Drudge Retort: The Other Side of the News
Monday, January 07, 2019

There'll be heaps of happy talk in Sacramento this month about bold new, expensive government programs. That's normal from an eager new governor and Legislature. Too bad there won't also be some bitter truth spoken about the crucial need for state government to correct festering old mistakes that threaten or already are damaging California, such as unfunded public pension liabilities, regulatory abuse that stymies economic development and a sick, decrepit state tax code.

Two decades ago state and local politicians promised public employees a lot more than pension funds could afford. There's an obvious conflict: Politicians get big hunks of campaign money from public employee unions.

Today, the total unfunded liabilities for all state and local pension systems in California range from $330 billion to $1 trillion, depending on how they're calculated.

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The options are ugly: Trim pensions, raise taxes, increase employee and government contributions or cut other public programs such as education. Local governments could also go bankrupt and slash retiree benefits.

Another ugly truth is that California is considered notoriously unfriendly to business investment.

High taxes are one problem. Wealthy taxpayers are leaving the state. Newsom and the Democratic-dominated Legislature should declare a moratorium on tax hikes, even if they're called fees. But they won't.

Another ugly truth is that California's outdated state tax system is unreliable and unstable. It produces a torrent of unneeded tax revenue in good times and shrinks the flow when the economy busts, playing havoc with the state budget and government services.

Because of Brown's soak-the-rich tax hike, the state leans too heavily on wealthy people, whose capital gains dry up in a recession. The top 1% pays nearly half the state income tax. That needs to be fixed by lowering income tax rates and extending the sales tax to services that are mainly used by businesses and the wealthy, such as legal.

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NewBeam's honeymoon may be pretty short, these problems are barreling at California faster than Moonbeam's still theoretical high speed train from Bakersfield to Modesto...

#1 | Posted by Rightocenter at 2019-01-07 10:33 AM | Reply | Funny: 1

"There's an obvious conflict: Politicians get big hunks of campaign money from public employee unions. "

Using that logic, campaign contributions from, say, ExxonMobil are a conflict as well.

#2 | Posted by Danforth at 2019-01-07 10:36 AM | Reply

NewBeam has two years to get rid of Jerry's Moondoggle Express before taking blame for its inevitable demise.

California's High Speed Rail Project Will Collapse Within Four Years
www.nextbigfuture.com

#3 | Posted by nullifidian at 2019-01-07 10:43 AM | Reply

#2

You are correct, but deflection noted nonetheless.

#4 | Posted by Rightocenter at 2019-01-07 10:50 AM | Reply

Inbred article posted by an inbred California hater.

"regulatory abuse that stymies economic development and a sick, decrepit state tax code. "

Not even trying to hint at any objectivity. This is pure trash and par for the course for ROC.

#5 | Posted by IndianaJones at 2019-01-07 02:08 PM | Reply | Newsworthy 2

ROC

None of those things are "elephants in the room". I did not even see any mention of the Actual Elephant in the room. Donald J Trump and his corruption and inept policies.

For this elephant may I suggest powerful sedatives? Double Tap with a few elephant tranquilizers just might give us time to secure the place. If a little fly (Limbaugh) gets to buzzing in his ear he could stampede at any minute totally and trash the place!

OOPS!!! Oh Dear.

Too late.

Thank Gawd California is standing up to the Elephant for you.

You can thank us later. If you make it.

#6 | Posted by donnerboy at 2019-01-07 07:31 PM | Reply

Wealthy taxpayers are leaving the state.

Oh Noooo!!! Don't take all your tax moneys to Mississippi or Oklahoma!

These wealthy taxpayers, what work are they finding in other states? Because as long as they are still doing business in California, they're still paying taxes.

But hey, fearmongering has its merits. Keep up the good work!

#7 | Posted by ClownShack at 2019-01-07 07:39 PM | Reply

Because of Brown's soak-the-rich tax hike, the state leans too heavily on wealthy people, whose capital gains dry up in a recession. The top 1% pays nearly half the state income tax. That needs to be fixed by lowering income tax rates

OHHH!!! Thats what California needs, tax cuts for the rich!

Trumponmics 101. Tax Cuts for the rich pay for themselves.

We already see how thats playing out nationally.

