Yesterday marked the 25th anniversary of the California Legislature’s passage of SB 400, a retroactive pension increase for public employees that constituted the largest single issuance of public debt in California history. Justified by Alice-In-Wonderland financial forecasts issued by self-interested state employees that I described in a 2010 essay in the Wall Street Journal, the increase contributed to unfunded retirement obligations that today are four times greater than bond obligations, and your elected officials are issuing more such obligations every day without voter approval. Fiscal sanity will be restored to California’s governments only when lawmakers are enveloped by an ecosystem of activist political philanthropies that persistently protect lawmakers who serve taxpayers. So if you’re on the sidelines, get off.
Speaking of voter approval, some GFCers have written me with questions about my plan to vote YES on state Proposition 5, which would lower the threshold required for voter approval of local infrastructure and housing bond measures to 55 percent. As I responded to one questioner, I’m no fan of unnecessary or unproductive bond measures, which is why I’m voting NO on two bond measures on the state ballot, but I’m even less of a fan of anti-democratic supermajority provisions, especially when supermajority provisions on local measures have played a big role in elevating state income tax rates. The more that spending and taxation decisions are made at the local level, the better.
