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Let Them Drive Teslas

Once again, Senate Leader Darrell Steinberg has thumbed his nose at the working class and other Californians of modest means by blocking legislation that would have slightly delayed implementation of carbon emission fees charged to oil companies. The fees are part of the state’s “cap-and-trade” program, California’s one-of-a-kind effort to reduce wordwide carbon emissions. These fees are really taxes that will be passed on to consumers.

California drivers need to brace themselves. We already have the highest gas tax in the nation and this silly scheme will add between 15 and 40 cents a gallon after the first of the year. Bigger increases are a near certainty after that.

The effort to postpone the harm to citizen taxpayers was no right wing conspiracy. Indeed, its champion was Democratic Assemblyman Henry Perea. He introduced AB 69 to spread the implementation of the new fees over a three-year period to allow those who must buy gasoline more time to adjust to the higher costs. The measure was supported by other moderate Democrats and Republicans but, in a letter to Perea, Steinberg made it clear that he would not allow its consideration by the Senate.

In his letter to Perea, Steinberg paid lip service to the cost of combating carbon emissions, but added “the cost of doing nothing is much greater.” That opinion, however, is not shared by the rest of the civilized world. Virtually all other nations have backed off their aggressive “global warming” policies. Australia is but the most recent country to abandon carbon taxes because of the “costs to households.”

Steinberg’s refusal to recognize the needs and problems of average state residents is typical of majority thinking around Sacramento. Steinberg and his colleagues would do well to emulate gubernatorial candidate Neil Kashkari who spent a week in Fresno living on the streets while looking for work. If the Senator and other disconnected legislators would spend a little time in the real world they might learn something.

While the unemployment rate has declined — California still ranks seventh highest in unemployment — areas like the Inland Empire are still suffering with nearly 10 percent out of work. And our state, at 23.8 percent, has the highest poverty rate in all 50 states.

Excepting the moderate Democrats and Republicans who understand the severity of working class problems, the detached political left is mistaken to overlook the millions of low income Californians — many of whom are working, but only part time — who are not happy relying on entitlement programs to get by. Most of these need a car to look for work and, if they’re lucky enough to land a job, a way to get there.

The cost of gasoline is already sky high and the dirty little secret is that 71.29 cents of what the consumer pays per gallon is state and federal tax. The “evil” oil companies’ profits on a gallon are about 7 cents. So, we have to ask – who’s ripping off whom? Having to pay another 40 cents a gallon in additional government imposed taxes is the last thing that those of low and moderate income need right now.

Assemblyman Perea has pleaded for consideration for these folks, only to be rebuffed. Steinberg’s response reminds one of Marie Antoinette’s who, when told that the people were starving because they had no bread, infamously said, “Let them eat cake.” In the case of those fervently devoted to the rigid implementation of California’s cap and trade program, it is as if when told that a low income citizen can no longer afford gasoline for their 1991 Toyota Corolla, they respond with “Let them drive Teslas.” The Tesla, of course, is a taxpayer subsidized electric car that will set the buyer back north of $100,000, which is well beyond the means of those who will be most hurt by this new gas tax.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 3

This is Part Three, explaining how unions may attempt to win control of the construction and permanent jobs at the ancillary development around the arena. Part One explained the background of how construction trade unions have already obtained a monopoly on the construction workforce for the arena itself. Part Two explained the union plot to monopolize the service jobs at the arena.

Factions in the Construction Industry: Trusting Pragmatism Versus Principled Cynicism

Leaders of the Sacramento regional construction industry were on the sidelines as the new ownership of the Sacramento Kings basketball team privately negotiated a Project Labor Agreement with trade unions for construction of the new downtown arena. Yet construction business associations such as Associated General Contractors (AGC) and Associated Builders and Contractors (ABC) still supported the city’s plan for the arena.

In a pragmatic decision, these construction associations took the risk to trust that private developers for buildings near the arena will not require their contractors to sign Project Labor Agreements. This development will supposedly include 475,000 square feet of office, 350,000 square feet of retail and commercial space, up to 550 new residential units, and up to 250 hotel rooms, for a grand total of as much as 1.5 million square feet. Up to 11,000 jobs would result.

In exchange for acquiescing to the Project Labor Agreement on the arena, these associations expect fair and open competition for adjacent projects within the city’s Entertainment and Sports District. The Sacramento Bee reported this perspective expressed at a January 27, 2014 rally of contractors and union leaders in support of the arena:

John Cooper of Associated General Contractors said his group, which represents both union and nonunion builders, supports the arena project. “We see an opportunity for huge leaps and bounds when it comes…to job creation,” said Cooper, the AGC’s regional manager.

But Cooper said he’d “pull my support” if the ancillary development – a hotel, retail and more – isn’t open to all bidders. He said “I’ve been assured” there won’t be a project labor agreement covering this ancillary development, like there is for the arena itself.

Political consultant Chris Lehane, who is part of The4000’s leadership, said it’s “premature to ask those questions” about how the ancillary development would be built.

“Our focus right now is to make sure we get those 11,000 jobs,” Lehane said.

A handful of electrical contractors objected vehemently to this arrangement. They felt that allowing unions to have a monopoly on construction of the basketball arena would set a precedent for other major projects in the region. In addition, they did not trust union leaders or the politicians backed by union leaders to resist such a lucrative target once it was definite.

Dissenting from the major trade associations, these contractors individually provided enough campaign funding to revitalize a floundering signature-gathering campaign on petitions for a ballot measure for voters to establish a city charter provision requiring voter approval of a public subsidy for an entertainment or sports facility. Arena supporters feared – and arena opponents expected – that Sacramento voters would approve this check and balance against the proposed $258 million public subsidy for the basketball arena.

Enough signatures were collected to qualify the petition for the June 2014 ballot, but the city clerk disqualified the petitions because of numerous technical errors. The campaign then sued to overturn the city clerk’s decision, but a Sacramento County Superior Court judge agreed with the city clerk’s judgment and also ruled that the city charter could not be amended in this manner.

Can Unions Resist Grabbing More Work Through CEQA Greenmail?

Which of these two positions among bickering groups of contractors will be proven right? One possible indication of the future is an ultra-last-minute attempt by unions to amend a last-minute bill in the California State Legislature providing certain breaks to the arena and surrounding development from the California Environmental Quality Act (CEQA), the primary tool of unions to extort concessions from private developers. (This practice is known as “greenmail.”)

Late in the 2013 session, Senate President pro Tem Darrell Steinberg (D-Sacramento) amended Senate Bill 743 to make some minor modifications to the California Environmental Quality Act and “expedite judicial review of the entertainment and sports center project” for the Sacramento Kings basketball team. Despite some griping from Left and Right, SB 743 passed 56-15-7 in the Assembly and 32-5-2 in the Senate. This occurred early in the evening of the last day of the 2013 session.

As the midnight deadline for legislative action approached, Assembly Bill 852 mysteriously appeared on the Assembly floor, courtesy of Assemblyman Roger Dickinson (D-Sacramento). This bill supposedly made technical corrections to SB 743, passed earlier in the evening.

Reportedly a specific individual senior staffer for the Assembly Republican Caucus became suspicious of the bill and investigated it. This staffer realized that it was some sort of union scheme to remove the CEQA breaks for development around the downtown Sacramento arena.

The Sacramento Bee described what happened next:

In a final flare of end-of-session drama, Assembly Republicans led the defeat of a last-minute labor-inspired cleanup bill related to legislation passed earlier in the evening to hasten the building of a new arena in downtown Sacramento.

Assembly Bill 852 surfaced late on Thursday evening, after both houses had passed Sen. Darrell Steinberg’s SB 743 to streamline the construction of a new arena for the Sacramento Kings. AB 852 was cast as a minor cleanup bill, making just a small change to the arena bill by further restricting which projects could be exempted from some environmental review.

It was requested by labor unions, Steinberg said, who feared that other businesses would get in on the streamlined environmental review procedures intended for the arena.”The concern from labor was that Wal Mart and the big box stores could potentially take advantage of that part of (SB) 743 to get an exemption,” he said.

