MyGovCost News & Blog

California’s Coastal Commission has shut down the last beach-sand mine in the United States, operated by the Mexico-based Cemex company. Coastal Commission boss Jack Ainsworth told reporters, “This settlement is an incredible victory for the public.” Taxpayers might not think so.

The Commission blamed Cemex for erosion along Monterey Bay. Company official Walker Robinson told the Monterey Herald the causes of erosion “are numerous and complex” and claims that attribute the erosion to the sand mine “oversimplify the issue.” The mine has been operating for more than a century, predating the Commission, but rather than face a court fight Cemex agreed to end operations by the end of 2020. A better outcome would be to let the mine continue and shut down the Coastal Commission, which has been eroding Californians’ property rights since the first Brown administration in the 1970s.

The Commission was supposed to be temporary, but legislators made it a permanent unelected body that overrides scores of elected city and county governments on land-use issues. In practice, the Commission became the private domain of Peter Douglas, a regulatory zealot with little if any regard for property rights. On his watch the Commission was also known for Mafia-style corruption. During the 1990s, Coastal Commissioner Mark Nathanson attempted to shake down celebrities for bribes, and wound up serving a prison term.

As we noted, the Commission has been expanding its power into new areas such as animal management and surfing tournaments. The CCC keeps busy adding new commissioners and deploying its new power to bypass the courts and levy fines directly. Now the Commission claims it is too shorthanded to clean up its own books and seeks regular loans to keep itself afloat.

Taxpayers provide the Commission’s annual $23 million budget, but for that spending they get nothing of value. California’s elected city and county governments are entirely capable of handling land-use issues. Shutting down the Coastal Commission would trim waste, restore accountability, and above all stop the steady erosion of Californians’ property rights.

The Mercatus Center has released its fiscal rankings of each state in the nation. Find your state in the map below to see how highly (or lowly) it may have ranked:

Here’s what the report’s authors, Eileen Norcross and Olivia Gonzalez, had to say about the five states occupying the fiscal basement in 2015, Illinois, Kentucky, Massachusetts, New Jersey and Connecticut:

In FY 2015, Illinois, Kentucky, Massachusetts, and New Jersey remain in the bottom five performing states. Connecticut leaves the bottom five due to a very strong increase in revenues and a reduction in expenses in FY 2015 that boosted the state’s budget solvency ranking from 50th to 3rd. But this factor by itself does not mean Connecticut is fiscally robust. Connecticut continues to have weak metrics in other areas, including very low levels of cash, high liabilities, and high levels of debt relative to assets. Maryland joins the bottom five at number 46. The state’s cash position is weak, with cash covering between 55 percent and 148 percent of short-term obligations. Maryland’s revenues exceeded expenses by 1 percent. On a long-run basis, Maryland’s fiscal metrics point to the state’s reliance on debt to finance its operations. Longterm liabilities are 94 percent of total assets. Noncurrent liabilities amount to $39 billion and assets totaled $41 billion in FY 2015. The largest noncurrent liabilities include $16.5 billion in bonds and notes and $24.0 billion in unfunded pension obligations….

The comments about Connecticut’s lack of fiscal robustness, despite its large tax increase, are especially compelling in that we know, two years later than the data analyzed in the report, that the state’s large tax hike two years earlier has failed to generate sufficient revenue to keep it out of the fiscal doghouse. That’s a significant result in that it provides confidence that Mercatus report’s overall methodology for assessing each state’s fiscal health is sound. Two years from now, we can reasonably expect that Connecticut will rejoin the fiscal basement dwellers.

You can find out more about how your state fared in this year’s rankings in the report.

As we noted, California taxpayers were the first to pay for the sexual-reassignment surgery of a violent criminal, Shiloh Heavenly Quine, who as Rodney Quine gunned down Shahid Ali Baig, a father of three, then stole his car. Taxpayers nationwide have also been footing the bill for sex-change surgery, and Congress just decided that they will continue to do so.

