Calls to Action: Legislators - Archive

In 2013, then-Lieutenant-Governor Gavin Newsom published a book entitled “Citizenville” in which he argued for a government that kept pace with changes elsewhere in society. Asserting that “we must inject a more innovative, entrepreneurial mind-set into government,” Mr. Newsom wrote that “we simply cannot have a government that relies on bureaucracy and maintaining the status quo.” I hoped his vision would be realized. But a decade later, half of which Mr. Newsom has presided over as governor, California’s bureaucracy is bigger than ever, residents would be hard-pressed to point to a single innovation, and the status quo is still the status quo.

Dear Legislators,

This week the Biden Administration announced that personal income rose 0.4% in April, consumers increased spending sharply, U.S. economic activity is at its highest pace in more than a year, and the unemployment rate is at an envious 3.4 percent.

Yesterday the Legislative Analyst’s Office (LAO) released its Multiyear Budget Outlook through fiscal year 2026-27, forecasting $52 billion of deficits over that period.

Dear State Legislators,

Last year we wrote to you about the alarming $500 million per year salary increase you granted to state prison guards under a contract extension executed in June 2021 and the state’s failure to comply with Subsection (c) of Gov. Code Section 19826, which requires a study of salaries of employees in comparable occupations before awarding a new contract. Because you did not commission such a study, we did, and the results were shocking. In our note, we implored you to hold the line in the next contract, which will come into effect upon the expiration of the current contract on July 2 — just six weeks from now.

West Contra Costa County Unified School District has received a “lack of going concern” determination from its county board of education. That means the district is unable to meet its financial obligations. But 60 percent of its deficit is accounted for by spending on an unnecessary insurance subsidy for retired employees known as “OPEB” (Other Post-Employment Benefits) that drains classrooms of resources while federal subsidies go unused.

Dear Legislators,

Few services are more important than medical services yet due to efforts by the politically-active doctors’ lobby to limit supply, Californians have not always been able to get immediate access to such services. Your passage of AB 890 (Wood) in 2020 was a big step towards improving that environment but more must be done. A good review is provided by this excellent article in The Atlantic, which details the “costly, lengthy credentialing system” unique to the United States. With reforms, we can have not only more doctors but also more medical practitioners in aggregate.

Dear Legislators,

At $7.3 billion, current year salary spending on Corrections employees is 33% higher than forecast by last year’s budget and nearly 50% more than the prior year.

Dear Legislators,

>90 percent of Californians have health insurance. To reach 100 percent, Governor Newsom proposes expanding Medi-Cal to all income-eligible residents, which would turn California into a multi-payer universal coverage system not unlike the systems of Netherlands and most of Europe.*

Earlier this week DOF released the Governor’s Proposed Budget for the fiscal year starting July 1. At 400 pages it takes time, a process we have now completed. Some initial thoughts follow:

Tomorrow the CA Department of Finance will release the “Governor’s Proposed Budget” for the 2022-23 fiscal year that commences July 1. At nearly 300 pages, it is one of two documents providing deep insight into the state government.* I’ve been reading them for nearly two decades now and offer a few tips:

Last June, the governor and legislature granted a $500 million salary increase to state correctional officers without complying with Subsection (c) of Gov. Code Section 19826, which requires the state to produce a study of salaries of employees in comparable occupations before awarding a new contract. So Govern For California commissioned such a study, an advance copy of which is being made available to you in your capacity as a member of a Budget or Public Safety Committee. Its conclusions are stark:

Whenever I use Medicare, the government pays a health provider of my choice even if the provider is not operated by the government. The same goes for Medicaid, which uses public funds to pay for the care of 15 million Californians.

In January, the 2022-23 Governor’s Budget will be made public, after which public hearings will commence, followed by public distribution of the May Revision to the Governor’s Budget and public enactment of the budget by June 30. Guess what’s not public during that period? Political donations from beneficiaries of budget spending.

Dear Legislators,

We enjoyed reading the Senate Budget Plan and Assembly Budget Blueprint for 2022-23. These items stood out to us:

Dear Legislators,

In January the Department Of Finance will issue the Governor’s Budget for 2022-23. No section will be more important than the Stress Test, which forecasts revenue losses in the event of a stock market decline such as in 2001-3 and 2008-9.

