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California’s Debt Bubble: How Does It End?

In a January 2017 study we estimated that California state and local governments owe $1.3 trillion as of June 30, 2015. Our analysis was based on a review of federal, state and local financial disclosures. This debt equals about 52% of California’s Gross State Product of $2.5 trillion and does not include the substantial cost of deferred maintenance and needed upgrades to the state’s infrastructure.

This analysis begs the questions:

  • How much debt is too much debt?
  • How and when does it end?

How much debt is too much?  It’s hard to answer with the information available to us. It could take a long time to reach a crisis, perhaps many years or even a decade or more.  Who knows? There isn’t any hard stop or red line limiting California’s indebtedness.

If the economy is growing, debt can increase indefinitely if debt service costs aren’t growing faster than the economy. Government debt need not be paid off.  It is rolled over into new debt when it comes due. Governments don’t retire or go out of business so their debt doesn’t have to be retired.  The main costs are interest on the debt, required pension contributions, and increasing retiree healthcare costs.

On the way up, adding to debt is painless and allows politicians to spend more than current tax revenues can support, knowing that the cost of the debt is someone else’s problem in the future.  It can make sense to borrow to finance cost-effective infrastructure with a long useful public purpose.  But, borrowing can also be used to pay for current expenses or to fund white elephants such as the bullet train.

What is fairly certain:

  1. Some other states such as Illinois could be an early warning sign for California in that they will get into trouble sooner. We can see what happens there and perhaps learn something. The Commonwealth of Puerto Rico which defaulted last year and which is now controlled by a federally appointed oversight board provides an even starker warning of the risks we face.
  1. We are unlikely to have a state-wide crisis. We are more likely to have increasing problems in individual cities, counties, school districts and special districts. The financially weakest agencies will run out of options and get in trouble first. During the last five years, we have seen bankruptcy filings by the cites of San Bernardino and Stockton and by healthcare districts in Contra Costa and Sonoma Counties. Several school districts are operating under state oversight due to poor finances.
  1. Underfunded pension funds will not be bailed out.  The state can’t afford to bail out individual cities, counties, and school districts that can’t pay interest on their debt or make required pension and OPEB payments.  The federal government will not bail out the state.  It would cost too much and would set a precedent that would have to be applied to other states that got into trouble.  Moody’s estimates that total state pension unfunded liabilities are $1.75 trillion at the end of fiscal year 2016. In fiscal year 2016 these pension funds earned a median return of 0.52 percent on investment compared to an average assumed rate of return of 7.5 percent.
  1. It’s unlikely that the governor and legislature will take meaningful action until there is a crisis of some sort that gives the state no choice but to deal with the problem. Short of a crisis, politicians are likely to nibble around the edges to say that the problem is being addressed while avoiding any hard decisions.

How can pensions become a problem?  Aren’t pensions guaranteed by the California constitution?  Yes.  But, what does the constitution say to do if there isn’t enough money?  If a city or county goes bankrupt, federal bankruptcy law overrides the state constitution and allows but does not require pension benefits to be renegotiated in a bankruptcy.

California Pension Fund Summary
2014 2015
Payments to pension funds:
Employee payments 8.9 9.5
Employer payments 21.2 24.7
Total payments 30.1 34.2
Payments by pension funds:
Pension benefits 43.7 44.9
Other payments 2.3 3.6
Total payments 46 48.5
Pension fund members
Employed 1.7 1.8
Beneficiaries 1.2 1.2
Source: U.S. Census Bureau data, https://www.census.gov/govs/retire/

So, how could it end?  Some possibilities are:

  1. A slow death.  Required pension payments, retired public employee health care expenses, and interest on government debt grow faster than tax revenues.  Services are cut, head count is reduced, and maintenance is deferred to make interest, pension, and retiree health care payments. This is already happening.  An increasing number of cities, counties, and special districts would go bankrupt over time.  More school districts would be taken over by the state. A slow death could also involve CalPERS and other California pension funds continuing to earn less than their investment targets.  Pension funding ratios deteriorate and required pension contributions increase until the process spirals out of control.
  1. A precipitating event. A recession or major stock market correction could cause a sudden reduction in tax revenue or significant pension fund losses that sharply increase underfunding.  In 2009, the CalPERS investment portfolio lost about 24 percent of its value.  California pension fund assets are heavily invested in stocks and other volatile assets that would lose value in a recession or stock market correction.  The result could be a forced recognition that future pension payments can’t be met in full.
  1. Government employees get nervous.  California pension funds are paying out in benefits to retired government employees more than they are taking in in new contributions. In fiscal year 2015, they paid out $1.40 in benefits for every dollar they received in contributions.  Think about it!  If you are a working government employee, none of the pension payments made on your behalf go into an account with your name on it. Your pension is totally dependent upon pension fund investment performance and the willingness and ability of future taxpayers to cut expenses and raise taxes to cover any shortfall in fund performance. In the future, will taxpayers and the politicians who represent them be willing to do whatever it takes to pay unfunded pension and retiree health care expenses?  Will they be more interested in finding ways to reduce these expenses?  Will there be enough tax money to go around even if their intent is to honor these unfunded obligations and other debts?