The Obama administration required the Pentagon to pay for soldiers’ gender-transition surgeries and ensuing hormone therapy. According to Rep. Vicky Hartzler, Missouri Republican, such surgery could cost the military $1.3 billion over the next decade. The surgery involves months of recovery time, during which the patients are undeployable and unable to do their jobs. Hartzler offered an amendment to the annual defense-authorization act that would forbid the military from spending money for medical treatment related to gender transition. On July 13, a full 24 Republicans joined Democrats to shoot down the amendment, which Democrats called a bigoted attack on diversity, and so forth. Taxpayers might take a few other factors into account.

The U.S. military has one job, to defend the nation and win wars. There is no right to join the U.S. military, which has age requirements and other standards. Once in the military, nobody has a right to sex-change surgery, a costly construct and an elective procedure. In reality, nothing can be a right that puts mandates and costs on other people. Putting taxpayers on the hook for sex-change operations does nothing to enhance the military’s capability to fight, win, and protect the nation. It is therefore military waste, and Congress just ensured that such waste will continue. That is a bad deal for taxpayers, just like those M-1 tanks the generals don’t find useful but that Congress wants to keep buying.

Meanwhile, Shiloh Heavenly Quine has been transferred from Mule Creek, a tough men’s prison, to the women’s prison at Chowchilla, where life will be much easier. And thanks to judge Jon Tigar, a one-man robed politburo, taxpayers will now be springing for Shiloh Heavenly Quine’s jewelry and sartorial needs, right down to the bracelets, earrings, and “compression tops.” California leads the nation in the kind of change taxpayers can’t believe in.

The Congressional Budget Office has scored President Trump’s first budget proposal. In its report, the CBO finds significant reductions in the U.S. government’s annual budget deficits compared to their baseline estimates, which reflect their projections of how those deficits would have grown if the spending policies of the Obama administration had continued on autopilot.

Here’s how the CBO’s analysts summarized the effects of President Trump’s proposals on the budget:

Compared with CBO’s baseline projections, the deficit under the President’s proposals would be slightly larger in 2018, about the same in 2019, and smaller in each year between 2020 and 2027, according to CBO and JCT’s estimates (see Figure 1). The cumulative deficit from 2018 through 2027 would be reduced by $3.3 trillion from the $10.1 trillion in CBO’s baseline. . . .

As a result of those smaller deficits, debt held by the public would also be lower under the President’s proposals than under current law. Federal debt held by the public would equal 77 percent of GDP this year and would hover around 80 percent for most of the 10-year period. That ratio would be lower—about 11 percentage points of GDP lower by 2027—than the amounts projected in the baseline (see Figure 2).

The following chart shows the CBO’s newest projections for the publicly held portion of the U.S. national debt.

These two charts represent the most positive assessment of the U.S. government’s fiscal outlook that the CBO has provided regarding both deficits and the national debt in over eight years.

There is a downside in the CBO’s analysis in that its projection of the future for the publicly held portion of the nation’s total public debt outstanding will require faster economic growth to achieve. Since economic growth is not something that can ever be dictated from Washington, D.C., that portion of the new projections is not guaranteed.

However, Washington, D.C., can dictate exactly how much the federal government will spend, where the president’s plan to slow the growth rate of that spending can most certainly achieve the CBO’s projections for the government’s reduced budget deficits.

The deficit reduction under the President’s proposals would stem from lower spending. The 10-year decrease of $4.2 trillion (or 8 percent) from amounts in CBO’s baseline would result from the following changes:

• A decrease of $2.0 trillion in mandatory spending (which is spending for programs generally governed by provisions of permanent law), including a $1.9 trillion reduction in spending for health care, as well as cuts to income security programs and student loans;
• A decrease of $1.9 trillion in discretionary outlays (which result from funding provided or controlled by annual appropriation acts) stemming from substantial reductions in nondefense discretionary spending and from sharply lower outlays for military operations and related activities in Afghanistan and elsewhere (known as overseas contingency operations, or OCO); and
• A decrease of $0.3 trillion in net interest costs because of lower deficits.