Dear Legislators,

The Legislative Analyst’s Office is filled with talented people who occasionally take on impossible tasks. Take LAO’s recent Fiscal Outlook for Schools in which it boldly predicts that “capital gains revenue [will be] strong in 2022‑23.” I can’t predict the stock market next week much less next year but unlike the state I’m not depending on it to finance schools that require stable annual funding. If I did, I’d keep loads of cash on hand. That’s because the annual performance of stock markets looks like this:

California needs at least $100 billion of reserves. Don’t take our word for it. See page 245 of the Governor’s Budget:

November 1 marked the commencement of the Open Enrollment period during which residents can purchase health insurance for the upcoming year and another opportunity to praise Covered California, the state’s healthcare exchange that’s an exemplar of government services well provided. At a time when even the New York Times is cynical about blue state performance, Covered CA is a reminder that California’s government can do its job well.

If ever you needed a reminder that our nation has always been a confederation of diverse states united only when facing a common enemy, re-read Democracy In America, Alexis de Tocqueville’s 1835 masterpiece.

When it reported a deficit last year, San Francisco Unified School District blamed Special Education. This year, SFUSD is blaming declining enrollment. Not being blamed is the real culprit.

From January through June last year, the California Legislature held hearings about a proposed budget for the 2021-22 fiscal year that allocated the majority of $300 billion of spending to healthcare corporations and government employees who — during that very same period — made political donations to lawmakers that weren’t disclosed until July 31, a month after the budget had been signed into law.

This year California will devote more than $120 billion to Medi-Cal, the state’s version of Medicaid that serves more than one of every three residents.

Dear Legislators,

We are pleased that 94% of Californians now have health coverage. We’d love to see that figure rise to 100%. Multi-payer universal coverage systems such as those that dominate continental Europe and towards which California is marching can work extremely well. But one big difference is that European systems do a better job of controlling costs and utilization. That’s one reason the US devotes so much more of its GDP to health spending without getting much better health in exchange, and also why some enterprises — including providers doing business with the state who make political donations — are so profitable.

Dear Legislators,

California’s unemployment rate (7.5 percent) is the second highest in the nation and 44 percent higher than the national rate (5.2 percent).

California’s 120 state legislators have responsibility over 29 legal codes that govern daily life:

Under SEC rules, investment advisors who do work for state and local pension funds can be disqualified if they make political contributions at certain levels to elected officials or candidates for those offices who have a say in the public pension decisions to contract with investment advisors. That’s a good thing because public pension funds such as CalPERS and CalSTRS enter into money management contracts the objectives of which should be to protect pension beneficiaries and taxpayers, not to enrich Wall Street.

Dear Legislators,

Earlier this week I easily applied online for a REAL ID and the next day smoothly completed the procedure in person at a DMV office. The process was painless and DMV staff were kind.

CA Gov. Code Section 19826 deals with “Administration of Salaries” amounting to $20 billion per year.

Dear Legislators,

If ever there was a bill that was inappropriate for rushed deliberation on a gut-and-amend basis but perfectly appropriate for un-rushed deliberation, it is AB 826. But don’t take our word for it — Ventura itself makes that case.

Dear Elected Officials,

We keep hearing about cities considering a Wall Street proposal to issue debt to fund supplemental pension contributions to city pension funds. They should not do so.

In 2012, nine California public school students filed a lawsuit (Vergara v. California) alleging that state statutes on teacher tenure, layoffs and dismissal denied equal protection to students assigned to ineffective teachers. The students won in Superior Court but public employee unions appealed and won. Public employee unions played to win for their members. Also in 2012, voters in San Jose passed a ballot measure to reduce exploding pension costs. Public employee unions sued and the Superior Court rejected the reform that would save the most money, but the city did not appeal. San Jose did not play to win for constituents.

Dear Legislators,

Wall Street specializes in fancy names for old fashioned financial schemes. Eg, as the Archegos scandal demonstrated, “Total Return Swaps” are nothing more than a way to exceed margin limits. In the government world, the most misleading phrase is “Pension Obligation Bond,” which has nothing to do with pension obligations. Here’s how they work:

Dear State Legislators,

Don’t do it. Don’t sign off on the new contract Governor Newsom has negotiated with Unit 6. It’s another giveaway to a powerful special interest — Corrections employees — that already collects gobs of money that could be used elsewhere. 55,000 employees already collecting more than $5 billion per year in salary and costing billions more in unfunded retirement costs for attending to just 100,000 inmates is bad enough.

