Inadequate support

The unanticipated struggle threw supporters of the bill, including Gov. Jerry Brown, onto the defensive, with lawmakers scrambling to appease holdouts without gutting their bill. “Senate Bill 32 seeks to ramp up the state’s emission reduction goals by cutting greenhouse gases to 40 percent below 1990 levels by 2030 and 80 percent below the 1990 mark by 2050,” the Sacramento Bee reported. A raft of amendments tightening legislative oversight over the mandate-enforcing Air Resources Board was granted by Sen. Fran Pavley, D-Agoura Hills, but recalcitrant Democrats still balked, either abstaining or voting against the bill “on a 25-33 vote, with 21 members abstaining, that featured no debate. ”

Pavley and company get another bite at the apple, however, teeing up some potentially marathon negotiations. But the bill’s showing augured trouble for SB350, the biggest piece of emissions legislation on offer, according to the San Francisco Chronicle. That bill “would set 2030 as the target for the state to cut petroleum use in half, boost energy efficiency in buildings by 50 percent and require the state to get half of its electricity from renewable sources,” the Chronicle noted.

Redoubled efforts

The divide has driven Brown, often poised between the party’s liberal wing and legislative Republicans, into a different negotiating mode. Along with Assembly Speaker Toni Atkins, D-San Diego, he huddled with Senate leader Kevin de Leon, D-Los Angeles, for over two hours, as the Los Angeles Times reported, declining to answer reporters’ questions on the way out of de Leon’s office.

Aside from the substantial practical effects of the bill, its Democratic supporters were poised to work overtime to secure its passage because of its outsized symbolic and political value. Gov. Brown has emerged as one of the world’s most vociferous advocates for using policy to curb carbon emissions; around the country, policymakers and observers have placed great weight on California’s ability to demonstrate a workable model for taking that kind of aggressive action.

As the Wall Street Journal observed, “California produces about 1.5 percent of the world’s greenhouse-gas emissions. But the state has long been a bellwether on environmental regulations, passing landmark laws that are copied by other states and become templates for federal environmental rules.” Leading Democrats have been well aware of the level of expectation set for the latest round of emission legislation.

“The rest of the world is watching very closely what is happening in California,” de León told the New York Times, “and I think so far they see a success story. Our economy has grown — we are adding jobs, and we are reducing our carbon emissions. Therefore it is absolutely crucial that this measure passes, because it will be a big blow to the rest of the states and the whole world if it doesn’t.”

But as the Times observed, those sentiments were not as broadly shared as he and Gov. Brown had hoped — especially within their own party. “The concerns have come not only from Republicans, but also from moderate Democrats who represent communities in central California,” the paper noted. “Many of these communities are struggling with high unemployment and slow economic growth.”

Ironic progress

Despite his last-minute scrambling, Brown has expressed confidence that California will continue to lead in accordance with his policies regardless of how the legislation fares. But that reflected the ironic way in which changing emissions standards already hardwired into law could give wary Democrats an out in voting against SB32 and SB350.

As Paul Rogers noted in the San Jose Mercury News, California will reach key environmental goals “even if it does nothing. That’s because of federal rules put into place in 2009 by President Barack Obama to double the gas mileage standards for new U.S. vehicles to 54.5 miles per gallon by 2025.”

What’s more, covering other ground within the scope of the new legislation could be achieved “simply by enforcing — and in some cases strengthening — existing laws passed over the last 15 years to boost electric cars, promote mass transit and reduce the amount of carbon in fuels, according to experts who have done the math,” Rogers argued.

Katy Grimes: A fourth California city is on the verge of bankruptcy. What a surprise. Yawn.

The news that Compton is about to file for federal bankruptcy protection is not surprising. But news that Santa Monica may also file, is.

Sadly, this is probably just the fourth in a long line of insolvent cities and municipalities preparing to file for bankruptcy.

Don’t say we didn’t warn you about the consequences of gross mismanagement, corruption, legacy building, criminal negligence, and incompetence of public officials.

While some in the media have been blaring the warning bells, most elected lawmakers have been practicing public denial and distancing themselves from culpability.

But heads will roll if pension checks bounce, or aren’t issued, or bond payments aren’t made.

Take Stockton… please.

Ed Mendel at Calpensions writes, “A Stockton bankruptcy proposal does not cut pensions, but the city wants to eliminate $197.5 million in pension bond payments over the next 25 years, a plan opposed by the bond insurer that would be stuck with the tab.

The bankruptcy proposal would end pension bond payments from the troubled city general fund, which pays for most programs and is deep in the red with a $26 million deficit that could balloon if employee lawsuits overturn emergency pay cuts.”

“Stockton issued $125 million worth of pension obligation bonds in 2007 to cover an ‘unfunded liability that was largely created by enhanced retirement benefits in the late 1990s and early 2000s,’” Mendel reported.

“The city proposal said $124 million remains to be paid. With interest, the city is scheduled to spend $239 million paying off the bonds by 2038, about 62.6 percent from the general fund and 17.4 percent from special funds.”

But the clincher is not just what Stockton pays now–“the annual city payment to the California Public Employees Retirement System, listed as $16.8 million, is expected to jump to $22.3 million next year and nearly double to $30.2 million in fiscal 2020-21.”

Read the entire story HERE — Mendel is the best when it comes to understanding pensions, and pension debt. As more California cities file for bankruptcy, it will be very interesting watching how they manage pension debt.