Under Prop 54, enacted by voters last year, bills - including budget bills - have to be available for at least 72 hours before passage. So the legislature has to finalize its state budget by the end of today, June 12, so that it can be passed by the constitutional deadline of June 15.
Even when passed by the legislature, the budget isn't final until the governor signs it some time before July 1. The governor has a line-item veto, but since he presumably will have worked out a deal with the Democratic legislative leaders, any such vetoes will likely be minor.
The period immediately after Labor Day is often viewed as the start of the final phase of the election season. Apart from the presidential race and the U.S. Senate race, there will be seventeen (!) propositions on the November ballot in California. Seventeen!! Even the New York Times is aghast.* The Secretary of State's office has the complete listing.** Of the seventeen, sixteen are initiatives (new legislation put on the ballot by voter petition). One is a referendum (a petition-based possible repeal of a law passed by the legislature and signed by the governor).
Despite the notion behind direct democracy, with its vision of Mom and Pop sitting around the kitchen table discussing deficiencies in public policy and then getting friends and neighbors to sign petitions, that isn't what happens in practice. Groups with deep pockets pay commercial signature-gathering firms to get the needed signatures. Because there were so many petitions out there competing for signatures, the cost per signature reportedly went as high as $5/name. In order to be sure you have enough signatures - many turn out to be invalid - you need as many as a million names. Not cheap!
Anyway, only one of the seventeen ballot items explicitly references UC. A possible tax increase on tobacco earmarks the uses of revenue for various health-related purposes including UC physician training. (Prop 56). There is a tax extension of Prop 30's top bracket income tax (but not its sales tax) under Prop 55. However, there is no explicit allocation to UC; in fact the funds are supposed to go to K-14. There is a marijuana legalization proposition - Prop 64 - which could lead to some added state revenue. Of course, virtually everything has some budgetary implications, directly or indirectly, even social issues such as the death penalty. (There are two competing death penalty items on the ballot.)
Good luck working your way through this year's ballot choices. Or you can just watch the TV ads. Below are pro and anti ads for Prop 56 (tobacco tax) you are likely to see on TV; that's the proposition which, as noted above, makes reference to UC physician training:
“I think we should be working toward free tuition. That may sound pretty radical, but that was in the original intention of the CSU system, so lower-income students could afford education without having to break the bank with their family, or not even being able to go because they can’t afford it.” ” Cal Poly SLO student Erica Hudson as quoted in the San Luis Obispo Tribune.
Make it free! Make it free!
Fearless prediction. The next big fight in California budgeting is coming, and it will be about a student movement to make public universities free. And it could scramble politics and budgeting in the state.
The San Luis Obispo Tribune offered a detailed story recently about Students for Quality Education, which has chapters at 19 of the 23 CSU campuses, and is ramping up for a big push this fall. They are going to challenge the CSU’s plans for annual increases in tuition tied to inflation – a model that resembles the approach favored by the legislature (and with some departures, by UC).
And they have a great argument. Subsidies to higher education more than pay for themselves; they were the foundation of California’s 20th century success. And tuition and fees have more doubled in the past decade, leaving many students in debt. The state, even in good times, is more interested in throwing money in a complicated rainy day fund than in investing in public higher education. And there are a lot of young Bernie Sanders supporters who need something to do.
Free tuition is it.
And there are many ways the students, and their sympathizers, could draw blood. One target would be Prop 55: the partial extension of Prop 30. They should point out that the measure doesn’t retain a sales tax increase, and is likely to produce less money than the stopgap Prop 30. The question: why doesn’t the state make tax changes that bring in more billions that go to higher education?
The students would also be wise to draft and start circulating a ballot initiative for 2018. It should be simple: bar UC and CSU from charging any fees or tuition to Californians, perhaps with the caveat that fees can be charged to students from families who make $250,000 or more.
That would precipitate a crisis in Sacramento. How to pay for it? How to budget for it? But that would be healthy. Gov. Brown and Sacramento have dodged fundamental questions about the budget and taxation, instead limiting spending and riding the wave of economic growth. The budget system is still dysfunctional, as will become apparent in the next recession. Or when university students demand what ought to be their birthright.