Wayne Morse was one of only two US Senators to vote against the Gulf of Tonkin Resolution in 1964 expanding military action in Vietnam. It takes guts to oppose party leadership. This week California saw similar courage when nearly a third of Democratic members of the California Legislature called for budget reserves greater than those proposed by the governor and legislative leadership.

If we are reading the laws about school reserves correctly, California’s K-12 schools are being set up for a fall of epic proportions unless schools or the state save much more from surging revenues.

Dear Legislators,

As you know, in nine days you must pass a budget. Based upon the Legislature’s Version of the State Budget submitted by Budget Committee chairs, as of now you are on track to make a big mistake.

Dear Legislators,

With your deliberations over the 2021-22 Budget, you are about to make a most consequential decision. Below is a chart of General Fund Revenues and Transfers from the beginning of the last decade. The blue columns are closed fiscal years. The green column is for the current fiscal year, which closes June 30. The yellow column is the amount projected by the Department of Finance for the next fiscal year, which starts July 1.

Dear Legislators,

The first sentence of LAO’s Multi-Year Budget Outlook published yesterday comes with an important disclaimer:

Dear Legislators,

The 2020 Budget Act you enacted 11 months ago forecast the S&P 500 to be at 2,060 in the first quarter of 2021. But because the S&P 500 closed the quarter at nearly twice that level and CA tax revenues are correlated with stock markets, revenues are way ahead of forecast. When it comes to revenue projections, no state flies more blindly than California.

Dear Legislators,

24 months ago, California’s Department of Finance forecast $151.8 billion of revenues in 2022-23 from the three largest sources:

Dear Legislators,

We have reviewed the May Revision to the Governor’s Proposed Budget for the 2021-22 fiscal year, which starts July 1. Our views are summarized below:

Dear Legislators,

As a shareholder, CalPERS has been pressing corporations for better disclosure of environmental sustainability risks, yet CalPERS has been a leader in not disclosing financial sustainability risks, as I explained a decade ago in Dow 28,000,000. The consequences have been terrible, especially for our state’s most vulnerable residents whose programs get crowded out whenever governments have to make up for CalPERS’s failures. Here’s what that looks like:

Dear Legislators,

Yesterday AB 20 died in committee. That’s good, because the bill was a one-sided attempt at campaign finance reform that banned donations from only one of the sectors that collects billions each year under agreements with the state and its subdivisions. Next time we hope you take up a comprehensive bill that bans donations from all corporations, unions and associations that receive money, or whose shareholders, employees or members receive money, under agreements with the state. Residents, not suppliers, are the customers who should be served by legislators. Political donations from suppliers of public services must be banned.

As usual, DOF’s latest Monthly Finance Bulletin is filled with data of relevance to your responsibilities:

Dear Legislators,

Non-government-operated schools have been one of the few bright spots during the pandemic. While many independent, parochial and charter schools have been serving students for months, LAUSD just welcomed students back this week and kids in San Francisco Unified are still waiting. Yet a bill has been introduced to crush charter schools in California.

Today the State Senate will hold a hearing on the nomination of State Assembly Member Rob Bonta to be Attorney General. We hope Mr. Bonta will say he supports legislation to ban donations from corporations, unions and associations whose shareholders, employees or members receive money under agreements with the state or its subdivisions. In doing so, Mr. Bonta would help divorce California from an ugly marriage to providers of public services. Nowhere has that been more evident than in dealing with police, prison and other safety unions from whom CA AG’s have long accepted donations and about whom have long been hypocritical, loudly saying one thing while quietly doing another.

Today’s San Francisco Chronicle editorializes that Governor Newsom is bending to special interests in dealing with California’s schools, which have been the slowest in the country to reopen. But surely the Chronicle knows that Mr. Newsom cannot open, much less reform, California’s schools without the vigorous support of the Legislature, and right now both branches operate in fear of school employee unions that for nearly five decades have always been there for legislators who toe their line and hit hard at those who don’t.

