It’s Not Facebook’s Fault

Look in the mirror.

China’s government fears an Internet that exposes people to political truths. Today some in Congress fear an Internet that exposes people to political lies.

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UPDATE: Reform Medi-Cal To Reduce Poverty

Ten years ago, California’s Department of Social Services — whose mission is “to serve, aid, and protect needy and vulnerable children and adults” — received nearly $10 billion, which was 10 percent of the General Fund that year:

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San Francisco Chronicle: Voters draw the line against gerrymandering

Arnold Schwarzenegger was not on the ballot in the midterms, but the former California governor’s influence was apparent in the outcome of reform initiatives in Michigan, Missouri, Colorado and Utah. Those four states were the 2018 battlegrounds in Schwarzenegger’s campaign to have independent commissions, rather than politicians in power, draw congressional boundaries after the 2020 census.

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California's Incredible Prison Spending

This year California’s governor and state legislature are choosing to spend $15 billion on the Department of Corrections and Rehabilitation (CDCR), which incarcerates 127,000 prisoners. 

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Marin Magazine: 8 Questions for David Crane

David Crane’s resume is a varied and illustrious one. He was a partner at Babcock & Brown, a global investment firm, for 24 years, then went on to serve as a special adviser to Gov. Arnold Schwarzenegger from 2004 to 2010. Now Crane lectures in public policy at Stanford University, serves on the board of the Goldman School of Public Policy at UC Berkeley, and is president of Govern for California, an organization of more than 250 politically informed philanthropists supporting state legislators who put citizen interests ahead of party or personal concerns. Some legislators vow publicly to support job creation, students and social justice, but vote against those priorities under pressure from special-interest groups. In backing legislators dedicated to honest budgets and open government, Govern for California aims to improve schools and health care, fix pension problems, fund parks and environmental protection, protect tax revenues from special interests, and in general make government work.

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$200 Billion

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.

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Federal Reserve Tells A Big Truth

On September 20 the Federal Reserve recognized a truth long covered up by California's public pension funds.

In its latest quarterly Financial Accounts report the Fed revised its measure of unfunded pension liabilities owed by state and local governments to $4.1 trillion, more than double the amount previously reported.

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Faux Progressivism in California

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? 

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CALmatters: California has big void in educational information

Knowledge, it’s been said, is power. The more you learn about something that affects you, the more you can influence that something.

It’s especially true in politics, whose insiders joust constantly among themselves and with outsiders, including the media and the voting public, over access to information.

One of California’s more important arenas of info-war is public education.

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The Trump Distraction

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.

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Net Per-Pupil Spending in California

The measure that matters.

California will spend more than $16,000 per pupil next school year and the state’s Legislative Analyst’s Office reports California’s per-pupil spending ranks in the middle among the states and predicts its ranking likely will increase as new data are released over the next few years.

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CalSTRS’s Underperformance

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).

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Verdict On Prop 30 Tax Increase — Part II

<20 percent went to citizen services.

In January 2012 California Governor Jerry Brown announced he would ask California voters to approve temporary sales and income tax increases. Later that year his proposal was embodied in Proposition 30, projected by the Legislative Analysts Office to raise $6 billion per year for four years and smaller amounts for three years (ie, $42 billion or less). 40 percent of P30 revenues were to be provided to schools and community colleges*, the balance to the state. Marketed as “Temporary Taxes to Fund Education,” P30 passed. Seven budget years later, the results are in.

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More Pension Math: Investment Earnings

Triggered by recent earnings reports from CalPERS and CalSTRS, some readers have asked why California’s pension funds are underperforming the overall stock market. Eg, for the fiscal year just ended June 30, 2018, CalSTRS and CalPERS earned only ~two-thirds the stock market. While the question is best asked of their Chief Investment Officers, one reason might be portfolio construction designed to minimize contribution volatility. CalSTRS’s most recent CAFR discusses volatility on page 29 here.

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An Open Letter To CA Legislators

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.

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Jerry Brown Goes To Court For Kids

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.

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Disrupt CA’s State-Operated Enterprises!

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.

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The Verdict On Prop 30 — Part I

>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…

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Reforming California Health Care

Start with $1,815.

Via a budget trailer bill signed into law last month, California has budgeted $5 million to establish a “Council on Health Care Delivery Systems” charged with developing a plan “for advancing progress toward achieving a health care delivery system that provides coverage and access through a unified financing system for all Californians.” Made up of five members, three chosen by the governor, one by the Senate Rules Committee, and one by the Speaker of the Assembly, the Council will start meeting in 2019 and must submit a plan to the legislature and governor on or before October 1, 2021.

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