Outlays would average 20.7 percent of GDP from 2018 to 2027 under the President’s proposals. In CBO’s baseline, by contrast, outlays average 22.4 percent of GDP during that period. (Over the past 50 years, they have averaged 20.3 percent of GDP.)

The Trump budget could do more to ensure better outcomes for the U.S. government’s deficit and national debt by focusing on further restraining the growth rate of its spending to be lower than the growth rate of the nation’s economy.

After the past eight years, however, it’s nice to finally see CBO budget projections that don’t involve an exponential worsening of the U.S. government’s fiscal outlook.

California Assembly Bill 1250, authored by Los Angeles Democrat Reginald Jones-Sawyer, would restrict counties from contracting out for key services. The bill is sponsored by two of the most powerful government employee unions, the Service Employees International Union (SEIU) and the American Federation of State, County, and Municipal Employees (AFSCME). As the San Jose Mercury News editorialized, “the intent is clear: Increasing the number of public employees, who would be members of unions, rather than looking at outside services that could be more cost-effective.” The government unions “want to force all services to be provided directly by counties so that they will increase full-time staff.” Taxpayers should be aware of the back story here.

The measure comes billed as backed by “labor,” but this is not so. According to the Bureau of Labor Statistics, 84.1 percent of California workers, the vast majority, are not union members. Only 15.9 percent of workers, a small minority, are union members. So “labor” is not the same as government-employee unions, who nevertheless wield enormous clout with legislators. As we noted, the SEIU demonstrates outside the California capitol proclaiming, “This is our house!” Government employee union bosses such as Bruce Blanning of Professional Engineers in California Government proclaim that contracting out for services wastes taxpayer dollars. As the Mercury News contends, the reverse is true.

Many California cities and counties, “weighed down by mounting retirement and benefit costs, are barely keeping their heads above water.” The “onerous” AB 1250 “could push some of them under.”

Therefore, “Local government leaders should be free to find the best services for the best price. They shouldn’t have to hire government workers for projects that are temporary or services best provided by the private sector.”

Lobbyists seldom get much sympathy from taxpayers, but that could soon change. According to a report by Taryn Luna of the Sacramento Bee, the Asian Pacific Islander, Black, Jewish, Latino, LGBT and Women’s caucuses in the California legislature “are asking lobbying firms to provide them with demographic data – including race, ethnicity, gender and openly gay or lesbian orientation – on their employees.” Supporters bill it as part of the “worthy cause” of making California’s workforce representative of its residents and a “courageous” effort to expand the conversation about “cultural diversity.” It’s actually an example of ignorance and intrusion.

In 1996 California voters approved Proposition 209—also known as the California Civil Rights Initiative—by a margin of 54 to 46 percent. This measure ended racial, ethnic, and gender preferences in state-college admissions, state employment, and state contracting. The six caucuses are apparently unaware of this state law, which bureaucrats and politicians have fought from the beginning. California has always been culturally diverse, but “diversity” is now code for the politically correct orthodoxy that all institutions must reflect the ethnic breakdown of the populace. Diversity dogma empowers politicians and bureaucrats to claim that there are “too many” members of certain ethnic groups at UC Berkeley, for example. This ignores personal differences, effort and choice, and because of those variables, politically correct proportional is nowhere evident.

The quota surge disturbed lobbyists such as Jim Cassie, who looks for good communicators, regardless of ethnic considerations. Loyola Law School professor Jessica Levinson wonders: “Is the government forcing companies to hire people they otherwise wouldn’t want to, to make sure they are seen with favor from lawmakers?” In her view, the caucuses gambit is “absolutely designed to exert pressure on hiring practices. I don’t think that this is the Legislature’s role.” Levinson is right about that. This is government intrusion based on ignorance and politically correct dogma. That’s why, as lobbyist Jim Cassie told the Bee, “This is something that goes straight to the trash can along with the Reader’s Digest sweepstakes.”

