Thursday, July 31, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Ignored issues undercut Legislature’s better image

walters column sig

By
From page A11 | June 18, 2014 |

Approval ratings of the California Legislature, as measured in periodic polling, were in the teens a few years ago but have since improved.

A recent poll by the Public Policy Institute of California says that 40 percent of all adults – but just 29 percent of likely voters – like the Legislature’s performance.

A couple of balanced budgets probably account for the Legislature’s better public standing. However, the next time you hear someone crow about what a bang-up job the Legislature is doing, consider these glaring shortcomings:

1. The state’s Unemployment Insurance Fund was weakened in the past decade when the Legislature sharply increased benefits without raising revenues to pay for them. So when recession hit, and more than a million jobs vanished, the UIF took a beating and the state began borrowing from the federal government, eventually running up a $10 billion tab.

Many other states also borrowed, but according to a recent report from the Pew Charitable Trusts, most raised payroll taxes and/or reformed benefits to clear their debts and rebuild reserves.

Gov. Jerry Brown has sought action, but the Legislature has ignored him. Meanwhile, the state is paying hefty interest charges on the debt and the feds have raised payroll taxes on employers to nibble away at the principal.

2. The Legislature has ignored another, even larger hole in the State Teachers Retirement System.

It has a $70 billion-plus unfunded liability that grows by about $20 million a day and says it needs $4.5 billion more each year from someone to restore solvency.

As Legislative Analyst Mac Taylor points out, the STRS deficit is just a third of $200 billion in mounting debts that are being ignored, such as $60 billion-plus in unfunded state retiree health care costs.

Brown is now floating a plan to make STRS solvent, but it would take a big bite out of schools’ financing down the road, school officials don’t like it, and its chances are mediocre at best.

3. The federal government has exempted underwater mortgage balances that are written off by lenders from income taxes, and the state did it for one year, 2012.

However, legislation to extend the tax break became entangled in a political stalemate over another issue, and many Californians who had received mortgage relief were hit with big state tax bills.

A bill to belatedly erase those bills for 2013 seems to be moving after a months-long delay, but even if it makes it into law, it would compel affected taxpayers to file amended returns and seek refunds.

This is an issue of equity and sympathy for Californians who face tough times that could – and should – have been resolved months ago, but legislators stiffed them as they pursued other trivial business.

That folks, has been your Legislature in action – or, more accurately, inaction.

Dan Walters is a columnist for the Sacramento Bee. Reach him as dwalters@sacbee.com.

LEAVE A COMMENT

Discussion | 2 comments

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  • rlw895June 18, 2014 - 6:21 am

    The answer is for the legislature to do what the governor wants. After getting the special tax passed, he's entitled to that for a while.

    Reply | Report abusive comment
  • HuckleberryJune 18, 2014 - 1:06 pm

    Brown proposed the tax and the Californias passed it and is paying for it so this entitles Brown. This is what you got out of this article. We are horribly in debt and Browns answer is the bullet train. Great.

    Reply | Report abusive comment
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