We noted a couple of days ago that the ballot proposition - since dubbed Prop 55 - for the November ballot that extends the income tax piece of Prop 30 does not include UC in its education funding.
There will also be a bond measure on the ballot in November for education - Prop 51. But it, too, does not include UC. Both Props 51 and 55 provide for K-14 only.
We have been blogging about the problems related to the Tier 3 pension proposal. It could have been worse if some anti-pension proponents had gotten their initiatives on the ballot for 2016. But as it turned out, they couldn't find a sugar daddy to pay for signature gathering and a later campaign. So they have given up for now:
For the third time in five years, an effort to put a government pension measure before voters has stalled for lack of money. Former San Jose Mayor Chuck Reed and former San Diego Councilman Carl DeMaio announced Monday that they are backing off plans to qualify a proposal for the November ballot. Instead, they said in a joint release, “we have decided to re-file at least one of our pension reform measures later this year for the November 2018 ballot.”...
A poll was released by the Bay Area Council showing strong support of Californians for funding higher ed and possibly a ballot initiative to do so.* When you read the poll question, it is clearly a push-poll, i.e., designed to suggest both a problem and a solution:
"To guarantee admission for qualified California students, place strict limits on tuition increases, continue tuition-free education for low-income students, and increase access to courses needed to graduate at University of California and California State Universities, should the state constitution be amended to establish a minimum level of state funding with accountability and oversight?"
It would be hard to imagine NOT getting endorsement of what is being suggested. But does that inevitable outcome mean that the poll has no significance? It does have significance in that the poll was paid for and supported by the Bay Area Council, a Bay Area business group with a lot of high-tech representation. In short, influential folks in a high profile sector are uneasy about how the state is managing its higher ed institutions and think that something better could be done.
===
*http://www.bayareacouncil.org/education/new-poll-shows-strong-support-for-stabilizing-higher-ed-funding/
...The political process meanwhile moves along independent of what UC does or doesn't do. There could be a mandate for still another tier on the state ballot. Yet we are rolling ahead to come up with a hastily-designed pension tier effective July 2016 that could be overridden a few months later. Yes, it takes a lot of money to get a proposition on the ballot and then campaign for it. But it could happen, particularly if some billionaire sugar daddy takes an interest in such a proposition:
From the State Worker blog of the Sacramento Bee: (Excerpt)
California pension overhaul advocates move forward after Kamala Harris issues analyses
BY JON ORTIZ
California moved one step closer to a public retirement fight after the state issued official summaries for two pension-change ballot proposals on Thursday – and for the first time neither labor unions nor the measures’ proponents griped that the language was politically slanted or inaccurate.
“It’s not the most positive way to describe the initiative,” said Chuck Reed, the former San Jose mayor who is backing the proposal, “but a least it meets the legal requirement to be accurate.”
Union spokesman Steve Maviglio said his clients wouldn’t criticize the language, but predicted that if a measure reaches the November 2016 ballot, “We’ll throw the kitchen sink at it.”
One proposal would put state and local employees who first join a public pension system on Jan. 1, 2019, or later into 401(k)-style retirement savings plans that guarantee fixed contributions from employers instead of guaranteed retirement payments by government agencies.
The second plan would cap the amount of money government employers could pay for new hires’ retirement benefits to a certain percentage of their salary. For most new employees, employers could contribute no more than 11 percent of wages, or a maximum of 13 percent for police, firefighters and other public safety workers...
Note: There are various versions of "split roll" under Prop 13 of 1978. Prop 13 essentially limits property taxes to 1% of the sales price plus 2% per year, even if the property value rises faster. (There are exceptions and provisos.) It resulted from the "taxpayer revolt" in the late 1970s when property tax bills were rising due to an inflation of property values. At the time, as in most jurisdictions, property was periodically reassessed as market prices rose and the local tax rate was applied to current values. Although the initiative reflected primarily homeowner discontent, its coverage included both residential and commercial properties. Proponents of a split roll propose retaining Prop 13 for residential properties but applying some other system for commercial. (There are various versions of what that other system might be.) Part of the argument is that commercial property may not legally change hands, and thus be reassessed at market value, when the legal entity owning the property changes hands. Prop 13 could only be changed by another ballot proposition, either one put on the ballot by the legislature (unlikely) or by an initiative petition.