So, how and when does it end?  We can’t be sure.  However, it could end badly.

California’s Total State and Local Debt Totals $1.3 Trillion

We estimate that California state and local governments owe $1.3 trillion as of June 30, 2015. Our analysis is based on a review of federal, state and local financial disclosures. The total includes bonds, loans and other debt instruments as well as unfunded pension and other post-employment benefits promised to public sector employees. Our estimate of California government debt represents about 52% of California’s Gross State Product of $2.48 trillion. When added to the state’s share of the national debt, we find that California taxpayers are shouldering debt burdens on a par with residents of peripheral Eurozone states.

Not included are billions of dollars in deferred maintenance and upgrades to California’s infrastructure. To the extent California’s government has not maintained investment in infrastructure maintenance and upgrades to keep up with normal wear and to keep pace with an expanding population, it has passed this cost on to future generations who will have to issue additional debt to pay for this expense.

Components of California Government Debt

This is an update of a 2013 California Policy Center study entitled “Calculating California’s Total State and Local Government Debt.” That study reported total debt between $848 billion and $1.1 trillion. While we retain confidence in the findings of this earlier analysis, our new estimate incorporates a more comprehensive array of data sources and updated methodologies.

Our previous research relied primarily on official reports prepared by the State Controller and State Treasurer. Since 2013, some of this reporting has been altered or discontinued. Our current estimate supplements state provided data, with US Census data and information gathered from audited financial statements issued by state and local governments.

The latest U.S. Census Bureau estimate of California state and local government debt is $426 billion. Although this estimate is as of 2014, it is the most authoritative number available. Further, it appears to be reasonable based on our review of audited financial statements published by 300 of the state’s largest governmental entities. Although the state has over 4,000 government entities (and perhaps many more depending on one’s method of counting), most of these entities are relatively small and do not contribute significantly to state-wide totals.

We used the data collected from the audited financial statements to allocate the $426 billion total to the various categories of governments listed in the first section of the following table. State government is the largest borrower, but cities, counties, local educational authorities and special purpose governments also made large contributions to the total.


Special districts, authorities and agencies receive relatively limited attention, but some are large borrowers. For example, the Metropolitan Transportation Commission responsible for Bay Area Bridges, and to a lesser extent, area roads and public transit systems, has over $10 billion in liabilities, mostly in the form of bonds.

Table 1 also shows an estimated $148 billion of unfunded Other Post-Employment Benefits (primarily retiree health care). The state and county governments contribute the lion’s share of this total. Los Angeles County has the largest Unfunded Actuarially Accrued Liability (OPEB), at almost $27 billion. Our OPEB UAAL estimates are based on our review of the government audited financial statements for the 300 largest state government entities, which we believe account for 95% of statewide obligations.

The bond and OPEB obligations account for a total of $574 billion that we can attribute to governments by category. To this we add statewide unfunded pension obligations reported by 85 single and multi-employer pension plans, estimated at $258 billion. For most systems, we used a database posted by the State Controller, but for the largest systems, we obtained 2015 updated data from actuarial valuation reports.

Unfunded retirement obligations are considered long-term debt by any reasonable accounting standard. The principle behind this is clear: retirement benefits are earned during the years an employee works. To the extent the pension fund assets do not equal the present value of this future liability, a debt is created.

A large body of literature has arisen to question Unfunded Actuarially Accrued Liabilities (UAAL) reported by pension systems (see, for example, the work of Robert Novy-Marx and Joshua Rauh). The main concern is that most public pension systems discount the value of future benefit payments by unrealistically high rates of between 7% and 8% per year. Some authors contend that the discount rate employed should be a long-term risk free rate (of around 3%) because the benefits are almost certain to be paid. Others argue that a discount rate based on future asset returns may be used, but argue for adopting a more conservative rate given the fact that most systems have failed to achieve target returns in most recent years.

