuana goods and driving under the influence of cannabis as soon as possible to avoid repeating mistakes his state made when it legalized recreational pot.

The senators heard from Hickenlooper as the Legislature prepares to regulate sales of the drug. California voters legalized recreational marijuana in November through Proposition 64.

Colorado legalized recreational marijuana in 2012 and faced a host of challenges implementing the new policy, from taxing marijuana dispensaries to keeping edible marijuana products away from children.

"We made an awful lot of mistakes as we were trying to wrestle with some of these issues," Hickenlooper said.

California faces a similar challenges implementing Proposition 64. Marijuana sales under the law are scheduled begin in 2018.

"We are in a sprint between now and Jan. 1 to be able to implement the mountain of rules and regulations associated with Prop 64," state Sen. Mike McGuire, D-Healdsburg, said during the committee hearing where Hickenlooper spoke.

Colorado saw a rise in child hospitalization because of kids ingesting edible marijuana products in non-child-proof containers, Hickenlooper told the committee. The state now requires edibles to be sold in child-proof containers and has stricter regulations on labeling such products.

California faces challenges determining how to enforce laws prohibiting driving under the influence of marijuana, Sen. Jerry Hill, D-San Mateo, said.

"There is no real quantifiable, definitive impairment level as there is with our alcohol," Hill said. "That’s been the criticism or the challenge that we’ve been faced with here in terms of defining what impairment would be."

Colorado struggled to quickly pass laws to regulate impaired driving for that reason, Hickenlooper said. He recommended California lawmakers start to address that issue quickly because it will likely take time to resolve.

Marijuana dispensaries generally are forced to pay taxes in cash because federal law prohibits banks from taking their money, which can present a challenge for the state and local governments collecting taxes from the businesses, Sen. John Moorlach, R-Costa Mesa, said. State analysts estimate the California legal marijuana industry could generate more than $1 billion in tax revenue each year.

Other speakers at the hearing, including local and state officials charged with overseeing the marijuana industry, also spoke about challenges implementing regulations so sales can begin next year.

"We are flying the plane while we are building it," said Amy Tong, director of the California Department of Technology.

Marijuana is still illegal at the federal level. Recently confirmed U.S. Attorney General Jeff Sessions has said he opposes marijuana legalization but has not announced specific plans to target marijuana industries in states that have legalized the drug.

Colorado has worked with federal authorities to crack down on black market marijuana sales, which Hickenlooper highlighted as critical to the success of the legal marijuana industry in the state. Hickenlooper said he is optimistic President Donald Trump will not crack down on Colorado’s legal marijuana industry, pointing to comments the Republican made during his campaign indicating he was open to letting states that have legalized marijuana continue to do so.

"We’re optimistic that he’s going to let the experiment continue," Hickenlooper said. "But they’re going to closely watch it, I’m sure."


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MOORLACH UPDATE — Pre-PEPRA Rush — February 12, 2017

What a difference a day makes.

When the Orange County Board of Supervisors majority in 2004, Supervisors Silva, Wilson and Campbell, voted to approve the general employee defined benefit pension formula to a generous 2.7% at 55 something unusual happened.

It should not have been a surprise, because people are motivated by finances. But, hardly anyone retired until the new formula, retroactive to the date of hire, became effective. More than 800 of the 17,000 county employees retired within days of the effective date. I was attending retirement parties almost every evening.

The Sacramento Bee has observed this phenomenon, but in reverse. Before the PEPRA changes took effect, a hiring binge occurred. The piece below shows some good investigative work. There is only one correction that I would make. I do not have a pension with CalPERS. My pension is with the Orange County Employees Retirement System for my 20 years of service (where I retired at a much lower salary than I was compensated with while serving as Treasurer-Tax Collector).

With pension reform looming, these California departments went on a hiring spree
Read more here:

CalPERS is one of a handful of California government departments that in 2012 added more staff than usual in the last week of the year. Those new hires were the last to accrue pension benefits under a generous formula that the state began to phase out on Jan. 1, 2013. Sacramento Bee, file
Read more here:



On the eve of major pension changes that would crimp retirement benefits for new hires, a handful of California government agencies went on a holiday hiring spree.

The Board of Equalization hired 25 new faces that week. Seventeen reported for their first day of work on New Year’s Eve.

The Sacramento Metropolitan Fire District brought on 23 new recruits between Dec. 24 and Dec. 31 of 2012. A spokeswoman said the department was racing to fill spots in a fire academy scheduled to begin Jan. 2, 2013.

And the state’s pension fund itself welcomed 20 new employees that week, including two well-paid investment fund managers who started work on New Year’s Eve.

Their timing was fortuitous.

By beginning work in the waning days of 2012, the employees enrolled in the California Public Employees’ Retirement System just in time to gain a generous pension formula adopted during the dot-com boom of 1999 that allowed most public workers to retire at age 55.

By contrast, most employees hired after Jan. 1, 2013, would have to work until age 67 to gain their full benefits.

Across the state, 707 people started work at local governments and state departments that participated in CalPERS during the last week of 2012. Another 64 employees from the city of Coalinga joined CalPERS that week, meaning 771 public workers entered the network just in time to become eligible for the expiring benefits.

That’s triple the average number of new hires at CalPERS-affiliated governments in the last week of the other years between 2007 and 2014. In five of those years, fewer than 275 public employees started work between Dec. 24 and Dec. 31.

The hiring spike was most pronounced on Monday, Dec. 31, 2012, when state records show 204 public employees reported to work for the first time.

New Year’s Eve in 2007 also was a Monday. Eighty-six California public employees started work that day. In every other year The Sacramento Bee reviewed, 30 or fewer California public employees had their first day on the job on a New Year’s Eve.

204Number of California public employees who started work on New Year’s Eve, 2012 – the day before pension reform took effect

The big numbers suggested to pension watchers that job candidates and certain government offices rushed to seal employment offers before the retirement changes took hold. Several government officials declined to defend the practice publicly, but said privately that their departments operated within the existing rules.

“If you’re being interviewed and you’re fully aware that (pension reform) happened because you’re applying with the state, I would think there was a lot of incentive to say ‘Hire me now or I’ll walk,’ ” said state Sen. John Moorlach, R-Costa Mesa, a retired Orange County treasurer who receives a pension through CalPERS and who has sponsored bills encouraging further retirement changes.

The hiring process for most public sector jobs usually takes months, so candidates may have been in talks with their employers when Gov. Jerry Brown signed the pension reform bill in September 2012.

“You get all of these agencies with unfilled positions saying it just is so arduous to hire and we can’t find qualified people, and then all of a sudden, they put their minds to it and they’re able to accomplish the hiring quite effectively,” said Marcia Fritz, an accountant who lobbied for pension reform early in the Brown administration.

Tax board reviewing hires

The Bee requested the CalPERS data after tipsters alleged workers at CalPERS and the Board of Equalization began their jobs with suspicious start dates. Those two organizations had the most new hires on Dec. 31, 2012.

Dan Elliott, a spokesman for the Board of Equalization, said the tax board considered the New Year’s Eve hires to be unusual, and it is reviewing them.

At least 10 of the tax board’s new hires reported to work at what was then a brand new call center in Culver City. The state Department of Finance has requested records about those new hires as part of an audit investigating the tax board’s personnel practices, according to records obtained by The Bee.

A press release the tax board issued in November 2012 to announce hiring for the call center read, “What better gift to receive than a job for the holidays!”

Most of the late-year CalPERS hires were information technology specialists who went to work on a large project that the department was shifting from a private contractor to in-house employees, said CalPERS spokeswoman Amy Morgan.


State Sen. John Moorlach on late-year hiring in 2012

The CalPERS board had approved the positions when it adopted its budget in May 2012, she said.

“There is no benefit for an employer to hire before” the pension reform law took effect, she said. “In fact, it saves the employer money if they’re hired after Jan. 1, 2013.”

Many departments apparently followed that guidance. About 3,250 employees joined the workforce with the state and other California local governments in January 2013, roughly 300 more than the number of hires in December 2012.

The Legislature passed its pension reform bill in the wake of a recession that clipped CalPERS’ robust investment returns, leading it to draw more money from taxpayers to fund retirements for public employees.

Before the reform bill, public employees enrolled in CalPERS could retire at age 55 with 2 percent of their salary for every year of their public careers. If they retired at age 63, their formula would give them 2.5 percent for each year of service. Police and firefighters had a better formula, allowing them to retire at age 50 with 3 percent of their salary for every year of service.

After New Year’s Day in 2013, police and firefighters could still retire at age 50, but with just 2 percent of salary for each year of service. The rate climbs to 2.7 percent per year until the employee turns 57.

Under the most common new pension formulas, other workers become eligible for retirement at 62 with 2 percent of salary per year of service. Their pension rates cap at 2.5 percent when the employee reaches age 67.

“This is the biggest rollback to public pension benefits in the history of California pensions,” Brown said when he signed the law on Sept. 12, 2012.

$900,000Difference in lifetime retirement earnings for Sacramento firefighters who retire at age 50 under new pension formula

His administration did not instruct government departments to hold off on hiring until the new formulas kicked in at the start of 2013.

The Governor’s Office declined to comment for this story. It directed questions to the state Human Resources Department, which declined an interview request. It issued a statement that read, “As with any change in law or regulations that affect California’s state employees, we expect our departments to not just comply but also uphold the spirit and intent of those laws and regulations.”

Short- and long-term savings

Brown and CalPERS recently have said the 2012 pension reforms are working as intended, saving money for the local and state government departments that participate in the fund. CalPERS remains underfunded and in December voted to lower its investment forecast, acknowledging that its returns would remain below past projections for some time.

In June, CalPERS estimated that almost 30 percent of public employees who will draw retirements from the fund are accruing their benefits under the post-2013 formulas. Those employees contribute more money from their paychecks toward retirement than the state workers who will retire under the older benefit model, saving government departments between 1.2 percent and 5.1 percent of their projected payroll costs, according to CalPERS.

“The law, supported by a large bipartisan majority, was designed to net both short- and long-term savings. It is doing just that,” said Steve Maviglio, a spokesman for union-backed groups that are working to preserve public pensions.

In Christmas week 2012, the departments that added the most new hires were:

▪ Santa Clara County, which started 37 new employees. The county did not answer multiple calls and emails asking why it accelerated hiring that week.

▪ The Board of Equalization, with 25 employees.

▪ The Sacramento Metropolitan Fire District, with 23 new hires. It was filling spots in a fire academy to work on new ambulance shifts that would open in March.

▪ The state Public Health Department, with 22 new employees. A spokeswoman for the department challenged the number late Friday, saying the department hired 15 people that week.