After going over two years without any kind of fiscal plan, Illinois’ state government now has a budget after the state’s legislature overrode a veto by the state’s governor to impose large tax increases on the incomes of the state’s residents and corporations. Unfortunately, Illinois’ legislature made no effort to address the state’s biggest liabilities.

The Quad-City Times has the story:

Illinois finally has a budget plan after two years. Now, to start paying bills.

The Democratic-controlled Legislature’s vote last week to create a $36 billion framework over Republican Gov. Bruce Rauner’s vetoes ended the nation’s longest fiscal stalemate since at least the Great Depression. At the core of the budget was a $5 billion income tax increase.

The tax hike is retroactive to July 1, and the state could start seeing some additional money within weeks. But after unchecked “autopilot” spending that outstripped incoming revenue by $600 million a month, Illinois has a $14.7 billion jumble of overdue bills.

The tax increase also does nothing to directly address the haunting, $130 billion shortfall in pension obligations to retired and current state workers.

Illinois’ legislature pushed through the tax increase specifically to avoid the fate of becoming the first U.S. state to have its credit rating cut to “speculative” or “junk” status. However, even after it budget passed its first hurdles toward becoming law, at least one major credit rating service notified the state that it was reviewing the state’s credit for a potential downgrade. Bloomberg‘s Elizabeth Campbell reports on the continuing risk that Illinois faces because the state legislature failed to enact reforms to fix its deteriorating long term fiscal situation:

Illinois is at risk of becoming the first junk-rated U.S. state on record even if lawmakers overturn Governor Bruce Rauner’s veto and enact a budget, Moody’s Investors Service said.

The state’s rating, one step above speculative grade, is “under review for possible downgrade” after Illinois’s leaders failed to enact a “timely budget” and come to a political consensus over how to solve the state’s financial challenges, Moody’s said in an emailed statement on Wednesday. The Senate overrode Republican Rauner’s veto of budget bills, including a $36 billion spending plan and tax hike, on Tuesday, and the House is scheduled to vote on override measures on Thursday.

The budget “appears to lack broad bipartisan support, which may signal shortcomings in its effectiveness once implemented,” Moody’s said. “So far, the plan appears to lack concrete measures that will materially improve Illinois’ long-term capacity to address its unfunded pension liabilities.”

In the short term however, the passage of a budget in Illinois has reduced the cost of borrowing to the state over what it had risen to in recent weeks. Compared to other, more fiscally solvent states however, it still costs Illinois over twice what they pay in interest rates for their general obligation debts.

A large portion of the state’s $36 billion budget will go toward paying its $15 billion backlog of unpaid bills.

Under the state government’s new budget, it will only pay down one-third of its balance of unpaid bills during the next year. At the same time, nearly $8 billion (over one-fifth) of the state’s budget will go toward paying the generous retirement benefits of current and former state government employees, while it is unclear if the state will have enough money to open its public schools on time for the 2017-2018 school year that is scheduled to begin next month.

Budgets are about priorities. Illinois’ new state government budget reflects the priorities of the state’s legislators, regardless of whether or not they are the same or are very different from those of the state’s residents.

Two years ago, California’s Legislative Analyst learned that 3,500 Caltrans engineers were doing little more than sitting at their desks and sought to eliminate those positions. Caltrans bosses cried foul and so did Bruce Blanning, executive director of Professional Engineers in California Government. As the union boss told reporters the Legislative Analyst was “childish,” that idle staff should be kept on in case of future projects, and that outsourcing work to independent contractors “wastes taxpayer money.”