We have a lot of friends in the CA State Senate but we take issue with their recent assessment that “a decade of responsible budgeting enabled California to endure the recession.” That isn’t factual. Here’s how the 2020–21 Budget they enacted last June closed a forecasted pandemic-related deficit…

There are many things to detest about the recall but worst among them is special interests using the opportunity to improve bargaining positions. According to the SF Chronicle, a $250,000 donation has been made to the anti-recall campaign by PECG, a union representing engineers employed by the state whose current contract expires next year. Over the next year, PECG will bargain a new contract with the Executive Branch to which PECG just donated and ratified by the Legislative Branch to which PECG is also a donor. In doing so,PECG is showing lawmakers it will always be there for them — if lawmakers are always there for PECG.

Dear Legislators,

92 percent of Californians have insurance coverage. The eight percent who don’t are primarily undocumented residents. CA has sufficient ongoing resources to cover them.

Dear Legislators,

According to the NYT’s Ezra Klein in The Best Explanation of Biden’s Thinking I’ve Heard, President Biden wants government to “deliver for its own citizens.” But that can’t happen in California without your help.

While residents in Georgia struggle to vote, residents in California struggle to get good government services no matter who they vote for. That’s because service providers who are political donors to elected officials are often the customers being pleased. This is a list of supplier-donors to one member of the State Assembly in 2019-20…

Earlier this week CALMatters posted about the Lira family’s hellish journey through California’s Employment Development Department. Equally troubling is that contractors with EDD such as Deloittes and Salesforce under contracts that pay them millions are donors to elected officials.

Today is GFC’s 10th anniversary. In the past decade, we’ve grown from three supporters to the largest bundler of direct donations to members of the California Legislature. And we’re growing faster than ever.

A US Senator once told me that special interests get their way because “they’re always there for us.” I’ll echo that: GFC will always be there for lawmakers who serve the general interest.

Not only does California permit political donations to legislators from corporations, unions and associations whose shareholders, employees and members are compensated under terms determined by those same legislators but citizens are kept in the dark about those and other donations until it’s too late to act.

Everyone in my generation remembers where they were when they learned about the assassination of Martin Luther King Jr. on this date in 1968, who alongside Cesar Chavez and Robert F. Kennedy were my inspirations as a high school student that year.

Yesterday’s CALMatters included a horrifying story about Californians languishing in county jails without being convicted or sentenced for a crime. One of the reasons given: “Serious shortfalls in court budgets.” Those shortfalls are not the result of a shortage of tax revenue but rather choices made by the CA Legislature:

In 1968 my bedroom wall was covered with posters of Robert F. Kennedy, whose hero was Cesar Chavez, who then became my hero. I can’t help but think Mr. Chavez would be disappointed by California’s treatment today of essential workers.

Yesterday GFC was proud to express support for SB 710, a bill by State Senator Steven Bradford to require prosecutors in California who have accepted money from a police union to recuse themselves from cases involving alleged lawbreaking by police represented by that union. If enacted, SB 710 would be a helpful step towards derigging public policy in California from political contributions, but the state would still have a long way to go.

Today’s New York Times provides a glimpse into the real world faced by lawmakers via an article describing the struggle by fiscal conservatives and liberal activists who want to curb the power of police unions in New York. This quote from a former police officer who is now a lawmaker says it all:

From Amazon, Instacart and Netflix to the Atlantic, Salesforce, Zoom and more, the private sector came through with flying colors for consumers during the pandemic, but the opposite has been the case for consumers of California’s government services, which weren’t good even before the pandemic.

Last month, we expressed hope that Governor Newsom would not select a fundraiser from special interests to be the state’s next Attorney General. Today, our hope was dashed. In selecting Rob Bonta, Mr. Newsom chose among the State Assembly’s most prolific fundraisers from special interests. His contributors include dozens of enterprises representing corporations and public employee unions who collect >$200 billion per year of spending approved by state legislators. Here’s a snapshot:

The California Association Of Professional Scientists (CAPS) is a public employee union representing state scientists that makes political donations to state lawmakers who approve employment contracts with state scientists. CAPS made 76 political donations in 2019-20, including to State Assembly Member Alex Lee who has introduced an Assembly Bill (AB 20) that would exempt CAPS and other public employee unions from a proposed ban on donations to state lawmakers.

Under current law, political donations may be accepted by CA legislators who have the authority to approve expenditures of benefit to donors and disclosure of donations isn’t required until after budgets authorizing expenditures have been adopted. Does that make sense to you?

