California school officials use Trump to mask their own failures

In announcing the end of the DACA program two weeks ago, President Trump seemed to fulfill a campaign promise to kill a program he once declared unconstitutional. But later, the president seemed to call for a permanent legislative solution that would grant resident status to people brought illegally to the country as minors. Tweeting that same day, the president said, “Congress now has 6 months to legalize DACA (something the Obama Administration was unable to do). If they can’t, I will revisit this issue!”

The nuance – the back-and-forth – was lost on many Obama-haters who celebrated the president. But it was also lost on Trump-haters, including public education officials and union leaders in California. They’ve used President Trump’s non-decision as an opportunity to rally their faithful by terrorizing undocumented families in the state.

California schools Superintendent Tom Torlakson denounced the president’s message as a “mean-spirited, political attack on students who are working hard to succeed.” Randall Booker, superintendent of Piedmont Unified in the Bay Area, said the president had launched a “direct attack on California families and their children.” In a letter to the California congressional delegation, University of California President Janet Napolitano called the president’s non-decision “callous and misguided” and said it “unnecessarily punishes hundreds of thousands of bright young people.”

Within a week of the announcement, closer to home, the board of the Santa Ana Unified School District voted to condemn the president’s move – or rather “non-move,” if you like. The resolution claimed “great uncertainty exists amongst students about what specific immigration policies will be pursued by the federal government, and immigrants and other populations within the SAUSD community are fearful of policies that may result in deportation or forced registration based on immigration status, religion or beliefs.”

I was the sole vote against the resolution, in part because we already passed a resolution in December 2016 asking Congress to act on immigration reform. But I was especially opposed to the resolution because the “uncertainty” it highlights has been caused by the very people behind this and similar resolutions. They are certainly the cause – and, if you believe them, the cure – of communal anxiety.

But I also voted against the resolution because I see it for what it really is: a tactic to transform Washington politics into local anxiety. Panic is useful for teacher’s union leaders and school officials who hope to distract us from the real issue: their failure to educate out students.

Their failure is documented in state tests that show a majority of our school children cannot read or perform math at grade level. Despite that undeniable evidence, SAUSD graduates these students from high school even though they’re unprepared for college or career. That’s a fraud.

Instead of correcting this social injustice, my fellow board members voted last week to condemn the president. That same night, teachers union leaders took their three minutes at the public-comments dais to condemn me for documenting the catastrophic, decades-long slide in student performance.

There is a crisis haunting our community. But it’s not a crisis the president caused. It’s not a crisis emanating from distant Washington, DC. Indeed, in the last several days, the president has begun talking with congressional Democrats about a deal that would permanently resolve the problem of people covered by the DACA program.

No, the crisis that should concern everyone has its origin right here in Santa Ana, California. It has been created by teacher’s union leaders, their allies and school officials who fail to educate generations of our children – and who attempt to distract us by sowing terror.

Under the law, all children, including immigrant children, have the right to a quality public education. Any other conversation is at best a sideshow meant to keep our community down.

This commentary appeared first in the Orange County Register. Cecilia Iglesias is a Santa Ana Unified school board trustee, president of the Parent Union, and director of community relations and education at the California Policy Center in Tustin. Researcher Stuart Clay contributed to this commentary.

 

 

Californians Approve $5 billion per Year in New Taxes

For the last few years, using data provided by the watchdog organization CalTax, we have summarized the results of local bond and tax proposals appearing on the California ballot. Nearly all of them are approved by voters, and this past November was no exception.

With only a couple of measures still too close to call, as can be seen, 94 percent of the 193 proposed local bonds passed, and 71 percent of the proposed local taxes passed. Two years ago, 81 percent of the local bond proposals passed, and 68 percent of the local tax proposals passed. No encouraging trend there.

California’s Local Tax and Bond Proposals – Voting Results, November 2016

A simple extrapolation will provide the following estimate: Californians just increased their local tax burden by roughly $4 billion, in the form of $1.9 billion more in annual interest payments on new bond debt, and $2.1 billion more in annual interest on new local taxes. But that’s not even half the story.