Moody’s, the credit rating agency, discounts pension liabilities with the Citigroup Pension Liability Index (CPLI), which is based on high grade corporate bond yields. When Moody’s first introduced its pension methodology a few years ago, we applied it to pension liabilities reported as of June 2011 when CPLI was 5.67%. More recently, CPLI has fallen: in June 2015, it was 4.44%. As a result, the increase in UAAL arising from the use of Moody’s methodology is much greater than it was when we first evaluated pension debts.

Using the CPLI discount rate, we estimate that the real UAAL is $713 billion, which is $455 billion more than the officially reported (the method for restating UAAL based on a different discount rate assumption is described here). An alternative approach used by the Stanford Institute for Economic Policy Research (SIEPR) is to discount the liabilities by a rate closer to the risk-free rate. In a recent report, Stanford researchers used a discount rate of 3.723%. Using Stanford’s methodology, we estimate a UAAL of $1.02 trillion.

It should be noted that this low rate is used by CalPERS to determine how much to charge a local government that chooses to leave the system. The logic in using this rate is probably that CalPERS would no longer be able to raise pension contribution levels after the agency has left the system and can’t depend upon local taxpayers to make up any shortfall in CalPERS’ future investment performance.

The following table shows liabilities by major pension system as reported, with the Moody’s adjustments and with the Stanford adjustments.


pensionunderfunding2015

Debt Continues to Increase

According to the State Treasurer’s Office Debt Watch website, $72 billion on new debt was issued in the year ending December 2016 as summarized below. This amounts to a debt increase of about $1,800 per citizen or about $4,600 per taxpayer in only one year (but this is partially offset by maturities and early repayments of exiting issues).

newissuance2016

California Debt in a National and International Context

The grand total of government borrowings, unfunded OPEB obligations and unfunded pension obligations is $1.28 trillion, or 52% of Gross State Product (GSP is a state’s share of the nation’s Gross Domestic Product and was $2.48 trillion in 2015). This represents a significant but not extraordinary debt burden by international standards.

But to more properly consider California debt in an international context, we should add federal debt for which California taxpayers may be responsible. In 2015, the ratio of publicly held federal debt to GDP was 73% (the national debt, which also includies debt securities held by the Social Security Administration and other federal agencies raises this proportion to 101% as of mid-2015).

Combining California’s debt with publicly held federal debt, we estimate a total debt-to-GDP ratio of 125% (or 153% using the broader definition of federal debt). This level places California distressingly close to peripheral Eurozone countries that faced financial crises in 2011 and 2012. Portugal’s 2015 debt-to-GDP ratio was 129% and Italy’s was 133%.

Implications at the Individual Level

The estimated California government debt of $1.3 trillion can be allocated back to all residents or just those that pay taxes. The state’s population is about 39 million. According to the IRS, about 17 million individual tax returns were filed in 2014. These levels imply California government debt burdens of $33,000 per resident and $74,000 per taxpayer – excluding their share of federal debt.

Further Research Needed

There are additional questions that remain to be addressed. The totals we report do not include the cost of addressing deferred maintenance of the state’s civil infrastructure. However, in 2015, California Forward estimated that the state faces a $358 billion infrastructure funding gap over the next ten years.

We have not looked at trends. How much faster has state and local debt grown compared to the state’s economy that supports the debt? We have not made any attempt to determine if the level of debt is beyond what the state can afford to service or what the impact of future interest rate increases may have on the ability of state and local government entities to service this level of debt in the future. Interest rates are at historic lows and are likely to rise in the future.

We have not estimated the impact of any possible increase in required pension payments on state and local government budgets. If CalPERS and other public employee pension systems reduce their discount rates to be consistent with recent investment performance and likely future investment returns, pension payments will increase substantially for state and local governments.

The State Treasurer’s office reports totals for debt issued on their Debt Watch website but does not estimate total debt outstanding. Some of the debt issued is retired or replaced by new debt. We understand that starting in 2018 the State Treasurer will start reporting debt outstanding as well as debt issued by various levels of government. This should improve the accuracy of future California Policy Center reports on total debt outstanding and eliminate the need to make estimates for some of the data.