▪ CalPERS, with 20. Eight started their jobs on New Year’s Eve.

▪ The Public Services Transportation Commission of Los Angeles, with 18.

▪ The Bay Area Rapid Transit District, with 16.

▪ The state hospital at Atascadero, with 13.

▪ Placer County, with 14. A spokesman for the county said it was adding staff to prepare for new work with Covered California.

▪ California State University, San Luis Obispo, with 11. One of them was a campus vice president.

Some of the organizations disputed that their holiday week hires represented a bump in late-year start dates.

A spokeswoman for BART, for instance, noted that the organization often hires more than a dozen people in a week. Similarly, representatives for the Department of Public Health and the state hospital at Atascadero said their departments added more new employees in January 2013 than they did in December 2012.

However, records obtained by The Bee show that those departments rarely added many employees over the holidays between 2007 and 2014. BART was an exception. It added seven employees in the last week of 2013.

California has about 250,000 state employees, and the roughly 700 who started work in the last week of 2012 won’t sink the long-term viability of Brown’s pension reform.

But the difference is meaningful to workers.

Take the recruits who joined the Sacramento Metropolitan Fire District, for instance.

The average salary for active safety members there between ages 45 and 54 is about $133,000, according to the district’s latest CalPERS valuation report. The average starting age of firefighters at Metro Fire is 28.


Steve Maviglio, spokesman for retirement security group

Someone who started at that age and made that much under the old pension calculation would receive an annual pension of $88,000 beginning at age 50, earning about $2.65 million in current-dollar pension payments during the first 30 years of retirement.

Under the new formula, a safety worker making $133,000 who started at age 28 would make an annual pension of roughly $58,500 with retirement at age 50. Over 30 years, that safety worker would earn about $1.75 million in current dollar pension payments, about $900,000 less than under the old system.

If the 23 Metro Fire employees hired during the last week of 2012 started at a typical age, made a typical salary, and retired at age 50, they would cumulatively earn about $20 million less in current-dollar pension payments over 30 years than they would have made had they been hired a week later.

The CalPERS investment fund managers who started work in late 2012 earn about $200,000 a year in base pay. If they work 20 years for CalPERS, they could retire at age 55 with a pension of about $80,000 a year. Had they started work a day later, they’d have to work until age 62 to earn that pension.

Adam Ashton: 916-321-1063, @Adam_Ashton. Sign up for state worker news alerts at


Hiring at California public agencies accelerated on the eve of pension reform between Dec. 24, 2012, and Dec. 31, 2012. How the 10 departments that added the most new people in that window have hired in end-of-year holiday weeks:

Department 2011 2012 2013
Santa Clara County 8 37 0
Board of Equalization 0 25 2
Sacramento Metropolitan Fire District 0 23 0
Public Health Department 1 22 1
CalPERS 2 20 1
Public Transportation Services Corp. (L.A. rail) 0 18 2
Bay Area Rapid Transit District 0 16 7
Department of State Hospitals – Atascadero 0 13 0
Placer County 2 14 5
California State University, San Luis Obispo 0 11 1

Source: CalPERS


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MOORLACH UPDATE — Fairview Developmental Center — February 11, 2017

When an opportunity presents itself that could address a number of growing concerns in the community, it merits a hard look.

The subject of mental illness and homelessness landed front and center while I was a County Supervisor due to the death of Kelly Thomas. It started a personal journey that found that many of my constituents have family members suffering with some form of mental illness (see MOORLACH UPDATE — Senate Bill 59 — February 7, 2017 february 7, 2017 john moorlach). I would recommend that you do a little research if you are new to this topic by going to the National Alliance on Mental Illness website at

The Daily Pilot and the OC Register (the electronic version) cover the Fairview Developmental Center topic in the two pieces below.

Advocates for mental health services look at Fairview Center site for future use

The remaining residents of the Fairview Developmental Center in Costa Mesa are scheduled to transition to other living arrangements by 2019, and some people want at least a portion of the site to be used for mental health services after the center closes. (File photo | Daily Pilot)

By Luke Money

The long-term fate of the Fairview Developmental Center site is still years from being decided, but already some are urging that at least a portion be set aside for mental health services.

Among them is state Sen. John Moorlach (R-Costa Mesa), who recently introduced a bill pertaining to the future of the 114-acre, state-owned property in Costa Mesa.

Moorlach’s Senate Bill 59 doesn’t outline specific plans — only the "intent of the Legislature to enact legislation focusing on the disposition" of the property — but he said his goal is to ensure that local leaders have a say in determining the future of the site at 2501 Harbor Blvd.

"I just want to make sure that property doesn’t slip away," Moorlach said this week. "I’d rather it be available for dealing with a growing epidemic in this state, and that’s mental illness."

Moorlach said he plans to continue meeting with area officials and residents to get their thoughts on the future of the property.

"I think this could be such a win-win for everybody, because you can’t just complain about some of these subjects that are becoming more predominant … we’ve got to provide a solution," he said.

Fairview Developmental Center, first opened in 1959, is a state-run facility that provides services and housing to people with intellectual and developmental disabilities.

A handful of people turned out to Tuesday’s Costa Mesa City Council meeting to encourage development of resources on the site for those who are homeless or mentally ill.

"SB 59 is a placeholder right now and there’s no language for it, but if we don’t say anything, then we lose the opportunity to say anything," said Matt Holzmann, government relations chairman for the National Alliance on Mental Illness-Orange County.

"If we do nothing, then the state is free to do as they please," he added.

Facilities like Fairview are slated to close in coming years as part of an effort to transition people out of institutional-style centers and into smaller accommodations that are more integrated into communities.

"Fairview is scheduled to transition the remaining residents to community living options by 2019, and all centers planned for closure are scheduled to close in 2021," Nancy Lungren, a spokeswoman for the California Department of Developmental Services, said in an email this week.

The department "has held extensive meetings with parents, stakeholders, including the city of Costa Mesa and Orange County, and local regional centers while it is developing housing and programs in the community for individuals transitioning from Fairview," Lungren said.

As of this week, 194 people are living at Fairview, according to Lungren. Its population peaked in 1967 with 2,700 residents.

Once Fairview is officially closed, another state agency, the Department of General Services, will step in to determine whether the state can use the land in some other way.

The property will first be made available to other state departments and then to local jurisdictions to see if they have any interest, according to Department of General Services spokesman Brian Ferguson.

If no one bites, the land could be put up for auction.

Ferguson said it’s too soon to tell what might happen with the Fairview site, since the disposition process could take years.

"Our role is to find a good use of that property that’s going to benefit the taxpayers and residents of California," he said.

To Moorlach, the closure of Fairview could create something of a rarity in Orange County — a significant amount of available open land.

The site could be used to provide services and housing for the homeless, developmentally disabled and mentally ill, he said.

"It’s just a matter of how you allocate space — how many acres for which program," he said. "But I don’t think you’re going to find another piece of property like this anywhere in the county."

Should the state sell the site to a private buyer, the property would come under zoning laws established as part of the recent update to Costa Mesa’s general plan.

The plan specifies that at least 25% of the property be set aside for parks and open space. It caps the number of possible residential units at 582. Institutional and recreational uses also are permitted.

Those rules wouldn’t come into play if the state holds onto the land for its use.

Twitter: @LukeMMoney

Costa Mesa homeless advocates propose converting Fairview center into mental health facility

Homeless advocates are proposing the Fairview Developmental Center in Costa Mesa be repurposed as a mental health center that provides long-term recovery. (Photo by Matt Masin, Orange County Register/SCNG)


To get Orange County’s homeless population on a path toward self-sufficiency, homeless advocates are proposing the Fairview Developmental Center in Costa Mesa be repurposed as a mental health center that provides long-term recovery.

Several homeless advocates voiced their concerns to the City Council Tuesday, saying they would like to see some of the 114-acre property used to provide long-term recovery to the county’s burgeoning homeless.

Fairview, a state institution for people with cerebral palsy, epilepsy and other developmental and intellectual disabilities, is set to close by 2021. The property could be either be repurposed or sold to a private party.

The facility, located at 2501 Harbor Blvd., currently houses 194 developmentally disabled adults who require 24-hour care.

The advocates said they envision a mental health center where those experiencing a crisis can receive psychiatric evaluations, follow-up care and temporary housing.

“In an ideal world, we would like a 250-bed wrap-around mental health facility,” said Matt Holzmann, chair of government relations for the Orange County chapter of the National Alliance of Mental Illness. “What we would like is where we could have people with mental illness check in, get their acute care and then get post-acute care.”

The population at Fairview has rapidly declined since it opened in 1959, when state institutions were options for families who could not care for their children with developmental and intellectual disabilities. In the 1960s, the population peaked with 2,700 residents.

In December, State Senator John Moorlach, R-Costa Mesa, introduced Senate Bill 59, which would ask the legislature to state its intentions for the property.

“There’s an infinite number of opportunities for that property,” Moorlach said. “We want to work with the county, the community, the city of Costa Mesa… to protect the city, the residents and those that are in need.”

Holzmann said he would like the center to resemble the Haven for Hope center in San Antonio, which has won accolades for its success in providing low-income housing and psychiatric and medical care.

“Getting them three-square meals and a roof over their head and making sure they stay on their meds and therapy if they need it… that could be part of it as well,” Holzmann said.

Once Fairview closes, the state Department of General Services will determine if the state can find another use for the property or sell it. If the property is sold to a private entity, the owner would be subject to Costa Mesa’s zoning laws.

The city’s general plan designates 25 percent of the property’s acreage for public institutional uses, said Mayor Katrina Foley.

“It’s a combination of public institutional, single-family housing and a community open space,” she said. “We are willing to work with the groups, the county to come up with a plan for that 25 percent area that can serve the community in need with regard to support service, mental health and other disabled services.”

Councilman Jim Righeimer said he cares about the mental health and homeless issues in the city, but had concerns the city would become a magnet for homeless people should Fairview expand its homeless services.

“We’re willing to take more than our fair share, but we’re not willing to take the whole county’s,” he said.

A recently-approved growth initiative, known as Measure Y, which is retroactive to the time the property was zoned, may raise issues about the current zoning of Fairview.

In the ongoing struggle to address mental health concerns, county officials have made some progress.

In September, the Children’s Hospital of Orange County broke ground on a mental health facility that will supply 18 beds for children under 12. The facility is slated to open next year.

County officials accepted a $3.1 million grant last year to help pay for emergency medical centers dedicated to treating those suffering from psychiatric episodes.

The county has suffered from a shortage of psychiatric hospital beds in recent years, resulting in long waits for one to open up in hospital emergency rooms. A 2014 Register investigation found there were 32 psychiatric beds in all of Orange County for it’s roughly 725,000 residents under age 18.

