The Jury Talks Back

5/19/2009

How to Save California: Four Reforms

Filed under: California Politics — Kevin M @ 8:12 am

California is a mess.  Not just the fiscal mess in Sacramento, but a local mess of overcrowded cities, stalled infrastructure, unresponsive local government and litigious interest groups.

Today’s ballot proposals don’t do anything but partially paper over the problems we face.  Win or lose, the problem is still growing and the powers-that-be are still digging.  They appear unable to address the real issues, largely because their constituency isn’t the people any longer — it’s the employee unions and the various interest groups that form their political base.

Several folks here have tried to address the issue of “What to Do?”.  Here’s my take.

I have four suggestions.  Some of these I’ve mentioned before, here or there, and some are new.  I guarantee that no one will like all of them.  While I think that the end of the gerrymander will help (assuming the new reapportionment jury system works), the government still needs to break out of its dysfunction.  Here’s how I see it:

1.  Restore the Prop 4 (Gann Initiative) spending cap.

Prop 4 passed in 1979 with 74% of the vote,  limiting state government spending to increases in population and cost of living.  Period.  It was nibbled to death by several propositions over the years (e.g. 1988’s Props 98 and 99) and largely repealed by Prop 111 in 1990, which changed the formula so that the limits were mostly imaginary (much like Prop 1A today).

Prop 4 was undone when the legislature responded by not spending money on infrastructure, and the people voted the limits out to get traffic relief.  This is the typical reaction of the blob — starve the public of services while maintaining the bureaucracy until the public caves.  They always lay off librarians and teachers, seldom the back office.

If only one thing can be done, a hard spending cap is a good first choice.

2.  Defined-contribution retirement plans.

Since about 1980, private sector retirement plans have changed markedly.  Rather than having “guaranteed” retirement payouts from a company-run fund, individuals now direct portable, tax-deferred, retirement funds largely independent of their employers.  These “defined-contribution” plans have the advantage of being inheritable should the employee die early, being (largely) independent of the employer’s success (or even existence), and a predictable annual expense to the employer.  Some industries that have resisted this change, such as the auto industry, have shown that relying on company-run defined-benefit plans can be a poor idea.

But, while the public has converted to defined contribution plans (401(k), IRA, etc), state and local government employees have not.  Instead, through sweetheart negotiations with the politicians their unions finance, employee pensions are both guaranteed and excessive.  It is not uncommon for a local government employee to retire at age 50-something and take “home” more on their first day of retirement than they did on their last day of work.

Since, unlike the auto industry, government has the ability to take money directly from their “customers”, these pensions cannot fail like private ones can.  But the impact of high pensions coupled with poor fund management can leave state and local finances in complete disarray, and taxpayers may not be willing to make up the losses.

This is long-term disaster for the state.  Even if corrected overnight (and even if we get past the current funding crisis), these pensions persist for decades.  It is not clear what to do about existing pensions except suck it up and try to grow out of it.  But we must stop adding to the problem.

State and local pension plans must be converted to the defined-contribution variety as soon as possible, preferably for all workers but certainly for new ones.

3.  Critical project exemptions from EIR requirements

Nearly every construction project in the state, public or private, requires a detailed environmental impact report.  There are some very good reasons for this.  However, the system is often gamed by project opponents who use the EIR process as a delaying tactic, and the entire process ignores the fact that often there is substantial environmental cost to doing nothing.

There needs to be a mechanism to cut through the (often endless) red tape when critical infrastructure projects are concerned.  This is particularly important for transportation projects, since transportation requires energy, energy production necessitates pollution, and poor transportation infrastructure wastes energy in bulk.  If, on any given day, 5 million cars burn gasoline for 30 minutes longer each the amount of unnecessary pollutants going into the air in an urban region is enormous.  To delay a project that would mitigate that waste, simply because an opponent is able to trump everything by challenging the EIR and enjoining construction during endless appeals, is lunacy.

Yet one would not want the EIRs waived for trivial reasons, either, so a high bar needs to be set.  Whether this means public votes to define critical systems, or extra-super-majority votes in governing bodies, or a mechanism for judicial exemption isn’t important.  What is important is that it doesn’t take 23 years to build 10 miles of subway.

4.  Local election dates

The problem with local elections is that few vote, and this leaves critical local decisions in the hands of the most motivated.  Voters are more likely to be people who have a vested interest in the outcome, such as public employees.  Financial support for candidates is liekly to come from similarly interested groups, such as unions or government vendors, or those highly impacted by government decisions, such as developers.

Year after year, good-government folks try to get the public interested in these local elections in odd months of odd years.  Rarely do they succeed.  Yet it is clear that elections that control the bulk of California government spending should attract more than 10% of the voters and should be as independent as possible of vested interests.

So.  Move local elections to the state and/or federal calendar.  If you cannot bring the people to the election, bring the election to the people.  Hard on politicians trying to “move up” without giving up their day job, but tough.  Just be glad the rule isn’t “resign to run.”

Conclusion

That’s more than I think will ever be done, and I have serious doubts that the current players can do anything at all except try to kick the can down the street a while longer.  But they are running out of street and the can is getting huge.  I despair.  I suspect that the “answer” will be raise taxes a bunch, and if so I will be the last of 5 generations of my family to live in California.


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