Daniel Parks / flickrMore than a month after Gov. Jerry Brown called for lawmakers to hold a “special session” on transportation funding, California still doesn’t have a plan for how to close its annual $5.7 billion shortfall for road, bridge and highway repairs.

More than a month after Gov. Jerry Brown called for lawmakers to hold a “special session” on transportation funding, California still doesn’t have a plan for how to close its annual $5.7 billion shortfall for road, bridge and highway repairs.

Brown said in his Inaugural Address in January that fixing the shortfall was a top priority in 2015. He referenced a $59 billion backlog in deferred maintenance, but that sum could balloon, transportation experts say, if bridge and road repair projects are neglected and require infrastructure replacement.

“All the data out there shows our roads are deteriorating, both at the state and local levels, at an alarming pace,” said Jim Earp, executive director of the California Alliance For Jobs. “If we don’t address it, the costs will skyrocket.”

Road reconstruction costs are tenfold higher than proper maintenance, added Earp, whose organization represents construction companies and unions.

While this debate is centered at the Capitol, its implications will be felt across the Golden State where motorists stand to pay a hefty price as roads get worse.

Driving on roads in need of repair costs California drivers $18.4 billion a year in extra vehicle repairs and operating costs, according to TRIP, a national nonprofit transportation research group based in Washington, D.C.

That amounts to an average of $762 per California motorist, and is hundreds of dollars more per year than motorists in Nevada, New York and Texas pay.

A report released by TRIP last week showed 15 metro areas in California rank among the nation’s worst for road pavement conditions. Those rough roads mean big bucks for drivers in San Francisco and Los Angeles, where the associated vehicle maintenance costs top $1,000 annually, according to the report.

Tax increases

This year, Democratic lawmakers have submitted a range of ideas to plug the funding gap, and ultimately start fixing more roads.

They include a $10 billion plan by Assembly Speaker Toni Atkins, D-San Diego, to charge all drivers a $52 annual road user fee.

Her five-year plan would also accelerate loan repayments from the state’s general fund that are owed to transportation accounts. Additionally, it would free up $1 billion per year by returning truck weight fees to transportation funds instead of using them to repay debt owed by state government.

Also in the mix is San Jose Democratic Sen. Jim Beall’s SB16, which would raise the gas tax by 10 cents per gallon, bump up the vehicle registration fee by $35 annually while also charging a new $100 annual fee for zero-emission vehicles.

The 10-cent increase would leave California with the highest gas tax in the nation.

Republicans, meanwhile, say they have no appetite for tax hikes and want to use existing funds to pay for the state’s crumbling road infrastructure.

Sen. Jeff Stone, R-Riverside, lashed out at California officials for their years of diverting money from transportation repairs after an Interstate 10 bridge collapsed earlier this month during a severe storm east of Coachella.

Built in 1967, the bridge was listed as “functionally obsolete” on the 2014 National Bridge Inventory, meaning it was no longer considered adequate for the high volume of traffic it handled. The listing did not mean the bridge was inherently unsafe, but instead was built to outdated capacity standards.

“It was one of hundreds of bridges across our state in need of replacement or repair,” Stone said in a press release. “Maintenance and repairs of California’s bridges and highways have been neglected far too long. Millions of taxpayer dollars, approved by voters to build and maintain our bridges and highways, have been siphoned away to programs that have nothing to do with infrastructure, transportation or highway safety.”

Out the door without a plan

Lawmakers held two special sessions in early July, then left the Capitol for a month-long recess a week later without a firm plan for moving forward.

Some, including Earp, said progress was made.

“I think there’s some good karma going on,” Earp said. “There’s a much greater chance that something will get done than we’ve had in quite a while. There’s a lot of traction on it.”

Still, getting a two-thirds vote in the Legislature for any new taxes will be a “heavy lift,” Earp noted.

Republicans in the Assembly are frustrated that Democrats waited until this summer to make transportation funding a priority rather than dealing with it in the spring budget process given the state’s higher revenue totals.

Some are less-than-optimistic that a deal will be reached, unless key pieces of their plans are incorporated, a GOP spokeswoman said.

“We’re stuck in proverbial political traffic,” Amanda Fulkerson, spokeswoman for the Assembly Republican Caucus, said.
Republicans in the Assembly proposed the following to raise $6.6 billion for road repairs:

• Dedicate 40 percent of the funds in California’s cap-and-trade program, generating $1 billion annually
• Use existing funds from vehicle weight fees, for $1 billion annually
• Invest half the governor’s strategic growth fund into shovel-ready road projects, for $200 million annually
• Eliminate redundancies at Caltrans, saving $500 million annually
• Eliminate 25 percent of the state’s long-term unfilled employee positions, saving $685 million annually
• Make a $1 billion commitment in the state general fund for transportation

The road ahead

The next round of special session meetings won’t start until lawmakers return to the Capitol Aug. 17, at the earliest.

