Rent Seekers - Archive

Yesterday I wrote that the Service Employees International Union (SEIU) is concealing from voters that revenues from its Proposition D tax proposal on the San Francisco ballot would primarily benefit SEIU itself. But that’s not the only secret.

The Service Employees International Union (SEIU), representing San Francisco government workers, is concealing the reality behind its Proposition D tax proposal. While presenting itself as a populist group focused on reallocating wealth from billion-dollar firms, the SEIU fails to disclose that this redistribution would primarily benefit the union itself.

I regularly ride SF Muni, which is not only a great way to get around town but also at times a wonderful way to interact with my fellow residents.

Once upon a time, Eric Swalwell was endorsed for governor by all of the “Big Three” of California’s establishment: the California Teachers’ Association (CTA), the Service Employees International Union (SEIU), and the California Hospital Association (CHA). Together the members of those organizations collect upwards of $80 billion per year from the governor and legislature.

In 2018, businessman and philanthropist Eli Broad spent $19 million to help elect a slate of pro-charter-school legislators. Nearly all of his chosen candidates won. Yet, in the next legislative session, almost all of those newly elected officeholders voted for an anti-charter-school bill sponsored by the California Teachers Association (CTA).

Recently a super-successful friend told me he met with Eric Swalwell and thought Swalwell wouldn’t be bad as governor. My friend and I are very close friends, so he wasn’t offended by my response: “You’re a fool if that’s what you think.”

The two largest recipients of state spending have picked their man. This weekend, the California Teachers’ Association endorsed Eric Swalwell for governor. Yesterday, the California Hospital Association did the same.

Some Johnnys-Come-Lately are warning about a pension bomb, but they’re way behind the times. Pension spending already exploded. For example, pension spending at Los Angeles Unified School District already quadrupled over the last decade.

Matt Mahan is introducing himself to more Californians, most recently in this sharp interview with sharp interviewer Dave Friedberg of the All-In Podcast.

After landing valuable endorsements from labor-union rent-seekers last week, this week Eric Swalwell picked up financial support from some of Sacramento’s leading commercial rent-seekers.

Before yesterday, the race for brand-name endorsements from rent-seekers was largely between Eric Swalwell and Tom Steyer…

Right after Eric Swalwell landed SEIU’s big endorsement, Tom Steyer countered with endorsements from AFSCME 3299 and California Federation of Teachers (CFT). AFSCME 3299 represents only 0.10% of California’s population but collects $2.75 billion per year of UC spending while CFT represents only 0.30% of California’s population but collects $14.8 billion per year of public school spending.

Yesterday SEIU endorsed Eric Swalwell for governor. Though the union represents only two percent of California’s population, it strikes fear and hope in the heart of every candidate for office in Sacramento…

All too often, rent-seekers and other special interests push polls to influence elected officials. One antidote is community-based polling that provides a clear signal of what the public actually wants. Recently Oakland got such a signal in a poll of its residents by the East Bay Polling Institute (EBPI).

While Hollywood is aflutter about who will win Academy Awards next Sunday, everyone in Sacramento is talking about which candidates for CA governor will win the endorsements of the state’s Top Rent-Seekers.

In fiscal year 2024-25, state and local governments in California spent $240 billion on public employees and $161 billion on healthcare enterprises. The government in California is big business, and the public employee unions, healthcare corporations and healthcare employee unions that captured those billions are among the biggest businesses in California.

Last night’s CA gubernatorial debate hosted by Jewish California reminded me of Li’l Abner, a comic strip I read as a kid in which the residents of a town lived in a state of perpetual war with tax agents whom they called “Revenooers.”

Yesterday’s post was about rent-seekers such as hospitals and public employees who receive cash from the California governments they seek to influence. Today’s post is about rent-seekers who receive benefits in other forms.

Below is a screenshot of California’s major rent-seekers ranked in descending order of dollars they currently capture from state spending…

Endorsements of gubernatorial candidates by Sacramento’s establishment are ramping up. Below is an updated list of the major Sacramento political organizations engaged in “rent-seeking,” which means they seek to manipulate public policy to boost their wealth without creating new wealth, and the candidates they have endorsed…

The race for CA governor is in full swing as the rent-seeking unions and corporations that capture the lion’s share of $500 billion per year of state spending are starting to announce their endorsements. I’m keeping a spreadsheet. Here’s a screenshot of endorsements so far by some of Sacramento’s leading rent-seekers.

With all the headlines about billionaires fleeing California because of a proposed — and self-harming — wealth tax, our disastrous state budget has escaped the grim headlines it merits.

Thirteen years ago, the California Chamber of Commerce and other big business organizations cut a deal with Governor Jerry Brown not to oppose a 30 percent temporary tax increase on individuals. Since then the state’s General Fund has extracted an extra $95 billion from individual taxpayers, including small businesses that pay business taxes at individual rates, and annual General Fund Expenditures have increased 165 percent.

Klein and his co-author Derek Thompson believe more of everything is the answer to what ails California. But bad governance will ruin it all.