Dear Legislators,

Eight percent of California residents don’t have health insurance yet an elite population of less than one percent not only have access to Medicare, Affordable Care Act and employer coverage but also a special insurance system just for them that costs the state $5 billion per year.

Dear Legislators,

California, Mississippi and three other states grant permanent employment (ie, tenure) to public school teachers after just 18 months of teaching experience. 45 states wait longer or never do.

California state law requires legislators to pass budgets by June 15 that contain >$100 billion of spending on enterprises that make political donations to legislators who approve that spending. But state law allows political donations to be kept secret until June 30 and the reports filed on that date aren’t made public until July 31. Shouldn’t political donations be made public before legislators finish their work?

Last Friday was the deadline for legislators to submit bills for the current legislative session. About 2400 were submitted. You can see a list of them here. But there is no list of donations to lawmakers from enterprises doing business with or regulated by the state who care a lot about those bills. That list won’t be made public until July 31 — after legislators have voted on the budget and held countless committee hearings. Does that make sense to you?

Recently, US Senator Bernie Sanders issued this surprising tweet:

We don’t like to bother you two days in a row but we had to make an exception after this New York Times article about Rhode Island’s schools. An extraordinary lawmaker who even more extraordinarily walks her talk, RI Governor Gina Raimondo is the only non-CA lawmaker we’ve supported and an exemplar for CA lawmakers, who she addressed at a GFC Retreat a few years ago.

The Governor’s Budget projects deficits down the road but that’s no reason not to enact worthy programs with savings from eliminating unworthy programs, and especially those contributing to the structural deficit to which Governor Newsom refers in his budget message.

Sometimes events involving other offices can help illustrate something important about the legislature. A current example is the competition to be appointed Attorney General. We hope Governor Newsom does not select a state legislator to fill that role, both because of cost of a special election to replace the legislator but far more importantly because of the ugly conflicts a legislator would bring to the state’s highest legal position.

Dear Legislators,

Re yesterday’s post, some readers asked what Oakland should do. Maybe an analogy would help.

Dear Legislators,

Today′s SF Chronicle includes this frightening headline:

Dear Legislators,

We find ourselves amazed that few state legislators and their staffs know about CoveredCA. They should take a test spin, which takes less than a minute. Eg, say you are a 53 year old retired prison guard with a $90,000 annual pension who lives in Sacramento with a spouse age 53 and two kids ages 15 and 13. Input that info at the Shop and Compare page and after a few click you’ll be presented with 24 plans and estimated savings of $1,461.15 per month.

Dear Legislators,

Like most employers, the State provides health insurance to active employees. But unlike most employers, the State also provides health insurance to retired employees and their dependents. Believe it or not:

In 1968, Governor Ronald Reagan signed the Meyers-Milias-Brown Act endowing police and other local personnel with the power to bargain collectively with the governments that employ them, making California only the second state to do so and taking a dangerous step Franklin Roosevelt and labor leader George Meany had long discouraged.

Believe it or not, CA state legislators accept donations from enterprises that collect more than $200 billion per year from the state. E.g., $10 billion is provided to prison staff under contracts authorized by legislators to whom unions representing prison staff make donations, and the state pays billions more to dialysis and other health care corporations that make donations to legislators.

A word often heard by those of us who worked for Governor Arnold Schwarzenegger was “willpower,” which he considers a core ingredient for success when faced with obstacles that everyone else thinks can’t be moved.

Dear Legislators,

We are pleased that more and more of you are eager to address the billions you unnecessarily divert every year from services to extravagant insurance subsidies for retired state employees (“Retiree Health Subsidies,” or “RHS”). Following are some basic facts followed by a list of reform opportunities.

Dear Legislators,

In a world in which The Intercept is criticizing biotech firm Moderna for potentially collecting $10 billion for creating a life-saving COVID vaccine, how do you think you should be viewed for the $10 billion you shower on CA state prison employees every single year?

Dear Legislators,

We know how much you fear public employee unions but in 2021 you must finally address an expense in their favor — let’s call it “The Giveaway” — needlessly costing the state, local governments, transit agencies and schools more than $10 billion per year.

Dear Legislators,

As you prepare for the release in early January of Governor Newsom’s proposed 2021-22 budget, consider this: The University of California is incurring $1.7 billion of unnecessary expense each year. That’s about half of the amount you allocated to UC from the state’s General Fund in 2020-21. To understand how that’s happening and how UC can stop it, see here.