Whoever wrote this opinion piece should move out of California.

And if Dulli, RoC, or Andre, A Mattress, don't like California, they can leave too.

#8 | Posted by ClownShack at 2019-01-07 07:43 PM | Reply

Wealthy taxpayers are leaving the state.

We should be so lucky!!!

I got my eye on that nice piece of property up the street.

#9 | Posted by donnerboy at 2019-01-07 07:44 PM | Reply | Funny: 1

"unfunded public pension liabilities, regulatory abuse that stymies economic development and a sick, decrepit state tax code."

Silly me, I thought "The Elephant" meant there was a Republican who is still relevant in California.

#10 | Posted by snoofy at 2019-01-07 07:50 PM | Reply | Funny: 2

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-- they can leave too.

I will leave if NewBeam imposes a new healthcare mandate

"Newsom's proposal would also create an individual mandate in California to thwart predicted drops in the state's health insurance market after the federal government removed financial penalties for uninsured consumers beginning this year."

#11 | Posted by nullifidian at 2019-01-07 07:50 PM | Reply

We should be so lucky!!!

Tell me about it.

I would gladly move to Manhattan Beach.

If only housing in Los Angeles was as cheap as the rest of the housing in our third world nation.

Friend bought a house in Mesa, AZ, two stories, 5 bedrooms, $125k.

$125k in Los Angeles buys you a studio with a communal restroom and kitchen.

#12 | Posted by ClownShack at 2019-01-07 07:51 PM | Reply

"I will leave if NewBeam imposes a new healthcare mandate."

Don't let the door hit you on your way out, fake Buddhist. See how you like Kentucky.

#13 | Posted by DirkStruan at 2019-01-07 07:55 PM | Reply

"Newsom's proposal would also create an individual mandate in California to thwart predicted drops in the state's health insurance market after the federal government removed financial penalties for uninsured consumers beginning this year."

A man who's concerned about the poor and destitute.

Of course you'd despise him.

Have a good life in Idaho, or Arizona, or where ever you end up.

#14 | Posted by ClownShack at 2019-01-07 07:56 PM | Reply

- See how you like Kentucky.

I'm going to move to your state so I cancel out your vote.

#15 | Posted by nullifidian at 2019-01-07 07:58 PM | Reply

Nullifidian, which part of Naples do you want to live in?

#16 | Posted by snoofy at 2019-01-07 08:00 PM | Reply

I'm going to move to your state so I cancel out your vote.

#15 | POSTED BY NULLIFIDIAN AT 2019-01-07 07:58 PM | FLAG:

Really? So you are all done with calling me a foreign interloper? I thought you might lose your taste for those games after they started playing them on you.

#17 | Posted by DirkStruan at 2019-01-07 08:08 PM | Reply

Re#11

Still getting upset when the adults tell you to be responsible? Sometimes we have to make rules for the children like you who are so selfish and ignorant that they don't have the sense to do what is right for themselves much less for others.

I'm going to move to your state so I cancel out your vote.

#15 | Posted by nullifidian

Is this like one of Trumps Campaign Promises?

LOL

You would do better to "cancel" a California vote by staying here.

But, don't let us stop you from shooting off your foot to spite your face.

#18 | Posted by donnerboy at 2019-01-07 08:11 PM | Reply

- $125k in Los Angeles buys you a studio with a communal restroom and kitchen.

Haha. I'm going to be laughing at you when I'm in Montana, New Mexico, or wherever.

#19 | Posted by nullifidian at 2019-01-07 08:15 PM | Reply

I'm going to be laughing at you when I'm in Montana, New Mexico

New Mexico is a Liberal state. Montana is freezing cold.

Colorado may work for you, its a purple state so you won't get too much shock from the move. Plus it has some great marijuana there. Not as good as California, but definitely good stuff.

#20 | Posted by ClownShack at 2019-01-07 08:20 PM | Reply

"Haha. I'm going to be laughing at you when I'm in Montana, New Mexico, or wherever."

Nullifidian laughing:
www.youtube.com

#21 | Posted by snoofy at 2019-01-07 08:25 PM | Reply

"Montana is freezing cold."

And purple.

#22 | Posted by DirkStruan at 2019-01-07 08:32 PM | Reply

Inbred article posted by an inbred California hater.