Last year, more than 200 homeless people died – the deadliest year for homeless people in the county. They died as a result of drugs, mental illness, violence and years of neglect, according to the Orange County Coroner’s Office.

Contact the writer: lcasiano


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MOORLACH UPDATE — Time for Change — February 8, 2017

The fun and drama never seems to stop. The first piece below is an opinion piece written by two titans in the fiscal conservative community and appears in the Metropolitan News Enterprise and on the Flashreport. They are echoing many of the concerns that I have raised, so it is great to have such credible voices get the message out there.

The second piece is from the Orange County Breeze and discusses a recent announcement from someone who visited me at my District Office last fall. The author of the piece reflected on my personal journey a couple of years ago (see MOORLACH UPDATE — Governor — February 23, 2013 february 23, 2013 john moorlach and MOORLACH UPDATE — June not April — June 14, 2013 june 14, 2013 john moorlach). John Cox is doing a little of the same research.

The third piece has been covered before, but this time we have it going national (see MOORLACH UPDATE — Oops! — January 19, 2017 january 19, 2017 john moorlach). EAG News and FOX News have the fun details.

Time for a Major Change in Course


Governor Brown, California Attorney General Becerra, legislative and other government officials are fixated on battling the new administration in Washington with almost total disregard for California’s major problems and unmet needs. Failure to address these pressing problems threatens the viability of a state whose status is rapidly being transformed from “golden” to “tarnished.”

To help the political class refocus on the important, here is a list of the most exigent problems accompanied by modest solutions, as compiled by a couple of veteran taxpayer advocates who speak with, and hear from, thousands of California taxpayers.

Roads & Highways – Just about any road trip one drives on in California confirms that we have gone from a world leader in highway capacity and quality to barely a third world contender. Major changes are in order. Our gasoline tax must be dedicated to roads and highways alone, not to other general fund uses like paying off state general obligation bonds, as is now the practice. Also, Senator John Moorlach’s demands to reform CALTRANS should be a top priority. California spends 4.7 times as much per mile of state highway than the national average, according to the Competitive Enterprise Institute, and a 2014 government report concluded the transportation agency was over-staffed by 3,500 positions. Additionally, we should end the practice of requiring “prevailing wages” on public works projects, which are estimated to add up to 20% on every road and other public improvement.


Energy Costs—Gasoline formulation requirements, “Cap and Trade” and other responses to climate change must be revisited with demonstrable science and hard-headed realism to help low and middle income Californians who struggle with the costs of transportation and household energy. This is not climate change denial, but rather a recognition that it is patently unfair to burden the citizens of one state with the entirety of a global problem.

Business Regulations and Lawsuit Abuse – Manufacturing restrictions, wage and salary rules, Worker’s Compensation standards, frivolous lawsuits and “sue and settle” standards have driven the aerospace and most other manufacturing industries out of California. Time for tort and regulatory reform to establish a business-friendly climate that will encourage refugees to return and lure others to relocate here. Note: The Nestle Corporation has just announced it is moving its U.S. headquarters from Glendale to Rosslyn, Virginia taking hundreds of high paying jobs with them.

Land Development and Housing Costs – The mid ‘70s pioneering California Environmental Quality Act (SEQA) has created a nightmare for those seeking affordable, conveniently located housing, workplaces and shopping centers. It has been used as a weapon by environmentalists, competitors, “NIMBYs” and labor organizations to limit—and dramatically drive up the cost of homes, apartments and other needed facilities. Fortunately, despite the best efforts of some in Sacramento, Proposition 13 remains on the job protecting homeowners from runaway property taxes that could force them from their homes.


Public Transit—Governor Brown’s “Bullet Train to Nowhere” is in a death spiral due to lack of public support, refusal of the federal government and the private sector to provide additional funds, and out of control costs due to mismanagement, malfeasance and insurmountable engineering hurdles. But fixed route/fixed rail transit remains part of the liberal social planners’ mantra. Other than in highly congested urban areas, public transit is unjustifiable in terms of both capital and operating costs. With the advent of Lyft, Uber, self-driving cars and even Elon Musk’s Hyperloop—that, within a few years, could move passengers at a fraction of the cost of rail—private companies and entrepreneurs are offering answers to the mobility problem. This justifies placing renewed emphasis on fixing and expanding our highway system.

Education Improvements and Cost Control—“School choice” is the answer to improving K-12 student learning results. The political clout of the California Teachers Association and other teacher unions has blocked progress. Properly framed ballot initiatives may be the only realistic avenue to reform as we must stop the automatic and mindless Proposition 98 commitment of nearly half of general fund revenues—regardless of need —to K-12 and community colleges.


Public Employee Wages, Benefits and Pension Reforms—Public sector compensation costs for California, at both the state and local levels, are now clearly unsustainable. According to the Department of Labor, California state and local employees are the highest compensated in all 50 states.

Pay, benefits and pensions of public employees have become disproportionate to their private sector counterparts who foot the bill. Adding to the approaching calamity is mismanagement—which has included criminal bribery—at CalPERS, the state’s largest public employee pension fund.

Politically motivated investment strategies and fanciful predictions of return on those investments have left taxpayers on the hook for hundreds of billions of dollars in unfunded liability for current and future retirees. Consideration must be given to shuttering CalPERS and fairly allocating to each current employee their share of the retirement funds, arranging for the public employer to make up the difference for what has been promised to date, and move from “defined benefit” to “defined contribution” plans for all existing and future employees. Otherwise, this pension burden has the potential to grow so large that California will not be able to fund the most basic services and as residents flee to other states, the last one out will be asked to turn out the lights.

We call on our representatives to stop pursuing discretionary causes and pet projects and come to grips with these real problems facing all Californians.

Room with a view: San Diego businessman John Cox mulling a run for California governor

Shelley Henderson

According to an article by Christopher Cadelago in the Sacramento Bee, wealthy San Diego businessman John Cox is on a listening tour to find out whether he has a snowball’s chance in the 2018 election to replace Jerry Brown as governor of California.

The article says that San Diego Mayor Kevin Faulconer is also eyeing the governor’s race.

Given that California provided most of Hillary Clinton’s margin of victory in the popular vote in last year’s Presidential election, any Republican who chooses to run will face threadbare prospects.

The so-called Calexit ballot measure, now collecting signatures to qualify, may receive more votes than a Republican candidate for governor. That measure proposes that California exit, stage left, from the United State of America. Not a new idea, secession, but one with historical roots that taste foul when chewed on. Also unlikely in the extreme to succeed.

In the lead-up to the 2014 election, I remember California Senator John Moorlach (R-Costa Mesa), then Orange County Supervisor for District 2, went on a similar listening tour. He decided that his chances were little or none. As a CPA, he listened to the numbers.

Mr. Cox is also a trained CPA, and attorney. We’ll see if he listens to the numbers.

Groundwork needed

An embarrassing surplus of Democrats have expressed interest in the seat left open by Jerry Brown under California term limits. The Sacramento Bee article lists former Los Angeles Mayor Antonio Villaraigosa, current Lieutenant Governor Gavin Newsom (former mayor of San Francisco), former state schools chief Delaine Eastin, and current State Treasurer John Chiang.

I would prefer John Cox to any of the listed Democrats, though perhaps John Chiang would be least painful.

However, the spectacle of Sharon Quirk-Silva beating Young Kim for State Assembly, Josh Newman beating Ling Ling Chang for State Senate, and Orange County as a whole voting for Hillary Clinton over Donald Trump, speaks volumes for the grassroots groundwork needed to rebuild conservative strength in California.

Even should a Republican be elected governor, he would still likely have to work somehow with a legislature dominated by (very liberal) Democrats.

Republicans and conservatives (not the same thing) cannot retreat to their strongholds. They will have to sally out to meet the arguments of their opponents head on. They must make the case for conservative policy.

CA lawmakers push to require schools to teach about Russia election ‘hack’

FEBRUARY 7, 2017



California state lawmakers want to mandate schools teach lessons about Russia’s alleged interference in the 2016 election and other politically charged issues to high school students.

Assemblyman Marc Levine, a Democrat from San Rafael, is pushing legislation to task the state’s Instructional Quality Commission with developing a lesson about the role Russian hackers allegedly played in the 2016 election and recommend the state board incorporate the lesson into new history and social studies standards.

Levine appeared Monday on Fox News’s Tucker Carlson Tonight to defend the measure against critics who oppose lawmakers injecting political bias into school lessons.

“To me, the most important thing is we need to understand our history to have a sense of what foreign policy we have in the future, so looking back decades from now, why are we on the course that we’re on,” Levine said, comparing the issue to the War of 1812, the Monroe Doctrine, and the Marshall Plan.

“These are moments in history that help us really understand where American leadership has come from,” he insisted. “We need to understand Russian interference in the 2016 election and its impacts on foreign policy …”

National Intelligence Director James Clapper alleged in testimony before the Senate Armed Services Committee in January that Russian hackers meddled in the 2016 election, but acknowledged that the alleged hacking “did not change any vote tallies” and the “intelligence community can’t gauge the impact it had on the choices the electorate made,” according to the Associated Press.

Despite the many unknowns, Clapper declared Russia “an existential threat to the United States.”

Carlson pointed out to Levine that “we don’t understand the effect of Russia right now” and questioned his motivation for injecting the issue into school history books before that’s clear.

“The War of 1812 was 200 years ago, the Marshall Plan was 70 years ago, we have an advantage. We sort of get it now. We have perspective,” he said. “We have no perspective on what happened (in 2016), and basically what you’re suggesting is adding propaganda from a politician into text books, and why should I be in favor of that?”

Levine then attempted to shift the conversation to President Donald Trump.

“Well, the intelligence community had an assessment where they agreed that the Russian government and Vladimir Putin himself, had the boldest move ever in the interference in our election. And this will have an impact on American foreign policy, but we have a president who is the least curious man on the planet about this issue,” Levine said.

“Usually the winners write the history books,” he said, “and we need to make sure the truth is in our history books and it’s not papered over by the president.”

“No, what you’re doing is trying to get losers to write the history books,” Carlson shot back. “I just want the historians to write the history books.”

“You know as well as I what you’re suggesting is the addition of political propaganda into text books, there’s nothing to substantiate your claims, we don’t know Russia’s intent, we don’t know the extent to which they influenced this election,” he continued. “Those are unknowable right now, and you know that as well as I do.”

Levine’s efforts follow a bill introduced by California state Sen. Bill Todd, a Napa Democrat, to teach students “media literacy” and how to differentiate “fake news” from the real deal, The Mercury News reports.