Op ed in LA Times: This year's very public showdown between Gov. Jerry Brown and
University of California President Janet Napolitano over raising UC's
tuition ended in a compromise that in no way addressed the real issue:
Where will the money come from to keep the state's world-class public
colleges and universities competitive in the long term? As
Napolitano and Brown squabbled over how much the state could afford to
pay into UC's coffers, they expressly avoided the real solution to
public education's money worries: Reform the commercial side of
Proposition 13 so the state can raise more revenue. California could
raise $9 billion a year for education and public services if commercial
property taxes were reassessed regularly. And note: Such a reform would
not affect Proposition 13's protections for homeowners...
Robert J. Birgeneau, a physics professor at UC Berkeley, was chancellor of that campus for nine years.
Gov. Brown - who was governor in 1978 when Prop 13 passed and flipped from being against it to being an enthusiastic supporter after it passed - has shown no interest (quite the opposite) in touching Prop 13 in his current iteration as governor. Back when Prop 13 passed, he was initially able to use a large state reserve in the general fun to bail out local governments. But the bailout's cost plus a recession created a state budget crisis toward the end of his first iteration and Brown was defeated in a run for the U.S. Senate in 1982.
As we have noted many, many times on this blog, while the Regents live-stream their meetings on the Internet, they do not keep the recordings available for more than one year. So in order to archive them, we record the sessions in real time and then post them indefinitely.
Minority Republicans in the legislature have complained about last-minute bills being pushed through and now an initiative has been filed to ban the practice.* However, the initiative also mandates that the legislature stream all hearings and then archive them indefinitely. It doesn't include the Regents. But one wonders whether the Regents would feel obliged to change their policy if such an initiative were enacted by voters.
Of course, the filing of an initiative doesn't mean it will get on the ballot or be passed. You need at least $2 million to hire signature gathering firms for the petition. This one, however, lists Charles Munger, Jr., a wealthy Republican who has the money for such a campaign, as a proponent. It was filed by a law firm that specializes in ballot matters so it appears to be a serious effort. If the initiative did get on the 2016 ballot, it might not be all that controversial. Who would be against a requirement that bills could not be enacted until 72 hours after filing so that legislators would have a chance to read them? (There is an exception for emergencies.) Who would oppose streaming and archiving legislative hearings?
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*The proposed initiative is at https://www.oag.ca.gov/system/files/initiatives/pdfs/15-0083%20%28Legislature%20Transparency%29.pdf?
Yesterday, in response to a news article indicating that there was a campaign to add a second student Regent (with voting rights), we asked why there was no voting faculty Regent. Faculty representatives from the Academic Senate participate in Regents meetings as "advisers" but with no voting rights.* You could rationalize this arrangement on the grounds that a hypothetical faculty Regent would have a conflict of interest since the Regents vote on issues such as pay. But since there is already one student Regent with voting rights, the conflict of interest rationale is inconsistent with current practice. The student Regent discusses and votes on issues such as tuition, i.e., issues where there is a conflict of interest. In response to the posting, I was sent a 2004 web link from the Academic Senate which discusses the issue of why there is no faculty Regent. You can find it at http://senate.universityofcalifornia.edu/news/source/facultyonregents.november2004.html. As you might expect, the conflict of interest concept is put forth:
A
question frequently asked is why the faculty, unlike students and
alumni, do not have voting membership on the Board of Regents... A
constitutional amendment approved by the voters in 1974 allowed that
“The Regents may, at their discretion, appoint either or both a faculty
and a student member to the Board.” This is now Bylaw Five, which
further provides for a faculty regent who may be on the UC faculty or
from another institution of higher education... The
argument against full regental status, which ultimately prevailed,
rested on the issue of trusteeship versus advocacy. President Hitch was
forthright in expressing his view that having a faculty member as a
regent would compromise the principle of regency as trusteeship. He
felt, as did many faculty, that the trusteeship concept ruled out
concurrent service as a regent and as an officer of the Academic Senate.