Earth to Indy...I live here and have for almost 50 years.

This is pure trash and par for the course for ROC.

As for the "inbred" trash article, George Skelton, an avowed liberal Democrat, has been covering Sacramento for the LA Times for over 40 years and is renowned for not pulling punches regardless of party affiliation. Sorry his honesty scares you so much.

Typical that none of the Usual Suspects are terrified to even address the substance of what Skelton is talking about...which pretty much makes his point when he says:

Like politics and religion at some family holiday dinners, certain subjects are taboo among most politicians, such as unfunded public pension liabilities, regulatory abuse that stymies economic development and a sick, decrepit state tax code.

Elected officials will be feeding dessert to the public and skipping the nourishing vegetables that don't go down easily with many voters on the left and their powerful interests.

The bitter truth about unfunded liabilities for public employee retirees just makes voters angry -- on both sides.

There's pension envy by private sector workers whose employers in recent years have frozen their traditional "defined benefit" retirement plans and turned to risky 401(k)-type savings programs. And there's resentment by public employees who feel they're being disrespected and picked on by pension reformers.

"We're still on this glide slope to a really bad place," says Joe Nation, a former Democratic state assemblyman who's a Stanford public policy professor and heads a pension research project. "In the end, someone has to pay this. It'll probably be the public employees."

The options are ugly: Trim pensions, raise taxes, increase employee and government contributions or cut other public programs such as education. Local governments could also go bankrupt and slash retiree benefits.

#23 | Posted by Rightocenter at 2019-01-07 08:53 PM | Reply

NY state had a huge unsustainable pension problem too, but it's somewhat better now as the result of actions taken by govt officials about 7 years ago:

Governor Cuomo Signs Law to Enact Major Pension Reform

www.governor.ny.gov

#24 | Posted by Gal_Tuesday at 2019-01-07 09:11 PM | Reply

I'm trying to remember back to before pension reform was passed. At first there was much resistance to the idea, but there was a lot of reporting done on abuses in the system as well as publishing just how much in pensions people were actually receiving, which turned out to be substantially more than what most in the private sector were receiving for comparable work and years of service. There was also a lot of reporting done on how much those pensions were costing taxpayers, how much of state and local budgets they were eating up, and as a result public opinion shifted to support the reform.

#25 | Posted by Gal_Tuesday at 2019-01-07 09:24 PM | Reply

Gavin NewBeam rolls out red carpet for illegal immigrants.

"California Governor Newsom Vows ‘Sanctuary To All Who Seek It' In Inauguration Speech"

As if we weren't overcrowded and overpriced enough, Cali is now a sanctuary state and NewBeam wants free healthcare for illegal queue jumpers. The result will be a flood of illegals from across the border and other states, adding to overcrowded schools, pushing housing prices higher, reducing wages for poor Californians.

#26 | Posted by nullifidian at 2019-01-08 08:42 AM | Reply

#26

That was just NewBeam pandering to his base, as George Skelton noted in today's LA Times Capitol Journal, we are already a sanctuary state and the free healthcare for illegal immigrants pledge probably won't get 66% support in the legislature.

It does go to show the gameplan to increase the Democratic base in California, however.

#27 | Posted by Rightocenter at 2019-01-08 11:54 AM | Reply

#24

Moonbeam tried to do something similar a while back:

Gov. Jerry Brown and the Legislature took at stab at a partial fix in 2012. They enacted some modest reforms that made pensions less generous for future state employees.

But the biggest barrier to a real fix is the so-called California Rule, an old, illogical concept. It decrees that pension benefits existing when a public employee is hired can never be reduced, even if they haven't yet been earned by service.

A state Supreme Court decision is expected soon on the California Rule. But even if the rule is junked, Newsom and the Legislature would need to conjure up the courage to buck labor and alter the pension system for current employees.

Given the fact that Labor provided almost 30% of the donations to Democratic candidates and affiliated PACs this last electoral cycle in California, the likelihood of Newbeam and the Democratic legislature telling their benefactors that they are going to cut pensions approaches zero.