The 2013 legislative session wrapped up in anger and partisan rancor as the Assembly Republican leadership refused to support AB 852 and accused the Democrats of trickiness. The bill only received 28 votes in the Assembly, and the legislature adjourned for the year with SB 743 intact.

Of course, there was no plan for a Wal-Mart next to the Kings arena. But the distaste of the Left for Wal-Mart provided a politically-potent rationale to “fix” SB 743. An article in Salon provided a perspective on SB 743 otherwise neglected by the news media:

Along with special exceptions for a new stadium for Sacramento’s basketball team, the new law restricts some grounds for CEQA lawsuits. “It’s going to give much more leeway to big companies to just come in and ram these projects through,” said James Araby, who directs the Western States Council of the United Food & Commercial Workers union…

The UFCW and Wal-Mart – and allies on both sides – faced off with particular fury not long before the final SB 743 vote, as legislators considered language labor argued was needed to stop the bill from becoming a loophole for unchecked Wal-Mart expansion…

[Assemblymember Lorena] Gonzalez, a former labor council secretary-treasurer, told Salon that in fights with Wal-Mart, “one of the only tools we’ve been able to use is CEQA, and specifically the traffic impact of Wal-Mart.” Following what she called “massive lobbying by the Chamber of Commerce” and “mainly by Wal-Mart,” the labor-backed amendment failed.

An official with the union-aligned Planning and Conservation League acknowledged in the article that “We all know that Wal-Mart is one of the biggest targets of CEQA lawsuits.”

Is it likely that the amendments backed by the United Food & Commercial Workers union will reappear at the last minute in a budget trailer bill or some other gut-and-amend bill in 2014? Of course it is, and every union will benefit from ending the CEQA break.

More evidence that unions will use environmental laws to target the ancillary development around the Kings arena comes from comments submitted to the City of Sacramento concerning the Draft Environmental Impact Report for the Entertainment and Sports District. As noted in Part 2, the UNITE HERE Local Union No. 49 submitted objections to the report along with remarks about wanting to retain and represent service workers at the new arena.

In addition, a group called Sacramento Coalition for Shared Prosperity submitted objections in conjunction with a demand for a “Community Benefits Agreement” that developers must sign for ancillary development. That agreement, modeled on the L.A. Live Community Benefits Agreement for development around the Staples Center, could guarantee “union jobs” for hotels, restaurants, janitors, parking attendants, and construction trade workers, among various occupations.

Perhaps the biggest threat to the downtown arena is the possibility that SB 743 is unconstitutional and that the arena doesn’t even qualify under the criteria in SB 743. If a court agreed with either of these claims, the environmental review would probably need to start from the beginning.

How will the Sacramento Kings basketball team ownership and the City of Sacramento respond to these costly union demands, packaged with the grounds for potential environmental lawsuits? If unions exploit the weakness of SB 743, they may get the whole package – provided the resulting cost increase allows the Entertainment and Sports District to get built in the first place.

The Three-Part Series: How a Basketball Arena Would Expand the Unionized Workforce in Sacramento

1. See How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 1

(how construction trade unions have already obtained a monopoly on the construction workforce for the arena)

2. See How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 2

(how unions are likely to win representation of the food and service workers at the new downtown Sacramento arena)

3. See How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 3

(how unions will likely target the ancillary development around the arena)

Sources

Union Leaders and Building Contractors Rally in Support of ArenaSacramento Bee – March 11, 2014

UNITE HERE Local 49 comments on Draft Environmental Impact Report

Sacramento Coalition for Shared Prosperity comments on Draft Environmental Impact Report

California Senate Bill 743

California Assembly Bill 852

Legislature Rejects Late Night Attempt to Tweak Kings Arena BillSacramento Bee – September 12, 2013

Very Sneaky, Walmart: How The Mega-Retailer Rolled Back California RegulationsSalon – October 14, 2013

Regional Sports and Entertainment Facilities in the Urban Core Attract Costly Political Meddling: Sacramento Kings as a Case Studywww.FlashReport.org – December 16, 2013

 


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

 

 

 

Transitional Kindergarten: A Boondoggle by any other name….

CA announces a budget surplus — and legislators can’t wait to blow it.

It’s hardly surprising, but California’s we-never-met-a-big-budget-bill-we-didn’t-like Democratic lawmakers and State Superintendent of Public Instruction Tom Torlakson have joined hands to sponsor SB 837, new legislation that would provide free public preschool to every four-year-old child in California.

The Kindergarten Readiness Act of 2014, introduced by Darrell Steinberg (D-Sacramento) and co-sponsored by Torlakson and Early Edge California, will expand access to transitional kindergarten programs to all four year old children, no matter when their birthday. Currently, children with birthdays early in the year are excluded.

“It’s impossible to overstate how important these early years are to a child’s future success in school,” Torlakson said in a press release. “Transitional kindergarten—particularly a full-year, full-day program—can make all the difference, especially for families who may be struggling to give their young children these valuable learning opportunities.”

According to the proposal, 46,000 four-year-olds would be added each year for the first five years of the program, which will cost a total of $990 million by 2019-20.

This bill is an upgrade to SB 1381, which the legislature passed in 2010. 

California’s current transitional kindergarten program applies to 4-year-olds who turn 5 in October, November or December. That age group was affected by the 2010 bill, which requires children to turn 5 by Sept. 1, instead of Dec. 2, to attend kindergarten. The state began phasing in the program, one month a year, in 2012-13.

Needless to say, the California Teachers Association is on board with this (and any) bill that adds thousands of new dues-paying jobs to help replenish its sagging coffers. In fact, SB 837 would create 8,000 teaching positions for class sizes of 20 children or fewer.  (CTA president Dean Vogel was not very happy with the earlier bill because unlike SB 837, it let individual districts decide whether or not to offer TK.)

Interestingly, the people of CA already weighed in on the subject back in 2006 when over 60 percent of the voters resoundingly clobbered Prop. 82 – a tax-the-rich scheme proposed by actor/activist Rob (Meathead) Reiner – which would have enabled four year-olds across the state to attend taxpayer supported preschool. But the Sages of Sacto have turned a blind eye to the will of the people since then.

What do we really know about Transitional Kindergarten (TK)?

TK, Pre-K and Head Start are different names for programs that accomplish little more than adding unionized teaching and educational support jobs to the state’s payroll. Oh, sure, the sales pitch sounds great. As Steinberg says, “Expanding transitional kindergarten can be accomplished with just a fraction of increased Proposition 98 funds while saving billions of dollars in the long run by reducing the extra costs of special education, grade retention and juvenile crime.”

Steinberg’s cheerleading notwithstanding, early childhood education has never proven to have lasting results. Obviously, due to its newness, there are no longitudinal studies specifically for TK. But we sure know about Head Start, which would seem to be TK by another name. The results of the third and final phase of the federal government’s Head Start study were released in December 2012, and they matched those of the second phase of the study published in 2010. They revealed that basically the federal program has been a $180 billion (and counting) boondoggle. Lesli Maxwell in Education Week explains,

In the first phase of the evaluation, a group of children who entered Head Start at age 4 saw benefits from spending one year in the program, including learning vocabulary, letter-word recognition, spelling, color identification, and letter-naming, compared with children of the same age in a control group who didn’t attend Head Start. For children who entered Head Start at age 3, the gains were even greater, demonstrated by their language and literacy skills, as well their skills in learning math, prewriting, and perceptual motor skills.

The second phase of the study showed that those gains had faded considerably by the end of 1st grade, with Head Start children showing an edge only in learning vocabulary over their peers in the control group who had not participated in Head Start.

And now, in this final phase of the study, “there was little evidence of systematic differences in children’s elementary school experiences through 3rd grade, between children provided access to Head Start and their counterparts in the control group,” the researchers wrote in an executive summary. (Emphasis added.)

After the second phase results came out, Reason Foundation’s Lisa Snell blogged,

The just-released large-scale random assignment study of Head Start confirms once again that the $7 billion a year federal preschool program provides meager benefits to children at huge costs to taxpayers.

