The Disaster Known as the California State Budget

by Maggie Wells on 21 May 2009 43 comments

On May 19th, Californians pretty much rejected all the budget ideas coming from our governor and the capital city of Sacramento. I'm sure he's exasperated as we all are. The only proposition that passed was one to make sure no bonuses were distributed to lawmakers during budget crisises. Go figure. Arnold has indicated he's open to ideas. As a teacher and parent in a rural community I've taken the opportunity to look around my county in the last few days since the election. Here's some ideas for Arnold from me. What are your ideas to help solve California's crisis?

I live in that beautiful golden state and three hours from the capital of Sacramento---otherwise known as the place where nothing can quite get done. Here in California we get an onslaught of mail and TV ads telling us how detrimental any cut would be to our state budget and how the state government and Schwartzenegger are out to get us. You know what? Baloney. So Arnold, if you read Wisebread here are some of my suggestions for budget trimming in California based on my own experiences with some of these programs and institutions.

1) Don’t feel guilty about cutting First Five. Don’t get me wrong it’s a lovely idea to employ various people around the state to ‘work with’ parents to teach them to read to their kids and send them to preschool. But in my county? First Five had a better office than I have in a brand new building with two staffers! They’d come around to our tiny programs that served a couple to five kids tops at a time. Most of the kids that wind up using these programs have parents that care in the first place. The objective should be to help kids whose parents are not giving them opportunities. But it’s impossible to reach those kids because the parents impede the process. So essentially First Five, while well meaning preaches to the choir. Cut it. Go ahead.

2) After school programs. In urban areas it makes sense to have these. But our tiny counties pretty much waste this money. Students sign in that they were there and then leave. My business partners two kids are in the local program in our town. That’s what they do. I checked it out across the county and that’s pretty much what happens. Students sign in, get a snack, leave. Divert the money to large urban areas that need it. Forget about us rural areas. Our kids are outside playing anyway.

3) Take away the tax credit for having kids if you have more than two kids (zero population growth).

4) I live in a county that has 20% unemployment and multigenerational welfare recipients. I know most of this is federal , but do what you can.

5) Student loans and grants. Come down hard on community college students. Each semester I have about 1/3 of my students in any given class disappear after the second disbursement of federal and state aid. Pay instead directly for their books and do it the first week of school. Don’t let them take out $10,000 for community college for a year. You don’t have power over the federal grants too but you do have control over the Cal Grants.

6) Release all prisoners convicted of marijuana related crimes as long as they aren’t violent crimes and let those people go back to their wheeling and dealing which stimulates the northern California economy.

7) Start working on a Proposition to abolish the Proposition process that takes up countless tax dollars and empower those elected to office in California to actually do their jobs. I’ll be the first to sign this to get it on the ballot.

8) Repeal Prop 8 since it’s not lawful to vote to take away people’s rights. And enjoy the stimulated economy that arises from all the weddings!

9) Take state employees to a voluntary 32 hour work week. Then moms and dads might have time to spend with their kids instead of sending them off to the after school programs where they are signing in and leaving anyway. Parents having that built in time off will be less likely to feign sickness to get errands done.

10) California public schools: look at the models of Japanese and Catholic schools. In Japan students clean their own schools and don’t tend to be as slovenly chiefly because they are the ones on cleaning detail. In many bare bones parochial schools the administrative duties are a shared task among faculty. This could make a lot of sense. And I know, you have to deal with the teachers union but common sense is on your side.

11) Forest management. Let's get back to traditional ecology and traditional ways to manage the forest. If we had some selective burning and cutting we might just avoid those crazy summer wildfires that take an enormous amount of resources we just don't have anymore.

Okay California and national readers...what can we do to save California from itself? If you were in a room with Arnold where would you tell him to cut? Where would you tell him to raise revenues from?

 

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Guest's picture
Bryan

I don't know the cost of administering a tax, but a 1-cent tax on hamburgers would solve part of the problem. Feel free to tear apart that idea, but it is an out of the box suggestion--something we need to do. I know Californians, including myself, do not want to see more taxes, but small increments here and there will help our budget.

Legalizing marijuana has huge implications, especially during hard economic times, but the money raised from this cash crop will also help with our budgetary problems.

Guest's picture
arvin

most of these sound good to me, as a CA resident. Definitely a plus on repealing prop 8... gay people, having fewer kids than heterosexual couples, traditionally have a lot more spending money, pay more taxes, and in general require less assistance from the government. Let's give them all the incentive needed to keep them happy in our state.