#28 | Posted by Rightocenter at 2019-01-08 11:59 AM | Reply

"Given the fact that Labor provided almost 30% of the donations to Democratic candidates and affiliated PACs this last electoral cycle in California, the likelihood of Newbeam and the Democratic legislature telling their benefactors that they are going to cut pensions approaches zero."

And that's a good thing.

"That was just NewBeam pandering to his base, as George Skelton noted in today's LA Times Capitol Journal, we are already a sanctuary state and the free healthcare for illegal immigrants pledge probably won't get 66% support in the legislature. "

So why would you stay there if you hate it so much?

#29 | Posted by danni at 2019-01-08 12:19 PM | Reply

I don't hate it, I disagree with some of the more ridiculous policies but has lived here most of my life.

Unlike you, I understand and accept differing viewpoints and am comfortable straddling the line between conservative and liberal viewpoints and policies.

#30 | Posted by Rightocenter at 2019-01-08 12:27 PM | Reply

And that's a good thing.

So you also then think its a good thing that without pension reform "the options are ugly: Trim pensions, raise taxes, increase employee and government contributions or cut other public programs such as education. Local governments could also go bankrupt and slash retiree benefits."

How tolerant and caring of others you are.

#31 | Posted by Rightocenter at 2019-01-08 12:29 PM | Reply

You're just saying that because you've convinced yourself being gay counts as liberal lefty street cred.

#32 | Posted by snoofy at 2019-01-08 12:29 PM | Reply

"Local governments could also go bankrupt and slash retiree benefits.""

Which is why there should always be a neutral party handling upfront contributions.

#33 | Posted by Danforth at 2019-01-08 12:30 PM | Reply

"So you also then think its a good thing that without pension reform "the options are ugly:"

I think that when a Republican uses the word "reform" is is the first word of a lie. Tax "reform" that resulted in 1.5 trillion dollar increase to the debt. We can't afford any more Republican "reforms." That word should be banned from the English lauguage, Republicans have turned it into profanity.

#34 | Posted by danni at 2019-01-08 12:32 PM | Reply

I think that when a Republican uses the word "reform" is is the first word of a lie.

Here's a lesson in reading comprehension Danni, that quote is from a longtime liberal democrat reporter from the LA Times:

"George Skelton, an avowed liberal Democrat, has been covering Sacramento for the LA Times for over 40 years and is renowned for not pulling punches regardless of party affiliation."

I know that reading articles is beneath you, but at least try to follow the thread.

#35 | Posted by Rightocenter at 2019-01-08 12:39 PM | Reply

#33

I totally agree, but unfortunately that cow left the barn (at least here in California) long ago.

#36 | Posted by Rightocenter at 2019-01-08 12:41 PM | Reply

Ah, the good ol' "unfunded liabilities" myth where they add up a bunch of costs and act as if they're not going to be paid for.

"These future costs are unfunded right now"! Yeah, because it's not the future yet. My next haircut is an "unfunded liability".

"Today, the total unfunded liabilities for all state and local pension systems in California range from $330 billion to $1 trillion, depending on how they're calculated."

Big difference between a trillion and a third of a trillion. Get back to us when you know what you're talking about.

#37 | Posted by Derek_Wildstar at 2019-01-08 03:36 PM | Reply

"range from $330 billion to $1 trillion, depending on how they're calculated."

Well then, let's be sure to calculate them at $330 billion.

#38 | Posted by Danforth at 2019-01-08 03:42 PM | Reply | Newsworthy 1

Big difference between a trillion and a third of a trillion. Get back to us when you know what you're talking about.

Once again, I am just quoting George Skelton from the LA Times...

Why is that so hard for you idiots to understand?

#39 | Posted by Rightocenter at 2019-01-08 03:44 PM | Reply

Haha. I'm going to be laughing at you when I'm in Montana, New Mexico, or wherever.

#19 | Posted by nullifidian

How old are you again?

Well, I will be laughing all the way to the bank when I sell MY solar powered home.(ok, so mostly it will be my wife will be laughing but whatever shutup!!)

My garage is worth more than a whole house in Montana.

Why?

Because People believe it is.

They also believe that Money is Real. That a Corporation is Real. And that apparently Walls are Magic.

Who am I to tell them they are talking crazy?

But, that is another "story" for another day.

#40 | Posted by donnerboy at 2019-01-08 04:36 PM | Reply

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