California County News

Governor Convinces CSAC to Abandon Competing Ballot Measure

Governor Brown recently addressed the CSAC Board of Directors at a meeting in Sacramento and the governor is no doubt pleased with the outcome of discussions, as CSAC ultimately agreed to suspend its own initiative that would have sought to secure funding for realignment. Brown made his case to county leaders and urged them to hold off on pushing forward their own separate initiative due to confusion it could cause on the ballot and the opposition of the education lobby on the issue, which could lead to an expensive campaign. Brown noted that his initiative, which would raise taxes and therefore provide funding to counties, contains the same elements of the CSAC-sponsored plan.

That being said, CSAC did not yet vote on whether it would support the governor’s tax proposal. Such a decision will be made at a future meeting.

The governor also vowed to protect counties from a financial standpoint due to the additional responsibilities they have taken on. He also noted that he wants to expand realignment in the future and further shift programs, such as in-home support services. Brown commented, “We want to look at taking over the health, the In-Home Supportive Service, the Medi-Cal, and maybe switching on some of the welfare. So, we're working on that for something we might do next year. We really want to clean up the relationship between state and local government."

One of the governor’s points of persuasion was that his tax initiative would have a broad coalition of support and raise more revenue, and it has already attracted lucrative campaign donations. Brown also noted that if both CSAC and the governor’s initiative plans were to fail, then it could damage relations between the two, as he stated, “If you lose and I lose, and we're starting to squabble. That's not good, is it?"

So while CSAC is getting behind the governor’s plan, there is still some level of risk involved because if it fails, then the opportunity to ensure constitutional protection would not be available until November of 2014.

LAO Raises Concerns in Analysis of Initiative Proposals Reforming Pensions; Legal Questions?

Back in November, the organization California Pension Reform filed two controversial initiative proposals with the goal of qualifying one for the ballot. Both are currently pending before they enter circulation for signature-gathering and their aim is to implement major reforms, such as requiring employees to increase their pension contributions, termination of abuses such as career ending spiking and retroactive benefit increases, and greater transparency. The Bee points out that “One measure would put future employees in hundreds of state and local pension funds into 401(k)-style plans instead of the current defined-benefit retirements guaranteed by employers. The other proposal puts future workers into "hybrid" plans blending the two types of accounts.” You can read fuller details about both proposals here.

The LAO recently released its analysis of both measures and noted that either one is likely to result in a legal battle if it’s passed by voters because of alterations that would be imposed on pension guarantees to current workers. The LAO’s analysis is somewhat muddled in that it points out clear effects are difficult to determine, but the analysis does argue that either initiative could potentially increase costs and force local governments to pay higher salaries to stay competitive. The LAO states the following about costs and investment returns:

“Under this measure, future employees’ hybrid plans would contain defined benefit pension components that are considerably smaller than those offered to current employees. Total contributions to pension systems for future employees’ defined benefits, therefore, will be much smaller than the total current contributions related to current and past employees. Defined benefit pension plans would experience a reduction in their incoming cash flow that would become more substantial over the coming few decades, as future employees grow to a larger share of the public workforce. These reductions in cash flow could cause many California pension plans to shift their allocation of investments to ensure they can meet existing benefit obligations, thereby reducing their average annual future investment returns. In general, when pension plans have to assume lower investment returns in this manner, their estimated normal costs increase, as do estimates of their unfunded liabilities. For these reasons, in the short and medium term (perhaps over the next two or three decades), these changes could result in public employers having to contribute over $1 billion more per year (in current dollars) to cover pension costs of current and past employees.”

The Latest Happenings in the World of California Propositions: Monthly Recap

Curious about the latest happenings in the world of California propositions? Our sister site, CaliforniaPropositions.org, has a monthly newsletter to keep readers up-to-date on all relevant prop-related news. Read the newsletter here. This month we delve into a proposal that would result in the closure of the state’s nuclear power plants. In addition, Proposition 8 is back in the news, and a second initiative has qualified for the November 2012 ballot. Check out other stories here.

Guv Launches Tax Hike Initiative as Taxpayer Groups Counter w/ Spending-Cap Proposal

This week Governor Brown officially announced the launch of his proposal to raise taxes with the Schools and Local Public Safety Protection Act of 2012, as the initiative has now been officially filed with the Attorney General's Office. You’ll recall that the measure would raise $7 billion annually by taxing the rich and hiking the sales tax by half a cent (and both of these tax hikes would expire at the end of 2016).

The text of the measure emphasizes repeatedly that funding will support education as well as realignment, i.e. public safety. The measure states, “This measure gives constitutional protection to the shift of local public safety programs from state to local control and the shift of state revenues to local government to pay for those programs. It guarantees that schools are not harmed by providing even more funding than schools would have received without the shift.”