About the Authors:

William Fletcher is a business executive with interests in public finance and national security. He retired as Senior Vice President at Rockwell International where most of his career was spent on international operations and business development for Rockwell Automation. Before joining Rockwell, he worked for Bechtel Corporation, McKinsey and Company, Inc., and Combustion Engineering’s Nuclear Power Division, and was an officer and engineer in the U.S. Navy’s nuclear program. His international experience includes expatriate assignments in Hong Kong, Europe, the Middle East, Africa and Canada. In addition to his interest in California’s finances, he is involved in organizations dealing with national security and international relations. Fletcher is a graduate of Tufts University with a BS degree in Engineering and a BA degree in Government. He also graduated from the U.S. Navy’s Bettis Reactor Engineering School.

Marc Joffe is the Director of Policy Research at the California Policy Center. In 2011, Joffe founded Public Sector Credit Solutions to educate policymakers, investors and citizens about government credit risk. His research has been published by the California State Treasurer’s Office, the Mercatus Center at George Mason University, the Reason Foundation, the Haas Institute for a Fair and Inclusive Society at UC Berkeley and the Macdonald-Laurier Institute among others. He is also a regular contributor to The Fiscal Times. Prior to starting PSCS, Marc was a Senior Director at Moody’s Analytics. He has an MBA from New York University and an MPA from San Francisco State University.

Government Created Energy Blackouts Coming to a City Near You

Most countries around the world think that it’s a good thing to have cheap energy. But in California, we have plenty of cheap energy available, just not the political will to access it.

California depends on natural gas-driven turbines and hydroelectric generators to provide just 38 percent of its oil needs. The state imports 12 percent of its oil from Alaska, and another 50 percent from foreign nations, relying heavily on Canada.

So why are California’s utilities warning of potential rolling blackouts again?

It’s political. And it’s corrupt.

Highest Electricity Rates = Less Power in CA

California’s natural gas shale formation is one of the largest in the world. And, California has been a pioneer in renewable energy, albeit still unreliable and unproven. Yet warnings are already coming that Californians may have rolling blackouts this summer. While California sits on one of the largest known deposits of recoverable oil and gas, production is falling steadily, as the state ignores its vast onshore and offshore deposits, which are fully accessible through conventional and hydraulic fracturing technologies.

This is one reason California electricity costs more than twice the national median –  thanks to a government-created shortage.

Another reason is that the California Public Utilities Commission, the state’s energy “regulator,” has an historic dubious relationship with Wall Street, making promises to keep the profits higher of the state’s publicly held utilities, than utility profits elsewhere. Those profits come out of ratepayers’ pockets. “You’re ego is writing checks you’re body can’t cash,” the famous quote from the movie Top Gun says.

$5 Billion Cover-Up at San Onofre

Another of the problem areas is the California Public Utilities Commission $5 billion cover up and scandal over the 2012 closure of the San Onofre Nuclear Generating Station, due to the failure of the steam generators. San Diego attorneys Mike Aguirre and Mia Severson exposed the attempt to make the public pay big for utility and regulatory executives’ mistakes at the failed San Onofre nuclear power plant.

20160613-CPC-GrimesSan Onofre could have operated for additional decades
if it weren’t for corruption and mismanagement.

Southern California Edison executives purchased new steam generators from Mitsubishi, but were warned that they were bigger and run hotter, and could fail. SCE executives purchased and installed the generators anyway, knowing of a flaw in the generator design, according to records. Built to last 40 years, the generators at San Onofre failed after 2 years. And, the generators’ cost had not yet been included in rates. So SCE was faced with broken generators they could not charge ratepayers for.

then-PUC President Michael Peevey, and executives of Southern California Edison colluded in secret to saddle ratepayers with $3.3 billion of the $5 billion shutdown cost. The $5 billion recovery settlement was negotiated in secret in Poland, away from prying eyes and open records laws in California.

Blackouts coming…

The state is awash in ultra cheap natural gas, yet in California, our corrupt government finds a way to create an energy shortage, and charge rate payers the highest rates in the country.

“State officials warn that Southern California could face as many as 14 days of scheduled blackouts this summer because of depleted reserves of natural gas caused by the massive leak in Aliso Canyon,” the Los Angeles Times warned in April. The LA Times neglected to mention that California ratepayers do have options, but its politicians have no will. The state sits on one of the largest known deposits of recoverable oil and gas — the Monterey Shale, a 1,700 square mile oil-bearing shale formation primarily in the San Joaquin Valley, which contains an estimated 15 billion barrels of oil. The Times article quoted Bill Powers, of Powers Engineering in San Diego, who said the utility’s pipeline system has not exceeded its capacity of 3.8 billion cubic feet per day during summer in the last 10 years, thus the concern of blackouts is without merit. “It is crying wolf for state agencies to be implying blackouts from a lack of gas, especially from a lack of gas in the summer time,” Powers said.

