Contra Costa Times columnist Dan Borenstein, who last year appeared before right-wing groups to share his "reporting" on pensions, is at it again, distorting information much like the uber-conservatives he's aligned himself with. This year, CalPERS decided enough is enough, sending a strongly-worded letter to the editor to the Times. It remains to be seen if it will be published. But it points out that when it comes to pensions, Borenstein doesn't seem to let facts get in the way of his columns.

Here's the CalPERS reponse, which speaks for itself.

Dan Borenstein is one of the few columnists that understands many of the complexities of public pensions but his personal bias and crusade against public employee pensions once again got the best of him, thus misleading your readers, in his January 11 column (“CalPERS planning to gut a key cost-control provision of new pension law”).
 
He attacks CalPERS preliminary interpretation of the new pension law that went into effect January 1 and the types of compensation that can be used toward calculating pensions. Contrary to Borenstein’s snide comment that CalPERS operates “in a parallel universe,” our interpretation of this provision is the agreed upon intent of those who wrote, passed and signed the bill into law. What he neglects to tell readers – a fact which CalPERS explicitly shared with him during multiple attempts to try to help him get the facts straight, which he nevertheless failed to do – is that during  the legislative process, CalPERS worked with the legislative committee consultants to answer their questions and enable them to write the bill according to their intent. They agree that the intent was to eliminate some special compensation but not all of it.  Further, as we prepared our preliminary interpretation in recent weeks, we based it on conversations with officials in the legislature and the administration.  In spite of Borenstein’s most fervent personal desires, the legislature’s intent was never to limit pension calculations to base pay only.  Additionally, CalPERS will seek broad public input on the issue of compensation before any interpretations or regulations are finalized.
 
Borenstein’s view that our interpretation of the law will lead to pension spiking is both shortsighted and wrong. The abuse of pension spiking, by significantly increasing an employee’s base pay in the final year of their career, has been addressed in changes CalPERS instituted years ago for public agencies and school employees.  In fact many of the items specifically called out in the new legislation have not been reportable to CalPERS.  Pension spiking is also addressed in the new law through a cap on compensation that can be used to calculate a new member's pension as well as requirements to use the average of an employee’s highest salary over three years of their career for public agencies and schools.
 
Lastly, Borenstein is again wrong when he condescendingly claims that CalPERS “absurd interpretation of the new law will … erode untold billions of dollars of savings that … CalPERS previously claimed the new law would produce.” The only absurd interpretation here is Borenstein’s complete ignorance or disregard of what CalPERS actually said in our cost analysis of the bill. CalPERS never claimed that the restrictions on what is included in pensionable compensation would result in significant savings, let alone “untold billions.” Instead, CalPERS wrote in our cost analysis: “We have not reviewed or been able to assess the potential impact of any such changes. To the extent that savings are realized as a result of additional restrictions on pensionable compensation, the savings will be greater than quoted in this analysis."
 
CalPERS is committed to implement and administer the laws as they were enacted. Borenstein has done nothing more than rush to judgment and yell fire. If his readers believe his rhetoric, they will likely only get burned by the misinformation.

Assemblymember Bob Blumenfield (D-San Fernando Valley), Chair of the Assembly Budget Committee, issued the following statement to accompany the release of his committee's initial review of Governor Jerry Brown's budget proposal that was introduced today in the State Legislature.  Brown's $97.6 billion spending plan for the 2013-2014 fiscal year came with an announcement that California's deficit is now gone.

"It's not time to roll out a ‘Mission Accomplished' banner yet but today's news gives Californians a reason to hold our heads high and put dunce caps on our state's critics.  For years, California has been the butt of jaded jokes and
called a lost cause. Yet, we are emerging from the grip of financial crisis and
keeping the California dream alive.  Great sacrifice has brought us
financial stability and it cannot be squandered.  Californians are fed up
with budget drama and are eager to focus on economic recovery. Unfortunately, our budget gains can be undone by forces outside of our control, like negotiations over the nation's debt ceiling. The governor correctly proposes a path of restraint. But our mentality must also change with the times.  Our budget decisions must shift from crisis-induced emotion to thoughtful and responsible actions that solidify our long term prosperity.  It's a
welcome change to shift from years where we had to decide what to cut or
eliminate.  We need to savor the difference as we work towards a budget in June."

A copy of the Assembly Budget Committee's review of Brown's budget proposal is available at http://abgt.assembly.ca.gov/.  The Committee will begin its schedule of public hearings on the governor's budget on January 31.

