CMA Capitol Insight is a biweekly column by veteran journalist Greg Lucas, reporting on the inner workings of the state Legislature.
Musical Chairs
That’s the standard cliché, but it pales in accurately describing the jockeying, hand-wringing and skullduggery that ensue when legislative lines are redrawn and lawmakers must decide in which district to run to best prolong their political careers. Shifts in demographics or the partisan complexion of a legislative seat and having to appeal to new people or behave in different ways is guaranteed to cause anxiety, as even a B- student of human psychology can attest. A healthy attitude for an elected official to take might be that change is inevitable and, mercifully, reapportionment – the redrawing of California’s 120 legislative districts and 53 congressional districts – is but a once-a-decade debacle. That hasn’t really caught on yet. There are really only three ways to deal with redistricting: Run again in the changed district, move to another district that’s easier to be elected in, or hang up the cleats and get a private sector job.
Like Sir Isaac Says...
For every action, there is an equal and opposite reaction. Here’s but one example of what’s happening multiple places elsewhere in the state. Rep. Wally Herger (R) has been a member of the House since 1986 – when Reagan was president, Pluto was still a planet and the Internet was negative four years old. His Yuba-City-to-the-Oregon-border district wasn’t threatened by redistricting. He just figured a quarter century in D.C. was plenty and it was time to spend more time with his 11 – soon to be 12 – grandkiddos. But now that vacuum must be filled. Stepping into the void, with a nifty bit of choreography provided by Herger anointing his successor, is state Sen. Doug LaMalfa, a Butte Republican. LaMalfa was elected to the state Senate in November 2010 and is entitled to another term that would keep him there until 2018. But in the world of term limits, where three two-year terms are allowed in the Assembly and two four-year terms in the Senate, Congress is the Big Brass Ring: No term limits and a salary that, at $174,000, is $75,000 more than state pay. LaMalfa’s move leaves his Senate seat open. GOP Assemblymembers Jim Nielsen and Dan Logue each could go for LaMalfa’s seat. Nielsen has declared himself a candidate for the seat and decided not to seek Assembly re-election. Initially, Logue said he would be moving to the newly drawn 1st Assembly seat because if he stayed in the 3rd Assembly seat where he was, he’d be forced to run against Nielsen. But after Nielsen’s gallant move, Logue says he’ll stay in the 3rd Assembly seat, declaring one of the 10 houses he owns there as his residence. That settles that. Not quite. See, LaMalfa’s seat won’t be vacant until after he gets elected in November, requiring a special election be called to fill the empty Senate seat sometime in 2013. Assemblyman Logue could challenge Nielsen for LaMalfa’s seat and not lose his Assembly seat if he’s unsuccessful. Get all that? There’ll be short quiz following. But if Logue wins, then who’ll run for his Assembly seat? Hold on. Let’s not start that again.
The Cost of Doing Business Just Went Up
California’s employers got a rude little shock on New Year’s Day as the federal government increased the unemployment taxes they pay. It’s complicated but here are the low points: The state’s Unemployment Insurance Fund, paid for by employer contributions, is insolvent. Has been since 2009. The only way the state has been able to keep sending support checks to Californians who’ve lost their job through no fault of their own during the Great Recession has been by using federal loans. About $10 billion worth. And now the federal government says it’s time to settle up. What that means immediately for employers is that the U.S. Department of Labor has made a 0.3 percent reduction in a tax credit employers currently receive, resulting in increased federal unemployment tax liability. The revenue removed from the pockets of business owners is earmarked for paying down the principal on the federal loans. That 0.3 percent boost is about $21-#23 per employee, according to Governor Brown’s estimate. And each year the fund remains insolvent, another 0.3 percent gets tacked on until the entire credit is eliminated and employers pay the maximum federal unemployment tax rate of 6 percent on the first $7,000 on each employee’s wages. And the fund gets out of the red, of course. The Democratic governor says solvency is a ways away. This year’s 0.3 percent increase will cost employers almost $300 million. Adding another 0.3 percent in 2013 takes the annual total to $616 million. Absent a change in the status quo, five years from now – when the governor says the fund will still be insolvent – employers will be paying some $1.8 billion more than they do now, about $135 more per employee. Have a nice day.
But Wait! There’s More
To cover future interest payments on the federal loans and repay another state fund he’s been borrowing from to make last year’s and this year’s $417 million interest payment to the feds, Governor Brown wants to impose on employers an average $39 per employee surcharge starting in January 2013. The surcharge would increase to $61 per employee in 2014 and drop back down to $41 by 2017, the Governor’s bean counters reckon. Assuming employers pay the current $434 maximum per employee each year, the Governor’s fee would boost that to $473 next year and $485 in 2014. The ray of light for employers is that the surcharge requires a two-thirds vote, saith the Brown administration. Based on past performance, Republican lawmakers will vote to increase taxes on anything right about the time pigs become airborne. Of course, the fund will still be insolvent and the federally imposed increases will continue.
Almost Forgot
Governor Brown introduced his budget plan for the fiscal year that begins July 1. He didn’t want to introduce it on January 5 – he was set to do it five days later – but a portion of it accidently appeared on his Department of Finance’s website. “There are no secrets in government,” the Democratic governor said at a hastily called press conference to release the rest of the details. One of the mistakes the media routinely makes is to devote far more attention to what a governor proposes in January than the details of the final product, created after months of legislative tinkering and sometimes wholesale rewriting. With that in mind: the Democratic governor fills an estimated $9.2 billion hole – a sharp decline from last year’s $26.6 billion problem – with a temporary, at least $5 billion, tax increase that must be approved by voters in November and some $4 billion in cuts, more than half in aid and medical care for the poor. If voters don’t agree to pay 0.5 percent more in sales tax and, at least for the higher earners, more state income tax, public school funds are reduced by $4.8 billion. Vote right or the school kids get it!
More Managed Care
Quoth Governor Brown: “Within the Medi-Cal program, approximately 7 percent of beneficiaries account for 75 percent of program costs, mainly because of costly institutional services.” Many of those he’s talking about are seniors or disabled beneficiaries who are also enrolled in Medicare – about 1.2 million, the Governor estimates. To save more than $840 million, Governor Brown would take these so-called dual eligibles – “some of the most expensive and medically complicated health cases” – and place them into managed care. Thus, the Governor reasons, one entity would be making all the decisions for the “beneficiary,” which, in turn, would mean better focused, less duplicative (expensive) care. This would not diminish the level of care dual eligibles receive, the Brown administration says. Read more about the idea and some other medical-related budget items here.
The More Things Change
“Few laws, well-directed, will effect more good than numberless statutes restraining, fettering and directing private enterprise. The greatest liberty consistent with good government is the true principle of Republics and will contribute most to the development of the resources and energies of a people.” So said California’s third governor, John Bigler – a Democrat – in his first inaugural address January 8, 160 years ago. Similarly: “The evil of an individual, as a general rule, affects him alone, for his power of injuring the few around him can be summarily restrained. But the wrong of a bad law affects the whole community and its poison may spread before discovery and the injury may be irreparable, though afterward annulled by a decision of a court or repealed by an act of a future Legislature.” From Republican Governor Henry Gage’s January 7 inaugural address, 111 years ago. The message will sink in eventually. Right?