In response to the LAO report, state senator John Moorlach wrote a bill to require Caltrans to contract out 50 percent of architectural and engineering services. As Moorlach recently explained, the engineers’ union killed that bill and now wants to add 400-500 new positions in the next fiscal year. If those were contracted out, according to a study for the for the American Council of Engineering Companies, that would save state taxpayers $43.4 million a year. That got a rise out of Bruce Blanning, who charged that Moorlach “cited phony figures – ginned up from the same private companies that want to gorge themselves on tax dollars – to try to justify his false assertion that it would be cheaper for taxpayers.”

Blanning did not show how, exactly, the figures Moorlach cited were “phony,” but he did contend that California has nearly 1,000 engineers on contract doing work that “Caltrans employees can perform at half the cost.” Giving the work to Caltrans employees, the union boss argued, would save $100 million in one year. “Let’s not waste public money by overpaying private companies,” Blanning concluded. “California is best served when a publicly employed professional engineer designs and inspects infrastructure projects.” And doubtless when more than 3,000 government engineers sit at their desks doing nothing, or when they play golf during work hours.

As the state auditor noted, for 19 months, one Caltrans engineer played dozens of rounds of golf during work hours, with Caltrans bosses duly approving his time sheets. Maybe Blanning can identify the lucky government golfer, and show how his game best served the state. The union boss did not indicate which infrastructure project he might have personally designed or inspected. Taxpayers might recall that Caltrans engineers supervised the new eastern span of the Bay Bridge which cost $5 billion more than the original estimate, came in ten years late, and remains riddled with safety issues.

According to the U.S. Treasury Department, the U.S. Department of Education has now cumulatively borrowed over one trillion dollars from the public for the purpose of funding its Federal Direct Student Loan program since January 2009.

Political Calculations’ charted the history of the Education Department’s borrowing to support its student loan business.

Between January 2009 and May 2017, the total public debt outstanding of the U.S. government increased by over 9.2 trillion dollars. Since $1 trillion of that borrowed money went to fund student loans, it accounts for 10.8% of the increase of the national debt over the last eight years.

Getting out of its money losing student loan business should be a top priority at the U.S. Department of Education.

As the Washington Times reports, the “Obamaphone” program, a federal government welfare gambit officially known as the “Lifeline Program,” was a massive fraud. Of the 10.6 million people with Obamaphones, a full 36 percent had dubious qualifications for the handout. Some 5,500 people had two Obamaphones and the program gave 6,400 Obamaphones to people who were in fact dead. Though Obamaphone was a federal program, the funding came from private carriers, so the program, as the Times notes, “has stashed some $9 billion in assets in private bank accounts rather than with the federal treasury, further increasing risks and depriving taxpayers of the full benefit of that money.” And as it turned out, “the FCC didn’t even have a good yardstick to measure whether the program was meeting its goals.” In other words, no accountability.

The FCC is seeking $51 million from a carrier that ripped off the program for $10 million but according to a Fox News report, Ajit Pai and other FCC commissioners “were told not to reveal the details of its investigation until April 1, a day after the FCC voted to expand the Lifeline program.” This directive had “the effect of preventing public knowledge of widespread fraud in the Lifeline program ahead of a contentious vote on expanding it despite persisting concerns about a lack of internal safeguards.” FCC mouthpiece Will Wiquest, a former press secretary for socialist Vermont senator Bernie Sanders, claimed the timing of the enforcement action was “in no way related to the timing of the vote on the program modernization.” Whatever you say Willy. In typical style, secrecy and obfuscation followed massive waste and fraud, with taxpayers on the losing end.

The Obamaphone scam, which launched in 2012, prompted imitation in California. As we noted, the California Public Utilities Commission handed out cell phones to homeless and low-income people in the hope that they would be better able to look for jobs. The Golden State also provided 250 minutes of call time a month and 250 free text messages. No reports on how many gained jobs through the plan, but when it comes to waste and fraud governments everywhere tend to phone it in.