MOORLACH UPDATE — Budget Choices — June 7, 2015

This past week saw the deadline for moving legislation written by State Senators onto the Assembly. It made for a very busy week. As we would say in my accounting practice days, nothing would get done if it were not for the last minute.

The next two weeks will see a scramble to present a budget to the Governor on or before June 15. Consequently, I submitted my observations to the OC Register, which kindly printed them in today’s Commentary section. It is the first piece below. I have also provided the history of California’s unrestricted net assets/deficit from 1999 to present directly below the editorial submission.

For your edification, I’m also including a graph that reflects where the budget priorities are being placed. As you can see, for all the concern about addressing road maintenance, transportation is not the highest priority.

The assisted suicide issue received an incredible amount of media attention, from The New York Times to small home town papers (see MOORLACH UPDATE — SB 128 — June 4, 2015 June 4, 2015 John Moorlach). Although there were some 550 articles on the subject, I have only provided you with a couple. So that you don’t think that I only forward positive pieces, the Daily Democrat of Woodland in Yolo County has a rebuttal and it is the second piece below.

During this past hectic week, the last of my five De Boer uncles passed away. Jan "John" H. De Boer was born on August 7, 1923 in the Netherlands. Holland was invaded by Germany in May of 1940. As Uncle John was sixteen at the time, he had to hide for a good portion of World War II in order to avoid being either conscripted into the German military or becoming a slave worker in German factories. His last few weeks were not easy, but I’m thankful for his strong will and fortitude. My deep sympathies go to my Aunt Tina and my cousin Hilda at this time of loss.

OC Register Logo

State lawmakers heedless of history’s budget lessons



The joy of being a little older is that one has seen a few economic cycles over the decades. This is certainly true for Gov. Jerry Brown, 77, who instinctively knows that after a brief economic boom, another recession is not too far off. The proverbial warning from George Santayana, “Those who cannot remember the past are condemned to repeat it,” is not lost on the governor.

Gov. Brown recently released his “May Revise,” an update to the annual budget plan released in January, to modify projections for rising or falling revenue over the spring months. This year, revenue was rising.

Although this is my first “May Revise” experience as a state senator, I admit to being a bit surprised by Sacramento’s exuberance over the forecast of increased income to the tune of $4 billion to $6 billion – money largely attributable to the 2012 Proposition 30 ballot measure that temporarily raised sales taxes and income taxes. The voters approved this tax increase in order to balance a $26 billion structural deficit plaguing the state and to get more solvent for future economic cycles.

With the state coming off one of the worst recessions in decades, the legislative majority is now overflowing with dozens of new spending proposals, including low-cost tuition, taxpayer-funded health care for undocumented immigrants and additional school spending around the state.

When the May Revise came out, I did what any good accountant would do: I used an industry standard to measure the state’s current fiscal health. I compiled data from California’s Comprehensive Annual Financial Report for each of the past 15 years and provided a spreadsheet reflecting the state’s recent spiral into an unrestricted net deficit.

According to the CAFR, California currently has an unrestricted net deficit of $117 billion. A fiscally healthy state should have positive unrestricted net assets. Even worse, this report does not include the hundreds of billions of dollars in unfunded state employee pension and retiree medical liabilities. Nor does it account for the estimated $200 billion of state infrastructure deferred maintenance.

In accounting language, this means the Golden State is in desperate fiscal shape.

When I released this data to the Capitol community, I got blank stares, as if someone momentarily turned off the music in the middle of a pool party. But, after a brief pause, the party continued.

This is because the Sacramento “spending lobby” is just that: a spending lobby. And our Legislature is like someone who is making minimum payments on maxed-out credit cards and has no savings, yet wants to buy a new car.

In a recent Budget Committee meeting, one Democratic senator opined that “austerity is a choice, not a necessity” shortly before joining the Democratic majority in passing a hugely inflated spending plan – loaded with hundreds of millions of spending beyond Gov. Brown’s budget proposal.

In that same meeting, the chairman of the Budget Committee made it clear that paying down California’s debts was “not a priority.”

As a trained Certified Public Accountant, I see things a little differently than most legislators. I do not focus on where we can spend. Instead, I examine what has been spent, what obligations have been incurred and not paid for, and assess the reality of the state’s financial health.

Our state has structural budget issues that would alarm even the most optimistic shareholders of any major U.S. corporation. Our high debt and looming unfunded liabilities have scared away some of our best job-producing companies. This financial reality simply cannot create the healthy fiscal future that California needs.

The increased projected revenue does not mean our government can ignore or put off addressing the existing fiscal obligations. The sooner California gets its fiscal house in shape; the sooner lawmakers can address other needs that will increase the quality of life for all Californians.

Gov. Brown is making a valiant effort to turn the ship of state to a proper fiscal course. But, if the Capitol disregards the recent past, and continues to increase spending without taking care of its glaring obligations, then California will be doomed to repeat the fiscal mayhem of the recent past. And it will be the taxpayers, once again, who will bear the brunt of this missed opportunity.