California’s voters also supported state ballot initiatives to issue new bond debt and impose new taxes. Prop. 51 was approved, authorizing the issuance of $9 billion in new bonds for school construction. Prop. 55 extended until 2030 the “temporary” tax increase on personal incomes over $250,000 per year, and Prop. 56 increased the cigarette tax by $2 per pack. The cost to taxpayers to service the annual payments on $9 billion in new bond debt? Another $585 million per year. Even leaving “rich people” and smokers out of the equation, California voters saddled themselves with nearly $5 billion in new annual taxes.

But as they say on the late-night infomercials, there’s more, much more, because California’s state legislators don’t have to ask us anymore if they want to raise taxes. November 2016 will be remembered as the election when a precarious 1/3 minority held by GOP lawmakers was broken. California’s democratic lawmakers, nearly all of them controlled by public sector unions, now hold a two-thirds majority in both the state Assembly and the state Senate. This means they can raise taxes without asking for consent from the voters. If necessary, they can even override a gubernatorial veto.

And they will. Here’s why:

There are three unsustainable policies that are considered sacrosanct by California’s state lawmakers and the government unions who benefit from them. (1) They are proud to have California serve as a magnet for undocumented immigrants and welfare recipients. (2) They are determined to continue to overcompensate state and local government workers, especially with pensions that pay several times what private workers can expect from Social Security. (3) They have adopted an uncritical and extreme approach to resolving environmental challenges that has created artificial scarcity of land, energy and water, an asset bubble, and a neglected infrastructure that lacks the resiliency to withstand large scale natural disasters or civil emergencies.

All three of these policies are extremely expensive. “Urban geographer” Joel Kotkin, writing in the Orange County Register shortly after the Nov. 8 election, had this to say about these financially unsustainable policies:

“This social structure can only work as long as stock and asset prices continue to stay high, allowing the ultra-rich to remain beneficent. Once the inevitable corrections take place, the whole game will be exposed for what it is: a gigantic, phony system that benefits primarily the ruling oligarchs, along with their union and green allies. Only when this becomes clear to the voters, particularly the emerging Latino electorate, can things change. Only a dose of realism can restore competition, both between the parties and within them.”

Despite the increase in consumer confidence since the surprising victory of Donald Trump in the U.S. presidential election, the stock and asset bubble that has been engineered through thirty years of expanding credit and lowering rates of interest is going to pop. The following graphic, using data from Bloomberg, explains just how differently our economy is structured today compared to 1980 when this credit expansion began.

Stock P/E Ratios and Interest Rates – 1980 vs 2016 

As can be easily seen from their price/earnings ratios today, publicly traded stocks are grossly overvalued. Equally obvious is that interest rates have fallen as low as they can go. For more discussion on how this is going to affect the economy, refer to recent California Policy Center studies “How a Major Market Correction Will Affect Pension Systems, and How to Cope,” and “The Coming Public Pension Apocalypse, and What to Do About It.” Despite healthy new national optimism since Nov. 8th, the economic fundamentals have not changed.

California’s democratic supermajority legislators, and the government unions who control them, are going to have a lot of explaining to do when the bubble bursts. For decades they have successfully fed their unsustainable world view to the media and academia and the entertainment industry. For over a generation they have brainwashed California’s K-12 and college students into militantly endorsing their unsustainable world view. This year they conned California’s taxpayers into approving another $5 billion in new annual taxes. But the entire edifice exists on borrowed time.

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Ed Ring is the vice president of research policy at the California Policy Center.

New California Policy Center Study Offers Next Generation Infrastructure Solutions

Invest California’s Pension Funds in Water and Energy Infrastructure

“We wanted flying cars, instead we got 140 characters.”
–  Peter Thiel, in his 2011 manifesto “What Happened to the Future.”

Anyone living in California who’s paying attention knows what venture capitalist Thiel meant. While a handful of Silicon Valley social media entrepreneurs have amassed almost indescribable wealth, and fundamentally transformed how humanity communicates, investment in boring things like roads, bridges, tunnels, ports, aqueducts, reservoirs and railroads – the list is endless – has stagnated. Especially in California. Flying cars? Forget about it. Go tweet.