In other words, it’s a very expensive and wasteful federal babysitting program. The Heritage Foundation’s Lindsey Burke elaborates:

… This federal evaluation, which effectively shows no lasting impact on children after first grade and no difference between those children who attended Head Start and those who did not, should call into question the merits of increasing funding for the program, which the Obama administration recently did as part of the so-called “stimulus” bill.

In a rare moment of candor, the mainstream media joined the naysayers, Time Magazine’s Joe Klein weighed in,

You take the million or so poorest 3- and 4-year-old children and give them a leg up on socialization and education by providing preschool for them; if it works, it saves money in the long run by producing fewer criminals and welfare recipients…it is now 45 years later. We spend more than $7 billion providing Head Start to nearly 1 million children each year. And finally there is indisputable evidence about the program’s effectiveness, provided by the Department of Health and Human Services: Head Start simply does not work.

So we may as well be flushing cash down the toilet. Perhaps that is what CA governor Jerry Brown was thinking when he announced his new budget last week. It seems that the quirky state leader has reservations about the financial outlay. Friday, he said that he has adjusted his initial budget proposals “to accommodate lawmakers on some of their priorities in recent years. But he made no mention in his presentation Thursday of a chief concern of legislative Democrats: transitional kindergarten.” When asked about the proposal, the governor said he would listen to proposals, but stressed that “wisdom and prudence is the order of the day.”

It’s outrageous that the taxpayers might have to fork over billions to satisfy the political agenda of the state legislature and their teacher union cronies. The Brookings Institution’s Grover J. Whitehurst sums it all up quite well, writing that childhood education,

… remains mired in philosophy, in broad theories of the nature of child development, and in practices that spring from appeals to authority and official pronouncements of professional guilds, rather than to research. Until the field of early education becomes evidence based, it will be doomed to cycles of fad and fancy. We need a science of early-childhood education, and we need it now.

Indeed, before spending another dime on any of this, we need fiscal discipline and solid research. Until then, we are at the mercy of what Stanford’s Caroline Hoxby refers to as the cardiac test. “We just know in our heart that this is right.”

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers with reliable and balanced information about professional affiliations and positions on educational issues.

Revised List of Union Actions in 2013 Under the California Environmental Quality Act (CEQA)

California State Senate President pro Tem Darrell Steinberg is still talking about changes to the California Environmental Quality Act (CEQA) as the legislature works through its last two weeks in session in 2013.

His vehicle for CEQA amendments – Senate Bill 731 – is still alive. It contains language that would supposedly help developers of urban infill projects to circumvent petty environmental objections of small neighborhood groups. Unions have publicly refrained from taking a position, but reportedly their lobbyists have objected behind the scenes to any provisions that would weaken the ability of unions to use CEQA as a tool to pressure developers to sign union agreements.

Steinberg also plans to “gut and amend” a bill and transform it into a bill that gives special breaks from CEQA to Sacramento Basketball Holdings LLC, the developer of the planned new arena for the Sacramento Kings professional basketball team. It’s expected that all construction companies will have to sign a Project Labor Agreement with unions in order to build this “entertainment and sports center.”

In the meantime, examples continue to emerge of union involvement in the permitting process for public and private projects in California. A June 25, 2013 article in www.UnionWatch.org (Collect Them All: Environmental Objections of California Unions in 2013) listed nine identified projects. That list is now up to 23 projects, and surely there are some projects targeted by unions that are still missing from the list. Plus there are four more months in 2013 for additional union “greenmail.”

Here’s the revised list of union CEQA actions in 2013:

1. Glenarm Power Plant Repowering Project, City of Pasadena

March 13, 2013 – Comments on Final Environmental Impact Report – California Unions for Reliable Energy (CURE)

Here’s a chronology of how the law firm of Adams Broadwell Joseph & Cardozo, representing California Unions for Reliable Energy (CURE), objected on environmental grounds to a municipal power plant project on one hand while negotiating a Project Labor Agreement for the same project on the other hand:

2012-2013 – Interaction Between California Unions for Reliable Energy (CURE) and City of Pasadena – Glenarm Power Plant Repowering Project

2. Napa Pipe Project, County of Napa

May 20, 2013 – Request for a Subsequent Environmental Impact Report – Sheet Metal Workers Local Union No. 104, Plumbers and Steamfitters Local Union No. 343, and the International Brotherhood of Electrical Workers Local Union No. 180, pretending to be the “Napa Coalition for Responsible Development.”

I wrote about the union environmental objections to this project in my May 28, 2013 www.UnionWatch.org article Spread the Word: Brazen Union CEQA Abuse in Napa Valley.

3. Agincourt Solar Project and Marathon Solar Project, County of San Bernardino

February 1, 2013 – Comments on the Initial Studies/Mitigated Negative Declarations – California Unions for Reliable Energy (CURE), pretending to be “San Bernardino County Citizens for Responsible Solar.”

This one had a happy ending!

April 23, 2013 – Announcement from California Unions for Reliable Energy (CURE), pretending to be “San Bernardino County Citizens for Responsible Solar” – the Western Burrowing Owl, the Desert Tortoise, the LeConte Thrasher, and the Joshua Tree are saved – let’s build!

4. VWR International Supply and Distribution Facility, City of Visalia

February 14, 2013 – Visalia VWR Employees Vote to Join Teamsters Union

After the Teamsters Joint Council 7 and fellow plaintiffs flipped a lower court decision by winning CEQA arguments (among other arguments) on appeal in Coalition For Clean Air v. City of Visalia, the International Brotherhood of Teamsters Local Union No. 948 won an NLRB-supervised representation election for employees of the new VWR International facility in Visalia.

Footnote 4 in the September 14, 2012 appeals court decision states that “Respondent VWR International’s brief alleges that the CEQA action was originally commenced by the Teamsters union and one of its local officers, in an effort to halt construction of the Visalia facility, fearing that its completion as a non-union facility would lead to the closure of a unionized facility in Brisbane.”

5. Pioneer Green Energy Solar Project, County of Kern

January 7, 2013 – Comments on Draft Environmental Impact Report – California Unions for Reliable Energy (CURE), pretending to be “Kern County Citizens for Responsible Solar.”

Unions don’t seem to regard this project as particularly “green,” but maybe the green of money from a Project Labor Agreement will change their minds.

6. Imperial Valley Solar Company 2, County of Imperial

February 15, 2013 – Comments on Draft Environmental Impact Report – California Unions for Reliable Energy (CURE), pretending to be “Imperial Citizens for Responsible Industry” and also February 18, 2013 – Comments on Draft Environmental Impact Report – Laborers (LIUNA) Local Union No. 1184.

Two union groups going after this one. Do you ever wonder if the Sonoran desert toads know they’re being abandoned to be squashed by heavy equipment when unions get their Project Labor Agreements?

7. Casa Diablo IV Geothermal Plant, County of Mono

January 29, 2013 – Comments on Draft Environmental Impact Statement/Environmental Impact Report – California Unions for Reliable Energy (CURE) and also January 30, 2013 – Comments on Draft Environmental Impact Statement/Environmental Impact Report – Laborers International Union of North America (LIUNA) Local Union No. 783.

This project is getting a double whammy, including from a union whose members travel to Mono County to “enjoy its peaceful repose and diversity and rarity of species of plants and animals.”

8. Three Rocks Solar, County of Fresno

May 31, 2013 – Request to Fresno County Board of Supervisors to deny appeal of Planning Commission’s decision to deny Initial Study/Mitigated Negative Declaration and conditional use permit – California Unions for Reliable Energy (CURE), pretending to be “Fresno County Citizens for Responsible Solar.”

As if the Fresno County Planning Department didn’t already have enough paper from the law firm of Adams Broadwell Joseph & Cardozo. Imagine the trees unions are cutting down to protect the environment.

9. Dignity Health Elk Grove Medical Campus Project, City of Elk Grove

January 18, 2013 – Request for all documents referenced in the Draft Subsequent Environmental Impact Report – Plumbers and Pipefitters Local Union No. 447, International Brotherhood of Electrical Workers Local Union No. 340, Sheet Metal Workers Local Union No. 162.