Assembly Speaker John A. Pérez released the following statement upon the announcement of the Governor's 2013/2014 State Budget Proposal:

"This is a proposal that clearly shows California has turned the corner. The Governor's budget is sober, restrained and forward thinking, and I believe it's a solid foundation for the budget process. I am looking forward to thorough and insightful public hearings as we work with the Governor to adopt the final budget by our Constitutional deadline."

For the first time, the state's leading proponents of slashing retirement security
are admitting their efforts to privatize public pensions aren't going anywhere
in California.

In an article published in the conservative online magazine Human Events (which also features articles from right-wingers Grover Norquist, Chuck Norris, and Pat Buchanan this week), former Schwarzenegger economic advisor David Crane, former Los Angeles Mayor Republican Mayor Richard Riordan, and failed congressional candidate and ex-Assermblyman Joe Nation all agree that state and local "reform" efforts are failing for a variety of political and legal reasons.

"Today pension reform gets little notice in California," notes the article. It cites "stiff court challenges" that are scaring off municipal efforts and that
statewide legislation and initiatives to reduce retirement security have
"stalled out."

"At the state level there's nothing going on," admits Crane. He also downplays the estimated $60 billion cuts in benefits to California budget employees that were the result of the pension reduction law passed by the Legislature last year and now in effect, saying the state will need to "look elsewhere" for savings.

When a friend of mine pointed out the news item from the Capitol Morning Report of Assembly Republican Leader Connie Conway announcing her "Diversity Outreach Team," I thought it was something ripped from the headlines of The Onion, which last week named Kim Jong-il the world's sexiest man alive.

In case you missed it http://blogs.sacbee.com/capitolalertlatest/2012/12/am-alert-california-assembly-republicans-form-diversity-outreach-team.html, Conway issued a press release naming a college intern and various staff members to show her commitment to diversity. (Previously. Conway's idea of diversity was recruiting GOP candidates that wore cowboy hats and fellow blondes.)

By naming a handful of staff members to this panel, Conway's V-8 moment was a laughable PR move at best. If Conway was serious about a commitment toward diversity, she could have at least put one of the two Latinos in the GOP Caucus to lead it. Or, more importantly, introduce some legislation critical to the communities to which she is hoping to appeal. But no.

Instead, Conway continues to be in denial about the positions of her Caucus. That is exemplified in this quote from her release. "We know that most Californians share our common-sense ideas, but we need to do a better job communicating that message."

Perhaps Ms. Conway needs to review the results of the election of a few weeks ago, as well as the party registration figures of the California GOP. The California electorate in nearly every demographic group rejected the GOP's tired anti-tax, anti-immigration, anti-public education agenda. GOP voter registration is at a record low, declining sharply among younger voters and voters of color.

So memo to the Assembly GOP leader: It's not a communication problem. It's a policy problem.

Conway's GOP Caucus shares, on a less subtle level, the views of one of its members,  Assemblyman Tim Donnelly, on issues important to the Latino, African-American, and Asian-American communities, as well as to California's young voters. Whether it's the DREAM Act, environmental justice, or education funding, Assembly Republicans (with the exception of GOP Caucus outcast Brian Nestande) have voted in lockstep against legislation these voters care about.

That, in turn, has resulted in record GOP losses under Conway's leadership. Nowhere was that more apparent than in a swearing in session last week where the difference between what the GOP and Democratic Caucuses looked liked was striking.

The Democratic majority in the Assembly is the now the most diverse in the nation. It features 16 Latinos, seven members of the American Pacific Islander community, seven African-Americans, 14 women, and 4 LGBT members.

In comparison, the GOP Caucus has just seven women and, as mentioned earlier, two Latinos. There are no African-American members, no Asian-American members, and a the median age that AARP would love.

If the Republicans want to be serious about appealing to the demographic groups that will dominate the California electorate for the future, they need to change their tune on policy affecting them. Issuing press releases about a "diversity panel" and serving guacamole at their Caucus lunches won't fool anyone.

The come-from-behind victory of Democrat Steve Fox was a stunner. But it wasn't just luck.

Speaker John A. Perez's team was instrumental in making it happening, dating back to paying the filing fee for his candidacy. There also were robocalls and  a direct mail program conducted by the Los Angeles Democrat Party.