A faculty regent could not function both as a trustee of the
institution as a whole and as a representative or advocate of faculty
interests. A faculty regent would have to withdraw from participating in
matters where there is a conflict of interest, such as compensation,
workload, promotion and tenure polities – indeed the very issues on
which faculty would wish to see their representative exert strong
leadership and influence. These arguments were persuasive, and in
February 1987, the Regents adopted the recommendation of the Council to
seat the chair of the Council on the Board of Regents as a nonvoting
member...
The problem here is that the assumption in the item above is that where there is a conflict of interest, the faculty Regent could not participate. But that assumption is inconsistent with current practice in which the student Regent clearly participates and votes on issues in which he/she has a conflict of interest. Indeed, the campaign for a second student Regent is really a campaign to do more such participating and voting. Of course, the world is full of inconsistencies. Hobgoblins of small minds, etc. And it is unlikely - but not impossible - that key issues will arise at the Regents in which one vote will be critical. However, if student representation goes up to two voting Regents, the inconsistency will be too glaring to ignore. In short, the answer to why there is no faculty Regent is really "that's the way it is." But that's not the same as that's the way it has to be in the future.
Addendum: The constitutional amendment referred to in the italicized material above was placed on the ballot in 1974 by the state legislature. It's main feature was cutting the terms of appointed Regents from 16 years to 12 years. The amendment as it appeared on the ballot can be found at http://repository.uchastings.edu/cgi/viewcontent.cgi?article=1783&context=ca_ballot_props. It passed with 55% of the popular vote. The official summary read: Adds Vice-president of alumni association as ex-officio member. Adds two
additional members appointed by Governor with approval of Senate. No
appointment to new term shall be made during first year of any
gubernatorial term. Reduces terms from sixteen to twelve years after
1976. Allows regents appointment of one faculty member of institution of
higher education and one student 'to board. Requires regents be persons
reflecting economic, cultural and social diversity• of state, including
ethnic minorities and women. Provides for advisory committee which
Governor must consult with in selection of regent appointees. Financial
impact: Minor increase in state costs. From: http://repository.uchastings.edu/ca_ballot_props/784/
The amendment says that "no appointnent to the regents for a newly commencing term shall be made during the first year of any gubernatorial term of office." That language appears in the actual text of the amendment, not just the summary. You may wonder how Gov. Brown appointed some new Regents after the Nov. 2014 election as part of the tuition/budget fight. He actually made the appointments before he was inaugurated for his fourth term so they were made - at least by him - in the last year of his third term. One wonders, however, whether "appointed" would include confirmation by the state senate which came later. I will leave that issue to legal experts. === *http://grammarist.com/spelling/adviser-advisor/
They don't have the money for a signature-gathering campaign or for a general election campaign so this is an attempt to see if some wealthy backer(s) will bite. The new initiative limits the amount of public support for new-hire pensions but doesn't forbid a defined benefit plan.
The anti-pension initiative folks appear still not to have the money for a campaign to get their initiative on the ballot and then run a campaign for it in the general election. Nonetheless, they keep resubmitting initiatives in the hope a sugar daddy will come along to fund them. UC has enough trouble with the Committee of Two deal. If these folks ever did get something on the ballot, it would further screw up the UC pension for new hires.
Read about it: Carl DeMaio, a former San Diego city councilman who is spearheading
the initiative effort along with former San Jose Mayor Chuck Reed,
wouldn’t disclose details about the new proposals, but indicated in a
telephone interview that they would take “a totally different approach”
than a measure his group filed over the summer. The
idea, DeMaio said, was to see whether Democratic Attorney General
Kamala Harris used what they consider “poison pill” language to describe
the new measures as she has three previous pension change proposals
since 2011. If she does, DeMaio said, “we think she’ll be giving us the
evidence we need” to successfully sue Harris for unfairly skewing her
description of pension initiatives. The attorney general’s office
writes the short title and summary of all ballot initiative proposals.