20161114-cpc-flyingcar

Why? Why the neglect?

(1) For starters, why invest in moving atoms around, which is messy and might incur the wrath of powerful climate change activists, when you can move electrons around in new and exciting ways and make billions? Silicon Valley entrepreneurs are making a rational choice to prefer manipulating characters to manufacturing cars.

(2) And when it comes to innovations that do involve atoms, that is, actual manufactured goods, Silicon Valley entrepreneurs are lobbying for mandates that force people to purchase internet enabled home appliances, connected to smart meters, that punitively bill consumers who, for example, operate their clothes dryer or dishwasher at the “wrong” times.

(3) Public money that might be used to backstop private investment in infrastructure is being used instead to pay over-market compensation to California’s state and local workers, who now receive pay and benefits that on average are twice what California’s private sector workers earn.

To justify this neglect, California’s governor Brown has been the cheerleader for a culture of austerity. But there is an alternative that would lower the cost of living for all Californians, and even make it possible to lower public sector compensation without lowering their living standards. That is a culture of abundance.

The culture of abundance used to be synonymous with the Silicon Valley. “Better, faster, cheaper” used to be the mantra that informed innovation in the Silicon Valley. And throughout history, the human condition has marched fitfully but inexorably upwards because human creativity and innovation made everything we needed better, faster, cheaper. So how can we invest public and private funds to create cheap and abundant water, energy, transportation and housing?

One untapped source of investment are California’s public employee pension funds, which collectively manage nearly $800 billion in assets. Investing just a fraction of these assets in revenue producing civil infrastructure could have a decisive positive impact. Using water as an example, along with a crumbling distribution infrastructure, there are well established water markets in California. Investing in sewage reuse, seawater desalination, and aquifer and reservoir storage for runoff could eliminate water scarcity in California.

There are several interlocking benefits to investing pension funds in California’s infrastructure. For the pension funds, these would be safe investments that over time would yield more than typical fixed income investments and in fact may exceed their target returns of 6.5% or more per year. For California’s workforce, building and operating these assets in water, energy, and transportation would create tens of thousands of high-paying jobs. For California residents, these assets would create abundance instead of scarcity, and lower the cost of living.

With respect to the environment, increasing the diversity and quantity of water and energy supplies would create climate resiliency, and in nearly all cases – since this factor is of great concern to many Californians – these operations would be either “carbon neutral” or very nearly so.

The challenge to rebuilding California’s infrastructure is not primarily financial. Attracting pension fund investment might be the centerpiece of finding the capital for these projects, but there are all the traditional sources of funds, namely bonds and private investment. The bigger challenge is cultural. Joel Kotkin, writing for the Orange County Register, vividly frames the cultural challenge we face:

“California is on the road to a bifurcated, almost feudal, society, divided by geography, race and class. As is clear from the most recent Internal Revenue Service data, it’s not just the poor and ill-educated, as Brown apologists suggest, but, rather, primarily young families and the middle-aged, who are leaving. What will be left is a state dominated by a growing, but relatively small, upper class, many of them boomers; young singles and a massive, growing, increasingly marginalized “precariat” of low wage, often occasional, workers.

This social structure can only work as long as stock and asset prices continue to stay high, allowing the ultra-rich to remain beneficent. Once the inevitable corrections take place, the whole game will be exposed for what it is: a gigantic, phony system that benefits primarily the ruling oligarchs, along with their union and green allies. Only when this becomes clear to the voters, particularly the emerging Latino electorate, can things change. Only a dose of realism can restore competition, both between the parties and within them.”

Californians must be convinced that the “better, faster and cheaper” mantra that used to define the Silicon Valley, and the cost-cutting virtue of innovations that have uplifted humanity throughout history, can again be our cultural guiding principle. They must be convinced that good jobs and affordable abundance are possible without overly compromising our culture that cherishes the environment. They must be convinced that these “green” values have been taken too far; that they are a cover for condescending, statist oligarchs.

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Ed Ring is the vice president for policy research at the California Policy Center.