"Every election has its surprises, and what a pleasant one we have here in LA County with Steve Fox's win in Assembly District 36," says LA County Democratic Chairman Eric Bauman. "Fox knew the long odds heading into the race, but never wavered in his commitment to fighting for the working families of the Antelope Valley.
 
In 2006, LACDP instituted its 'Red Zone Program' to assist Democratic candidates in LA County running in Republican-held districts. The program's reach has expanded each election cycle since then, including this year's efforts in Fox's district.

"This race is a good example of a statewide trend of voters choosing the reasonable solutions of the Democratic Party over the extreme rhetoric of the Republicans," said Bauman. "The big blue wave of Democratic support got bigger over the weekend with Fox's last-minute victory."
 

The San Francisco Chronicle ran an op-ed over the holiday weekend that I penned in response to charges from Consumer Watchdog, a self-styled consumer group, that is calling on the state Fair Political Practices Commission to require political bloggers like me to reveal our clients, something we already do.

What's curious is that Consumer Watchdog refuses to disclose the sources of its financial support.

One source of Consumer Watchdog’s financing is public record. Consumer Watchdog sprang from the loins of Voter Revolt, which gave us Proposition 103 and auto insurance reform in 1988. Organizations created by Prop. 103 author Harvey Rosenfield have collected $7.8 million in intervenor fees since his measure passed, including $2.4 million in 2009 alone.

No other group has received any of these fees in years. (It’s not clear why consumers need intervenors when there are lawyers, actuaries and analysts at the state Department of Insurance to protect our interests.) Meanwhile Rosenfield has paid himself millions of dollars through nonprofits, including one organization whose only grant, according to IRS records, is a grant to another one of his organizations

More recently, Consumer Watchdog pushed legislation that would regulate health insurance rates at the state level even though the federal government plans to do the same thing — with one critical difference. Federal law doesn’t pay “intervenors,” so Consumer Watchdog wrote a state law that promises juicy intervenor fees in California.

When lawmakers insisted on auditing their fees, Consumer Watchdog backed off and put the law on the ballot instead, betting that high health care costs will cause voters to overlook Consumer Watchdog’s self-interest. Curiously, Consumer Watchdog spelled out the rate regulatory process in excruciating detail, but it would adopt the intervenor program by statutory reference. If you know what Section 1861.10 of the California Insurance Code is, you’ll be an informed voter in 2014.

Their sneakiness is not surprising to those who have been asking Consumer Watchdog for years to reveal the source of their financial backing.

If voters have learned anything over the years, it’s to look under the skirts of those who write ballot measures and spend millions to pass them. Their motives are key to a realistic understanding of the likely consequences of a measure’s passage or defeat.

Read more: http://www.sfgate.com/opinion/openforum/article/Watchdog-or-special-interest-lapdog-4060346.php#ixzz2DMF5TqYj

The San Francisco Chronicle ran an op-ed over the holiday weekend that I penned in response to charges from Consumer Watchdog, a self-styled consumer group, that is calling on the state Fair Political Practices Commission to require political bloggers like me to reveal our clients, something we already do.

What's curious is that Consumer Watchdog refuses to disclose the sources of its financial support.

One source of Consumer Watchdog’s financing is public record. Consumer Watchdog sprang from the loins of Voter Revolt, which gave us Proposition 103 and auto insurance reform in 1988. Organizations created by Prop. 103 author Harvey Rosenfield have collected $7.8 million in intervenor fees since his measure passed, including $2.4 million in 2009 alone.

No other group has received any of these fees in years. (It’s not clear why consumers need intervenors when there are lawyers, actuaries and analysts at the state Department of Insurance to protect our interests.) Meanwhile Rosenfield has paid himself millions of dollars through nonprofits, including one organization whose only grant, according to IRS records, is a grant to another one of his organizations

More recently, Consumer Watchdog pushed legislation that would regulate health insurance rates at the state level even though the federal government plans to do the same thing — with one critical difference. Federal law doesn’t pay “intervenors,” so Consumer Watchdog wrote a state law that promises juicy intervenor fees in California.

When lawmakers insisted on auditing their fees, Consumer Watchdog backed off and put the law on the ballot instead, betting that high health care costs will cause voters to overlook Consumer Watchdog’s self-interest. Curiously, Consumer Watchdog spelled out the rate regulatory process in excruciating detail, but it would adopt the intervenor program by statutory reference. If you know what Section 1861.10 of the California Insurance Code is, you’ll be an informed voter in 2014.