From the initial sessions, it appears lawmakers want “a portfolio approach” taking the best pieces from existing plans rather than looking for just one solution, said Jay Day, chief of staff for Assemblyman Jim Frazier, D-Oakley. Frazier is chair of the assembly’s special session panel tasked with addressing the problem.

Day added that ultimately lawmakers need to fashion a bill that’s to the liking of Gov. Jerry Brown, who has said he doesn’t favor another transportation bond.

They won’t have much time. The deadline for the Legislature to pass bills is Sept. 11.

“Everything’s on the table,” Day said of funding options. “We’re in dire need. We have a nearly $6 billion shortfall every year.”

Contact reporter Chris Nichols at chris@calwatchdog.com or on Twitter @ChrisTheJourno

So which sort of institution is particularly vulnerable? One would think the state of California because of its long history of incompetence in upgrading and installing computer systems.

This is from a 2010 Sac Bee story about the state being unable to adjust paychecks to reflect fewer hours paid during a furlough:

“California’s payroll computer system is so old that it relies on programming language, Common Business Oriented Language, or COBOL, that was introduced in the late 1950s, popularized in the 1960s and 1970s, and is no longer routinely taught to programmers.

“’When I was studying computer science in India, in 1973, none of us wanted to study because it was considered old-fashioned back then,’” said Prem Devanbu, computer science professor at the University of California, Davis.

State agency overwhelmed by computer chores

This is from a Governing magazine story the same year:

Dale Jablonsky, who until August was CIO of the California Employment Development Department (EDD), knows the situation all too well. The EDD runs California’s unemployment insurance program, where caseloads skyrocketed during the current recession. As the economic downturn deepened, Congress repeatedly extended the length of time individuals could draw unemployment benefits.

“In all, federal lawmakers approved seven benefit extensions since the recession began — and each was a nightmare for the EDD. Every extension requires changes to several hundred interconnected computer programs in the EDD’s eligibility system. Those programs are written in common business oriented language (COBOL), an ancient programming language, and modifications must be hand-performed by increasingly rare — and expensive — COBOL experts.

“’It typically takes two to three weeks to implement changes, depending on how complex the federal legislation is,’ Jablonsky says. ‘Sometimes the legislation is so complex it takes five to six weeks to implement.’ Indeed, implementing one particularly complex piece of legislation in late 2009 required changes to 650 programs in the EDD system. The resulting delay in mailing unemployment checks made front-page news throughout the state … .”

COBOL not hospitable to hackers

Oddly enough, however, using a computer language invented in 1959 actually is a deterrent to hackers. Computer World explained why in 2000. COBOL is a …

… simple language that’s so easy to read, it’s impossible to hide malicious programs. A language for mainframe data locked securely behind tried-and-tested access controls like the Resource Access Control Facility (RACF), Top Secret and ACF2…. Checking code for malicious programs is easy in COBOL.

COBOL can be part of a larger security problem when programmers try to connect it with newer software that can be accessed over the Internet. But by itself, its backwardness is an asset.

So now the government in the state that’s home to Silicon Valley and the birth of the information technology revolution has a reason to remain trapped in the mid-20th century on its IT.

Merry Christmas!

First came Los Angeles Superior Court Judge Rolf True’s ruling that teacher tenure laws are unconstitutional and “shock the conscience” because they protect incompetent teachers and funnel them to the schools in poor minority communities that most need the best teachers.

Now U.S. Bankruptcy Judge Christopher Klein has struck another blow for sanity by rejecting CalPERS’ argument that the city of Stockton can’t cut the pensions of city employees and retirees as it tries to get out of bankruptcy. CalPERS’ claim that state laws somehow trump federal laws has always seemed strange. Klein’s comments Wednesday certainly reflected that view. This is from Ed Mendel at calpensions.com:

Part of his analysis yesterday that CalPERS pensions are not state “governmental or political powers” protected under federal bankruptcy law is that while state workers are in CalPERS by statute, cities choose to join CalPERS.

Klein said California cities have the option of forming their own pension systems, joining a county pension system, hiring a private pension provider or withdrawing from CalPERS, if they can afford to do so.

He concluded that benefits not prescribed by state law are not “governmental or political” powers protected by the federal bankruptcy law, but instead are unprotected “business powers.”