Even if the developer pays for it, is there any dignity for city employees when law firms force them to spend a huge amount of time collecting a huge pile of paper? Is this how government employees should be serving the people?

10.  World Logistics Center Project – City of Moreno Valley

April 5, 2013 – Comments on Draft Environmental Impact Report – Laborers International Union of North America (LIUNA), Local Union No. 1184

This would be the largest master-planned warehouse complex in the United States, and unions want their share of the estimated $3.5 billion in construction and 20,000 permanent jobs.

11. Ocotillo Wind Energy Facility Project, Imperial County

February 27, 2013 – U.S. District Court rejects lawsuit filed by plaintiffs that include Laborers International Union of North America (LIUNA), Local Union No. 1184

Unions decided to file a lawsuit (Desert Protective Council et al v. United States Department of the Interior et al) challenging the Final Environmental Impact Statement/Final Environmental Impact Report to overturn a May 2012 decision made by the U.S. Department of the Interior, Bureau of Land Management, California Desert District, El Centro Field Office to allow 112 wind turbine generators.

12. Acheson Commons (2133 University Avenue), City of Berkeley

May 8, 2013 and June 13, 2013 – Requests for Zoning Adjustments Board not to approve Use Permits for the project – Alameda County Building and Construction Trades Council, pretending to be “Berkeley Residents for Sustainable Development.”

Allegedly the “largest apartment complex ever planned for Berkeley’s downtown,” this project moved forward after some sort of deal with the Alameda County Building and Construction Trades Council, as reported in this July 11, 2013 article City’s Largest Apartment Building Ever Gets Go-Ahead.

13. Campo Verde Solar Project, Imperial County

Laborers’ International Union of North America Local Union No. 1184, et al. vs. County of Imperial, ECU7294

Laborers Local Union No. 1184 filed a lawsuit against Imperial County to stop First Solar, Inc. from building the 139-megawatt Campo Verde photovoltaic solar project. 

14. Citation Residential Project, City of Milpitas

A California appellate court rejected an appeal from the Carpenters Local Union No. 405 related to the union’s efforts to challenge approval of a 732-unit condominium project. See the July 16, 2013 decision in May v. City of Milpitas.

15. Cordes Ranch Specific Plan, City of Tracy

July 24, 2013 – Objections to Final Environmental Impact Report for Cordes Ranch Specific Plan – Carpenters Union Local No. 152.

A construction union has CEQA objections to a commercial and industrial development proposed in Tracy.

16. Palen Solar Electric Generating System in Riverside County, at California Energy Commission

March 26, 2013 order granting petition to intervene from Laborers (LIUNA) Local Union No. 1184May 8, 2013 status report.

While California Unions for Reliable Energy (CURE) reached an agreement to end its interference with permitting for this solar thermal power plant, the Laborers union in Riverside County is just getting started.

17. Desert Harvest Solar Project, Riverside County

March 11, 2013 – U.S. Bureau of Land Management denies protest of Laborers (LIUNA) Local Union No. 1184 against Final Environmental Impact Statement.

Another solar project under assault. California Unions for Reliable Energy (CURE) has not objected to the project, perhaps because the IBEW Union Local No. 440 has the electrical work.

18. Los Angeles International Airport (“LAX”) Specific Plan Amendment Study, City of Los Angeles and Los Angeles World Airports

April 29, 2013 – Objections to the Final Environmental Impact Report – SEIU United Service Workers West; May 29, 2013 – Lawsuit Against City of Los Angeles and Los Angeles World Airports – SEIU United Service Workers West.

Another one of the those CEQA lawsuits that allegedly rarely happen. This one comes courtesy of Service Employees International Union (SEIU) United Service Workers West, which claims to represent 2,000 Los Angeles International Airport workers, including passenger service workers, security officers, sky caps, baggage handlers, cabin cleaners, janitors, and cargo handlers.

19. Sun Valley Energy Project in Riverside County, at California Energy Commission

August 5, 2013 – Request to California Energy Commission for Notices – Laborers (LIUNA) Local Union No. 1184.

Better late than never. California Unions for Reliable Energy (CURE) submitted a petition on February 8, 2006 to the California Energy Commission to intervene on this project.

20. One South Market, City of San Jose

Staff Report on Appeal of Santa Clara-San Benito Counties Building and Construction Trades Council to One South Market Street Project (includes June 25, July 9, and July 12 letters from law firm ofAdams Broadwell Joseph & Cardozo)

I wrote about this union CEQA appeal in the August 13, 2013 www.UnionWatch.org article Union Environmental Appeal of San Jose Infill High-Rise Fools No One.

21. Avalon Bay Communities – Dublin Station – Transit Center, City of Dublin

Carpenters Local Union No. 713 objected to this project in order to control the work. The union filed a lawsuit after the Dublin City Council rejected their appeal. On March 7, 2013, a California Appeals Court sided with the City of Dublin in Concerned Dublin Citizens v. City of Dublin.

22. Basin Street Properties – Riverfront Mixed Use Project, City of Petaluma

Pretending to be “Petaluma Residents for Responsible Development,” the Sonoma, Mendocino, and Lake Counties Building and Construction Trades Council managed to delay an August 13, 2013 Petaluma Planning Commission meeting with its CEQA objections to the Riverfront Mixed Use Project.

23.  Eagle Mountain Pumped Storage Water Project in Riverside County, State Water Resources Control Board

April 10, 2013 – Comments on Final Environmental Impact Report – Laborers International Union of North America (LIUNA), Local Union No. 1184

Water would move back and forth between two old mining pits at different elevations to generate electricity during peak hours of usage. The Laborers Union is concerned.

24. Apple Campus 2, City of Cupertino (added October 22, 2013)

The Service Employees International Union-United Service Workers West is trying to organize employees of companies that provide security under contract to the major companies in Silicon Valley, including Apple. It submitted comments on the Draft Environmental Impact Report and comments on the Final Environmental Impact Report for the massive proposed Apple 2 Campus.

I wrote about the union environmental objections to this project in my October 19, 2013 www.UnionWatch.org article Union Threatens to Block Apple, Inc. “Spaceship” with Environmental Lawsuit.

25. Regional Seawater Desalination Project, City of Santa Cruz and Soquel Creek Water District (scwd2) (added October 25, 2013)

California Unions for Reliable Energy (CURE) submitted comments and 224 pages of exhibits objecting to the Draft Environmental Impact Report for this project.

26. CleanPowerSF/Shell Community Choice Aggregation Program, San Francisco Public Utilities Commission  (added October 25, 2013)

International Brotherhood of Electrical Workers Union Local No. 1245, represented by Adams Broadwell Joseph & Cardozo, informed the San Francisco Public Utilities Commission that it would need to prepare an Environmental Impact Report under CEQA for the program. IBEW Local No. 1245 represents workers for Pacific Gas & Electric (PG&E). It wanted Shell to sign a Project Labor Agreement. See the union’s web site Stop the Shell Shock.


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

 

Union Environmental Appeal of San Jose Infill High-Rise Fools No One

Today (Tuesday, August 13, 2013) construction trade unions either showed exceptional arrogance or exceptional foolishness when they chose to exploit the California Environmental Quality Act (CEQA) against a high-profile “infill” project in downtown San Jose.

For the past few years, some California state legislators have wanted to discourage CEQA actions meant to advance objectives unrelated to environmental protection. Even Democratic legislative leaders such as California State Senate President pro Tem Darrell Steinberg (D-Sacramento) are seeking minor CEQA amendments to reduce obstacles to infill development, which is regarded by some as a wise planning strategy for the environment.

Under these circumstances, it was astonishing to see the Santa Clara-San Benito Counties Building and Construction Trades Council appeal the San Jose Planning Director’s approval of a downtown 23-story residential “infill” project called One South Market Street. The appeal was filed by the law firm of Adams Broadwell Joseph & Cardozo and based on alleged CEQA violations and planning and zoning code violations.