To corral support around this initiative, the governor also released “An Open Letter to the People of California.” The letter states: “The stark truth is that without new tax revenues, we will have no other choice but to make deeper and more damaging cuts to schools, universities, public safety, and our courts.” The governor also explains that he is resorting to an initiative because he does not want to get bogged down by partisan gridlock and that the stakes are too high.  You can read the full letter here.

And in response to the governor’s tax proposal, the California Taxpayers Association, Howard Jarvis Taxpayers Association and Small Business Action Committee have filed an initiative of their own that would cap state spending.  The Bee reports the following on the proposal:

“The proposal would reconfigure the Gann Limit, a 1979 spending restriction established on the heels of tax-limiting Proposition 13. Voters later softened the limit, and the state is now $17 billion below the spending cap. […] In years where tax revenues are greater than the limit, the state would first have to pay down debt and then divide up to $2 billion between schools and a rainy-day fund. If money is left over, the state would return money to taxpayers.”

Jon Coupal from the Howard Jarvis Taxpayers Assoc. wrote the following description of the measure over at the Flash Report: “The measure will limit annual state appropriations to the prior year's level (adjusted for cost of living and population growth), require surplus revenue to first be spent on debt service and strengthen the two-thirds vote requirement for legislative passage of laws that authorize or raise new or higher taxes. The measure will give voters the choice they deserve. I firmly believe voters want Sacramento to prioritize spending and live within our means – once and for all.”

CA’s Direct Democracy Lampooned by the Daily Show

The Daily Show with Jon Stewart poked fun of California and its system of direct democracy in a recent segment. California Democratic Party Chairman John Burton was interviewed for the feature and his comments alone make the video worth your time due to their amusingly colorful nature (let’s just say quite a few f-bombs were dropped). The title of the segment is “California’s Direct Democracy Troubles” and you can watch it below:

The Daily Show with Jon Stewart
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Early Start: Two Challengers Look to Knock RivCo Supervisor Buster from His Seat

Riverside County will likely face an $80 million deficit in the next fiscal year and calls for pension reform will be a major sticking point as officials grapple with how to address the county’s budget woes. Supervisor Bob Buster has gone so far as to call for an across-the-board 5 percent pay cut and has posited that his tough stance toward the county's public employee unions is necessary in light of the deficit. However, as the county weighs how to deal with its budget, voters will have to weigh who they think will best manage the county’s fiscal issues and come June 5, 2012, Supervisor Buster will have two challengers for his seat. The election is far in the future but during these tough economic times the competition already looks to be fierce. Buster has emphasized that the tough budget situation and poor economy demand his experience and that a change would be unwise at this point. Buster is running for his sixth term on the county's governing board and he is being challenged by Assemblyman Kevin Jeffries, R-Lake Elsinore, and retired California Highway Patrol Lt. Mike Soubirous. Buster’s rivals are calling him divisive and confrontational. The North County Times reports on the upcoming race:

“UC Riverside political science professor Shaun Bowler said the contest, as it is shaping up, promises to be an interesting one. At this point, Bowler gives Buster the edge. Bowler said that is because Jeffries, a three-term state Assemblyman, is known primarily in Southwest County and lacks significant name recognition in Riverside. He said that although Soubirous is backed by the well-funded sheriff deputies' union, the Riverside Sheriffs' Association has had minimal recent success promoting its causes. Representing 3,200 deputies, investigators, probation officers and deputy coroners, the union pumped hundreds of thousands of dollars into the campaigns of Buster opponents in 2004 and 2008, and lost.”

Buster has fought back already by arguing that his challengers are exactly what’s wrong with local government because Soubirous is backed by the deputies union and Jeffries is “looking for a place to roost” since he will be ineligible for another term in the Assembly. See more about how the upcoming race will shape up here.

Two Petition Drives Seek to Overturn Marijuana Ordinances in Butte County

Back in May, Butte County Supervisors approved an ordinance regulating medical marijuana cultivation with major restrictions, despite the objections of passionately opposed residents. Practically immediately after the ordinance’s approval, a petition drive was started to put the issue to a vote. Since enough signatures were collected, supervisors had to decide how to handle the referendum: either repealing the ordinance or scheduling a vote. The officials opted for the latter, so voters will have the final say come June 5, 2012 during the Primary Election. It is predicted the election will cost the county $50,000 or less. However, in an update, the county may have another referendum to add to the ballot.