The Monterey Shale formation is estimated to be several times bigger than the Bakken Shale formation, currently delivering a record economic boom to North Dakota. But even as the fourth-largest oil producing state in the country, oil and gas production has been steadily declining here. Instead, California lawmakers turned their attention to wind and solar, and other types of alternative energy. The state has been only focused on implementing the Renewable Portfolio Standard, passed in 2011, which requires the state to be using 33 percent renewable energy by 2020.

A University of Southern California study, “Powering California: The Monterey Shale & California’s Economic Future,” looked at the development of the vast energy resource beneath the San Joaquin Valley known as the Monterey Shale. It found that hydraulic fracturing could create 512,000 to 2.8 million new jobs, personal income growth of $40.6 billion to $222.3 billion, additional local and state government revenues from $4.5 billion to $24.6 billion, and an increase in state GDP by 2.6 percent to 14.3 percent on a per-person basis.

It’s Not Easy Being Green

California politicians have gloated over being the first state to enact such aggressive green energy and greenhouse gas busting policy, but have yet to produce any proof that these oppressive and business-killing laws have had any “green” results.

All while they ignore that natural gas is clean, less expensive to extract, natural and abundant. It wasn’t that long ago that natural gas used to be the left’s preferred alternative to all other “dirty fuels.” But as the oil and gas industry found better, more affordable ways to access natural gas, it fell out of favor with emotional, whimsical environmentalists.

The last California Governor blamed for rolling energy blackouts was recalled by voters… hold that thought.

Katy Grimes is senior correspondent for The Flash Report, and a contributor to the Canada Free Press and Legal Insurrection. She is a senior media fellow with the Energy & Environmental Legal Institute, and she serves as president of the Sacramento Taxpayers Association.

(Orange County Archives / Wikimedia Commons)

Stanton officials launch propaganda war on tax-repeal effort

(Orange County Archives / Wikimedia Commons)

Downtown Stanton, 1913: More innocent times.

STANTON, Calif. – It was a Wednesday afternoon in early March, a more innocent time in Stanton, California. Gathered in the community center of the Plaza Pine Estates, we were like Adam and Eve in the Garden of Eden before they ate the apple that gave them a second-grader’s sense of good and evil.

Plaza Pine Estates is a well-manicured mobile home park so close to Beach Boulevard – the 26-mile state highway that functions as an asphalt riverbed moving automobiles between the foothills of inland Southern California and sprawling Huntington Beach State Park – that you can hear the dopplering traffic inside the community center.

That’s where Councilman David Shawver led a parade of public officials, including a county firefighter and two sheriff’s deputies, in a celebration of Stanton’s voter-approved hike in the city’s sales tax – from 8 to 9 percent, the highest in Orange County.

The so-called Talk with the Block series – there’ve been three-dozen so far, an official said – are supposed to be about community concerns. But at this one, at least, the communication was mostly one-way – what your computer scientists might describe as less input than output.

Speaker after speaker depicted that increase in the sales tax as the penny-thin line between civilization and chaos. And, in the end, the tax isn’t an ordinary tax, they said, but a “shared tax” – by which they apparently mean that the tax will hit residents as well as humans they called “outsiders.”

“The penny sales tax is a shared tax, a tax from people who drive through our community,” said Shawver. “They drive up and down Beach Boulevard, stop to get gas, and we get one penny. One penny! And thanks to that one little penny, we’ve been able to restore critical public safety assets.”

It also hits anyone who shops in Stanton, of course, though not (the officials stayed carefully on message) grocery and pharmaceuticals shoppers.

But it’s all for a good cause, Shawver said: public safety.

Stanton has a well-earned reputation for violence – it’s among the toughest towns in a county more famous for cat-fights among wealthy housewives than gunfights, gangs and prostitution.

“I’m not going to fool you,” said Shawver, a council veteran. “Public safety is expensive, but I am concerned with maintaining the level of service that you demand.”

Public safety in Stanton is indeed expensive – and getting pricier. This year, the city will pay an additional $1.1 million for public-safety, most of that the escalating cost of pay and benefits for its $220,000-per-year cops and firefighters. Those pay packages were negotiated by the powerful sheriffs and firefighters unions – the same unions that backed Shawver’s 2014 sales tax hike.