No one was fooled. San Jose Mayor Chuck Reed declared “It’s not really about the environment … it’s abuse of the environmental process.” And Councilman Johnny Khamis complained that the city council had two abusive back-to-back CEQA objections on its agenda, one with an anti-competitive motive and one with a union motive.

In the end, the city council rejected the union appeal, although two council members voted to support the unions. One of them was San Jose City Councilman Xavier Campos, who is the brother of Assemblywoman Nora Campos, who is married to Neil Struthers, who spoke at the meeting in support of the CEQA appeal as the head of the Santa Clara-San Benito Counties Building and Construction Trades Council.

Groundbreaking for the project had already occurred in a ceremony on June 25, 2013. No one up to that point had indicated any concerns about permitting or environmental review. But on that same day, the law firm for construction unions submitted an objection letter. The unions formally appealed various aspects of the project on July 9 and July 12.

In an August 13, 2013 article about the appeal (Union Challenging Downtown San Jose High-Rise), the Silicon Valley Business Journal indicated that the union objections to the project were not necessarily related to environmental concerns.

So what’s going on? Sources told me the union appears to be trying to send a message after several key subcontracts on the job were delivered to non-union contractors out of Sacramento.

“The Building Trades are not opposed to more high-rises downtown. What we are opposed to is this developer generating more profits at the expense of local workers and the environment,” Neil Struthers, CEO of the Santa Clara & San Benito Counties Building & Construction Trades Council, told me in an email.

He added: “No project should be given the ability to avoid the requirements every other developer must meet as it relates to water quality, affordable housing and traffic mitigation. Someone needs to stand up to those that have the power to gain preferential treatment from local government.”

Reportedly the contractor most objectionable to the unions is a large electrical company that works on major commercial projects throughout Northern California. Its headquarters is in Sacramento, but it has a Bay Area office in Hayward, 25 miles away from downtown San Jose via Interstate 880. Construction companies in Northern California capable of working on a 23-story high rise building tend to have a regional market – these are not hometown plumbers.

Because the City of San Jose has provided tax and fee waivers with financial value to the developer, One South Market Street is regarded under California law as a public works project. All construction companies – both union and non-union – must pay state-mandated construction wage rates (“prevailing wages”) to their trade workers on this project. In California, state prevailing wage rates always duplicate the wage rates in the applicable union collective bargaining agreements for that trade in that geographical region.

In other words, local hiring or wage rates are not legitimate issues. Control of the workforce is the issue.

Presumably, the Santa Clara-San Benito Counties Building and Construction Trades Council will continue to interfere with the project (perhaps with a lawsuit) until the developer (Market Street Tower Venture, LLC, on behalf of Essex OSM REIT, LLC) agrees to sign a Project Labor Agreement or some other contract giving unions a monopoly on construction of the building.

The One South Market Street CEQA appeal shows that unions have a strong economic interest in stopping any proposals that compromise the obstructive power of CEQA. It should not be a surprise that construction trade unions are reportedly the primary obstacle to Senator Steinberg’s very modest CEQA reform bill, Senate Bill 731, but apparently Senator Steinberg was surprised, according to the August 5, 2013 article from California Forward: CEQA Roundup: Have Negotiations Really Stalled?

Steinberg himself seems to have been surprised by the opposition on the part of some labor leaders, in particular, who have pushed back against his most basic goal: Updating the CEQA process for infill projects. While the Senate leader has tried from the start to write a bill that would drive more of this type of development across the state, sources say some labor leaders view the coming infill wave as the source of a steady stream of jobs – and they are wary of losing CEQA as a tool they can use to reach project labor agreements with developers.

Reform of the California Environmental Quality Act is not an environmental issue. It’s a labor issue.

News Media Coverage

San Jose Denies ‘Greenmail’ Environmental Appeals on High-Rise ProjectSan Jose Mercury-News – August 13, 2013

San Jose Council Says ‘No’ to Union’s CEQA Challenge of One South MarketSilicon Valley Business Journal – August 13, 2013

Sources

Staff Report on Appeal of Santa Clara-San Benito Counties Building and Construction Trades Council to One South Market Street Project (includes June 25, July 9, and July 12 letters from law firm of Adams Broadwell Joseph & Cardozo)

Initial Study/Mitigated Negative Declaration for One South Market Street and Mitigation Monitoring or Reporting Program for One South Market Street

Union Challenging Downtown San Jose High-RiseSilicon Valley Business Journal – August 13, 2013

California Senate Bill 731 – CEQA reform for infill development projects

CEQA Roundup: Have Negotiations Really Stalled? – California Forward – August 5, 2013

KT Properties One South Market Street

Background on One South Market Street from Silicon Valley Business Journal

CEQA Works – the coalition of environmental groups and labor unions opposed to CEQA reform

www.PhonyUnionTreeHuggers.com


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

Businesses Can Make a “Social Impact Bond” with Unions

Unions were supporting a bill. This meant taxpayers were about to give unions more money.

That’s what I thought when I saw this notice for a press conference at the California State Capitol on the morning of March 19, 2013:

[California Senate] Pro Tem Darrell Steinberg and others announce legislation to “foster increased business and industry investment in linked learning and career pathway programs in California public schools.” 10 a.m., Rm. 1190. Contact: Mark Hedlund 916 651 4006. Also listed: Allan Zaremberg, CA Chamber of Commerce; Jack Stewart, CA Manufacturers & Technology Assn.; Supt. Jonathan Raymond, Sacramento City Unified School District; Dennis Cima, Silicon Valley Leadership Group; Andrew Giacomini, Bay Area Council Board of Directors; Cesar Diaz, State Building and Construction Trades Council of CA; Stephanie Roberson, CA Nurses Assn.; Van Ton-Quinlivan, CA Community Colleges.

In addition to union officials, the leader of the State Senate had gathered a few Democrats in the legislature, the heads of the state’s top organizations representing large corporations, and a few public education officials. (Here is the video of the press conference: http://www.youtube.com/watch?v=bKGvTi-PiCM)

What was this proposal that brought together some of the titans of California political power?

The video link to the press conference was titled “High School Dropout Reduction & Workforce Development Bond Act.” Was the State of California actually going to borrow yet MORE money by selling bonds to investors?

The press conference began and Senate Pro Tem Darrell Steinberg began talking about his Senate Bill 594, California Career Pathways Investment. I couldn’t figure out what he was trying to explain, but he insinuated that philanthropic assistance to schools was inadequate to prepare young people in California for the modern workforce. The policy details seemed elusive.

Senate Bill 596 would establish a “Career Pathways Investment Credit” (a tax break) for businesses that “invested” in career technical education under guidelines of a “California Career Pathways Investment Committee.” Every K-12 school district and college district in California would have to create a “Career Pathways Investment Trust Fund.” Those educational districts would enter into something called “Social Impact Bonds” that corporations would buy to fund career pathways programs.

A “Social Impact Bond” would be “a contract between a school district or a community college district and private investors who provide capital in exchange for a share of governmental payments that become available if performance targets are met. Financial returns to investors may vary pursuant to the measured level of performance. The bond issuer may use operating funds from the sale of the bonds to contract with service providers to deliver the services necessary to meet the performance targets.”

A source of public income for this scheme would be the increase of property tax revenues resulting from “the dissolution of redevelopment agencies.” The state would not reimburse these districts for any costs, but the districts would be authorized to “pursue any available remedies to seek reimbursement for these costs.”

Apparently government was going to give corporations a tax break for getting involved in public education, and public educational districts would be forced to establish yet another pot of money to pay for whatever emerged from that involvement. It was unclear who would pay the interest to the corporations and foundations that would “invest” in these bonds.

But what role would unions play? Senator Steinberg referred to growing a “high-wage economy” for “building the middle class” with “high-wage jobs” and “high-wage workers” – the usual Democrat euphemisms for unions.

Among the platitudes about the importance of education, children, jobs, and the future were remarks from a representative of the California Nurses Association and a representative of the State Building and Construction Trades Council of California.