On the same day that the county approved the aforementioned vote on the cultivation ordinance, petition gatherers also submitted signatures to overturn another county ordinance that outright bans dispensaries. Proponents of the petition drive turned in 12,025 signatures (they only needed a little over 7,600). As a result, the ban on dispensaries will be delayed from going into effect (it was supposed to be implemented on the 26th) so that the registrar of voters can verify signatures. If enough valid signatures have been submitted, then supervisors will once more have to decide whether to just rescind the ordinance or put the issue to a public vote. A local CBS news station reports:

“Last month, the county agreed with a planning commission recommendation that there are just no suitable areas for medical marijuana dispensaries in the county given the violent crime they tend to attract, among other concerns. But supporters of medical marijuana dispensaries insist that crime issues are overblown and that dispensaries are necessary under the state's proposition 215 rules. The county now has 30 days to certify the petition.”

For more, see here.

Oil Representatives Vow to Put Up a Strong Fight against Potential Oil Tax in SB County

In November of 2012, voters in Santa Barbara County may weigh in on a local ballot measure that would tax crude-oil production in the county. The Board of Supervisors narrowly agreed to explore the issue as a potential revenue-generator for the cash-strapped county, as it faced a $72 million budget shortfall this year and is likely to face another large shortfall next year. According to county officials, such a tax could create between $1.8 million and $3.3 million each year. Supporters contend that the county cannot merely cut its way out of its fiscal woes and that additional revenue will be necessary to maintain services. If the board ultimately decides to officially move forward with the measure, then it will have to make a decision by July 5th in order to qualify for the ballot. In the meantime, a recent meeting showed that the proposal is sure to face strong opposition. Oil company representatives, taxpayer advocates and environmental groups all spoke against the oil tax. The Valley Journal reports:

“Blair Knox, public affairs director of the California Independent Petroleum Association, assured the board that the tax proposal was a nonstarter. ‘Our association has a perfect record of defeating every severance tax that we’ve opposed over the last 10 years,’ he said. ‘We have a strong campaign team in place and resources to contest the tax initiative.’ The association, representing companies that produce the majority of onshore oil production in Santa Barbara County, has successfully fought similar proposals in Los Angeles and Beverly Hills.”

The Santa Barbara County Taxpayers Association also said it would work hard to defeat any ballot measure involving a tax and that its research shows the measure would not find two-thirds support. A representative from the Environmental Defense Center was also on hand and noted that the measure could have unintended consequences, namely that the oil industry would be encouraged to increase production.

CA Pension Reform Group Introduces Two Initiatives; Current Employees Would Pay More

Governor Brown isn’t the only one proposing pension reforms. A Republican-led group called California Pension Reform recently filed two ballot initiative proposals that would also implement major pension reforms, including making current local government employees pay more for their pensions. Proponents behind the effort include Mike Genest, pension crusader Dan Pellissier, former state GOP chairman Duf Sundheim, and former assembly member Roger Niello. However, the proponents have noted that they will only pursue one of the two initiatives for qualification on the November 2012 ballot. This decision will be based on which initiative polls better and the summary and title that is provided by the Attorney General’s Office. It is estimated that $3 million will be required to qualify just one and that finding donors will be a significant hurdle.

Mike Genest, former California Director of Finance, commented the following about the proposals:

“Other than defenders of the status quo, no one disagrees that our unfunded pension and retiree benefit obligations are decimating the capacity of our state and local governments to deliver critical public services. Unless we act now the situation will only get worse. While we would prefer to see a legislative solution to this problem, we know full well that there is little chance of that happening. We cannot afford to postpone decisive reform while our elected leaders debate half measures. We must act now.”

In the words of the proponents, the major proposals are as follows:

• “Requires current government employees to pay their fair share
• Makes benefits for new workers comparable to benefits in the private sector
• Stops the accumulating debt caused by unfunded pension and retiree benefit liabilities
• Reduces unfunded liabilities
• Requires pension boards to be more transparent and accountable
• Ends abuses such as salary spiking and retroactive benefit increase”

Details about version one of the initiatives are here. It includes stipulations like banning retroactive benefit increases and a provision that prevents felons from collecting full government pensions; in addition, pension funds would be prohibited from incurring new debts or unfunded liabilities.

Details about version two are here.

Labor groups have already called the proposals legally tenuous.

Ventura Supervisor Introduces Initiative to Ban Perks for Part-Time Officials

Ventura County Supervisor Peter Foy has filed an initiative with the Secretary of State that would ban perks/benefits for part-time politicians. The initiative proposal has been submitted to the Attorney General with a written request that a title and summary be prepared for the measure. Foy’s formal request for title and summary posits the following as its Statement of Findings:

“In recent years, part-time local officials have abused their positions of power to provide themselves with excessive compensation and expensive perks, like lifetime health benefits and pensions. Worse yet, these abuses have been hidden from the public through complicated formulas, multiple layers of local governmental bodies, even the abuse of the Charter power provided for in this Constitution.”

The proposal calls lifetime health insurance and pensions excessive and calls on them to be prohibited for part-time officials. The proposal also calls for stronger transparency in posting compensation information on government websites. You can read the initial proposal here.