In early January Governor Newsom will present the Legislature with a proposed budget for the next fiscal year. The last budget dealt with a large deficit caused by excessive spending. To address that deficit, Newsom and the Legislature raided the Rainy Day Fund, borrowed money, shifted funds and deferred spending, steps that should be reserved for deficits caused by recessions, not by excessive spending.

As previous writings have disclosed, our current focus falls into three categories…

For years the University of California has been treated like a doormat by the state’s elected officials. That’s because UC supporters have not flexed their political muscles. That’s changing.

SACRAMENTO — With a windfall of cash five years ago, Gov. Gavin Newsom said he was doing away with a state budget “gimmick” one of his predecessors relied on to shave about $800 million off a deficit during the Great Recession.

Yesterday Governor Newsom, Senate President pro Tempore McGuire and Assembly Speaker Rivas confirmed they still intend to close the budget deficit in part by drawing half of the state’s budget reserves when they finalize the budget in June.

Two social media and crypto executives are behind an initiative on the November ballot that would jeopardize steady funding for services financed by the General Fund and force state taxpayers to use after-tax dollars to fund what the sponsors and others like them could fund with pre-tax dollars.

This report examines the compensation of California state correctional officers relative to several other groups. It examines wages in detail because of the richness of available data. It examines benefits in less depth because available data are far less comparable and detailed.

A number of you have written seeking advice about the recall election. We don’t have any to give. Our focus is the legislature and we must work with whoever sits in the governor’s office. If it’s helpful, below is a piece I recently published about the subject.

At the request of the Carla and David Crane Foundation, we examined a wide range of potential changes to pension benefit policies for members of the San Jose pension plans. We were asked to examine options that would achieve substantial savings for the city without attempting to evaluate whether they might be subject to successful legal challenge. The policies examined below are not proposals from the authors, but rather options designed to meet these goals. We modeled these changes for the Police and Fire Department Retirement Plan and the Federated City Employees Retirement System.

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:

Before running for office, US Senator Kamala Harris was employed for 13 years as an attorney by the counties of Alameda and San Francisco, which provide expensive insurance subsidies to retired employees such as herself. In the case of San Francisco during the years Ms. Harris worked there, those lifetime benefits extend to employees who worked only five years. Known as OPEB (Other Post Employment Benefits), the subsidies were rendered largely redundant after enactment of the Affordable Care Act and middle class subsidies by the State of California yet San Francisco continues to run an OPEB program that costs a fortune — SF spent $180 million last year — and the most expensive beneficiaries of which are public safety employees who can retire at age 50 with pensions equal to 90 percent of their final compensation.

Several members of the GFC Network have asked, “how can a state legislator get away with saying one thing but doing another?” Here’s how:

University of California at Berkeley economist Emmanuel Saez knows something about economics but apparently not about politics.

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.

For the 12 months ended June 30, 2018, the S&P500 returned >14 percent but California’s State Teachers’ Retirement System (CalSTRS) earned <9 percent. Some of the underperformance results from the difference in allocation to equities (the S&P500 is 100 percent invested in equities while CalSTRS is not), but CalSTRS’s underperformance (37 percent) is more than twice its allocation to non-equities (14 percent).

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.

Seeks to level playing field against self-dealing adults.

According to the Sacramento Bee, California Governor Jerry Brown has asked the California Supreme Court to accelerate consideration of a lawsuit the outcome of which is existential for California classroom funding.

>100% of schools’ share went to increased retirement spending.

In January 2012 California Governor Jerry Brown announced he would ask California voters “to approve a temporary tax increase on the wealthy, a modest and temporary increase in the sales tax, and to guarantee that the new revenues be spent only on education.” Later that year his proposal was embodied in Proposition 30, a temporary tax increase projected by the Legislative Analysts Office to raise $6 billion per year for four years and smaller amounts for three years. Marketed as “Temporary Taxes to Fund Education,” P30 passed. Seven budget years later, the results are now known…

Retirees subsidized at expense of active teachers.

School funding in California is at record levels…

In his final State of the State address, this is all Jerry Brown had to stay about K-12 education…

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.

This afternoon, I spotted a tweet from a San Diego parent: 

There’s something particularly wrenching about being asked what services should be cut at your kid’s school to pay for increased employee pension & healthcare costs, when most working parents don’t have pensions. https://t.co/Vs6uMojuSt cc @sdschools

— Ashley Lewis (@AshleyJPL) January 12, 2018

I followed the link to the survey, and a message from the San Diego Unified School District said it was seeking input on how to resolve a growing budget shortfall due to “increases in costs outside of the district’s immediate control, such as healthcare costs, utilities expenses, and state retirement contributions that are all expected to rise for the foreseeable future.” 

California Speaker of the State Assembly Anthony Rendon established a Select Committee on Health Care Delivery Systems and Universal Coverage charged with determining (1) the method by which universal coverage in California could be financed and provided, discussed in an earlier post, and (2) how care should be delivered, which is the subject of this post.

Every Californian should read “The Healing of America” (Penguin Books, 2010) by T.R. Reid. An informative and entertaining tour of health care systems around the world, Reid’s book exposes the deception being proffered by proponents of legislation misleadingly characterized as a “single-payer” system similar to single-payer systems in other countries. It’s not.