The nurses’ union official complained that nurses graduating from nursing school were ready to work but couldn’t find jobs in California, so they were moving to other states. Senate Bill 594 was proposed at a good time, because the implementation of Obamacare in California would mean many more jobs for nurses. She saw the California Career Pathways Investment bond act as a huge jobs stimulus package that would restore frayed partnerships between unions, hospitals, and schools.

This argument seemed inconsistent with Senator Steinberg’s claims earlier in the press conference that the bill was needed because young people in California were unprepared to take jobs in a modern economy. According to this labor union official,  young people were prepared to be nurses in California’s health care industry but could not find jobs and thus had to move to other states. (Texas?)

The construction union representative talked about apprenticeship training for trades workers. He claimed that the average age of an apprentice and the average age of a journeyman construction worker were increasing. He noted that unions were in schools promoting construction as a career because new job opportunities in the industry would come with major infrastructure projects. (California High-Speed Rail, on which unions have a Project Labor Agreement?)

Clearly these union leaders aren’t on board with Senate Bill 594 without some sort of guarantee that unions will be getting a piece of this money.

Senator Steinberg ended the press conference by asking for questions from the press. Reporters jumped at the opportunity to ask how this scheme would be funded. Steinberg suggested cutting enterprise zones, using  employment tax credits, and Proposition 98 funds dedicated to education. “By God we’ll find it!” he said.

News Coverage:

Steinberg Pushes Privately Funded Career Training Program – Sacramento Bee – March 21, 2013

Reinvigorating ‘Career Tech’ a Worthy Goal – by columnist George Skelton – Los Angeles Times – March 20, 2013

Steinberg’s legislation is a bit convoluted — at least the financing part — and needs much work…Steinberg is suggesting several financing methods, including tax credits and foundation grants. But the main money source involves bonds. The state would sell “workforce development bonds” — say, for $1 million a crack — to businesses in areas “with the greatest potential for high-wage job growth.” The bond revenue would pay for the career-tech programs. The bond-buyers would earn a rate of return based on a program’s results, as judged by some committee. “I’m not sure I completely understand it,” Zaremberg [Allan Zaremberg, President & CEO of the California Chamber of Commerce] told me. “Why don’t we just fund this out of existing resources? Is this not a priority? … like Zaremberg, he [Jack Stewart, President of the California Manufacturers & Technology Association] doesn’t quite grasp the bond idea.

Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

With Senate Bill 7, California Unions Advance Plot to Neuter City Charters

More than 30 California cities are likely to defy top union officials by asking their citizens in 2014 to vote on enacting a “home rule” charter for local control.

Cities want to free their purely municipal affairs from costly union-backed state mandates, for reasons revealed in these recent articles:

Unions Rise to Defense of “Prevailing Wage” Rates Jeopardizing Hotel Project in Redding – www.LaborIssuesSolutions.com – February 15, 2013 and Redding Needs a Charter to End Nonsense Definition of Private Hotel as a “Public Works” Project – www.LaborIssuesSolutions.com – January 31, 2013.

Stanford Professor Warns Costa Mesa about Pension DebtOrange County Register – February 27, 2013 and City’s Pension Outlook Called ‘Stark’ – Newport Beach/Costa Mesa Daily Pilot – February 27, 2013. (With the failure of the Measure V charter in November 2012, Costa Mesa is now in the union paradigm with a proposed solution to raise taxes.)

A Former Mayor of a Southern California City Provides an Intellectual Argument for City Charters and Local Government Authority – www.LaborIssuesSolutions.com – February 19, 2013 (a commentary on Reasons to Consider Becoming a Charter City – San Diego Union-Tribune – February 19, 2013).

For a powerful example of how charter cities are saving money and being more cost-effective in their city operations and services, see Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions? Cities recognize that exercising the power of a charter can free their municipal affairs from the grip of the state legislature and the special interest groups entrenched at the capitol. A staff report about city charters to the Murrieta City Council for its October 2, 2012 meeting was blunt about the need for cities to enact charters:

…a knowledgeable, involved electorate should both propel and constrain the direction of its own city. Local control has always been a paramount matter of residents, businesses and the Murrieta City Council. Yet state legislators and previous gubernatorial administrations continue to impose far greater mandates, while at the same time hindering the ability of local governments to operate successfully. With little ability to protest, local governments have watched as the state government continues to balance its budget deficits on the backs of fiscally responsible local jurisdictions…The voice of cities in Sacramento has become mute due to a combination of special interest groups, influential political campaign contributions and tone-deaf lawmakers passing unfunded mandates. This process has left cities with little ability to petition the state government…

A city charter is a unique document that acts like a constitution for a city adopting it. Overall, this puts more control into the hands of the residents instead of state legislators and gives a community greater independence to determine its own destiny. Cities typically enter the process to become a charter city to become more autonomous. A charter city has more flexibility and has ultimate authority over municipal affairs. The charter city provision of the state Constitution, commonly referred to as the “home-rule” provision, is based on the principle that a city, rather than the state, is in the best position to know what it needs and how to satisfy those needs. The home-rule provision allows charter cities to conduct their own business and control their own affairs. Therefore, a charter maximizes local control. Such benefits of a charter city are greater flexibility on public works contracts and other changes in the procurement process, more control over economic development practices, and less reliance on the state.

Right now there are 121 charter cities in California, up from 107 in 2007. But there are aggressive opponents who regard cities’ exercise of their charter authority (as cited above from the Murrieta staff report) to be an attack on their hegemony. In 2011 and 2012, unions spent jaw-dropping amounts per voter on campaigns to convince voters to reject reasonable proposed charters.

Charters were defeated in Rancho Palos Verdes, Auburn, Costa Mesa, Escondido, and Grover Beach, to the dismay of civic leaders whose local grassroots efforts were rolled over by well-funded union-backed professional campaign operations. Unions are now ready to crush California’s federalist rebellion once and for all in 2013 and 2014.

As one strategy, they are infiltrating and trying to neutralize the League of California Cities as an organization that provides information to cities looking at charters. A union-affiliated group called www.SmartCitiesPrevail.org is trying to influence the League of California Cities through sponsorship, partnership, and participation in the League’s Transportation, Communication & Public Works Committee.

Unions are aggressively opposing charters when proposed on the local level and are trying to derail proposals through charter review commissions (a strategy that worked for unions in Elk Grove, Redding, and other cities). See the newspaper articles listed below for evidence.

Union lobbyists also have a bill now in the California State Legislature (Senate Bill 7) introduced by Senate leader Darrell Steinberg and a Republican State Senator, Anthony Cannella. It will cut off state funding for cities that use their constitutional charter authority to establish their own policies concerning state-mandated construction wage rates. (See Bill Introduced in State Senate to Suppress Authority of California’s Charter Cities to Establish Their Own Policies on Government-Mandated Construction Wage Rates – www.LaborIssuesSolutions.com – February 20, 2013.)

This bill adopts the same concept of crushing charter city authority as did the union-backed Senate Bill 922 in 2011 and Senate Bill 829 in 2012 (two bills pushed by Senator Michael Rubio, who just resigned to take a lobbying position with Chevron). These two laws cut off state money to charter cities that adopt policies prohibiting those cities from requiring construction contractors to sign a Project Labor Agreement with unions as a condition of work.

Threatening to withhold money as a tactic to force a government to submit to centralized authority may remind you of warnings in the dissent in the U.S. Supreme Court decision in June 2012 concerning the constitutionality of Obamacare:

Structural protections – notably, the restraints imposed by federalism and separation of powers – are less romantic and have less obvious a connection to personal freedom…The fragmentation of power produced by the structure of our Government is central to liberty, and when we destroy it, we place liberty at peril…[The] practice of attaching conditions to federal funds greatly increases federal power…This formidable power, if not checked in any way, would present a grave threat to the system of federalism created by our Constitution…Coercing States to accept conditions risks the destruction of the “unique role of the States in our system.”

While the same principles would seemingly apply to the relationship of state and local governments, forces at the state capitol seem to prefer an overbearing centralized government that can solve problems with broad strokes of alleged social justice.