“During the final, critical months of the 2016 presidential campaign,” according to the bill, “20 top-performing false election stories from hoax Web sites and hyperpartisan blogs generated 8,711,000 shares, reactions, and comments on social media.”

Republican state Sen. John Moorlach described Levine’s efforts as a “petty” example of “showmanship,” and condemned both lawmakers’ efforts to inject political bias into public school classrooms.

“I’d just be happy if we taught kids how to read and write and do arithmetic,” he said.


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MOORLACH UPDATE — Senate Bill 59 — February 7, 2017

On my very first full day in Sacramento, I received a reporter call from the Daily Pilot. He was curious about a bill that wanted to close the Fairview Developmental Center (see MOORLACH UPDATE — Day Two — March 26, 2015 march 26, 2015 john moorlach). This would start a long chain of involvement in state mental health policy in the almost 2 years I’ve been in Sacramento.

With my background on implementing Laura’s Law in Orange County (see MOORLACH UPDATE — Laura’s Law Journey — August 11, 2014 august 11, 2014 john moorlach), I pursued SB 1273 last yearto assist with clarifying state law on the use of current mental health money on crisis stabilization services for counties (see MOORLACH UPDATE — SB 1255 and SB 1273 — July 25, 2016 july 25, 2016 john moorlach).

I also supported "No Place Like Home" to address housing and dealing with very difficult mental health issues and advocated for better oversight over Mental Health Services Act (Proposition 63) monies (see MOORLACH UPDATE — More Prop. 63 Repurposing — January 6, 2016 january 6, 2016 john moorlach and

I also appreciate the city of Costa Mesa’s concerns about state properties within its borders as the state has done a poor job of communicating with local governments who have state Department of Developmental Services facilities services within their boundaries (see MOORLACH UPDATE — OC Fair — August 12, 2010 august 12, 2010 john moorlach).

With that, I decided to do a bill, SB 59, this year to have a seat at the table on the closing of Fairview. I wanted to assemble key local players, including two that are quoted in the Voice of OC piece below, in order to obtain stakeholder buy-in and to collaborate on – what seems to me – a rare opportunity to obtaining an existing available property that would require very little public resources to do great things for the community.

Until now, I have kept the conversations quiet, as the process of meeting with key leaders and impacted stakeholders was important to making sure everyone was communicated with and had a chance to form an opinion on the options before us.

The risk of bringing in some parties is that they may go to the media before we have a chance to form a functional plan that may create consensus sooner rather than later. That’s what happened here. Although the piece completely fails to update my having addressed the new availability of more psychiatric beds, it is an introduction to an opportunity that needs to be fully explored and allows for ownership by all parties.

Here is a brief background on process.

1. Currently, the property is owned and maintained by the California Department of Developmental Services (DDS).

2. Once the site is officially closed, DDS will contract with the Department of General Services (DGS) for the disposition of the property.

3. DGS will then determine if there is another “state use” for the land. If there is, they can make an administrative transfer to that state agency. Conversely, the City of Costa Mesa would have no say in what happens.

4. If DGS determines that there is not another state-use, they will then surplus the property and sell it.

5. Once the sale of land is done, and the rights are transferred to a private entity, the city would gain sovereignty and have the ability to dictate on local planning issues.

6. In November of 2016 – Costa Mesa voters passed Measure Y – a no-growth ordinance, which is retroactive to the time before the Fairview Developmental Center site was zoned. This calls into question the legality of the current zoning, as Measure Y dictates that it might need to go to the vote of the people.

Consequences of inaction.

1. This is a leadership opportunity. If the local community doesn’t step up and push for a regional outcome, the state could impose a state outcome. Everyone needs to come to the table and support this process to get a good outcome for Orange County residents.

2. The county and city may lose access to precious and scarce real estate that will likely not be replicated elsewhere.

What are my office’s priorities on the bill?

1. To begin the discussion between local stakeholders and residents on what happens to the site after closure.

2. To ensure the local community has a say when the state makes a determination on if there is another state use.

3. To ensure that a portion of the land continues to be a public good that helps the developmentally disabled, mentally ill and homeless.

4. To make sure the state does not modify the site to something the local community is vehemently opposed to.

What my office is not looking to do:

1. Dictate what exactly goes in at the site. This should be a community effort led by the City of Costa Mesa and regional stakeholders.

2. Push for any specific developers or private providers to have an inside track to acquisition of the land.

My office will work to construct the language for SB 59 so that we can continue the legislative process and discussion.


Costa Mesa Property Eyed as Site for Mental Health Service Center

By Thy Vo

After decades of inaction, Orange County officials in recent years have finally begun to make progress on helping homeless people find a safe place to sleep for a night — the shelter carved out of an abandoned bus terminal in Santa Ana and a permanent shelter planned for Anaheim are evidence of that.

But they still are a long way from reaching the next level, which goes beyond just giving people a hot meal and a cot, of getting them on a path toward stability and greater self-sufficiency.

Homeless advocates say re-purposing a 114-acre property nestled between a golf course and a condo development in Costa Mesa could provide an important step in that direction.

Currently, the property is home to the Fairview Developmental Center, a residential facility that now houses 194 developmentally disabled adults, some who require around-the-clock care.

But the state, which plans to close all but two of its developmental centers statewide by 2021, could end up using it for other purposes or selling it off to a private party.

The advocates want to keep that from happening and have their own vision for the property: a mental health center where people experiencing a crisis can receive follow-up care and be housed for a temporary period.

“If we don’t say something, the state will do as it pleases with Fairview,” said Matt Holzmann, chair of the Orange County chapter of the National Alliance of Mental Illness (NAMI-OC) and one of the main advocates proposing the mental health center.

Holzmann said the county has an opportunity with the property to add much-needed mental health beds and add a crucial link in its chain of services for the homeless, a place where people can not only be treated for mental health crises but be monitored for up to 30 days afterward, either as residents or in an outpatient program.

State Sen. John Moorlach (R-Irvine), who pushed for mental health legislation as an Orange County supervisor, has taken the first step to plant a flag on the Fairview property, introducing a bill last month that would ask the state legislature to clarify its intent with the property.

The bill, Senate Bill 59, does not advocate for any specific use of the property, although the language of the bill – which is so far vague and only one sentence long – is likely to be added to over the next few weeks.

“Our office believes that a portion of the land should continue to be a public good,”Moorlach said in an emailed statement. “It should be the role of the community; including Costa Mesa, the County of Orange and regional stakeholders to determine what the best use of the site will be.”

A Mental Health Crisis

Mental health care is uncoordinated and inadequate in most places, but things are particularly bad in Orange County.

The California Hospital Association recommends that a county have 50 mental health beds per 100,000 residents, Orange County has just 16, according to a 2015 report by the Orange County Grand Jury.

That shortage means that many people who suffer from chronic mental illnesses like major depression, bipolar disorder, schizophrenia or addiction often have to wait a day or more after a psychotic episode before a hospital bed opens up.

As a result of this delay, people often end up in expensive emergency room care when they may not need it, and others who might require more care are discharged to make room for other patients, said Holzmann.

Holzmann, who along with other mental health advocates plans to present his plans to the Costa Mesa City Council on Tuesday evening, hopes the center would resemble the Haven for Hope facility in San Antonio, which has attracted national attention for its innovative approach and success. The 22-acre campus that opened in 2009 and provides a combination of emergency shelter, low income housing, social and psychiatric services, and full medical care on-site.

He envisions a program at the Fairview site to provide wrap-around services for 200 to 250 people, including psychiatric evaluations, crisis intervention and up to thirty days of care after a crisis.

“The two most expensive places to put people are in an ER and jail,” Holzmann said. “This would be a low-cost place to spend maybe two to thirty days healing, instead of in a psychiatric unit, and it would be a lower level of care than an emergency room.”

Paul Leon, CEO and President of the Illumination Foundation, an organization which works to provide homeless individuals with housing, medical and mental health support, said that such a facility would help complete what he sees as a piecemeal approach to addressing homelessness and mental health care.

“You need all three parts – the intake in the hospital, a hospital bed for the urgent needs, and then recuperative care so you can adjust their medicine and give them a place to stay,” Leon said. “And then the final piece – permanent housing. And I think we can do that.”

Only in recent years have county officials moved to beef up support and mental health care for homeless.

The Children’s Hospital of Orange County also has plans for a 18-bed psychiatric unit for children under age 12, which is slated to open in 2018. And the county recently won a $3 million state grant to start emergency treatment centers for people with psychiatric crisis.

Leon does not think the facility should model itself after a large mental health institution and attempt to house mentally ill homeless people long-term, noting that many people benefit from the stimulation of living in a community.

“Our theory is, why don’t we start in the communities and transition them in place,” Leon said.

City Has a Say

Although the state can ultimately re-designate the Fairview Center for some other public use, if officials decide to sell the property to a private party the city does have some say in what goes on the property through its zoning laws.

When the Fairview Center opened in 1959, the property was 752 acres and intended to house up to 4,125 residents. A large portion of that property was transferred to the city in the 1970s, eventually becoming the golf course and apartment homes directly adjacent to the property.

The state has also changed its approach to treating developmentally disabled adults over the last decade and has focused on housing individuals in group homes, causing a steady decline in the number of people housed at the Costa Mesa facility.

Whether it includes Holzmann’s vision or not, any future plans would likely include open space, public or private recreational facilities, and institutional uses like medical facilities, with the remaining acreage going toward new housing, including apartments for developmentally disabled adults.

The Costa Mesa City Council approved those uses in 2015 as part of an overhaul of its general plan, according to the Daily Pilot.

Mayor Katrina Foley has said in the past that she would like future housing on the property to prioritize homeless people, veterans and other vulnerable groups. .

Contacted last week, Foley said her concerns are mostly focused on ensuring any future plans for the property will stick to the general plan.

“We don’t want another fairgrounds situation where some legislative proposal is being done in the dead of night and nobody in Costa Mesa has an opportunity to weigh in,” Foley said.

Foley is referring to a battle that began in 2009 when the county fair board took advantage of a Great Recession-era push by former Gov. Arnold Schwarzenegger to sell off state-owned properties in order to balance the state budget.

Fair board members conspired with the Schwarzenegger administration to buy the land through a nonprofit they formed and then privatize it. They would have succeeded if not for an aggressive effort by local activists to block the sale.

Local hospitals are also taking an interest in the Fairview Center property, said Leon, noting that a representative of the Hospital Association of Southern California (HASC) was present at a meeting that he attended with Moorlach’s chief of staff.

Hoag Hospital, which is less than 4 miles from the Fairview site, was part of a merger between a number of nonprofit hospitals that was approved by the state last year. Conditional to their agreement with the state, the hospitals will be required to spend at least $30 million in the first three years after the merger toward mental health treatments, including services benefiting the homeless.