Klein said a CalPERS-sponsored state law preventing cities from rejecting their CalPERS contracts in bankruptcy is “flat-out invalid” under the constitutional “supremacy clause” giving federal law priority over state law.

The judge said another CalPERS-sponsored state law that gives CalPERS a lien on all city assets, except wages, when they declare insolvency is an invalid attempt by the state Legislature to “edit” the federal bankruptcy law.

Judge: “Why should I take [CalPERS claim] seriously?

The New York Times treated this ruling as a major national story and made a point that California coverage did not: “Judge Klein’s ruling went beyond anything that Stockton was seeking.” More from the NYT:

Calpers had argued that if Stockton stopped making payments and dropped out of the state pension system, the lien would let it claim $1.6 billion of its assets. But Judge Klein said those statutory powers were suspended once a California city received federal bankruptcy protection.

“Why should I take that lien seriously?” he asked a lawyer for Calpers, Michael Gearin. …

“The bankruptcy code provides that the lien can be avoided and be treated as an unsecured claim,” Judge Klein said.

Judge Klein also said that Stockton had many options other than Calpers for retirement benefits: a private provider, like an insurance company; a multiemployer pension plan affiliated with a union; one of California’s county-run pension plans; or it could even offer no pensions at all.

“There are lots of permutations and combinations out there with respect to the art of the possible,” he said, adding that nothing in the law required any city to give its business to Calpers. “The whole world is out there.”

Conservatives, libertarians and believers in small government have long viewed the courts with suspicion. That’s especially so in California, where conservative ballot propositions have often been scrapped or enfeebled by courts but liberal ballot measures rarely seem to get picked apart.

But Judge Treu and Judge Klein go against that narrative — and offer hope that a new balance of power is coming in a state dominated for too long by public employee unions.

]]> https://calwatchdog.com/2014/10/02/stockton-ruling-like-vergara-ruling-shakes-ca-status-quo/feed/ 20 68689 https://calwatchdog.com/2014/02/27/death-taxes-and-state-incompetence-with-computer-projects/ https://calwatchdog.com/2014/02/27/death-taxes-and-state-incompetence-with-computer-projects/#comments Thu, 27 Feb 2014 19:00:49 +0000 http://calwatchdog.com/?p=59978 There are fewer sure things in life than the likelihood the California state government will screw up a computer project. We may be home to Silicon Valley and the greatest concentration of information-technology skills in the world, but once a project unfolds in Sacramento, it almost always goes wrong.

Here’s a short list of state agencies that have been home to computer nightmares: Covered California, CalPERS, the DMV, and the departments in charge of unemployment benefits, prisons, courts and social services.

So it was no surprise to see this headline pop up Wednesday on the Los Angeles Times’ website: “State is warned about new fiscal computer system’s costs and timeline.” The details:

“A computer project to modernize the way the state of California manages its finances will take 12 months longer to complete and cost $55.8 million more than originally budgeted, the state auditor warned Wednesday.

“The Financial Information System for California project is aimed at coordinating and improving state government activity on budgeting, accounting, procurement and cash management.

“A decision to change the way the project is implemented to reduce risk and increase the probability of its success has increased its price tag from $616.8 million to $672.6 million and added a year to its schedule, State Auditor Elaine Howle said in a letter to Gov. Jerry Brown and leaders of the Legislature.”

Ho-hum. California bureaucrats in action. Same as it ever was.

No way, as illustrated by a new report from state Auditor Elaine Howle on “high-risk” government programs that got cursory coverage from the Capitol press corps. The state teachers’ pension system, the prison system, emergency preparedness, computer systems and public health efforts are all found wanting. Those are some pretty crucial categories of government operations.

Here’s a sample of Howle’s warnings:

“The funding status of the Defined Benefit Program of the California State Teachers’ Retirement System (CalSTRS) has not improved, and it remains on the high-risk list. … The inability to adjust contributions, as well as poor investment returns due to economic recessions, have caused the funding ratio of the CalSTRS Defined Benefit Program to decrease from 98 percent in 2001 to 67 percent in 2012, well below the 80 percent considered fiscally sound. At the current contribution rate and actuarially estimated rate of return on investments, the Defined Benefit Program’s funding ratio will continue to drop and assets will eventually be depleted. Similarly, the State’s estimated accrued liability of $63.85 billion related to retiree health benefits is almost completely unfunded and continues to increase. …”

“We have added the 2011 realignment of funding and responsibility between the State and local governments as a new high-risk issue. Realignment shifts the funding of and responsibility for many criminal justice and social services programs from the State primarily to county governments. The funding for these programs totals approximately $6 billion. The State does not currently have access to reliable and meaningful data concerning the realignment. As a result, the impact of realignment cannot be fully evaluated at this time. Even so, initial data indicate that local jails may not have adequate capacity and services to handle the influx of inmates caused by realignment.”