Dear CA State Legislators,

You lead the country in spending on prison employees. After granting them six salary increases since 2010, you are spending >$5 billion/yr on salaries for 57,000 state prison employees attending to ~115,000 inmates. But that’s not all. You also spend >$4 billion/yr on insurance subsidies for retired employees, the most expensive of whom are prison guards and CHP. These subsidies, known as “Other Post Employment Benefits” (“OPEB”), are in addition to pensions, which you allow prison guards and CHP to start collecting in their 50’s.

Dear Legislators,

Last night I posted a thread on Twitter explaining how CA unnecessarily spends a fortune on health subsidies for retired police, prison guards and other employees and the two steps required to fix that.

Further to our earlier notes on this subject, we were pleased to read this week that California will prioritize vaccine distribution to disadvantaged racial and socioeconomic groups. That’s good news for the hardest hit parts of our population. We remain concerned about disproportionate unemployment in the bottom wage quartile, where California’s 28 percent drop in employment is nearly 50 percent greater than in that wage quartile nationwide.

Yesterday, an important epidemiological study — Mobility network models of COVID-19 explain inequities and inform reopening — based on the hourly movements of 98 million people from neighborhoods to points of interest (POIs) such as restaurants and religious establishments was released.

We are increasingly concerned about poor performance of critical state services. According to the US Department of Labor, in June only 52 percent of First-Time Claims for unemployment in California were addressed within 14 days and according to the San Francisco Chronicle, teachers at San Francisco Unified School District have been given no additional guidance from the school district since March on how to make virtual education successful.

Suddenly US Senator Kamala Harris has become an advocate for police reform, a subject about which she had little to say while serving as California’s Attorney General or San Francisco’s District Attorney. There is a political reason.

Further to our earlier notes about the state’s processing of first time unemployment claims, the Employment Development Department (EDD) improved its performance in May but tens of thousands of Californians are still waiting unacceptably long periods of time. In May, payments to more than 200,000 first time claimants — 30% of total first time claimants — took at least 14 days to be issued.

After our email last week encouraging US Senator Kamala Harris to help eliminate California’s extraordinary spending on unnecessary insurance subsidies for retired public employees (OPEB), some of you asked why we thought someone like Senator Harris with such a long history of support from public employee unions would be willing to help on that issue. We have several reasons:

Further to our earlier notes on this subject, the state’s Employment Development Department has provided us with information indicating that even in normal times, 20–30% of unemployment claims aren’t paid within 21 days.

Two weeks ago we expressed our concern to the Legislature about the pace at which the state is processing unemployment claims. At the same time, we submitted a Public Records Request to the Employment Development Department. Earlier this week EDD provided a disappointing response that, so far as we can tell, is at odds with the information collected by New York State and required for compliance with federal guidelines. We will keep trying but with millions of our fellow Californians unemployed, we hope the Legislature is focusing attention on this matter to ensure benefits are being provided in a timely fashion.

Some of you have asked for an estimate of the savings California could realize from reforming OPEB (Other Post-Employment Benefits) subsidies of retired employee health insurance.

1. You have the power to change OPEB. See page 136 of the state’s Comprehensive Annual Financial Report:

Our dismay about the pace at which the state is processing unemployment claims was compounded this morning after reading in the LA Times that the Administration blames an outdated computer system when we know that an outdated computer system need not be an obstacle. As a reminder, earlier today we sent legislators the notes we sent them earlier this month about Rhode Island’s conversion to a cloud-based system. Distribution of unemployment benefits is a critical state service the performance of which California should lead, not lag.

If like me you’ve marveled at the largely uninterrupted supply of food in the US during the pandemic, you might appreciate what The Economist had to say about that subject in The global food supply chain is passing a severe test.

Everyone knows housing costs are a problem for middle-class Californians but also troublesome are education costs. Recently the New York Times profiled a San Francisco couple earning $150,000 per year who just had a baby. If San Francisco’s public schools aren’t acceptable to them when their baby is ready to start school, the couple — who already pay taxes to fund schools — will have to pay for a private school that on average in San Francisco costs $20,000 per year. A good education will be critical to their child’s future but an extra $20,000 per year — nearly 20 percent of the couple’s after tax-income — would be a crushing financial burden, and that’s just for one child.