Their sneakiness is not surprising to those who have been asking Consumer Watchdog for years to reveal the source of their financial backing.

If voters have learned anything over the years, it’s to look under the skirts of those who write ballot measures and spend millions to pass them. Their motives are key to a realistic understanding of the likely consequences of a measure’s passage or defeat.

Read more: http://www.sfgate.com/opinion/openforum/article/Watchdog-or-special-interest-lapdog-4060346.php#ixzz2DMF5TqYj

The decision by former Los Angeles Mayor Richard Riordan today to end his effort to slash retirement security for public workers in Los Angeles is another example of how difficult it is to circumvent the bargaining table in an attempt to reduce pension costs.

"The plan proposed by Riordan to close the defined benefit pension system as a way of saving money was both simplistic and costly to taxpayers," said Tyler Izen, president of the Los Angeles Police Protective League, the leading opponent of the measure.

According to Izen, the proposed charter amendment would have dramatically increased the City's required payments to LA's three pension systems by millions of dollars. These increased costs, which would have been in addition to already scheduled contributions, would have taken effect as soon as the systems were closed to all future employees and would have continued at the increased level for a decade or more.

And that's the problem with most other attempts at the municipal level to roll back pensions. These agreements were made in good faith with public employees. Any attempt to "unwind" them means significant up front costs.

That's exactly what helped derail a statewide ballot measure on the issue. The nonpartisan Legislative Analyst criticized the proposal put forward by Republican operative Dan Pellisier last year for its heavy up-front costs to taxpayers, and said savings wouldn't result for years.

Labor also was quick to point out who was bankrolling the pension "reform" efforts in LA -- billionaires like Riordan. That also made it a tough sell as well.

Let's hope the billionaires sniffing around for a 2014 ballot measure on pensions take notice of what happened to Riordan's proposal in LA.

It looks like former LA Mayor Richard Riordan's plan to slash the retirement security of that city's public employees is imploding.

 Riordan has finally acknowledged that the pension initiative that he’s circulating for signatures was thrown together without any financial analysis behind it. To be blunt, Riordan has come clean that his claims of savings and plan costs from his initiative are made up and don’t have a shred of actuarial support.

In a Los Angeles Daily News story, Riordan admitted that he has not conducted any independent actuarial study to support his wild claims of bringing cost savings to the City.

“Riordan has rushed out an initiative with claims that he now admits are unsupported by any actuarial analysis. Every credible businessman would demand to see a thorough financial analysis before investing in any business opportunity, and would never make a major purchase based on solely on provocative Powerpoint slides and overstated claims without some financial data to back it up. Yet, Riordan has insulted voters of the City of Los Angeles by paying to put an initiative on the ballot that lacks even a rudimentary actuarial analysis to support the claims he has put forward in both public statements and the initiative preamble,” said Tyler Izen, president of the Los Angeles Police Protective League (LAPPL).

“Last week, while flip-flopping on his promise to debate the LAPPL on the merits of his scheme, Riordan said, ‘Let’s not put the cart before the horse.’ How ironic, now that he has been caught putting the cart before the horse, Riordan is scrambling to buy an actuarial analysis that he can point to in support of his claims. That slipshod and reckless approach should be rejected. Thoughtful analysis and real solutions are needed to address pension issues – not sound bite clips and Charter changes that are poorly thought-out and extremely costly,” said Izen.

Texas, New Hampshire, North Dakota, Minnesota, Kansas, New Mexico, Rhode Island, Missouri, Wyoming and New York City have considered and rejected the same type of proposal offered by Riordan. The common reason for rejection was that it was too costly to close the pension system to new employees and switch to a defined contribution system.

Riordan told the Daily News, “I didn’t feel we needed one (a study) because we were basing our proposal on existing city studies.” The Riordan scheme ignores all of these published studies, as well as the one done in 2005 for the City of Los Angeles showing the immediate and significant costs of closing the defined benefit plan to new hires and implementing a defined contribution pension proposal in its place for the new hires is higher than continuing to make the defined benefit plan open to new employees.

“Also troubling is that the Business Leadership of Los Angeles Chamber of Commerce, of which the LAPPL is a member, voted to support the Riordan scheme without doing any independent due diligence to verify Riordan’s claims. We hope that the business community hasn’t decided to support a pension plan of such great impact based on unsubstantiated rhetoric by the Riordan camp,” concluded Izen.