Guest's picture
Olivia

Well, I am not from California but I have to disagree with some of your suggestions. After school programs should not be cut. Maybe they are not being used effectively in your area, but many areas do use them effectively. If the mentors and supervisors of these programs took some responsibility, they would be quite effective. Also, coming from a rural area myself, I can tell you that those are the LAST places to cut programs from. Kids out in rural areas do not have much to do to begin with. They need programs like these.

Secondly, why on earth would we discourage people from having kids? Kids are a wonderful thing. They are also a huge responsibility. People should not be punished for having more than two kids. Families ought to be encouraged, not frowned upon.

Finally, I sort of disagree with your point about grants. While I do think that the process can be modified, I think more financial aid should be encouraged.

I do agree with you about Prop 8,though. I never did agree with that one.

Guest's picture
Rick

I am from Utah. The state constitution mandates a balanced budget every year. This is something that Californians might consider for the future. Utah also has a rainy day fund which is being held in reserve for next year if the recession continues.

One way Utah makes cuts is to order every agency to take say a 15% reduction. And yes, state workers get laid off. Most years cuts are not needed because budgeting is very conservative and adjustments are made mid year if necessary.

It seems that some of California's laws are getting in the way of correct budgeting practices.

As for children I have five who are all paying taxes into the Utah economy except one who is performing service in Mongolia. The grand secret is that children create prosperity. Societies that cease to produce children (or greatly curtail their births) eventually shrivel and die.

As for your list I think it was rather good, except that I hope the judges recognize the will of the people in regards to Proposition 8.

Guest's picture

>>>..."The grand secret is that children create prosperity. Societies that cease to produce children (or greatly curtail their births) eventually shrivel and die..."

Well said.

Guest's picture
Guest

This is a typical NoCal attitude. The other half of this state wants nothing to do with you people.

Maggie Wells's picture

FYI--From Los Angeles. But what's a norcal attitude?

Margaret Garcia-Couoh

Guest's picture
Guest

The Northern /Southern California split sounds very familiar, as I am from New York... born near Buffalo, have lived in & around NYC for 10+ yrs (currently 15 years in Finger Lakes), and the difference in beliefs, attitudes & opinions of how much government we should have in our lives is amazing - and from what I've seen, the North Country (Adirondacks) is an even further split.

I honestly believe it would do the individual states good if they were able to divide cleanly by belief systems... i.e. North & South California, East & West Dakotas (instead of bifurcated North & South), and New York & Upstate (Adirondack? Lakeland? Ontario USA?).

"Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one."

"We have it in our power to begin the world over again."
-Thomas Paine (both)

The first quote, second clause, is our current state of affairs (and has been for 20 years)... The second - well, it's obvious.

Guest's picture
Edith

I'm from SoCal and I don't see "typical NoCal attitude". Your suggestions are good, *especially* the one about limiting deductions for children. Children go to school so cost taxpayers money. And if they have health/mental issues, they cost us even more. And people who have more than two should be required to pay HIGHER taxes.

Here are my suggestions:

Get rid of the supermajority requirement to pass a budget. Make it 55% if you don't like having a simple majority.

Modify Prop 13. It's ridiculous that commercial real estate falls under Prop 13.

Get rid of term limits. If the politicians are that bad,vote 'em out of office.

Modify the initiative process. No bond issues should be allowed on the ballot. If something is needed, lobby your pol to put in the state budget.

Guest's picture
JerryB

My solution is to split the state in two. Say somewhere just South of Visalia.

Guest's picture
Glen

Suggestion #1 was Proposition 1D on the ballot. From the information guide: "Revenues generated by the First 5 tax are deposited into the California Children and Families Trust Fund... Thus, none of these funds are subject to appropriation by the Legislature."

This is why the election was held. The governator and the legislature can't move funds from many proposition acts without the voters approving it. They also can't change the state constitution with out voters approving it (this includes changing the proposition process).

So please read your voters guide and understand how our crazy government works before complaining.

Maggie Wells's picture

Does not eliminate the program completely.