With bills such as SB 922, SB 829, and SB 7 deemed as acceptable modes of governance by the legislative supermajority and the governor, I anticipate a union-backed effort in the future to repeal outright the section of the California Constitution (Article XI, Section 3) that allows cities to govern their own municipal affairs under a charter. It would be an effective way to eliminate another one of the diminishing number of checks and balances that interfere with utopian schemes planned under the benevolent and enlightened one-party state.

Then there is the strange case of Republican Senator Anthony Cannella, who is so proud of undermining local control and raising costs for taxpayers that he used the Senate Republican Caucus communications operation to proclaim his legislative achievement to a gullible press. Here’s a Tweet:

It didn’t go unanswered. I responded with this Tweet:

Senator Cannella may not realize (or may not care) that he represents two cities – Modesto and Merced – that use their charter authority to set their own policies concerning government-mandated construction wage rates (so-called “prevailing wages”). Here is the Modesto policy, set by a 1995 resolution: Modesto Prevailing Wage Policy and Staff Report. Here is the Merced practice: Merced Exempts Rental Housing Preparation from State-Mandated Government Wage Rates (Prevailing Wage). Oh well, sometimes the union lobbyists in Sacramento are a more important constituency than the people back home in the Central Valley.

With the help of Senators Steinberg and Cannella, union lobbyists intend to direct their legislative puppets from Los Angeles and San Francisco to suppress the small and medium-sized cities trying to determine their own financial destinies. To protect union power, these cities must submit to centralized power exercised by the state legislature and Governor Jerry Brown.

In the meantime, the local federalist rebellion continues. In addition to the cities of Temecula and Murrieta, the following California cities are now publicly moving forward on asking their citizens to approve a charter in 2014 (with several more soon to begin public discussion):

Costa Mesa

Outsourcing Back in for Costa MesaOrange County Register (editorial) – February 6, 2013

…passage of Measure V would have made the privatization task easier. But the union outspent Measure V proponents by more than seven-to-one. However, Mr. [Councilman Jim] Righeimer said he hopes a new charter measure will be put on the June 2014 ballot…Within 60 days the council will hold a study session on how to set up the independent committee for the new charter measure.

Escondido

Escondido Mayor Touts Urban Renewal, Embracing DiversitySan Diego Union-Tribune – February 20, 2013

Delivering his annual State of the City address to nearly 300 residents and business leaders gathered at the city’s arts center… [Mayor Sam] Abed said he also wants the city to take another shot at becoming a charter city, which would increase Escondido’s independence from Sacramento and reduce the cost of some city construction projects.

Moreno Valley

Moreno Valley: City to Explore Becoming Charter City – Riverside Press-Enterprise – February 26, 2013

The Moreno Valley City Council on Tuesday, Feb. 26, unanimously approved establishing a subcommittee that would explore becoming a charter city and appointing two council members to it.

Moreno Valley: Charter City Committee Could Be Created  – Riverside Press-Enterprise – February 25, 2013

The Moreno Valley City Council on Tuesday, Feb. 26, is to follow through on plans to determine whether to become a charter city. The council is set to vote on whether to establish a charter exploratory subcommittee and appoint two council members to it.

Buellton

Buellton Continues “Home Rule’ Talk – Santa Ynez Valley News – February 7, 2013

The idea of changing Buellton to a “home-rule” city is on hold again after City Council members decided to set up a workshop for more discussion about a draft plan…City Manager John Kunkel said the committee wants voters to be comfortable with the measure and, if the council wants to have a dialogue with unions, there is no rush.

Charting Best Path to Buellton’s Future – Santa Ynez Valley News (editorial) – February 7, 2013

…being a charter city does mean that local elected officials and voters can make more of their own decisions, and are therefore better able to tailor policy to fit specific local needs…Being a charter city also lets local government off the hook for paying a prevailing wage. Labor unions don’t like that possibility…

Arroyo Grande
Arroyo Grande Considering City Charter – www.CalCoastNews.com – January 28, 2013

The Arroyo Grande City Council has created a committee to explore the idea of becoming a charter city in order to cut costs…Many union members oppose city charters because they allow exemptions from state-mandated prevailing wage agreements. City staff says adopting a charter could save Arroyo Grande $50,000 to $300,000 annually.

Study Under Way to Find Out if Arroyo Grande Should Try to Become a Charter CitySan Luis Obispo Tribune – January 27, 2013

A committee has been convened to study whether Arroyo Grande should try to become a charter city, a move that officials say could save money and give it more local control. The idea, however, faces stiff opposition from local union members…

California cities have two choices about their financial futures: enact a charter as an way to become more cost-efficient, or raise taxes. Guess which choice the unions want?

Kevin Dayton is the President and CEO of Labor Issues Solutions, LLC and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com.

Businesses Exit California and Illinois

Businesses have had it with poor business conditions in two of the most dysfunctional states in the union, California and Illinois.

In an editorial, the Orange County Register reports Even profitable firms fleeing California

Democratic reaction to the news that Waste Connections, a $3.6-billion company and major Sacramento-area employer, is headed to Houston to seek a friendlier business climate tells other businesses all they need to know about the attitudes of those who run California’s government.

State Senate President Pro Tem Darrell Steinberg, D-Sacramento, gave these clueless and snarky remarks in response to the news: “In this instance you have a company that is, in fact, profitable, making significant revenue gains in 2011 and 2010. That doesn’t speak to a bad business climate here in California when a good company is able to thrive in that way. So whatever Mr. Mittlestaedt’s (company CEO) reasons are to leave the great state of California, I know I’m pushing back.”

Is it really the Senate president’s role to determine the proper profit margin for a privately owned company? Talk about arrogance.

“The decision by Waste Connections to relocate, despite the 17 percent revenue increase and the $18 million cost to move to Texas, illustrates that businesses will endure short-term costs to ensure long-term prosperity,” wrote state Sen. Mimi Walters, R-Laguna Niguel, in response to Steinberg’s message. Walters quotes business-relocation expert Joe Vranich of Irvine, who notes that businesses typically save 40 percent in costs by leaving California because of lower taxes and more manageable regulations found elsewhere.

If California wants to improve its business climate and reduce its double-digit unemployment rate, its officials need to understand what companies such as Waste Connections are saying, rather than simply dismiss their concerns.

Businesses Bargain for Better Deals in Illinois

The Chicago Tribune lists 10 companies with an eye in exiting the state in Illinois companies eyeing an exit

Chicago’s huge futures exchange owner CME Group has joined a growing list of companies threatening to leave Illinois as a result of the state’s corporate tax increase earlier this year. Illinois pushed through the 45 percent corporate tax increase in January, trying to address one of the biggest budget shortfalls of any state in the U.S. But the move proved to be a risky step — since then, both small and large companies have complained about the increase, and some have received incentives to stay put.

Also on the list: Sears, Motorola Mobility, Caterpillar, Navistar, Mitsubishi, US Cellular, Jimmy John’s, and continental Tire.

Small Businesses, Taxpayers Screwed

On December 12, Illinois House approved CME-CBOE, Sears tax deal. Indeed, most of the above companies negotiated huge tax breaks and will stay in Illinois at least for a while.

Small companies with no clout and no leverage as well as taxpayers in general are the ones paying the price for the seriously misguided policies of Democratic Governors Pat Quinn, and Jerry Brown.

Tax-and-Destroy Policies

The tax-and-destroy policies of Illinois and California, coupled with the the massive public union pandering in both states got me wondering about respective unemployment rates, state by state.