Holzmann notes that the mental health campus would only take a portion of the property – up to 25 acres – and that a public-private partnership could help pay for it.

Leon said county leaders will need to work together if they want to have a say in how the property is developed after the Fairview Center closes.

“The takeaway was that, we all have to work together and see what we could do, so the state can’t just decide ‘well there’s nothing viable that can go there and we’re just going to put a prison there,’” Leon said.

“That really encourages us to work together.”

Senior reporter Tracy Wood also contributed to this article.

Contact Thy Vo at tvo or follow her on Twitter @thyanhvo.


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MOORLACH UPDATE — Senate Resolution 8 — February 6, 2017

The Flashreport and Canada Free Press provide an account of the fun I’ve been enjoying with the "peaceful transfer of power" in Washington, D.C. in the piece below (see MOORLACH UPDATE — Thirteen! — December 6, 2016 december 6, 2016 john moorlach and MOORLACH UPDATE — Sanctuary State — February 2, 2017 february 2, 2017 john moorlach).

I truly hope that the animosity shown by the Senate leadership begins to subside. We need a process of reconciliation and statesmanship with the new Administration, and the Democrats hold the key.

California Democrats’ ‘Bullying’ and Flagrant Hypocrisy

By Katy Grimes

On December 6, 2016 upon the return of the Legislature and newly-elected members, Sen. John Moorlach, R-Costa Mesa, authored Senate Resolution 8, introduced to simply welcome newly-elected President Donald Trump and acknowledge the historical peaceful transition of power. SR8 said the Senate “hopes for the peaceful transition of power in the United States, that the incoming presidency will be a success, and that the president-elect will take his responsibilities seriously to ensure a strong and unified America.”

SR8 was supposed to be presented and voted on at the beginning of the 2017 Senate Session, during the first week of the New Year. But this congenial resolution message was never given a chance.

Instead on December 6, Sen. President pro Tem Kevin de León, D-Los Angeles, presented and then had the Senate vote on his own Senate Resolution, SR 7, on the day that the Senate was sworn in.

Claiming to be “guided by principles of justice,” de León essentially ordered President-elect Trump to not deport illegal immigrants to their home countries, “under any circumstances” in SR 7. When pressed by a reporter, de León said he had not heard President Donald Trump’s actual statements regarding the deportation of only criminal illegal aliens. “I’m not sure I heard it that way,” de Leon said. “I based it (SR7) on the 60 minutes interview, and 3 million ‘criminal immigrants.’”

Marxist Hypocrisy on Display In California

While riots, fights, violence, fires, and extensive property destruction broke out last week at University of California Berkeley over the scheduled appearance of Breitbart editor Milo Yiannopoulous, police were said to be hiding inside buildings and on balconies, demanding the rioters disperse.

Students there to attend Milo’s speech were attacked with rocks, pepper sprayed, and someone was beaten unconscious by the rioting thugs.

“When asked why police didn’t move in and stop the rioters, UC Berkeley spokesperson Dan Mogulof curiously said, ‘Police tactics are driven on a campus by need, the non-negotiable need to protect our students and ensure their well being,’” CBS SF Bay Area reported. “University officials said police decided to stay back to prevent injuring innocent protesters and bystanders who could have been hurt if officers waded into the crowd.”

Several sources reported a stand-down order was issued to UC police, just as had been done at UC Davis three weeks earlier at another Milo event, which also turned violent.

At both events, first hand reports of black buses filled with masked, black clad rioters arrived to engage in the fight. At Berkeley, reports of as many as 150 of the mysterious masked rioters were there, destroying property, beating and pepper-spraying Milo supporters.

Many have Tweeted and posted on Facebook the irony of UC Berkeley shutting down Milo’s speech, and in effect, shutting down free speech, in light of the 1960s free speech movement at Berkeley.

This isn’t the first time Berkeley leftists have done this.

Upon hearing about the brutal and violent riots, President Donald Trump Tweeted:

“If U.C. Berkeley does not allow free speech and practices violence on innocent people with a different point of view—NO FEDERAL FUNDS?”

Berkeley Mayor Jesse Arreguin Tweeted his own message prior to the event:

“Using speech to silence and promote bigotry is unacceptable. Hate speech isn’t welcome in our community,” he tweeted.

As the riots broke out, Arreguin sent out a CYA Tweet:

“Violence and destruction is not the answer.”

Then this idiot Mayor threw the Berkeley Police Department under the bus:

“Police strategy was ordered by the department, not me. They did an excellent job in preventing further risk to safety. (4/5)”

Thomas Lifson at The American Thinker pointed out, “But the officers on the line were guided by policy of the department, and there was ample time for the mayor to review the threat posed by enemies of free speech and discuss the use of force by the cops. The last time the BPD used tear gas on rioters in downtown Berkeley, they came in for criticism from then-mayor Tom Bates, a man who used to vacation in East Germany before the wall came down. His successor, Mayor Arreguin, is widely considered to be well to his left.”

Hypocrisy, Thy Name is Democrat

Thursday following the Berkeley riots, California’s Democrat State Senators spent a great deal of time in session blaming President Trump for the riots. Senate President Pro Tem Kevin de León, more concerned about President Trump’s threat to cut federal funds than of the violent riots and injured, showed his support for shutting down free speech:

“Cal Berkeley is not Trump University,” de León said twice. “It’s unprecedented. It’s quite extraordinary that from the White House they would threaten one of our own institutions. And this is somewhat rich coming from someone on record who encouraged supporters to assault others who disagreed with him.”

“This is not America,” de León added.

There is plenty of irony to go around with Sen. de León. In 2014 during debate over de León’s “Yes Means Yes” bill SB 967, the legislature threatened to withhold money from the state’s colleges and universities if they didn’t adopt policies concerning sexual assault, domestic violence, dating violence, and stalking.

Last year, Sen. Ricardo Lara, D-Los Angeles, authored SB 1146, which threatened to eliminate the religious liberty of all California faith-based universities unless they complied with special LGBT laws. Lara’s bill required religious colleges and universities that receive state financial assistance or that enroll students who receive CalGrants, to comply with the anti-discrimination laws that apply to state-related programs, despite the affront to faith-based education. Lara, an openly gay activist, claims religious universities practice discrimination against LGBTQQIP2SAA. Fortunately, the outcry over SB 1146 was so vast, Lara amended the bill to exclude provisions that threaten religious freedoms to keep Cal Grant students from choosing Christian schools. This bad bill was signed into law by Gov. Jerry Brown in September.

De Leon Unnecessarily Hostile to Fellow Senators

Moorlach’s SR8 received numerous hostile amendments from de León, which had nothing to do with the peaceful transition of power. Hostile Amendments are proposed by another Member in Committee or on the Floor that are not supported by the bill’s author. Here are just two of de Leon’s suggestions to Moorlach’s SR8:

  • WHEREAS, The voters asked the Electoral College through free and fair elections to elect a populist candidate that lost the popular vote by a historic margin with no previous political experience into the White House, shunning an established candidate with decades of public service credentials, stunning observers and pundits alike; and
  • WHEREAS, Because the United States was founded on the principles of liberty and justice with all persons being equal under the law and entitled to the pursuit of happiness, the President-elect is expected to work through a peaceful transition of power ‚ a hallmark of our democracy ‚ as he has called on America to bind the wounds of division, asking all Republicans, Democrats, and Independents across the nation to come together as one united people while repeatedly attacking our free press and men and women in the intelligence community, many of whom risk their lives to serve their country and protect our freedom, promoting and condemning individual companies, sometimes based on their financial support for his campaign, and taking a generally hostile tone with broad cross sections of the United States.

Back in the Senate Thursday, Sen. Moorlach, frustrated with the hypocrisy (my words) of Senate President de León last week over the Berkeley riots, hit back:

“What has been an amazing month here in the Senate. It’s been very unique and very historic. But most of us are tired of the rancor—it’s been on both sides,” Moorlach said. “To respond to it I have SR 8. I want to welcome the new President and request for a peaceful transition, and I get hostile amendments. We’re just trying to do a nice gesture. I appreciate the comments about bullying, but it’s happening right now in this chamber. So I think we might lead by example, because we are falling short.”

Sen. Moorlach’s comments reflect his desire to govern, while de León and Democrats continue to behave like Brownshirt activists. Is this a precursor of what is ahead with the Democrat Supermajority?


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MOORLACH UPDATE — Super Bowl Budget — February 5, 2017

It’s Super Bowl Sunday and I’m wishing you a fun afternoon with friends and family. Speaking of annual big events, how about that State Budget?

It’s been some time since Jonathan Lansner of the OC Register and I enjoyed a fun debate, or I should say, fun telephone conversation. We go back to the OC bankruptcy days, more than twenty years.

He was recently asked by his editors to deviate from his Business Section domain and dig into the California budget process. The result is the first piece below. This front-page column is another good budget primer (also see MOORLACH UPDATE — Budget Tutorial — January 22, 2017 january 22, 2017 john moorlach).

For fun with Jonathan Lansner, if you go to the LOOK BACK sections of a sampling of past UPDATEs, you’ll see that his writing style has been consistent as he covers the OC bankruptcy, the OC Transportation Corridor Agencies (TCA), and even the scam of investing in tax lien certificates.

OC Bankruptcy: MOORLACH UPDATE — Daily Pilot 103 — December 27, 2013 december 27, 2013 john moorlach, MOORLACH UPDATE — The Wall Street Journal — December 7, 2013 december 7, 2013 john moorlach,MOORLACH UPDATE — Twitter Musick — October 9, 2013 october 9, 2013 john moorlach, MOORLACH UPDATE — Bridge Bash — August 16, 2013 august 16, 2013 john moorlach, MOORLACH UPDATE — OCTA Chair and CEO — January 15, 2013 january 16, 2013 john moorlach, MOORLACH UPDATE — Gadfly Management — December 5, 2012 december 5, 2012 john moorlach, MOORLACH UPDATE — Election Night — November 3, 2010 november 3, 2010 john moorlach;

TCA MOORLACH UPDATE — Alternative Investments — November 17, 2013 november 17, 2013 john moorlach;

And tax liens MOORLACH UPDATE — Bridge Bash — August 16, 2013 august 16, 2013 john moorlach.

The OC Register also provides a community service announcement in the second piece for those residing in Laguna Woods.


California’s budget debate




Gov. Jerry Brown’s latest budget proposal shows that juggling government finances is no simple chore.

The annual Sacramento budget dance is pretty well scripted by now, with the Democrats in supermajority control and fiscally conservative Republicans with limited votes for dramatic change.