Margaret Garcia-Couoh

Linsey Knerl's picture

Margaret,

Obviously, I fall into the dreaded (or as I like to call it, "blessed") group of people who have more than 2 kids (I have four.)  Curious as to your #3.  When you say "zero population growth" are you referring to state population, national, or global?  While I don't live in CA (so I can't speak to many points you make), I am interested any objection to family tax programs and incentives that take place on a national level.  Is there a child tax benefit that specifically costs Californians separate from the Federal? How much money does this make up? When you say "take away" the benefit, are you referring to not granting any benefits above 2 children, or are you suggesting that we take it away completely from anyone who has more than 2 kids? Not trying to be combative, I just knew that you were trying to make a point and wanted to be sure I was clear about your message.

Edith,

As a homeschooler, I felt that I should respond.

California has over 166,000 homeschooled children (and these are just the documented cases).  These children represent families who pay taxes to the state of California, but often do not take advantage of many of the public education programs.  They also represent famlies who often choose to have larger families (the avg number of kids for a homeschooling family is 3.)  What you are seeing from them would be a net gain to the state of California's educational system (putting money in, but not taking their entitled amount out).  While numbers are debateable, it's reported that it costs an average of approx $11,000 to educate a student per year in California.  Take that times 166,000 and you have a whole lot of education you DON'T have to pay for.  With homeschooling growing in popularity, I'm not sure you want to punish these larger families with higher taxes.  They'd most likely just move to more family-friendly states and support those states with their tax dollars.  Remember, educational dollars, in some cases, move with the child. Those states without penalities for growing families would glady accept them and their tax money. 

Interesting discussion.  I hope that CA gets what they need to straighten things out.  I have many loved ones there who are concerned, and I wish the best for them and their families (no matter how large or small they may be.)

Linsey Knerl

Maggie Wells's picture

It's not that you would pay more but you wouldn't receive the tax credit and childcare credit passed two. So you could take it for the first two. I would personally like the tax credit incentive to not be there because we do not need to be encouraging population above replacement level in my opinion. We live in a drought state with finite water supply. The population of our state is of course way more than Nebraska---and we are in the west and mostly desert (though people seem to think water will just appear for all these people).

In California the argument of homeschooling (I send my kids to private school) as a way not to be part of the system economically doesn't hold true because our homeschoolers are entitled to books and materials from the state--and are eligible for community college at a free tuition rate in their teen years (in fact in our area the majority of homeschoolers start community college around 15 and graduate from high school with an AA at the same time).

 

But keep the ideas flowing.....we are a state in crisis and about 5 counties in California (including mine) are now at a 20% unemployment level.

Margaret Garcia-Couoh

Linsey Knerl's picture

I appreciate you answering my questions, Margaret.  I'm sure it's obvious that we are from opposite ends of the spectrum on many issues (as I'm sure many Californians are, as well.)  While I still contend that  homeschooling can be more affordable as an educational option (even with books, supplies, and the college courses you mentioned added in), I'm also glad to see that CA is giving some concessions to that demographic.

Since many of your posts deal directly with personal liberties and freedoms, I'm sure you can understand how it may not be taken well by many when you start to mention "population" issues. Again, I appreciate the dialogue.  Wise Bread writers are perhaps one of the most pointedly diverse group of bloggers -- the fact that we can keep it together in spite of our differences is what I love most about writing here.  :)

Linsey Knerl

Maggie Wells's picture

While I am indeed a native Californian, I grew up as an Army brat along the east coast, south, and Europe. I an not insensitive to other regions having other issues to deal with that don't match our own.  Granted each of our regions have issues that pertain to the region of the country we live in----perhaps the biggest issue in the western states will always be water and population. 

It's no secret that I have children, right Lindsey? As we both write for ParentingSquad as well. And if people can afford more children and think their region can handle it , then blessed be.

But I spend a good deal of my day with 18-21 year olds with three-four kids pretending to go back to school to collect checks with no intention of graduating or going to class for that matter. I've had students who sign up, get the check, disappear until a week before the next check is to appear. In the parlance of northern California that's hella wasteful. We lock up marijuana smokers up here and leave the meth dealer next door alone. All that is wasteful and if we want to get serious about the budget we need to think about these issues a little more.

The elephant in the room of course is Prop 13.

And Lindsey---if I hadn't had a wonderful private school open up a few miles away, I'd be homeschooling too.

 

 

 

Margaret Garcia-Couoh

Guest's picture
Chris

California is a perfect example of what liberalism will do. The government tries to give everything to everyone and eventually you just run out of money. Liberalism has obviously failed in that state. I do not see why anyone would want to live there.