Alfred Hitchcock often employed a technique in his films known as a “MacGuffin,” which is an object, device or event that draws attention from the real plot but is largely insignificant itself. MacGuffins are also employed in California politics, as the example below demonstrates.

Imagine you are a donor to a non-profit organization whose board members receive gifts from employees to whom the board, without your consent, promises retirement benefits. Now the organization is asking you for larger donations to cover surging retirement spending but not disclosing the real reason more money is needed.

Socialism has become a hot topic in the presidential election but that should not be a surprise. Governments in the US have long engaged in various shades of socialism. California is no exception.

A number of people in the GFC Network have asked our opinion of presidential candidates. To date we have begged off, citing our expertise as limited to state politics. But on reflection we think there’s one piece of advice we could offer: a checklist for assessing candidates. While federal and state governments take on very different tasks — the federal government is (as one pundit puts it) “an insurance company with an army” while states provide most domestic public services — both are American-style democracies with co-equal branches of government that require particular talents from legislators and executives to be successful. So, for what it’s worth, here’s our approach…

Medi-Cal is an entitlement to health insurance provided to low-income Californians. With 13 million customers, Medi-Cal is a voucher-type system funded by a combination of the state and federal government. Spending on Medi-Cal in the fiscal year starting July 1 is projected to be $102 billion, $23 billion of which is projected to come from the state’s General Fund.

Govern For California supports lawmakers who legislate in the general interest. This week two bills will be up for votes in the State Assembly that are pure examples of special interest legislation.

There’s a scene in the Monty Python film Life of Brian in which a committee meets to discuss a resolution condemning Roman oppression while their hero, Brian, is being led to his crucifixion. A resolution wasn’t the sort of action Brian needed at that time. But at least he got a discussion.

Some legislators are afraid to take on the toughest special interest.

In 2012 the California Legislature and Governor Jerry Brown asked voters to approve a big sales and income tax increase to better fund schools. Voters approved the measure and per-pupil spending has risen 60 percent since then to $17,160 per student. One would expect schools to be faring well.

Now that Governor Brown has acted on all 1,217 bills sent him by the legislature, we are turning our attention to the 2019 legislative session. One GFC focus will be improving the quality of services provided Californians. Below is a overview of two of the most important services.

The California Prison Guards Association (CCPOA) is spending $500,000 on TV ads against Marshall Tuck in the race for Superintendent of Public Instruction. Why would the largest recipient of state spending on California’s prison-industrial complex care about the identity of the state’s next SPI? 

Where are legislator tweets about CA’s schools?

Donald Trump trolls California. Of course, trolling is not a presidential responsibility outlined in Article II of the US Constitution. But many California state officials troll Trump and likewise are not fulfilling any of their responsibilities under Article IV of the California Constitution.

Dear California State Legislators,

July 18 marked Nelson Mandela International Day. There is so much to celebrate about Mandela but of particular relevance to your job is one of his most famous quotes: “Education is the most powerful weapon which you can use to change the world.”

You and the governor run K-12 education in California. You write the Education Code, which governs schools run by government employees. No other government-operated enterprise in California receives more money.

California has two state-operated enterprises (SOE’s), each with annual revenues of ~$100 billion: K-12 education, which serves six million students, and Medi-Cal, a single-payer health insurer covering 13.5 million low-income Californians. K-12 services are largely provided by public employees while Medi-Cal pays for services largely provided by private sector employees.

As much as we wish it otherwise, two recent bills illustrate how far our state legislature still has to travel to be fully liberated from special interests.

Governor Jerry Brown is negotiating yet another salary increase for state prison employees, the fourth in seven years.

California’s unemployment rate exceeds the national rate…

Lunch isn’t free.

California’s General Fund operates like a waterfall. Programs protected by constitution (principally K-12, community colleges, and debt service on General Obligation Bonds), statute (principally Medi-Cal, the state single-payer health insurer for low-income Californians) and contract (principally pensions and subsidies for retired employee health insurance) get first dibs on tax revenues. Only after those programs are satisfied do funds become available for unprotected programs such as UC, CSU and courts.

California school boards are prevented by the state legislature and governor from offering disproportionate pay to employees willing to work in high-poverty zones, cutting pension spending, altering tenure rules or granting principals the power to fire poorly performing employees. The outcome: poor student performance and shaky finances despite a big increase in spending.