Curiously, over the years, Brown has tried to play an awkward middleman, though still leaning toward Democratic thinking.

But this year’s Sacramento budget script has a major, new, unpredictable character – President Donald Trump.

Trump’s “America First” viewpoint is a stark contrast to California’s more global lifestyle and business ways. And the inevitable political friction could translate to serious damage to California’s overall economy and/or its state budget.

That puts the typical state budget arm wrestling into a harsh perspective.

The mix of political and social philosophy merging with economic and political realities shows why budgets are, at best, a perpetual work in progress. Brown’s most recent budget proposal is criticized on both sides of the political spectrum but gets decent reviews from some outside observers for its financial logic.

Some of Brown’s fellow Democrats suggest that spending is too lean for good times. Republicans say the opposite: that even if the business climate is rosy – and they have their doubts – too many current and future fiscal challenges call for deep cuts and/or new spending priorities.

In trying to understand this debate, I’ve learned that there are plenty of difficult to answer questions facing state policymakers – and eventually state voters – on how California will spend what it can get now, and how it will raise revenue and fund programs going forward.

So, with so many unknowns and a surplus of opinion – pro and con – here’s my look at the key questions facing California’s budget-making process.

What’s the goal?

The “debate” usually centers on the “general fund” – that’s the pool of state revenue and spending that is directly controlled by the Legislature.

On the revenue side of the equation, Brown pegs the general fund portion of the state budget to grow by $3 billion, to $125 billion, primarily because he expects Californians to pay more in income taxes. So-called special funds, typically for targeted spending and not easily shifted by legislators, are projected to take in another $50 billion.

But no budget – whether household, corporate or municipal – is crafted without some underlying principles.

Except for paying the outstanding bills.

It’s not very hard to see Sacramento’s tilt to growing state spending on Democratic pet issues, including social programs and publicly funded education. Unfortunately, making a budget make numerical sense and meeting political expectations isn’t as easy.

California voters have passed several propositions over the years that make it tough for the governor and the Legislature to manipulate and manage spending. Voters have commanded that the state spend on everything from education to rainy day funds to imprisonment rules that shrink prison overcrowding.

Bottom line: California budget-makers have as little financial flexibility as any legislature in the nation.

What are the wild cards?

The proposed budget raises doubts about California’s cash-raising strength.

Brown’s proposal, made public last month, suggests there will be a $1.6 billion hole for the current fiscal year. He blames weak income tax inflows and, as a fix, he proposes $3.2 billion in budget cuts.

Critics blame Brown and his fellow Democrats for carrying on a spending spree. In Brown’s five years, general fund spending has risen by 45 percent, or $40 billion.

But Brown came into office just as the recession was ending, a downturn that smashed the state’s economy and, with it, the state’s budget. If you take a longer term view – looking back to the previous peak of spending, $103 billion in fiscal 2008 – then the rise in the state budget under Brown looks more moderate, about 2 percent a year.

“If you take a step back, you see that California has come a long, long way,” says David Hammer, who watches California issues for the bond-trading giant Pimco.

No matter how you slice it, California’s budget is big money.

The general fund, the major financial spending tool for the nation’s most populous state, is roughly $3,000 per California resident. That’s about the same per capita spending as you’d find in Wyoming, the nation’s least populous state.

And if Brown’s projection of a $1.6 billion deficit in the current year sounds worrisome, remember this: Budgets during the last recession came in with deficit projections running $40 billion.

Brown’s budget – with roughly flat general fund spending – is the result of an improving economy and rising taxes in California.

Critics like state Sen. John Moorlach, R-Costa Mesa, say new taxes, along with stiff regulatory burdens, create a large hurdle for the state to attract new businesses and additional skilled workers. On a per capita basis, California has attracted the fewest residents from other states from 2010 through 2015.

“We need more discipline to attack the challenges,” Moorlach says. “Jerry Brown has done nothing.”

But forget politics for a moment. The bottom line is that California’s budget is directly linked with California’s economy, certainly more than it is to the discipline of any particular governor or legislator. The state has had more cash in recent years, in part because of an upswing in the state’s economy.

Brown’s budget suggests basic revenue will grow by 3 percent. The state’s nonpartisan analysts at the Legislative Analyst’s Office predict the growth will be closer to 5 percent, which is common in economic upswings. By that measure, Brown looks prudent.

Will growth last?

Observers outside the political arena say yes; they predict 2017 will be California’s seventh year of recovery.

Economist Chris Thornberg says, “Brown’s intentionally low-balling the numbers to control the Democrats who are pretending they have unlimited money to spend.”

But there’s a huge caveat to any economic forecast: What about Trump?

On everything from immigration policy and environmental regulation to the view of China as a trading partner, the Trump administration figures to offer policies that could hurt California’s economy and, with it, the state budget.

And what if Trump retaliates against California or its municipalities if they balk at new policies, such as immigration enforcement? Federal spending in the state is estimated to run in the ballpark of $100 billion.

Trump could be California’s rainy day.

“What’s coming out of Sacramento makes pretty good sense to put away dollars for the next downturn,” says economist John Husing of Redlands. “This recovery can’t go on forever.”

Does Wall Street matter?

To be more specific, California’s budget is a bet on the stock market.

California’s tax collections are volatile because they are directly tied to the success of the state’s wealthiest residents, with incomes that vary widely based on the performance of the stocks they own.

Roughly half of California’s general fund spending is tied to state income taxes, and much of the variation in income tax collections is capital gains.

If the stock market is strong, and wealthy Californians are motivated to sell stock, capital gains will be created and tax revenue will continue to rise. But if the stock market drops, or the wealthy hold stocks longer perhaps due to anticipated federal tax cuts, the state budget will be severely challenged.

“If Trumps puts us into a recession, you know how desperate this state is for capital gains,” Thornberg says. “If markets tank, there will be revenue hell to pay.”

In addition, a large and growing cost to California taxpayers comprises the retirement benefits of its state workforce. Pension finances also rise and fall with investment performance, and Brown’s critics say the state budget doesn’t track with a risk that figures to be a long-running drain.

“Sacramento has kicked the can down the road for so long, now we are at the end of the road,” says Marilyn Cohen, a municipal bond expert from Los Angeles.

“Even nationally, we see more talk about that we can no longer afford these kind of pensions.”

Bond market view?

Since California is a major borrower – in recent years simply for long-term projects; not to meet cash concerns – it’s important to know how the bond market views the state’s finances.

Three independent credit-rating agencies have rated California at highs not seen since the turn of the century. Yet, even at that, California’s credit rating remains among the lowest of any state in the nation.

Emily Raimes, a California credit analyst at Moody’s, says California’s rating is still “very high” – Aa3 by Moody’s – and adds that while the state owes “very big” debts it also has “a very, very large economic base to draw from.”

It is worth noting that according to Pimco’s Hammer, bond investors hold California debts in high regard – meaning, these bonds trade better than their credit rating would suggest.

“The bond market has rewarded California for tightening its budget belt,” Hammer says.


If you know the future of the Affordable Care Act, please call California budget-makers.

California has been aggressive in adopting the previous president’s signature health care legislation, and a full repeal of that legislation could blow a huge hole in the state budget.

“California is one of the higher-risk states,” says Moody’s Raimes.

How California will deal financially, and politically, with any changes to Obamacare is the big wild card for the budget – perhaps more in future years.

But should the state start pruning budgets and stashing cash now for future health insurance needs for its citizens?


The $102 billion budget for Medi-Cal, the state’s health program, is largely financed with federal dollars. “Without that cash,” Brown admitted when his budget was released, “it will be extremely painful for California.”

Cash for infrastructure?

One of the government’s basic roles is to provide a support structure for quality of life and economic prosperity.

That creates tough choices about building and maintaining everything from trains and freeways to water and sewer projects to schools. The budget estimates that California would need $78 billion to completely retool all infrastructure.

Critics of Brown’s budget say not enough is being spent on fixing the state’s aging road system and that too many dollars are going toward mass transit investments. Just thinking about cost-cutting could help.

Moorlach thinks Caltrans, for example, is “badly overstaffed … there’s a lot of room to reduce overhead – do a lot of trimming and do a lot of outsourcing.”

Education spending – $67 billion in Brown’s proposal – draws complaints about being out of touch with today’s student requirements. The Brown budget does not address a new spending mandate: $9 billion in bonds authorized by voters to be spent on school facilities.

“We don’t have an educational system that can train and retrain people for the technical work,” economist Husing says.

How much cushion?

Rainy day funds aren’t sexy.

Every dollar stashed in a reserve fund by state government is revenue spent with no immediate bang for the buck.

The rainy day savings math of Brown’s proposed budget is complicated, as all budget matters are, but the basic plan is to grow California’s financial backstops to $7.9 billion by June 2018. Critics say that’s not nearly enough considering the huge swings in state revenue created by the last economic downturn.

Moody’s Raimes takes a different tact; she compliments California for making strides with its rainy day fund.

Still, she points out, “we get reserve levels that are small for a state of this size, and for the level of its budget volatility.”

The future, of course, isn’t registered to vote.


Constituent help: State Sen. John Moorlach will host mobile office hours 2-4 p.m. Feb. 13, and every second Monday to follow, at Laguna Woods City Hall, 24264 El Toro Road. Moorlach’s staff will assist constituents with state casework issues. For an appointment, contact Aly John at Aly.John.

Jennifer Karmarkar



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MOORLACH UPDATE — Sanctuary State — February 2, 2017

At the Senate Judiciary Committee, I had the privilege of hearing the two witnesses in support of SB 6 (see MOORLACH UPDATE — Senate Bill 6 — January 30, 2017 january 30, 2017 john moorlach).

The first was a young woman who shared her difficult experiences in trying to enter the United States by illegally crossing the border. She was successful on the third attempt and has settled in and now hopes to become a lawyer. The second witness needed the bill’s author to translate his testimony from Spanish to English. (I did not speak English when I arrived, but I learned it rather quickly, thanks to total immersion.) But, both sincerely felt they were entitled to legal assistance and that it should be provided by California’s tax dollars.

On Monday, I heard from several of my Jewish colleagues on the other side of the aisle that we should support Senate Resolution 16, but the seven countries mentioned in the Executive Order do not even recognize Israel as a nation (see MOORLACH UPDATE — Senate Resolution 16 — January 31, 2017 january 31, 2017 john moorlach).

The logic here in Sacramento is not making sense to me. And the rhetoric and justification of certain actions, including the riots on the Cal Berkeley campus yesterday evening, is confusing at best and sad at worst.