Infrastructure, workfore prep, emergency records all weak

“Maintaining and improving the State’s infrastructure remains on our list of high-risk issues. The State’s investments in transportation and water supply and flood management infrastructure have not kept up with demands. The California Transportation Commission estimated that the State faces a funding shortfall of more than $290 billion to adequately maintain its transportation infrastructure for the 10-year period from 2011 through 2020. Similarly, the State’s water supply and flood management infrastructure requires significant investments. …”

“The State continues to face challenges related to its workforce and succession planning as the proportion of employees approaching retirement age increases. While state agencies we reviewed had generally developed workforce and succession plans to ensure continuity of critical services, we identified notable exceptions. Further, with the recent reorganization combining the State Personnel Board and the California Department of Personnel Administration into the California Department of Human Resources, the State faces the general risk associated with this type of structural change.”

“The State’s emergency preparedness remains an area of high risk. Two key California agencies that oversee statewide emergency management — the California Department of Public Health (Public Health) and the California Governor’s Office of Emergency Services (Cal OES) — lack fully developed strategic plans to guide their emergency preparedness efforts. “

Home to Silicon Valley still a joke on IT front

Then there’s the hardy perennial: the state’s computer klutziness.

“The high costs of certain projects and the failure of others continues to make the State’s oversight of information technology (IT) projects an area of high risk. As of July 2013 the California Department of Technology (CalTech) reported that 46 IT projects with total costs of more than $4.9 billion were under development. In our August 2011 high risk report, we discussed four large IT projects that would have a major impact on state operations — the State Controller’s Office’s 21st Century Project, the Judicial Branch’s California Court Case Management System, the California Department of Finance’s Financial Information System for California, and Corrections’ Strategic Offender Management System. With this update, we examined the status of these projects, as well as the California Department of Motor Vehicles’ IT Modernization Project. We found that three of the five IT projects experienced major problems that require either part of the project or the entire project to be suspended or even terminated. “

“Finally, Public Health and the California Department of Health Care Services (Health Care Services) remain on the list of agencies exhibiting high-risk characteristics. Public Health continues to face challenges and weaknesses in program administration and is slow to implement audit recommendations with a direct impact on public health. Its unresolved recommendations have increased from 20 to 23 in the past two years. Many of these recommendations have a direct impact on public health and safety and, if not implemented, could adversely affect the State.”

This doesn’t exactly paint a picture of a well-run government. Somehow I doubt The New York Times or any of the other Jerry Brown fans in East Coast newsrooms will get around to mentioning any of this.

But when it comes to public employee benefits and the damage they wreak on local governments, scoundrels have another refuge: blaming racism for concerns about lavish, unaffordable benefits and broken governments.

We are seeing one version of this in some pontificating about Detroit’s bankruptcy. Now it could be coming to Sacramento, courtesy of Democratic consigliere Steve Maviglio.

Government workers ‘disproportionately black’

Tuesday on Twitter, Steve linked to a Bloomberg column that tried as hard as it could to reframe the pension debate in racial terms.

 “Public-sector workers are disproportionately black. In 2011, about 19 percent of black workers were employed by the government, compared with 14 percent of whites and 10 percent of Hispanics.  …

“The share of blacks in the public sector coincides with worrisome economic figures for blacks overall. Just 52 percent of blacks 16 or older were employed in 2011, compared with 59 percent for whites and Hispanics. Median net wealth for black households was $4,900 in 2010 — about 5 percent that of white households. …

“The upshot is pretty clear: Reducing the value of public pensions and other benefits wouldn’t just hurt blacks disproportionately; it would do so at a time when other economic trends have already hurt them more than most. So the question isn’t whether race is part of the debate over public pensions, but how to address it.”

Groan. The racial makeup of the public sector work force should not be a factor in deciding whether public employees’ retirement benefits are unaffordable and must be scaled back. Math and public policy priorities should be what drives the debate.

But in Sacramento, which didn’t even blink in 2009 when an Assembly speaker likened opponents of tax hikes to terrorists in an interview with the state’s largest newspaper, we can expect cries of racism to be a new blunt-force tool of Maviglio and Maviglian lovers of the pension status quo.

Great. Just great.