I'm not sure what "right" you are referring to with Prop 8. Nobody has the right to marry someone of the same sex. I don't and you don't either. So there was no "right" to begin with. This was all just gay people wanting to get a new "right" and now crying inequality because they didn't get it. They have the same rights as I do - to marry someone of the opposite sex. If they are gay, fine. I don't have a problem with that, but marriage is between a man and a woman.

Guest's picture
Muaadib

I agree with you on the whole downfall caused by liberalism thing. I'm not sure marriage is a "right" though. As far as I'm concerned the best way to solve the Prop 8 issue is to get the government out of marriage completely. No tax breaks no nothing for marriage. Marriage was and always should be a religious issue not a governmental issue.

Although I believe this nation was mostly founded on Christian religious principles and the majority (including myself) still believe in these, I would like to keep or instigate a separation of religion and government. My reason being a little selfish, that I would not enjoy a religion other than my own gaining power in government and then being able to dictate their beliefs to the people.

As far as the rest of the ideas given in this blog, they are good ideas. Number 6 maybe not so much, in that they have done the crime so do the time. I'm for the legalization of marijuana though. It just makes sense seeing it's basically like alcohol and tobacco anyways and if legalized then taxes can be claimed on the exchange of it.

Guest's picture
arvin

I agree with most of what this poster has to say as well, especially about how government should just stay out of marriage altogether. That's a hard lobby to get across because people just HATE losing something that, as has become extremely clear in these recent debates, they shouldn't have had to begin with (their religious belief of marriage explicitly recognized and supported by the law).

Unless you don't believe in religious freedom for all, of course, at which point you might be in the wrong country altogether.

I say if gay marriage opponents insist that civil unions afford gay people exactly the same benefits as marriage, then the government should bring everyone down to civil union status for their tax breaks and whatnot, and let your own religious affiliation (or none) recognize you as being married.

Guest's picture
Steve

I agree with your ideas. Liberal ideas of entitlement are bankrupting our state and country. The whole idea of taking money from the "rich" and giving to the poor has a fundamental problem. Eventually, you run out of "rich" people to take money from.

As for prop 8, you took the words right out of my mouth. Where do these people come up with the crazy idea that they are being descriminated against? They have exactly the same rights as everone else. Everyone has the right to marry a person of the opposite sex (excluding certain family members). If laws were to be changed allow marriage between anyone who is in love, are we next going to see brothers and sisters, fathers and daughters, or maybe even fathers and sons demanding the right to marry?

As for balancing the budget, why is raising taxes always the first thing that our government wants to do? Cutting spending is the answer. And why is healthcare and education always the first areas targeted to cut? These are the last areas that should be touched. How about cutting money spent on rediculous grants. Stuff like researching the mating habits of snails, and multiple other useless studies going on.

As for raising funds, do not increase taxes on law abiding citizens. How about generating funds by enforcing the laws that have recently been put on the books. A significant amount of money could be raised by enforcing laws that pertain to automobile use. Millions could be generated by enforcing cell phone laws alone, not to mention headlights on when wipers are on full, and seat belt laws. Why put these laws on the books if they are not going to enforce them? In the past year, I have seen thousands of people driving while talking or texting on the phone. Yet, only once have I seen someone pulled over for the same. IS THIS STUPID OR WHAT? Either enforce the laws or do away with them.

Guest's picture
Meg

I just want to comment about the tax credit issue. Taking away a tax credit is not the same as "raising taxes." Tax credits are just a method of handing out money - they are given to you regardless of whether you work or pay any taxes at all.

So California residents are PAID by the state to have kids - kids the state can't afford to educate or provide health care for or feed, in the case of poor families on public assistance.

That said, I'm not sure repealing the tax credit would actually impact people's behavior and result in less procreation - I don't think many people take the tax code into consideration when planning families (or failing to plan). The child tax credit is simply a form of public welfare - it's meant to help people who have kids make ends meet.

Guest's picture
Glen

Margaret:

The voters would have to decide to eliminate the program put into place by the proposition. If they aren't even willing to move surplus funds (which the First 5 program currently has) to reduce the budget deficit, why would the voters be willing to eliminate the program?

I would whole-heartedly support #7. But I don't think it's going to happen. People like being able to "stick it to the government", which explains Prop 1F (punish the legislature by withholding their raises) passing, even though it doesn't do anything to help the budget crisis.