The language is important because it appears on petition materials used
to qualify them for the ballot, often shaping voters’ first impression
of an initiative’s contents. Perhaps even more important, the wording
affects potential contributors’ willingness to underwrite a campaign. Unions,
which strongly oppose the Reed/DeMaio effort, note that the campaign
has virtually no funding yet. Labor spokesman Steve Maviglio recently
ridiculed an online drive to gather volunteer signature gatherers as “nothing more than a way to boost the finances of DeMaio’s political committee.” “This
is the gang that couldn’t shoot straight,” Maviglio said Friday, in
reference to former pension measure attempts. “They’ve messed this up so
many times, we have complete confidence they’ll do it again.” ...
You may have noted that the anti-vaccine kooks were unable to get enough signatures to get a referendum on the ballot. Fact is that the idea of grass roots efforts to put things on the ballot is a fantasy. You need something like $2 million to hire professional signature gatherers. And then you need more - lots more - for an election campaign if your ballot proposition is controversial.
Yours truly happened to be reading the LA Business Journal and came across the clipping at the left, which was a reminder of the Regents' action some time back creating the UCLA Venture Fund. The idea was to get local entrepreneur types to invest in companies based on UCLA-developed technology.
Anyway, you can check out the website at http://www.venturecapital.ucla.edu/ Turns out the Fund has invested in a flower delivery service ("free delivery from a volcano") and game company, as well as the water treatment company in the clipping. (The game company's website doesn't mention any games the company actually has, but I'm sure they'll find something, now that they have funding: https://www.youtube.com/watch?v=e7xiIzcYRpA)
Six is better than one!
Now the Fund has an executive committee and one name on it is one you might recognize even if you aren't into entrepreneurship: Tim Draper. You might remember Draper as the guy with the wacko idea of dividing up California into six new states by ballot initiative. (OK; some folks said at the time that it was actually a clever idea to divide California's electoral votes to favor Republicans because some of the new state-lets would be red states rather than blue. Still, pretty wacky because it would never happen.) Anyhow, Draper announces with a fanfare that he has over 1.1 million signatures for the initiative (which cost him over $5 million for signature gatherers) and which should have been more than enough signatures, even given that some always turn out to be invalid. But when the secretary of state sampled the petitions, it turned out that so many were invalid that the initiative was rejected.** So it seems that Draper had been sold a bill of goods by somebody. In short, whether Draper actually believed in his initiative or just wanted some good PR, he got himself neither.
Anyway, it sure is great that Draper and his good ideas are on the executive committee of the UCLA Venture Fund, don't you think? The Fund surely needs someone with the good judgment to believe whatever he is told:
"The petition-gathering firm hired by the Six Californias campaign
“predicted a much higher validity rate than the random sample result,” Mr. Draper said."***
And why wouldn't anyone believe what the firm said?
When Prop 30, with its new temporary income and sales taxes was on the ballot, the Regents supported it to aid the UC budget. There has been talk recently about extending the temporary taxes. An initiative has now been filed by K-14 education groups that would involve an extension (focused only on the income tax portion). But the funding would be earmarked only for K-14. So it's unlikely that the Regents would support such a measure. Note that filing an initiative is a long distance away from paying signature gathering firms to get it on the ballot, much less funding an election campaign. It's also unclear that the governor would support an extension of Prop 30 for whatever purpose. In the past, he has indicated that he sold the Prop 30 taxes as temporary. So whether a longer version of temporary would be agreeable to him is uncertain.
The State Worker blog of the Sacramento Bee has an article indicating that the proponents of the pension initiative - that would sweep in UC - haven't found a sugar daddy to fund a campaign to gather signatures or a full-fledged campaign actually to enact the initiative if it were to get on the ballot.*
You can read the whole article - which talks about mounting a "grassroots" campaign for signatures - but here is the key point:
...DeMaio’s political committee, California Reform, had
$28,910.88 in the bank at the end of June. Contributions through the
first half of the year totaled $45,974, including an $8,000 loan from
DiMaio in March...
A signature-gathering campaign typically costs $2 million and up nowadays.
It's clear what the proponents need, but don't have:
A summary of the issues surrounding the proposed pension
initiative appears today in Calpensions.* As we have noted in past postings,
whether the initiative ends up on the ballot depends on whether its proponents
can get enough money to gather the necessary signatures. The number required is
lower than usual because turnout in the last gubernatorial election was low.