Unemployment Rates for States
Monthly Rankings
Seasonally Adjusted
Nov. 2011p
Rank State Rate
1 NORTH DAKOTA 3.4
2 NEBRASKA 4.1
3 SOUTH DAKOTA 4.3
4 NEW HAMPSHIRE 5.2
5 VERMONT 5.3
6 IOWA 5.7
7 WYOMING 5.8
8 MINNESOTA 5.9
9 OKLAHOMA 6.1
10 VIRGINIA 6.2
11 UTAH 6.4
12 HAWAII 6.5
12 KANSAS 6.5
12 NEW MEXICO 6.5
15 LOUISIANA 6.9
15 MARYLAND 6.9
17 MAINE 7.0
17 MASSACHUSETTS 7.0
19 MONTANA 7.1
20 ALASKA 7.3
20 WISCONSIN 7.3
22 DELAWARE 7.6
23 PENNSYLVANIA 7.9
23 WEST VIRGINIA 7.9
25 ARKANSAS 8.0
25 COLORADO 8.0
25 NEW YORK 8.0
28 TEXAS 8.1
29 MISSOURI 8.2
30 CONNECTICUT 8.4
31 IDAHO 8.5
31 OHIO 8.5
33 ALABAMA 8.7
33 ARIZONA 8.7
33 WASHINGTON 8.7
36 INDIANA 9.0
37 NEW JERSEY 9.1
37 OREGON 9.1
37 TENNESSEE 9.1
40 KENTUCKY 9.4
41 MICHIGAN 9.8
42 GEORGIA 9.9
42 SOUTH CAROLINA 9.9
44 FLORIDA 10.0
44 ILLINOIS 10.0
44 NORTH CAROLINA 10.0
47 MISSISSIPPI 10.5
47 RHODE ISLAND 10.5
49 DISTRICT OF COLUMBIA 10.6
50 CALIFORNIA 11.3
51 NEVADA 13.0

Not a Red vs. Blue or Rustbelt Issues

High unemployment is not a red-state vs. blue-state issue. Nor is there a clear rust-belt trend. Moreover, Nevada, is among the more business friendly states but like Florida the hardest hit by the housing bust. Illinois was not so hard-hit but parts of California were.

However, California and Illinois have many things in common:

  • Harsh business environments
  • High tax rates
  • Both states are among the most pro-union states
  • Both states lack right-to-work laws

That California and Illinois suffer from business flight and high unemployment should not be surprising.

About the author: Mike “Mish” Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management. His top-rated global economics blog Mish’s Global Economic Trend Analysis offers insightful commentary every day of the week. He is also a contributing “professor” on Minyanville, a community site focused on economic and financial education. Every Thursday he does a podcast on HoweStreet and on an ad hoc basis he contributes to many other websites, including UnionWatch.

AB 114: A Blatant Attack on California’s Schools

The California Teachers Association and Democrats in the legislature join forces to victimize school districts, children and taxpayers.

In Sacramento, on Tuesday night, June 28, school districts, children and taxpayers were essentially mugged by a gang of Democrat legislators at the behest of their bosses in the California Teachers Association. Governor Jerry Brown, also in the pockets of CTA, was a willing accomplice.

AB 114, a one hundred page monstrosity, was rammed through both houses of the state legislature late on the 28th and was not published until the following morning. Governor Brown signed it into law the next day. As the Sacramento Bee reported, there were no committee hearings and no chance for the public to scrutinize the bill, which became public less than an hour before it was approved for passage.

AB 114 does several things, all of which imperil local school districts by imposing a mandate upon them that many will not be able to carry out. Educated Guess writer John Fensterwald says there are three ways that AB 114 steals power away from the local district.

First, it requires that each school district “assume the same level of funding as last year and maintain staffing and program levels consistent with that. Legislators are dictating this even though they admit there’s a good chance that revenues may not bear that out.”

Secondly, AB 114 eliminates the option that “districts would have over the next 45 days to make staff adjustments if they view this as necessary. Instead, the legislature is suspending that capability under the law for the next year. As School Services noted, ‘This provision is clearly designed to protect union positions, even if the district cannot afford to pay for the services.’”

Finally, the new law will “suspend key provisions for one year of AB 1200, under which school districts must self-certify that they can balance their budgets in the current year and one and two years into the future. Those that cannot must work with their county office of education to align revenues and spending. This year 13 districts were negatively certified in the latest filing, indicating they could not balance their budgets this year and next. An additional 130 districts – nearly one in seven – acknowledged trouble balancing their budgets two years out. AB 114 would require districts to assume the same revenue as this year and prevent county offices from seeking evidence of financial stability for the next two years.”

Where to begin? Since laying off teachers is not an option, it seems that the only device left in the local district’s toolbox to balance their budgets is to shorten the school year via furlough days. In this scenario, each furlough day would mean a day without learning for children and a day without teaching (or being paid) for teachers. And even this option is not something local officials can decide on their own. They must negotiate this with the same teachers union that put them in this horrible position to begin with. In other words, because of the new law, the best option would be to reduce instructional days for students, which is the last thing students need. But it should be apparent that the crafters of this legislation essentially look at teaching as a jobs program and let the children be damned.

The unfairness of this law has drawn fire from every possible quarter.

The San Diego Union-Tribune editorial board wrote that the result of AB 114 “could be downright catastrophic for San Diego schools. District leaders are imploring board members to try to save money to prepare for the big hit the district will take in 2012-13 when scheduled raises of 7.2 percent for all employees are phased in. Now a state law exists that discourages such prudence and may give district employees a legal cudgel to block prudence.”

A Los Angeles Times editorial didn’t mince words either. “Ham-fisted yet pandering, and fiscally irresponsible too, AB 114 perpetrates an abuse of state power that could wreak budgetary havoc in local school districts.” The Times also reported that more than “140 school districts are already in serious financial jeopardy, according to a state Department of Education estimate released in June. If Brown and legislative Democrats do not muster the courage to defy the California Teachers Assn. by repealing AB 114, they may push many more districts to the brink.”

Even harder hitting is Katy Grimes, writing for Cal Watchdog. “Gov. Brown has, in essence, allowed teachers to avoid layoffs under any circumstances in the next fiscal year. And school agencies will not be scrutinized financially. That’s a recipe for disaster — and a gift-wrapped treat to the CTA.” In her piece, she quotes Lance Izumi, Koret Senior Fellow in Education Studies at the Pacific Research Institute, “This is shocking. It’s obvious that unions do not care for the kids at all if they are willing to shorten the school year. This is about protecting teachers’ jobs, whether they deserve it or not.” Izumi also said, “Any need of further evidence that Brown is bought and paid for by the CTA is unnecessary. This is the real face of the governor.”

It’s difficult to disagree with Dr. Izumi. When Brown became governor earlier this year, one of his first acts was to fire a reform minded school board and replace it with business-as-usual types including Patricia Rucker, a highly paid CTA lobbyist.

School superintendents are no less outraged by AB 114. Natomas Unified interim Superintendent Walt Hanline described the measure as “the most irresponsible piece of legislation I’ve seen in my 35 years in education.”

The California School Boards Association urged the governor to repeal two sections of the bill that “intrude on the ability of school boards to manage their own resources.”

Needless to say, the kick-the-can-down-the-road crowd has been very busy as they shamelessly try to defend the indefensible. Senate President Pro Tem, and former union lawyer, Darrell Steinberg said when he met with the Sac Bee Capitol Bureau, as reported by Cal Watchdog writer John Seiler, “We were intentional. We do not want to create a situation where more teachers and classified employees lose their jobs. And we did not want to see class sizes increase.” (This isn’t the first time that an outlandish law has been passed in the name of small class size. To learn more about the small class size myth, go here.)

CTA President Dean Vogel told the Sac Bee that AB 114 “provides stability for students and teachers.”

Stability?!

No, this bill in fact destabilizes the entire state. I guess Mr. Vogel thinks that maybe seven furlough days is “stabilizing.” Are school boards going belly up all across the state “stabilizing?” Are the taxpayers in California going to feel “stabilized” when the inevitable tax hikes are proposed in order to pay for the legislators’ flagrant irresponsibility? With AB 114 the only thing that will remain stable is the $649 in CTA dues collected from each teacher whose job is saved by the union-coerced bill.

While the wanton disregard for individual school districts, children and taxpayers may technically not be a crime, it is highly immoral. As such, Governor Brown needs to be reminded that former Governor Gray Davis was recalled for gross mismanagement of California’s finances. And the legislative miscreants behind AB 114 should be voted back into the private sector come November 2012.

About the author: Larry Sand is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers with reliable and balanced information about professional affiliations and positions on educational issues.