It's going to be painful over the next few years, since I can't see how they're going to fix this without more tax increases and making serious cuts to our sacred cows (education, health care, and prisons).

And just get the government out of the marriage business entirely. Leave marriage to the churches and let them decide who they want to marry.

Guest's picture
Kari

I think I would like to see more research behind your proposals besides looking around at a few people in your community to decide if certain programs work. Saying that a couple kids don't use the after school program appropriately does not convince me that the program should be dropped for the entire state of California.

Honestly, I am pretty sure that there is a lot more unneccessary stuff in the California budget than programs that help children. We are already drastically cutting the funding for public school - do we need to cut more programs for young kids as well? If the current programs aren't working, I'd rather find a way to make them work rather than just cut them.

Guest's picture
Brad

The key, and I realize is over simplified, is the State needs to stop spending money like a drunken sailor. If you look at their expenditures, they clearly do not represent what is necessary to run the state.

Pushing the pain down to the Counties and Cities is not going to help. They are hurting as much or more than the State and spreading the State pain is more than they will tolerate.

I've lived in NoCal in Lassen County and I currently live in SoCal and in both cases there is an increase feeling of entitlement and the State supports it. First things to cut are these entitlement programs so that the people who NEED the support get the support. Be it in medical, education, after school programs, or public safety.

Every expenditure needs to be looked at carefully, just like we do with our own checkbooks. The State needs to look hard at what services they must provide, and stop providing services that are not needed. Simple.

Federal, State, local governments and school boards should be held accountable for their overspending.

Write or call your representatives. Let them know.

Guest's picture
Lacey

I like your ideas. I'm not sure about the after-school programs and such, because I don't have experience with them here.

I love the removal of tax incentives after the first 2 kids - because California specifically is experiencing a huge population boom, even as we are running out of resources to support all these people. We shouldn't be encouraging MORE population. If you have the resources to raise more kids on your own, that's GREAT! (I'm not anti-family!) But don't expect the government to provide incentives for a population explosion we don't have the resources to support.

To expand on #6. It's beyond ridiculous to have marijuana users in jail. If not outright legalized (which I support), the harshest penalties for possession should be fines. Not jail. I would encourage fines, not jail, for ALL victimless crimes: illegal gambling, prostitution, panhandling, drunk in public, etc. We have way too many serious crime problems to be clogging up our legal system with this petty nonsense. The local jails seem to full to the brim with petty 'criminals' (many on public intox charges).

People who need unemployment or welfare benefits should be given the opportunity or 'strongly encouraged' to give something in exchange - receive and provide job training, or volunteer to complete government work that needs to be done. This could reduce the number of state employees on the payroll, because certain things could get done by unemployed volunteers.

Guest's picture
Guest

California has great scenery and wonderful climate, but as a political entity, I'm not sure it can be saved. For other states that still might avoid a California-style disaster, here's a thought:

Limit tax methods to exactly one. Make it one that everyone is obviously subject to, if not directly, then in a clear way. Examples would be sales taxes, value-added taxes or property taxes.

Granted, this will impact people who most of us would agree should not pay taxes, but no system is perfect.

The big advantage, though, is that this defeats the "divide and conquer" method that politicians use to jack up taxes by convincing most voters they will somehow be exempted. Aside from a few saints, all of us would love to have people we don't like, or people we don't approve of, pay taxes for services that benefit us. That old dictator wanna-be Huey Long put it well. "Don't tax me, don't tax thee, tax that feller behind the tree." The fact that this will lead to unsustainable spending which will sooner or later cause California-style problems is usually only recognized by Ph.D.s in Economics and others no one listens to.

It is only when we know that we (not someone else) will have to pay the bill for anything we want that there is any chance of spending discipline. Even that is sometimes not enough, but it's the only hope.

Once a majority of the population thinks it can get lots of government services and send the bill to a few suckers (whether they be "the rich" or smokers or business owners or hamburger eaters or whoever), the die is cast. Sooner rather than later, the system will crash. California went down this path earlier and faster than others, so I hope we'll learn from it, but I'm not holding my breath.

A lot of Lindsey's suggestions are very sensible and would make a great start, but there's absolutely no chance they could be enacted. Too bad. I was born in California and would have liked to retire to California, but that would be like buying a ticket on the Titanic after it hit the iceberg. All I can do now is hope that our current tendency to federalize every problem won't drag the rest of us down for mistakes we never made.