This morning, during the Senate Session, I had my fill of the rancor and let my colleagues know it. All the talk about the new President, while the Senate’s leadership has been bullying my Senate Resolution 8. If the Senate is to lead, it should lead by example, and not by using the same techniques they are complaining about (WATCH HERE or go to

I share this because this month has been surreal here in the Capitol. The brazen defiance and the angst displayed against a new President who is enforcing existing law and communicating strategies that are no different than those propagated by his predecessors, Presidents Clinton and Obama, has been a sight to behold.

California’s rush to become a "Sanctuary State" even made it to FOX News with Bret Baier. See

It has certainly caught the attention of others in the media and now my quotes are reappearing. Western Journalism is the first piece below, New American, is the second, and Moral Low Ground is the third.

Market Watch has an editorial that has taken my warning and juxtaposed it as a threat and provides a counter-perspective. (Don’t tell me I don’t provide equal access.) It’s the fourth piece below.

In the fifth piece below, Real Clear Policy provides a different perspective on the Trump dilemma and weaves in the unfunded pension plan concerns that I’ve been addressing for some seventeen years (see MOORLACH UPDATE — Financially Unstable States — January 24, 2017 january 24, 2017 john moorlach).

For a little more fun on the pension topic, watch my interview with Brad Pomerance of California Channel News at (see MOORLACH UPDATE — PEPRA 2 With SB 32 — January 15, 2017 january 15, 2017 john moorlach).

The sixth and final piece is an invitation in the OC Register to attend the Cypress Chamber of Commerce’s Networking Breakfast on Valentine’s Day to hear my Deputy Chief of Staff, David Mansdoerfer, speak on laws that have become effective this year.

California Seeks To Become Nation’s First ‘Sanctuary State’

"We will not stand by …"

by Jack Davis

Lawmakers Tuesday took their first step to make California a “sanctuary state” in which all levels of law enforcement would be banned from cooperating with federal immigration authorities.

The bill passed the Democrat-majority Senate Public Safety Committee and heads to the Senate Appropriations Committee before it moves to consideration by the full Senate, which is also controlled by Democrats.

The measure, which comes on top of a similar measure passed in 2013, is being fast-tracked by Democrats anxious over any future actions that might be taken by President Donald Trump.

“We want to make sure that police officers don’t abandon their beat and go enforce immigration laws,” said Senate President Pro Tem Kevin de Leon of Los Angeles, who authored the proposal.

“We will not stand by and let the federal government use our state and local agencies to separate mothers from their children,” he added.

“We need to stand up for every man, woman and child who has contributed to our community,” said Democratic Assemblyman Rob Bonta. “That is under full-frontal attack by the federal administration now.”

The bill was opposed by many Republicans.

“I think this bill is making it that much more difficult for the federal authorities to get the most dangerous criminals that we want to deport to keep our communities safe,” said GOP Sen. Jeff Stone.

Some noted the fiscal implications. Trump has signed an executive order that could block federal funds to sanctuary cities.

“If we’re getting $100 billion in federal funding, $85 billion of which goes to local communities, who is Sacramento to jeopardize that funding for our local communities?” said Republican Sen. John Moorlach. “That’s playing chicken with somebody else’s money.”

California Advances Bills to Become Sanctuary State

Written by Raven Clabough

One of Donald Trump’s first actions as president was to issue an executive order that targets sanctuary cities by directing local and state agencies to enforce existing immigration laws or face losing federal funds. In response, San Francisco is suing the Trump administration, claiming that the orders violate states’ rights provisions. And in flagrant disregard of Trump’s order, California is attempting to become the first-ever sanctuary state. Mercury News reports that Democrats in San Francisco are forging ahead with a legislative package aimed at expanding sanctuary status throughout the state of California in response to Trump’s order.

At the expense of California taxpayers, Democrats in the state Senate advanced bills to create statewide sanctuary for illegal immigrants, provide money to pay for immigration lawyers on behalf of immigrants facing deportation, and stop efforts to create a Muslim registry that senators believe will be on President Trump’s itinerary.

"We in California have a responsibility to say no and to be a counter balance of the nightmare coming out of Washington," San Francisco Democrat Scott Wiener insisted.

One of the bills in the package, SB 54, also known as the California Values Act, would prohibit state and local agencies from enforcing immigration laws or from working with immigration enforcement agencies. The legislation reads:

In no event shall state or local law enforcement agencies or school police or security departments transfer an individual to federal immigration authorities for purposes of immigration enforcement or detain an individual at the request of federal immigration authorities for purposes of immigration enforcement absent a judicial warrant….

The attorney general … shall publish model policies limiting immigration enforcement to the fullest extent possible consistent with federal and state law at public schools, health facilities operated by the state or a political subdivision of the state, courthouses, and shelters, to ensure that they remain safe and accessible to all California residents, regardless of immigration status.

The bill directs the same entities not to use money or equipment to “interrogate, detain, detect, or arrest persons for immigration enforcement purposes.”

According to Mercury News, the 2013 California Trust Act already restricts law enforcement’s abilities to detain someone for immigration authorities; however, the new measures take it a step further, preventing agencies from collecting information on legal statuses or cooperating with requests from federal agents.

Fox News adds, "Many of California’s largest cities, Los Angeles, San Francisco and Sacramento, already have sanctuary policies that prohibit police from cooperating with immigration officials. The state is already home to an estimated 2.3 million illegal immigrants. SB54 would extend those policies statewide, prohibiting police officers and jailers from arresting or detaining people solely for immigration violations unless a judge issues a warrant."

Democrats on the state Senate Public Safety Committee claim that SB 54 will ensure that police officers are not distracted from doing their jobs.

"We want to make sure that police officers don’t abandon their beat and go enforce immigration laws," stated Senate President Pro Tem Kevin de Leon of Los Angeles, who authored the sanctuary measure.

But Republicans argue that the measure will make it harder for law-enforcement groups to do their job of fighting crime effectively.

State Senator Jeff Stone declared, "I think this bill is making it that much more difficult for the federal authorities to get the most dangerous criminals that we want to deport to keep our communities safe."

The sanctuary legislation now moves to the Senate Appropriations Committee for consideration.

Additionally, Assembly Bill 3, introduced by Assembly member Democrat Rob Bonta, would create state-funded centers to train defense attorneys on immigration law, while SB 6, introduced by Democratic Senator Ben Hueso, would create a state program to assist those who face deportation.

The Senate Public Safety Committee also passed a bill that prohibits state and local officials from participating in the creation of a possible Muslim registry. The bill’s author, Senator Ricardo Lara (D-Bell Gardens), said he was compelled to write the bill in response to statements made by Trump during his presidential campaign.

"In our country’s darkest moments, we have discriminated against whole groups of people," Lara stated.

Though California’s Democratic Governor Jerry Brown has not commented on the bills, he has indicated that his administration’s interest is to protect and support immigrants.

“Let me be clear,” he said. “We will defend everybody — every man, woman and child — who has come here for a better life and has contributed to the well-being of our state.”

While the state of California certainly has the right to nullify federal laws that it feels are unconstitutional by simply not enforcing them, the catch, of course, is that it risks losing federal funds. As the saying goes, he who pays the piper calls the tune. If Californians do not want to adhere to federal laws, they have the option to forego federal dollars. The problem is that California Democrats feel that American taxpayers should continue to fund their illegal actions, and therein lies the problem. Likewise, those who are protecting illegal immigrants are doing a disservice to California residents who don’t wish to provide sanctuary to violators of the law, but face the repercussions of the actions of the Senate Democrats.

Republican Senator Joel Anderson of San Diego said that the Senate Democrats are merely “step[ping] on cities that don’t want to be sanctuary cities.”

And Senator John Moorlach, a Republican representing Orange County, pointed out, “If we’re getting $100 billion in federal funding, $85 billion of which goes to local communities, who is Sacramento to jeopardize that funding for our local communities? That’s playing chicken with somebody else’s money.”

ABC 10 local news notes that all bills will face more hearings, but supporters are hoping to enact SB 54 and SB 6 as urgency measures, which require two-thirds votes in both the Senate and Assembly before being signed into law.

However, critics are hoping to mount enough opposition against the two measures to stop them in their tracks. We the People Rising, an advocacy group that supports strict immigration enforcement, announced that it will be actively oppose the bills. The group’s Executive Director Robin Hvidston notes, “It actually puts the nation at risk when our state is crafting bills that do not uphold or respect the federal law.”

California Lawmakers Defiantly Advance Sanctuary State Legislation


As President Donald Trump threatens to withhold federal funding from sanctuary cities, Democratic lawmakers in California are defiantly advancing legislation that would create a statewide sanctuary for undocumented immigrants.

The San Jose Mercury News reports one bill would bar police officers from gathering information on a person’s immigration status or even responding to certain requests from the federal government. Other measures would hire attorneys to defend immigrants facing deportation and block efforts to create a Muslim registry, which President Donald Trump has promised to implement.

Senate Bill 54, introduced by state Senate President Pro Tempore Kevin de León (D-Los Angeles), would prohibit local law enforcement agencies “from using resources to investigate, interrogate, detain, detect, report, or arrest persons for immigration enforcement purposes.”

“We need to stand up for every man, woman and child who has contributed to our community,” Assemblyman Rob Bonta (D-Oakland), who introduced one of the bills and is co-sponsoring another, told the Mercury News. “That is under full-frontal attack by the federal administration now.”

Republican state lawmakers and law enforcement groups argued against the bills, saying they would make it harder to fight crime in the state. “I think this bill is making it that much more difficult for the federal authorities to get the most dangerous criminals that we want to deport to keep our communities safe,” Sen. Jeff Stone (R-Temecula) told the San Francisco Chronicle.

However, studies show undocumented immigrants are less likely to commit crimes or be incarcerated than the general population. Many of the safest cities in the nation are also located on or near the Mexican border — including El Paso, San Diego, San Antonio, Austin and Tucson, a fact acknowledged by even some leading conservative voices. The American Immigration Council, a pro-immigrant nonprofit, noted in a recent study that the decades of increased immigration into the US spanning the 1990s through the 2010s also saw a dramatic decrease in crime across America.

Trump vowed throughout his presidential campaign to crack down on sanctuary cities by stripping their federal funding and stepping up immigration enforcement. He repeatedly cited the case of Kate Steinle, a young woman allegedly shot dead on a San Francisco pier in July 2015 by a Mexican immigrant who entered the country illegally five times, as evidence that the nation’s immigration system is broken. Last week, the president moved to fulfill his campaign promises on immigration by signing executive orders authorizing construction of a wall along the US-Mexican border and calling for the suspension of federal funding for sanctuary cities.