If it weren’t for a few lousy public investments over the last several decades, the city might be able to pay its sheriffs and firefighters even at that stratospheric level. But Shawver was among those on the city council who approved Stanton’s play in Vegas-style redevelopment schemes until Gov. Jerry Brown killed them in 2011. Stanton, Orange County’s poorest city, now pays millions on bonds to hold property it purchased while betting on its steady appreciation. Interest payments this year alone: $2,323,887. Unless the city refinances that debt, it’ll pay $42 million in interest by 2040.

And there’s bad news just ahead for Shawver and other Stanton officials. Residents qualified a tax repeal for the November ballot; if successful, that’ll put a ding in the city’s income statement. So will the steady rise in the cost of cops and firefighters: Thanks to more rigorous accounting (and the reporting of the Orange County Register’s Teri Sforza), Orange Countians recently learned for the first time that the Fire Authority is actually running in the red, with deficits – especially for retirement pay and other health benefits – exceeding assets by $169 million for the fiscal year that ended in June.

That has other cities so enraged, they’re talking about leaving the authority and even privatizing firefighting.

But not Shawver. When it comes to the county’s sheriffs and firefighters, “There are no finer government agencies,” he asserted.

We might have believed that in a more innocent time, before the Talk With the Block. But later that night, we discovered that Shawver, a 28-year veteran of Stanton’s redevelopment fiascos, has served for 21 years as his city’s representative on the board of the Orange County Fire Authority.

Citing CPC study, new Assembly bill seeks to stop runaway school bond debt

For Immediate Release
March 24, 2016
California Policy Center
Contact: Will Swaim
Will@CalPolicyCenter.org
(949) 274-1911

SACRAMENTO — A California Assemblyman hopes to stop school officials before they recklessly spend again.

AB 2116 author Rep. James Gallagher (R-Sacramento Valley) says his bill would limit the ability of school districts to take on debt through new bonds – even authorizing county auditors to stop spending if bond “funds are not being spent appropriately.”

“Borrowing for school construction has exploded in the last decade,” Gallagher said.“As borrowing hits record highs, it is more important than ever that school construction bond funds be fiscally sound, and their financing mechanisms transparent.

“AB 2116 ensures that future school construction bonds are subject to stricter scrutiny and transparency.”

Gallagher said his Assembly bill is built on research and recommendations in a July 2015 California Policy Center study.

“For the Kids: California voters must become wary of borrowing billions from wealthy investors for educational construction,” by CPC researcher Kevin Dayton, tracked passage over 14 years of more than 900 California school bonds worth $146.1 billion.

In addition to waste and abuse in the management of those school bonds, Dayton found another problem: the surge in school bond debt has produced a massive wealth shift upward – from taxpayers of relatively modest means to “wealthy investors who buy state and local government bonds as a relatively safe investment that generates tax-exempt income through interest payments.”

Gallagher’s bill would implement three of the California Policy Center’s recommendations – requiring independent audits of a bond’s drain on local tax revenue; establishing annual reviews of bond issuing and repayment; and empowering auditors to halt spending that is inconsistent with the bond’s purpose.

The bill will be heard April 6 at 1:30 pm in the Assembly Education Committee of the California State Capitol, Room 2116.

ABOUT ANALYST KEVIN DAYTON
Kevin Dayton is a policy analyst for the California Policy Center, a prolific writer, and the author of frequent postings about generally unreported California state and local policy issues on the California Policy Center’s Prosperity Forum and Union Watch, as well as on his own website www.LaborIssuesSolutions.com. His other policy reports include Legacy Issues: The Citizens for California High-Speed Rail Accountability 2014 Business Plan for the California High-Speed Passenger Train System and four editions of Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions? — a publication that sparked high-profile policy debates in cities throughout California and in the state legislature. His 2003 journal article “Labor History in Public Schools: Unions Get ’Em While They’re Young,” endures as the leading critical analysis of that movement. Dayton is a 1992 graduate of Yale University. Follow him on Twitter at @DaytonPubPolicy.

ABOUT THE CALIFORNIA POLICY CENTER
The California Policy Center is a non-partisan public policy think tank providing information that elevates the public dialogue on vital issues facing Californians, with the goal of helping to foster constructive progress towards more equitable and sustainable management of California’s public institutions. Learn more at CaliforniaPolicyCenter.org.