Guest's picture
Lucille

I pretty much agree with all of your suggestions. Something the state of CA needs to stop doing is harassing out of state people to try to get them to pay CA state taxes. I have not lived in CA for over 20 years and somehow the state of CA found me half way across the country and sent me a scary letter demanding I pay "taxes" I supposedly owe them for working in CA. I have not been there in 20 years and certainly have not done any work for anyone there. I happened to have hired a lawyer in CA to clear up an old disability case where the insurance company never paid me for a period of time a few years ago when I could not work. The only reason I hired a lawyer in CA was because they were experienced in forcing this insurance company to comply with their policies.

This lame attempt to shake down anyone for a few bucks really left a bad taste in my mouth about the state. It certainly made me wonder how much random harassment I would get if I moved back if they are this bad to non residents. How much money did they waste on this venture? They need to stop pointless wastes of money like the one I was caught up in.

Guest's picture
Guest

Thank you for being brave enough to bring up the "PROBLEM" of overpopulation. Being one of the more educated societies on this planet we need to face this issue since it is truly the root of all of our environmental problems.

I know a lot of people feel threatened by your suggestion to eliminate benefits for those having more than 2 children. My sister wants more than two and says that since I probably won't have any she will consider it a wash. In my opinion anyone having more than 2 children doesn't care enough to be a truly loving parent, outside of accidental pregnancies. I know some readers will take offense, but if you truly care than you care about the future your children will have, and by having more than two you are downgrading their future possibilities and opportunities.

Truth is found in action, and if you truly care then you will consider the future of your children and not just have more children for your own selfish emotional needs.

TAX all those that chose to live ignorantly by choice.

Guest's picture
Guest

Look at it this way - If your sister has more than two, there's at least a slightly bigger chance that one of those children will be tolerant enough of sour-puss misanthropes to be willing to visit you in the nursing home in your old age.

Guest's picture
Guest

I really think that all state workers from supervisors and up should take a 30% wage cut.
Has anyone looked at what they make??? Wages paid and perks are well above the 30% mark from private business and other states.
Yes this includes all those in Sacramento as well.
I see some commision had cut their wage but left (a perk) of $35,000 annually for living in place....cut that as well if we are serious about the budget mess.
Yes, I live in CA as well.

Guest's picture
Guest

CA you need to ck your facts. Studies have been done.
CA STATE employees are some of lowest paid public employees in US. However the clowns we elect are highest paid and they get prediem on top of it. 35,000per year.

Create a crisis and they get 170.00 for every day they stay in town.

If you fired every state employee in california you would not even slove 1/2 the 24 billion the state is in hole

Guest's picture
Shawn L

Cut government at the top. Arnold has tripled the size of his personal staff, and that trend has also happened all across Sacramento. After school programs, cut. The reading program you mentioned cut. Cut everything possible except direct funding to the schools. Americorp, cut all funding to that. Its a total waste of funding, both federal and State.

Cut administration at schools. California needs to cut all the bull*hit paper work that schools have to go through for funding. Stop with the special funding. Have a straight amount of cash, per student, per day instead of what we have now.

Stop prosecuting prostitution and marijuana. These are "morality" issues, not criminal. Nevada didn't explode when they legalized prostitution. Release everyone in prison for marijuana crimes.

Schools cant afford any more cuts.

Btw, Calgrants are awarded based on getting a high GPA at a college. You cant get one for just showing up half time. Student loans are through the federal government, not state. So has no impact at all on California.

Guest's picture
William

The tax-and-spend imbeciles who run Sacramento are not going to stop destroying California; they can't; it's part of their DNA.

All the suggestions in the world will be of no use to people determined to find a way to grow government. I'm a native Californian. Moving to another state is getting more appealing with each passing day.

Guest's picture
Yikes123

hi -

Glad to see someone else believes what I am beginning to conclude about First 5: that it is one big jobs program for the employees.

I think the state should just borrow the $2.4 billion they have sitting there by giving them CA bonds.

Guest's picture
Yikes123

Contra Costa’s First 5 Commission has blown nearly $2 MILLION of its pension assets?

From their 06/01/09 Agenda (on their website):

http://www.firstfivecc.org/index.php?page=commission-info

“Update on the pension UAAL

… staff have met with First 5’s actuarial consultant to review the results of a recent study estimating First 5’s assets within the CCCERA retirement fund. The study was commissioned in anticipation of considering whether First should move its retirement to CALPERS. The study found that, based on CCCERA’s standard calculations, First 5’s assets are calculated in the negative range. “

So, people, looking at Contra Costa’s latest audit report (07/08) to get a point of comparison, it shows that this First 5 Commission contributed, for the past three fiscal years, a total of $949,920 to its employee pension plan, with an annual growth rate of 18%.