Time for more than lip service from California legislators.

In 1951 Oliver Brown sought to enroll his third-grade daughter Linda at a neighborhood elementary school in Topeka, Kansas. African-American, Mr. Brown was unhappy that his daughter had to travel to a segregated black school while her neighborhood school was located only seven blocks from her home. As Ms. Brown later told a reporter, “the walk was very frightening to me and then when wintertime came, it was a very cold walk. I remember walking, tears freezing up on my face, because I began to cry.” But her all-white neighborhood school refused to enroll Ms. Brown. Defiant, Mr. Brown joined in suing the school district and prevailed in 1954 when the U.S. Supreme Court ruled in Brown v. Board of Education that segregated schools were inherently unequal.

California’s largest health care system is a state-run single-payer system (“Medi-Cal”) that covers the state’s 13 million poorest residents, a population greater than all but four states. Service is terrible. Despite spending of $100 billion per year, appointments are hard to get, emergency room visits are up, there’s little indication of greater healthiness, and there’s even evidence than uninsured patients do better in some cases. Yet the California Legislature has not seriously tried to fix it. Indeed, in a twist worthy of parody by George Orwell, a Select Committee in the legislature recently proposed changes to other and even better-performing parts of the health care system but, with a single exception, not to Medi-Cal! Meanwhile, all that unproductive Medi-Cal spending is also crowding out funding for the needy, courts, parks, the University of California and California State University.

“Show Me The Incentive and I Will Show You The Outcome.”

Last month Berkshire Hathaway Vice-Chairman Charlie Munger reminded audiences that America’s health care problems are all about incentives. As he puts it, “show me the incentive and I will show you the outcome.” In the US, the incentive for health care providers — hospitals, doctors, nurses et al. — is to provide more services than necessary and not to address chronic problems. They make more money when people don’t get healthy. The outcome perfectly matches that incentive: US health is no better than the rest of the developed world despite spending twice as much per capita.

SB562 does not.

Here’s what Berkshire Hathaway Vice Chairman Charlie Munger had to say at the latest annual meeting of DJCO, another company of which he is Chairman, about health care…

In 1850 California passed its first professional licensing law requiring foreigners to buy a monthly license to mine gold. During  the next hundred years the state so dramatically expanded its licensing regime that by 1950 one in every twenty workers required a license. Today one in five working Californians requires a license from the state government; a recent study found that California is the most broadly licensed state in the nation.

Actions speak louder than tweets.

Today California legislators are tweeting quotations from Martin Luther King. They should compare the objectives expressed in their tweets with the state of affairs for their constituents, starting with the six million children in California public schools and the 14 million customers of the state’s single-payer health care system.

Five pro-citizen issues should be on the agenda when the California Legislature reconvenes tomorrow…

Does it take political courage for a California Democrat to attack Donald Trump? Obviously not, just as it didn’t take political courage for a red-state Republican to attack Barack Obama. To qualify as courageous, a political act must threaten the actor’s political future. Neither of the foregoing examples qualifies. Qualifying examples include Abraham Lincoln, who took on every political interest and more to preserve our union, and Lyndon Johnson, who took on his own party to pass civil rights legislation. More recent examples include Gina Raimondo, the governor of Rhode Island who took on the most powerful interests in her party in order to protect services for citizens, and Arnold Schwarzenegger, who took on both political parties in leading successful efforts to end gerrymandering and partisan primaries in California. Not every action taken by those actors was courageous — look no further than LBJ’s Vietnam legacy. Each political action must be evaluated separately.

The recent release of Ken Burns’s Vietnam documentary transported me back to the politics of my youth and the ugly hypocrisy of Lyndon Johnson, whose story contains a critical lesson for California today.

California’s wine country fires delivered a vivid demonstration of the critical importance of governments being able to assemble armies of public safety workers when needed. Citizens expect their governments to provide public safety — but they also expect parks, animal shelters, transportation, road, sidewalk and tree maintenance, housing for the homeless, libraries and much more. What citizens don’t know is that some of their elected officials are systematically reducing the ability of their governments to both field adequate numbers of public safety personnel and fund other services.That’s because those officials refuse to acknowledge or address the explosive growth in pension and other retirement costs crushing their budgets.