Some California Republicans warned against picking a fight with the Trump administration. “If we’re getting $100 billion in federal funding, $85 billion of which goes to local communities, who is Sacramento to jeopardize that funding for our local communities?” Sen. John Moorlach (R-Costa Mesa) asked the Mercury News. “That’s playing chicken with somebody else’s money.”

Sanctuary cities are municipalities that welcome and protect undocumented immigrants, in many cases refusing to cooperate with federal immigration enforcement officials. According to the National Immigration Law Center, an advocacy group, around a dozen California cities have enacted formal sanctuary policies, and none of the state’s 58 counties “complies with detainer requests by US Immigration and Customs Enforcement.” Some of the state’s largest cities, including Los Angeles, San Jose, San Francisco, Fresno, Long Beach, Sacramento, Oakland, Santa Ana and Berkeley, have officially declared sanctuary policies. Many other municipalities have partially adopted sanctuary policies.

Many of these cities have vowed to resist policies many residents view as racist, xenophobic and contrary to American values of inclusion and religious tolerance. On Tuesday, San Francisco became the first city to sue the Trump administration over what it called an “unconstitutional” executive order seeking to withhold federal funding from sanctuary cities. “Not only is it unconstitutional, it’s un-American,” City Attorney Dennis Herrera said, according to the San Francisco Chronicle. “It is necessary to defend the people of this city, this state and this country from the wild overreach of a president whose words and actions have thus far shown little respect for our Constitution or the rule of law.”

An estimated 2.5 million undocumented immigrants live in California, out of a total state population of about 39 million.

California Gov. Jerry Brown (D) did not comment on any of the pending bills, but he did speak forcefully about the need to protect all immigrants during last week’s annual State of the State address. “Let me be clear,” said Brown. “We will defend everybody — every man, woman and child — who has come here for a better life and has contributed to the well-being of our state.”

Opinion: California leads states’ fight to break Trump’s authoritarian wave

By Chris Edelson

Not yet two weeks into office, Donald Trump is raising grave concerns about his administration’s authoritarian ambitions.

The president’s aides preposterously speak of “alternative facts” as part of a broader effort to declare their authority to say what reality is, regardless of pesky objective facts that get in the way. The Trump administration has taken action to prevent federal agencies from communicating with the outside world, including members of Congress and the press. The head of one watchdog group described this as “the cloud of Mordor descending across the federal service.”

Experts on authoritarianism already see warning signs from the Trump administration’s actions. Professor Cas Mudde concludes that “There is no doubt [Donald Trump] is an authoritarian…He sees democracy as ‘I have won, so I can do whatever I want or whatever I think is best for the country and I’m allowed to do that because I’m the CEO of America, Inc.”

The United States is a constitutional democracy, not a corporation, and Trump exists within a constitutional system that, in theory, sets legal limits on his power. The problem, however, is that those limits show no sign of working right now. At the moment, the U.S. is experiencing a constitutional failure. As Professor Ruth Ben-Ghiat puts it, “Formally, we have checks and balances [but] I’m of the school that those things are not going to stop [Trump].” At the federal level, Congress is best positioned to set limits on presidential power. However, Republicans in Congress show no appetite or desire to act. They look more like a rubber stamp than an effective check.

With checks and balances uncertain or even failing at the federal level, the states have an increasingly important role in setting limits on presidential power. Federalism assigns some power to the states and was designed, in part, as another check on the authority of the federal government. In the past, states have taken action to set limits on presidential power. One recent example is a successful lawsuit brought by states to block implementation of President Barack Obama’s efforts to temporarily remove the threat of deportation for some undocumented immigrants.

Some states are standing up to Trump’s bullying, even as members of Congress lay down their arms. Washington, Massachusetts and New York are the first states to sue the Trump administration over the contentious executive order restricting refugees and immigration.

The biggest challenge to Trump comes from California, where Governor Jerry Brown has signaled his readiness to stand up to the administration, saying that California will defend its policies. If California were a country, it would have one of the largest economies in the world. There are nearly 40 million Californians, and they voted almost 2-1 against Trump last November, so Brown may well feel emboldened to act.

One area where California could be effective is with the environment and climate change. In response toTrump’s refusal to take climate change seriously, Brown “has doubled down on California’s efforts to negotiate carbon-reduction agreements with other states and countries.”

If Brown follows through on his promise, he and his state will be taking a risk: Trump and his Republican allies in Congress could retaliate. Earlier this month, California state senator John Moorlach warned that “if California decides to draw a line in the sand, Trump, the consummate businessman, might not view California as a very good investment.”

That is the kind of thinly veiled threat one might hear in a Hollywood movie about the mob, not the way we’d like to think elected officials would act. Trump,. however, has shown an appetite for vengeance and retaliation against opponents and critics. California will have to be ready to defend itself.

There are indications that Californians understand this. Earlier this month, Democratic leaders of the state legislature hired Eric Holder and his law firm as legal advisers to represent the state in possible legal clashes with the Trump administration. State Senate Leader Kevin De Leon said that bringing the former U.S. Attorney General on board “brings us a lot of firepower in order to prepare to safeguard the values of the people of California. This means we are very, very serious.”

De Leon described Trump as a “clear and present danger to the economic prosperity of California,” and mentioned immigration and criminal justice as other areas where the state may take on the White House. If Trump moves ahead with mass deportation, it will be very difficult to implement his plans without cooperation from California and other blue states or large cities: for example, the mayors of New York and Chicago have suggested they would not cooperate with deportation efforts. The Trump administration has threatened to withhold federal money if cities take this approach. Brown, in turn, has suggested that California could decide to stop sending federal tax dollars to Washington, D.C. (The state pays more in federal taxes than it receives in federal benefits.)

A key question may be whether California gains allies in its fight. Though it is a large state, standing up to the bully in the White House who has support from Congress will not be easy. Whether California succeeds or not will tell us a lot about whether meaningful limits can be set on presidential power.

Chris Edelson is an assistant professor of government in American University’s School of Public Affairs. His latest book, Power Without Constraint: The Post 9/11 Presidency and National Security , was published in May 2016 by the University of Wisconsin Press.

Public Pension Crisis Bodes Ill for Coastal Democrats

By Lewis M. Andrews


The upset election of Donald Trump and the ascendency of the Republican Party at all levels of government has led to an intense debate among Democrats about how to heal their split with middle- and working-class voters, especially in Michigan, Wisconsin, and other rust-belt states. But the Left’s complicity in the ever-growing debt for underfunded public pensions, which the Stanford Institute for Policy Research puts at $5.599 trillion, or $46,884 per household, only further enhances the GOP’s prospects, even in New England and on the West Coast.

Both parties have some responsibility for the unproductive work rules and overly generous benefits that have led to the funding crisis. But politicians in blue-state legislatures and cities dominated by Democratic Party machines have clearly been more willing to placate public workers in return for their unions’ support.

According to a 2016 analysis by The American Interest of Cook Political Report voting data, the 19 states ranking “strongly Republican” over the last two decades have per household pension debt of $33,800, while the figure for the nine states leaning “strongly Democratic” is almost twice that amount ($65,080). And of the 10 cities with the largest ratio of unfunded liabilities to revenue in the context of stricter rules from the Government Accounting Standards Board (GASB), only Billings, Montana, has a Republican mayor.

The problem now for liberals is that, after years of papering over inadequate pension funding with wildly optimistic assumptions about investment returns on existing assets, the inevitable wave of tax increases and service cuts required to keep plans solvent is beginning to hit, especially in blue precincts.

Unsurprisingly, many of the hardest hit cities have been in California, where Democratic policies are almost indistinguishable from those of the teacher and other public employee unions. In Los Angeles, where between 2003 and 2012 pension costs grew 25 percent annually, the city has sought a series of supplemental levies for essential programs it can no longer afford. These include a $1.2 billion property tax increase to house the homeless and a half-cent sales tax to generate $860 million in transportation improvements.

And in San Diego, the percentage of teacher salaries that city schools must contribute to pensions is slated to go from 8.8 percent in the 2014–2015 school year to 19.1 percent in 2020–2021. As a result, the Unified School District is looking at $117 million in offsetting annual budget cuts, including for maintenance and supplies.

One could argue that there is nothing new about the problem of underfunded public pensions, which watchdog groups, such as the website, have been warning about for more than a decade. But it is one thing for voters to contemplate the vague future consequences of an ever-postponed financial crisis and quite another to experience higher taxes or service cuts today.

Once reliably blue Connecticut saw massive ticket splitting last November in the wake of Democratic Governor Daniel Malloy’s effort to bail out the country’s second-least solvent state pension system with back-to-back income tax increases. “Local Democrat (candidates) were astonished by the level of hostility they got toward Governor Malloy,” notes Kevin Rennie, a long-time political reporter in the state. While Hillary Clinton easily beat Donald Trump in Connecticut with 13 percent more of the vote, Republicans managed a tie in the State Senate and left Democrats in the House with their smallest majority in three decades.

Until recently, many blue-state politicians have been able to forestall voter anger by pretending that higher taxes and fees were needed for new services or improvements, rather than to compensate for underfunded pensions. California Democrats, for instance, would have voters think “we are fixing roads,” says Republican State Sen. John Moorlach of a recent $10 car-registration increase. But, in reality, “that money is going to be diverted into pension plans.”

Yet the large sums required to bolster sagging funds will ultimately limit this tactic. When the Bay Area Rapid Transit (BART) subway sought voter approval last fall for $3.5 billion to improve service in San Francisco and its suburbs, East Bay Times editorials noted that the system was really seeking a disguised pension bailout. Although the referendum passed in November, a related transportation measure to increase sales taxes in BART’s Contra Costa region was defeated.

Conservative think tanks have also begun to highlight the various ways that government agencies quietly divert funds from their apparent purposes to prop up pensions. In October, for example, the Manhattan Institute ‘s Josh McGee published a national study of public education budgets. It showed that taxpayer contributions for government-worker retirement plans have nearly tripled since 2001, while per pupil spending on equipment, facilities, and property fell 26 percent.

The economic consequences of immigration and globalization seem be to what animated voters last November, especially in the Midwest. But the cost of bailing out the country’s pension mess, created by a decades’ old alliance between Democratic politicians and public-union bosses, may soon impact every voter without a government job.

Dr. Andrews was executive director of the Yankee Institute for Public Policy from 1999 to 2009. He writes frequently on government reform.



Networking breakfast: David Mansdoerfer, deputy chief of staff for state Sen. John Moorlach, will be the featured speaker at the Chamber of Commerce networking breakfast at 7:30 a.m. Feb. 14 at Residence Inn by Marriott, 4931 Katella Ave., Los Alamitos.

Cost is $20 in advance or $25 at the door. Information: 714827-2430 or


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