If you go back for another 4 years to probably when this First 5 started to have some number of staff, and assume just a 15% growth in the contribution over the 4 years, the expected total of contributions for FY 00/01 through FY 07/08 would be about $1,775,000 in total pension contributions.

So, here are my questions:

1. WHERE exactly did nearly $2 MILLION dollars go?

IMO, even if the stock market was down 50%, then you could expect that pension value to maybe be about $1 million, which is still ridiculous, but it being in negative territory reflects a level of investing ineptitude. Who should be held responsible for that? Well, it should be the Finance Committee.

Note that the agency will have to make up the $1.7 million first just to get back to ZERO, and then come up with a lot more to cover its legal obligation. So the real need to cover their future obligations is probably more like $3 - 4 million just to get to a point of stability.

Do they intend to take this money from the funds directed to kids? If so, that bothers me a lot and shouldn’t that bother those who believe that First 5’s are doing such great work, like Marie Lakin at the Making Waves blog at Ventura Star? Because this First 5 will have to take the money from somewhere and it does not grow on trees. So, IMO, it would not be the taxpayers taking money away from First 5’s, it would be inept management and/or investors; how is that more ok? To me it is not.

2. Will Contra Costa’s next audit report for FY 08/09 actually print that they are in negative pension value land? Are they going to try to fudge the study’s assumptions so that it does not look so bad by the time the fiscal year ends?

IMO, even if it were just $1 million (when it’s clear it’s more like $3 million minimum), that amount is easily material and significant from an accounting perspective. As the agenda also says, their 09/10 budget is about $17 million – so even just using the $1 million number shows the problem is greater than 5% of their budget - and in accounting circles - that means it is significant and/or material. It’s not probably really disputable, so I do not think it can be hidden by just showing the annual pension contribution expense – it’s really just too large and so I believe their auditor will make them disclose it.

Again, folks, IMO something’s wrong here; public documents clearly show it.

p.s. while I was digging, I happened to notice Note 9 of the audit, which stated that Contra Costa has a lease obligation of nearly $1 million. Okay, can someone please explain to me this size of lease? Maybe they should downsize and put some of that money in the pension. Should they have a pension? Well, I think that could be another post.

Guest's picture
Yikes123

Here is MORE documented First 5 data:

How African American children are underserved by First 5.

From Orange County’s CFCOC's Annual Report to the State Commission: 2007-2008 located at http://www.occhildrenandfamilies.org/Outcomes.aspx

In 07/08, of the 115,865 children for whom ethnicity breakouts were provided, only 1,066 were African Americans.

That is 0.92% or 92/100 of 1%.

From the Center for Demographic Research (vol 7, no 1 March 2002) using census data in its Orange County Profiles, African American children make up 1.8% of the children ages 0-17 in the OC. So one should expect that about 1.8% or at least 2,086 African American children should have been served.

Perhaps not as ridiculous as the others, but people, what we have here is a pattern:

Santa Barbara: 56 out of ~40,000+
Ventura (documented): 31 out of ~10,000+
Orange: 1066 out of ~115,000+

In total, of the approximately $55,000,000 received per year in Prop 10 funds in these three counties, of the 165,000 children, only 1,153 African American kids were served.

Though of course some programs cost more than others, for the sake of simple intuitive understanding, and ballpark speaking, about how much did they spend per child (including admin and evaluation costs)?

Prop 10 revenues / approx # kids served = estimated average cost per child served

Santa Barbara $ 5.7 million/40,000 ~$ 140 per child
Ventura $10.7 million/10,000 ~$1,000 per child
Orange $40.2 million/115,000 ~$ 350 per child

And so about how much went to serving African American kids?

Santa Barbara $ 140 per child x 56 = $ 7,840
Ventura $1,000 per child x 31 = $ 31,000
Orange $ 350 per child x 1066 = $373,100

In other words, only about $410,000 of about $55 million went to serving African American kids.

That is only 74/100 of 1% or 0.74% of the money.

THAT STINKS!