State Sen. John Moorlach, R-Irvine, is a CPA and certified financial planner. He gained national attention 20 years ago when he was appointed Orange County treasurer-tax collector and helped the county recover from its 1994 bankruptcy filing – at the time the largest municipal bankruptcy in U.S. history.

Fiscal Year
Net Asset/Deficit
Per Capita Governor
6/30/99 $1,533,113 $46 Wilson/Davis
6/30/00 6,531,331 192 Davis
6/30/01 7,001,095 203 Davis
6/30/02 (19,417,429) (553) Davis
6/30/03 (43,927,987) (1,238) Davis
6/30/04 (52,897,395) (1,474) Davis/Schwarzenegger
6/30/05 (52,631,090) (1,457) Schwarzenegger
6/30/06 (54,710,847) (1,514) Schwarzenegger
6/30/07 (56,519,478) (1,546) Schwarzenegger
6/30/08 (69,346,950) (1,887) Schwarzenegger
6/30/09 (86,302,434) (2,335) Schwarzenegger
6/30/10 (103,272,000) (2,772) Schwarzenegger
6/30/11 (123,783,314) (3,285) Schwarzenegger/Brown
6/30/12 (123,897,753) (3,257) Brown
6/30/13 (117,383,903) (3,085) Brown
6/30/14 (116,948,128) (3,014) Brown


I’d prefer to decide how I die

“What kind of society are we?” asked Sen. John Moorlach, R-Costa Mesa, during Thursday’s debate about the landmark right-to-die law later passed by the state Senate. “I don’t believe we are in a disposable one, when it comes to short-cutting the natural course of life.”

Thank you for your concern Sen. Moorlach, but I don’t believe I should be forced to live in pain as a science experiment.

“Life should be protected from beginning to end,” said Sen. Mike Morrell, R-Rancho Cucamonga. “We are sending signal that suicide is OK. We are becoming a culture that devalues life.”

Thank you for the values you place on life, Sen. Morrell, but quality of life counts too and if I’m in a position of pain with no hope ever again getting out of bed, breathing fresh air or not using a bed pain then I don’t want it.

Those are my feelings about the opinions of some lawmakers who voted against the End of Life Option Act which passed 23-14 in the state Senate on Thursday. The proposal now goes to the full Assembly. If it’s approved there, it will go to Gov. Brown, who has not indicated his position.

This legislation is more than a bit personal for me since my initial diagnosis of tongue cancer last September. I’ve survived thanks to the treatment provided by a group of very caring physicians, my own fortitude, and the love of family and friends.

But as many who have had and suffered through cancer treatments, there were times when one questions whether the treatment is worse than death itself. When my throat was so burned by radiation I couldn’t swallow I wondered how long I could hold out against the pain.

And I had it easy. There were others I met on my cancer treatments who had no hope. You could see it in their eyes. You could smell it as they passed by in their wheelchairs.

I’m grateful the Senate approved this legislation. It took the heart-breaking case of 29-year-old Britanny Maynard to galvanize our lawmakers. Britanny was, of course, a UC Berkeley graduate and newlywed diagnosed with aggressive terminal brain cancer, who could not receive physician-prescribed medications to end her life last year in California. Maynard and her husband moved to Portland, Ore., so she could take her own life under that state’s Death with Dignity law.

Britanny had no choice but to accept increasing levels of pain coupled with loss of mobility and the use of her brain. That’s not living under anyone’s definition.

So, it is with deep thanks to Britanny for causing a shift in this debate. I thank co-authors Sen. Lois Wolk and Sen. Bill Monning for bringing this issue back before us all for consideration.

Oregon has had 17 years of experience with the law to get it right and the statistics show it is rarely used and has not triggered any legal disputes. Since the Oregon law went into effect in 1997, 1,327 people have requested prescriptions. Of these, 35 percent have not used them. That information to me shows that only people in true need have sought to end their own lives on their own terms. The ability of what some would say is “committing suicide” has not be abused by those in true need.

Wolk said one of the reasons she sponsored the legislation was the traumatic cancer death of her mother when Wolk was 17. “Her suffering was prolonged and unbearable,” she told her Senate colleagues.

For me, it was watching my father slowly fade away from intestinal cancer. Confined to a bed, he had a tube running out of his gut and into a bag that caught whatever had gone down his throat. He was under hospice care toward the end. That’s also pretty close to how my mother died. She had liver cancer but I never saw her in the final days. It was up to one of my sisters to help her get to the bathroom, wipe her backside, and watch as this little British woman took her last breath.

If my cancer returns and there is no hope then I want to be able to talk freely with my physicians and my family before deciding my own fate

Sen. Joel Anderson, who said he was disabled for a number of years and couldn’t provide for his family, told his colleagues he thought about sucide but decided against it. Sen. Anderson made a decision that he thought was right for him, what’s wrong with those who have incurable diseases to be given the same right?

Jim Smith is editor of The Daily Democrat. Email him at news or follow him on Twitter @newsie2001.

This e-mail has been sent by California State Senator John M. W. Moorlach, 37th District.

If you no longer wish to subscribe, just let me know by responding with the request to do so.