But we are still talking about something like $2 million for a signature
campaign. Thereafter, of course, there would be a much more costly campaign,
pro and con, for the actual election in 2016.
As Calpensions point out, a version on this initiative was
filed last year but dropped after sthe attorney general’s summary was deemed (by
proponents) of the initiative to be slanted. However, a legal challenge to the
wording was unsuccessful in the courts. One difference between the wording this
time and last is that there is no specific mention of occupations. Instead, the
new attorney general’s wording lists sectors:
Old (abandoned) version:
“Eliminates
constitutional protections for vested pension and retiree healthcare benefits
for current public employees, including teachers, nurses, and peace officers,
for future work performed.”
Current version:
“Eliminates
constitutional protections for vested pension and retiree healthcare benefits
for current public employees, including those working in K-12 schools, higher education, hospitals, and police
protection, for future work performed.”
Although Calpensions does not get into it, you might note
that the new version specifically includes “higher education.”Whether that addition would influence votes
one way or another is unclear. But the addition does make clear that higher ed –
and thus UC – would be covered.
The UC pension already has two tiers, thanks to changes made
by the Regents in 2010. Because of the unfortunate Committee of Two deal, a
third will have to be added and much work will go into designing the third one.
Should the initiative pass, there would have to be a fourth tier.
Inside Higher Ed has a lengthy article on a lawsuit against the U of Texas regarding its affirmative action policies. Apparently, the U.S. Supreme Court has just announced it will take up the case with a likely decision in 2016. The issue might seem to have no potential effect on UC since it is banned from using such practices under Prop 209 of 1996. Prop 209 was enacted by voters after the Regents adopted an anti-affirmative action policy favored by then-Gov. Pete Wilson. (The Regents rescinded the policy after 209 was passed since it had become redundant.)
There could be an effect in California, however, were 209 to be repealed or modified. The legislature nearly put a proposition on the ballot that would have allowed the voters to repeal 209. But after protests from the Asian community, there were not enough votes for such an action and the matter was dropped. It is possible, however, that the issue of a repeal proposition could come up again. The meaning of such a repeal, were it ever to occur, would be constrained by whatever the Supreme Court might say in the Texas case.
We have previously blogged about a potential ballot initiative that would bar anything but defined contribution pensions after 2019. The proponents evidently had the $200 to file it but are hoping some wealthy sugar daddy or daddies will come along to finance a campaign to a) get the needed signatures for putting it on the 2016 ballot and b) then finance a campaign to get voters to support it.* Such an initiative would further complicate the pension challenges for UC created by the Committee of Two deal which would likely produce some kind of hybrid plan. So far, no one has reported anything about sugar daddies that might have appeared. But it is evident that if the proposition got on the ballot, the opposition campaign would largely be financed by public sector unions.
One complication is that unions may have other ballot items to promote or oppose and there is a limit to how much they will want to spend in 2016. There may be some taxes on the ballot that will likely attract union financial support. Example:
Hoping to influence a special health care budget session, a coalition
of labor and medical groups has put $2 million into an initiative to
raise California’s tobacco tax and use the revenue to fund health care
for low-income Californians. The money flowed from a coalition of
groups that include SEIU California State Council – a union umbrella
group whose members include thousands of health care workers – the
California Medical Association, the California Dental Association, the
American Cancer Society and groups promoting heart and lung health. Their twin ballot initiatives would
impose a $2-per-pack tax on cigarettes to fund health programs that
include smoking prevention and Medi-Cal, California’s health insurance
program for low-income residents...
Read more here: http://www.sacbee.com/news/politics-government/capitol-alert/article25118476.html#storylink=cpy
There are other tax proposals that may be coming, too, such as a change in Prop 13 allowing a "split roll" with non-residential property in one way or another assessed differently (paying more than at present). Such a move would likely attract support of teachers' unions and others. We will see.
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*http://uclafacultyassociation.blogspot.com/2015/06/now-what-happens-on-pension-initiative.html
As we approach June 15 when the legislature must pass a budget, it is worth noting that even as more revenue comes into the state treasury, Prop 98 - which allocates funding for K-14 by formula - tends to absorb it. Here is Brown's easel chart as reproduced by EdSource:
