In reponse (I believe) to Speaker Karen Bass’s explanation that “legislative leaders have compromised,” Cheslog writes, “The Democrats have been compromising with themselves on the state budget crisis. The Democrats have agreed to horrible spending cuts and other measures that go against their interest groups…The myth of bipartisan intransigence may be a more interesting story for state pundits to tell, but this fiction does nothing to move the state towards a solution to this problem.”

Here is the Bloomberg report on the plan Governor “blow the box up” Schwarzenegger proposed on December 31.

Here is the transcript of Speaker Bass’s reactions to the Governor’s proposed budget plan

Will the last sane adult leaving California please remember to turn out the lights?

“This is the fifth consecutive year that the Grand Jury has been one of the voices forcefully bringing this matter to the attention of the Supervisors and the public. The Supervisors consistently approved labor contracts covering the remaining 86% of the workforce that obligate the County to expenses that are not sustainable, and budgets that do not provide funds to pay down this obligation over time.

“The pattern has continued this year. Supervisors have said that they have learned their lesson, that they will do better, and that they are on the road to fiscal sanity. Their record says otherwise. In the past few months, three labor contracts have come up for approval, and in each case, the Supervisors as a group have failed to take any meaningful steps to address out-of-control health benefit costs, attributable largely to the generous union agreements.

“The Supervisors have been unable to maintain a united front because some supervisors have gone outside the “meet and confer” process, communicating directly with union leaders about matters that are being negotiated by the County’s negotiating team.”

In its June 24 response to the GJR, the BOS essentially agreed in principle to most of the findings of fact, then summarily rejected key recommendations.

The BOS claims it has implemented GJR recommendation (#1) to establish and promulgate its labor negotiation policy to its negotiation team, but rejected the recommendation (#2) that individual Supervisors should stop negotiating with labor leaders behind the backs of the body; nor would it agree to approve “fiscally prudent” labor contracts (#3)!

County leaders shined off the recommendation (#4) that a health benefit plan be developed and implemented—in German this is pronounced “Yah-Yah-Yah”—and rejected the recommendation (#5) that while OK for future non-union retirees, existing retirees ought not enroll in Medicare Part B but have the County pay for this til death do us part.

The BOS waved their hands dismissively and spoke German again to GJR recommendation (#6) to stick to the plan to reduce or contain OPEB costs (see #3 above), then rejected outright the recommendation (#7) to increase the 40% target level to 85%. The BOS claims that:

“Over time, the combination of current resource redirection, new tiers for new hires, and a budget for health care costs will fully fund the County’s liability.”

Excuse me? What manner of Supervisor speak is this?

These guys can’t even set a date certain for the blessed $20 million payment to the irrevocable OPEB trust account scheduled for sometime — somewhere in the 08-09 budget. Not to mention at least FIVE BIG IFs. According to Dan Borenstein’s research presented to the Contra Costa Taxpayers:

Even IF the BOS makes good on its promise to prefund $20 million; Even IF it ever gets around to adding a $588 million chunk by 2022-23; Even IF it can pay $100 million dollars a year thereafter; Even IF the County implements the proposed benefits changes to unrepresented workers, the County would still be $54 million short of 40-percent funding and still leave a 60 percent or $1.042 Billion balance due. Furthermore, even IF the BOS added the same benefits changes to unionized employees, the County would still owe $705 million after 30 years.

Sadly, this is what the BOS means by “fully” fund.

According to the Grand Jury, “It is imperative that the Supervisors take additional meaningful steps to get the County on a fiscally sound footing. The next key step involves establishing and holding tough negotiating positions with the unions that represent County employees. To do so will require a majority of supervisors who take seriously their duties to all, not just some, County taxpayers.”

“Put it all together, and it’s a big, fat political mess. The contending ideological factions have been rolling toward this calamity for years, adopting budget after budget that evaded underlying conflicts of spending and revenues with gimmicks and wishful thinking, well aware that any economic downturn could put them into a hole too deep to ignore.

“It’s finally happened. No one – and that includes the governor and 120 legislators – has the slightest notion of how or when the mess will be cleaned up, or whether it will be.”

Mary Piepho, our current supervisor has been sending out a campaign material touting her accomplishments of the past three years. The message is, this inexperienced member from the community swept in and has single handedly fixed all the county problems, in spite of the fact that the Board votes in lock step 5 to 0 on every issue. If I were on the Board with her I would be insulted that she gets all the credit. But then again, maybe they are happy under her “Leadership” to give her all the credit for the County Grand Jury report that came out on Friday:

“Supervisors have said that they have learned their lesson, that they will do better, and that they are on the road to fiscal sanity. Their record says otherwise.” The report says:

- Individual supervisors are individually communicating with labor leaders undermining the negotiation process
- The Board has continued to approve labor contracts through the last couple of months that “…in each case, the Supervisors as a group have failed to take any meaningful steps to address out-of-control health benefit costs, attributable largely to the generous union agreements.”
- The Board has targeted only 40% of the OPEB debt, the Grand Jury recommends raising the target to 85% of the debt. They say the Board should come up with a plan in the next six months as to how this will be achieved.
- The current annual “gap between the required and planned contributions” for OPEB is estimated to be $54 million. The Board is not required to actually “fund” that amount, but it must fund it, reduce it in some manner, or disclose the $54 million as a liability on the financial statements. Currently, the plan is to report the liability.

Guy Houston’s accomplishments in the State Legislature are too numerous to list in one blog. Here is but a sample of what he has accomplished in Sacramento:

- Equalization for school funding which has brought millions of extra dollars to not only Contra Costa County but under funded districts across the state.
- Introduced a bill to equalize county funding across the state, which would bring millions into Contra Costa County and other under funded counties in the state.
- A bill to enhance penalties for people that maliciously post someone else’s information on the internet.
- Authored a bill which helps address State’s critical shortage of specialists for disabled students.
- Introduced a bill to increase the tax exemption for 100% totally disabled veterans.

Additionally, he was appointed this year to serve on the Banking and Finance committee, the Local Government committee and the Transportation committee. He received the American Electronics Association prestigious award as “Legislator of the Year.”

Guy Houston doesn’t promise to swoop in like Superman and make this County whole overnight. But with his background and experience at the State level Guy has gained the support of the Assessor, the Auditor-Controller, the County Treasurer (the financial Big Three) and the Sheriff.

So let’s move away from the gender arguments, nice person arguments, hard working arguments and elect the most qualified candidate with a proven track record. That person is Guy Houston.

The latest estimate is lower than the $2.57 billion calculated two years ago. The reduction results primarily from the use of new actuarial assumptions, and secondarily, from recent board of supervisors’ action to modify the health care benefits for unrepresented county employees.

The liability is still staggering, because the board of supervisors has yet to make any meaningful changes to the generous health care benefit plans available to county employees and retirees covered by union contracts, despite three opportunities to do so in the past several months.

The county’s predicament did not develop overnight. It has been nurtured for decades by past boards that repeatedly agreed to increasingly expensive health care benefits in a labor-friendly environment, without any consideration of future costs. But in light of today’s clear understanding of the crushing impact that the obligation will have on the county’s ability to provide services, it is worrisome to see the current board appears to be continuing this trend.

Most of the county’s 39 union contracts expire in September of 2008. In the past several months, three new labor contracts have been approved. None includes changes to health care benefit plans that would begin to seriously address the county’s imminent financial crisis. This does not bode well for the outcome of future negotiations unless the supervisors take as realistic and tough a position with labor unions as it has with the County’s unrepresented employees.

If the Board of Supervisors either collectively, or any of its members individually, squander this opportunity to substantially improve the county’s financial situation in the name of political expediency or labor peace, out-of-control retiree health care costs will surely and painfully impact the county’s ability to deliver basic services to its more than one million citizens.

The complete report is available on the Contra Costa County Grand Jury web site: www.cc-courts.org/grandjury

BUDGET 20008 — CLAIMS WE CAN’T BELIEVE IN

YES THEY CAN. Contra Costa County Supervisors (BOS) passed its 2008-09 budget by slashing county services to the poor and public safety. Let’s cut thru the spin from the Contra Costa Times:

- $51 million cut is still only 3.9 percent of $1.3 billion overall budget.

- “clamping down” and “capping subsidies” on health care benefits for non-union employees is serious cherry picking of low hanging fruit instead of dealing with union employees.

- “For the first time in a decade, county spending will drop next year” A sure sign of the Apocalypse.

- Eliminates 192 positions, most vacant. 30 positions will be notified but CAO cannot provide a number for actual layoffs. So let’s spin around three times yelling ZERO JOBS LOST like we mean it.

- Arguing over a measly $4,000,000 (0.3 percent of budget) to privatize custodial, maintenance, and gardening from the Health Dept is insane.

- Suggesting the County would lose control (when it already has…like the out of control overtime and the $600,000 pyschiatrist running Doctors Hospital!) and longtime county employees are more qualified; with Rollie Katz arguing that you don’t know what you’re going to get when the cost approaches triple of same services in private sector is insane.

- Still waiting for the BOS to put any substantial money into the mythical OPEB lockbox. Now they have “approved budget set asides of $20 million.” Pick one: Goona Gonna Gonna v. Acutally doing it.

- “The best employees will leave and then you’ll be sorry.” Like the $600,000 pyschiatrist running Doctors? MAKE MY DAY!

- “These cuts are just the beginning” The structural insanity of paying more than you take in has been going on for a long time, but even in the at last three budget cycles, nothing was done.

- To blame future cuts due to this structural deficit on state revenue cutbacks or that only 13 percent is discretionary spending is insane.

Oh for the good ole days when Supervisor John “Igor” Gioia jerked the public and press around with his semantic game of whether the County cuts were a “challenge” and not a “crisis.”

Says Fritz, “Elected officials and the governor are powerless, and all term-out eventually. Administrators, such as those in near-bankrupt Vallejo, are giving up trying to balance budgets; overtaxed and underserved citizens can move to another state, and businesses can simply shut down or relocate. Unions endure.”

Fritz suggests that unions should recognize that municipalities and counties simply cannot afford promised contracts that feature early retirements and overly generous retiree lifetime health benefits. Instead, unions should promote labor, not leisure by increasing retirement age.

“On average, if each new member keeps working just five more years, pension costs will be cut in half. Retiree health benefit costs will almost disappear if more choose to work until they qualify for Medicare. Fewer positions will be cut or left vacant. Businesses will pay less for government services and can hire more workers to compete with out-of-state and foreign businesses…Employee pension contributions can be reduced or eliminated; this will increase their take-home pay to pump into local economies…Studies have shown people who keep working tend to live longer, healthier lives than those who retire sooner. Unions can and must lead the way.”

I agree. And I’m ready to do something about it.

Since Senator Torlakson’s endorsement of incumbent Supervisor Mary Piepho’s re-election bid, it has become clear that our Democratic representatives in Sacramento and the Board of Supervisors (BOS) in Martinez do not have the power or political will to solve the County’s $51-million budget shortfall. Appealing to Supervisor John Gioia, for instance, would be akin to negotiating with some crippled humpback with a lisp named Igor, instead of dealing direct with Dr. Frankenstein.

Therefore, it’s time the taxpayers of Contra Costa County go straight to the power source in Martinez. We need to humbly take our hat in hand, get ready to eat some serious crow, and go crawling to the boss, Mr. Big, Rollie Katz.

Rollie! What do you want? Fame? Fortune? How about a pat on the back and a job well done? How about a new suit and a car detail once a month on CoCo Tax or Contra Costa Council? This could all be yours only with a few minor gimmees that would demonstrate Local One’s willingness, once again, to stand in solidarity with the rest of the working families in Contra Costa. And we aren’t even talking increasing the age of retirement, although that looks like a damn good idea, wouldn’t you agree?

Anyways, longer lives and more job security in the long run for your union members aside, all we’d really need to do this fiscal year is a couple simple things. Two minutes. That’s all we need.

1) Let’s get retirees on Medicare, and 2) ask employees to save county services on the chopping block, by agreeing to pay a $10-15-25/month (single-couple-family) healthcare contribution with a co-pay capped at $20 or less per visit. This is what most working families in the county currently shell out and is just not that much to ask. OK, OK, maybe just take a look at subbing out a few of the no-show jobs from the health care budget like Dr. Walker suggested. I’m just sayin’…throw me a bone, OK?

Rollie. It’d break my heart to see all those critical services and public safety get cut just so county workers don’t have to contribute a pittance to their health benefits or pay a meager co-pay like the rest of us working schmucks. And the Times’ Borenstein says retirees would get better healthcare and the County could save almost $37-million a year if we got them on Medicare at 65.

These two items alone would go a long way toward solving the County budget crisis, Badabing!

Look. Just move an inch, OK? Otherwise it will be a PR nightmare when people realize the BOS is in fact protecting union members instead of representing all of the county’s working families while coddling public employees instead of ensuring delivery of critical services. It’s hard to argue with the truth, man. Help me out here, would ya?

Talk to me, Rollie. I’m serious, dawg. Have your peeps call my peeps and we can get the pencils out, sit down, take off our shoes, do the math, and make this thing happen. Then everyone’s happy, go have a drink, you know what I’m sayin’? Look, maybe we can even make it look like John Cullen, the BOS and the rest of the wannabes really made it happen, you know? Win-win, smiley photo-ops, the whole enchilada. You da man. Call me.

Paul Strange, the author of the article asks, “What is wrong with the system that the Superintendent is not immediately notified of a $2.7 million error in the budget?”

What could be wrong, Paul, is the board of directors of responsible organizations typically have a better handle on the operations of its firm. Maybe it’s the board that needs to be replaced as well; with elected members more qualified to listen to the community instead of the teachers’ union and Sacramento bigwigs, as well as provide better organizational and financial oversight and direction to the management and staff?

Corporate culture always starts at the top.

Here is the Executive Summary, with excerpts:

It is telling that a state as beautiful as California has the nation’s second-largest domestic population outflow. Despite warm weather, sandy beaches and the Pacific Ocean, Californians are leaving in droves to escape the state’s oppressive tax burden. These former citizens are generally the “highest achievers and those with the most wealth, capital, and entrepreneurial drive,” leaving the state much less economically productive in their wake.

… some states show little concern for spending restraint, whether during times of prosperity or poverty—in some cases spending their way into financial ruin. The case of recalled governor Gray Davis of California serves as an important example. By coupling high taxes with rampant government spending, California had a budget crisis of historic proportions. At the time, Carl DeMaio of The Performance Institute argued for the “need to stimulate the economy without further burdening taxpayers or driving more businesses out of state.” It is clear that California did not follow that advice and still doesn’t. Unless our current lawmakers choose the path of fiscal restraint, the mistake could soon be repeated.

This is not about Republican versus Democrat, or left versus right. It is simply a choice between economic vitality and economic malaise. To become competitive in the global business environment of the 21st century, states must have free-market, pro-growth tax systems in place, rather than increasing the ever-burdensome role of government on citizens. May this publication help lawmakers act responsibly by encouraging capital formation and allowing the dreams and entrepreneurial spirit of their fellow man to flourish.