(Note that I know Orange actually spent about $9 million more by taking funds from their reserves, but this kept it simple, and actually the picture would be worse if I had included that money – i.e. it already massively stinks without my having to splice and dice further).

Guest's picture
Jordan

I say cut the wages of all major elected officials by 10% and let them lead by example. It's easy to cut social welfare programs and state parks and everything the lower half of the economic population benefit from and then drive home in a 2009 mercedes or lexus to a warm house.

I also think small one-cent taxes on soda and fast food is a great idea. Something has to change and its either lose funding that is geared toward helping or pay a little extra to keep jobs that help stimulate the economy.

I say we need as many jobs as possible

Maggie Wells's picture

Because I was once on a First Five contract im my county and despite all the work we put into trying to get books in the hands of little kids and playgroups where there were no preschool programs etc., it was impossible to reach those kids that needed it most. Partly this had to do with the apathy of the parents in the demographic we were trying to serve. My paycheck was tied to about 20 hours of paper work every two weeks. As you may infer---most of my wages went to paper work NOT anything having to do with children.

 

 

 

Margaret Garcia-Couoh

Guest's picture
Yikes123

I totally agree Maria -

The whole project seems to have problems and the more I look into it, the more appalled I am at how little results have been shown and how much money has gone to adults.

Also, in counties like Ventura, all that paper pushing you did appears to have resulted in little or no confidence in the "results"

I think this debate should not stop just because 1D did not pass

So, I am sure you may not agree with everything I post about First 5, but here are two links to other blogs where some interesting debate took place - some of it is lengthy:

http://blogs.venturacountystar.com/mlakin/archives/2009/04/prop-1d-the-d...

http://www.thesweetmelissa.com/sweet_melissa/2009/04/proposition-carves-...

Guest's picture
Yikes123

oops - I was thinking of the gal name Marie who has been defending First 5 and I glitched on your name - many apologies.

Guest's picture
Yikes123

* * * FIRST 5 NEWSFLASH * * *

SAN DIEGO COMMISSIONER gets caught self dealing and miraculously resigns:

http://www3.signonsandiego.com/stories/2009/jun/03/1n3first5234537-membe...

Guest's picture
Guest

Bravo!

Guest's picture
theo

The bond deals that Arnold made dunk California. I was born and raised in California. Everyone always says these famous words (What about Me) so California runs around trying to make everything okay for everyone. It is impossible even in a family to please everyone. No one wants to raise Taxes. Without taxes,no money. yes prop 13 should have been revised years ago, but noone moved on that one either. The Governor Spent more money, promise more than what He could or was capable of doing. Some folks in California elected a man who had no training in state Government. Yes he is likeable but he was not Capable.In real life noone yells cut that a wrap. When the housing market was getting out of hand no one at the Top level of our Government in California Shouted Fire, they just kept raking in the inflated revenue. This of course made their eyes dance with delight. Now that California has been beached,like a sick Whale, How is it that our Great Governor has no Ideas of how to politic his way out this one?. I think that some of the Ideas on here are great but lets look at this clear in order for California to pull it self up by its own booth strap. Our great leaders of the state must stop playing games, get real about a true workable budget. Make cuts that are real (they know where the waste is) starting with themselves. If programs are not working , cancel them. Letting prisoner out of Jail early, wrong move. first-Five, cancel it. What happen to the day when Parents cared and taught their own children at home. Things like reading, teaching them basic numbers, should be taught at home and also what happen to feeding your children at home, the free lunch ride is over lets face it. We can not help, mold , give everyone everything they want because they might yell discrimination. Yes we California are Liberals some that is/ but not when it comes to our monies. Califorina should not be split. One reason why.? Because the whole state an it people are in this mess together. One portion of the state is no better than the other. We stand together , we fight together.Whether you have 2 children or Five children it does not matter. We should be asking ourselves when did people lose pride in taking care of their own childern. The welfare system was always a reward system. It should have been Stop years ago. I guess our great leaders of Califonia was asleep at the wheel on that too. Most people who are given everything sooner or later feels like it is their right to have it. then when that happens the problems start.It is not just welfare, it a whole slew of things that need to be fix or cut. yes some people who real need these programs are the true one that are going to be hurt. Lets not talk of splitting Califorina. Let make sure whoever we put in office next time knows what a budget is and can say NO. Yes California is in a mess now but,This too will pass.whether you are a liberal or conservative. We all got to run down to the beach and help that beached whale back in the water and thrive.united we stand , divide we fall.