MOORLACH UPDATE — Fixing California’s Finances — December 11, 2015

I’ve been enjoying opportunities to share my first Session’s experiences in Sacramento and what I hope to pursue legislatively in the coming year. The first piece below is from the Newport Beach Independent and provides a taste of the remarks I made last week at the Newport Beach Chamber of Commerce’s Wake Up! Newport monthly breakfast forum (see MOORLACH UPDATE — December Activities — December 2, 2015 december 2, 2015 john moorlach).

To view my entire presentation to Wake Up! Newport, go to

The Digital Journal has an editorial on Wednesday’s Check-Off Oversight Hearing (see MOORLACH UPDATE — Oversight Hearing — December 10, 2015 december 10, 2015 john moorlach and MOORLACH UPDATE — Check-Off — December 9, 2015 december 9, 2015 john moorlach).

In fact, the Digital Journal’s website has a link to the entire hearing. See

As this article refers to the OC bankruptcy, allow me to commemorate the 21st anniversary of the Chapter 9 filing. It occurred on December 6, 1994. For a little fun, visit MOORLACH UPDATE — Twentieth Anniversary — December 5, 2014
December 6, 2014December 6, 2014 John Moorlach and MOORLACH UPDATE — The Wall Street Journal — December 7, 2013 December 7, 2013December 7, 2013 John Moorlach.

Senator Provides Inside Scoop on Sacramento

Former Orange County Supervisor and current Senator John Moorlach speaks at the Newport Beach Chamber of Commerce’s monthly Wake Up! Newport meeting on Dec. 3. — Photo by Sara Hall ©

Former Orange County Supervisor and current Senator John Moorlach speaks at the Newport Beach Chamber of Commerce’s monthly Wake Up! Newport meeting on Dec. 3.
— Photo by Sara Hall ©

Newporters got the inside scoop on Sacramento straight from the source last week at an early morning meeting with a California politician.

Former Orange County Supervisor and current Senator John Moorlach spoke at the Newport Beach Chamber of Commerce’s monthly Wake Up! Newport meeting, held Dec. 3 in the Friend’s Room at the library.

Moorlach spoke about the fiscal health of the state, budget priorities, transportation and Caltrans reform, and more.

“I want to focus on fixing California’s finances,” Moorlach said.

The California fiscal condition ranks poorly, he noted.

The unfunded pension is one of the biggest problems. California has the nation’s highest unfunded pension obligations at $140 billion, which a conservative number, Moorlach said. Reform is needed, he added.

Another issue is that companies are leaving California because of a number of issues that make it difficult for them to prosper. The state’s major export is people, Moorlach joked, because residents are moving elsewhere for better business opportunities. The goal is to have a business friendly state where they can thrive, he commented.

The budget priorities have changed in recent years. During the 2008-2009 fiscal year the state spent the most money in k-12 education, just under $40 billion, according to a graph Moorlach displayed. The budget for the 2015-2016 year revealed that health and human services took the top spot this time around. While the budgets for both grew, each hovering around the $50 billion mark, education came in at a close second.

The budget priorities also showed that the state has paid the least amount of attention to transportation. The state has not made it a priority, he noted.

“The state has intentionally not done anything with fixing our roads,” Moorlach said.

California outsources about 10 percent of transportation and maintenance projects, which is tiny compared to other states that outsource between 50 and 80 percent. It would save a significant amount of money if California stepped up and started contracting projects out, he noted.

Caltrans reform needs to be a priority, Moorlach said.

He mentioned a report from the State Legislative Analyst’s Office that came out in May of 2014.

The report explained that out of the 20,000 Caltrans employees, about half are architects and engineers. They found that they are overstaffed in that area by 3,500 employees.

“It’s just staggering,” Moorlach commented. “There are 3,5000 of these guys that have nothing to do.”

That group of 3,500 overstaffed people are paid an average of $143,000, he continued, which totals to about half a billion dollars that taxpayers are paying “for people to do nothing.”

“The math is not pretty,” he added.

These are just a few of the issues that face California, Moorlach noted.

For more information, visit and

State Senator investigates California

taxpayer donations

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By Jonathan Farrell

At this time of year when people tend to be more generous, it is disconcerting to learn that some charitable donations don’t get distributed. This was at the heart of California State Senator Robert Hertzberg’s committee hearing on Wed. Dec. 9th.

As a Democrat, he serves District 18 which includes Van Nuys, CA, he represents over 1 million residents of the San Fernando Valley. He began the hearing by holding up a 540 tax form explaining that the check list of charities for tax payers to donate to has made it easy and convenient for Californians to make a thoughtful donation with their tax returns.

Yet when Hertzberg said he was told by AP reporter Don Thompson that many of the charities listed have not received any designated donations, Hertzberg, promised he would do something about it. According to the AP’s investigative findings, by then reporter Fenit Nirrapil back in August of this year, almost $10 million dollars in charitable money from tax payers sat unspent. The AP exclusive which was dispersed to the San Diego Union-Tribune and others, said that for a decade 29 funds on the ‘check off list’ had collected $35 million since 2005.

"This ‘check-off list’ as Hertzberg called it, of charities and non-profit organizations for tax payers to donate to has been in effect since 1982. He noted that initially there was over 50 on the list. But that "18 are still active." Charitable money not distributed went back to the state’s general fund. Hertzberg said he wanted to know why and that in some instances it took three years for donated money to go to the selected charity by a taxpayer.
At Hertzberg’s side on Wednesday at the committee hearing was CA State Senator John Moorlach. He represents the 37th District which covers much of Orange County. At the hearing that morning at a conference room at The California Endowment in downtown Los Angeles, he pointed out he has years of experience as a CPA and Financial Planner.
"If the report by the AP is accurate this is bad news," said Moorlach. He talked with this reporter by phone the day after the hearing. "What is frustrating is that other than legislative representatives no one (official) from the Franchise Tax Board was present to speak."
Thompson as reporter for AP was present and he wrote, The AP found that nearly $280,000 that was supposed to be spent on asthma and lung disease research was never allocated by legislators or public health officials. At Wednesday’s hearing, an education official disputed that nearly $90,000 intended to aid disadvantaged youth went back to the state’s general fund and said the department still hopes to distribute the money.
Moorlach said more than once he was pleased that the press was taking interest in this situation. "It makes you wonder, who runs (the state government in) Sacramento?" While Moorlach did say that the Controller for the State of California, Betty Yee should have some sort of system in place to deal with things like this, "Welcome to Sacramento!" "There is no CFO or CEO for our golden state," he added.
Hertzberg said at the committee hearing what his team found out going through information "painstakingly." "Some of the money collected went directly to well-known charities like The American Red Cross for example. But "in other instances when a taxpayer selected a cause such as asthma or lung disease research, the money went through a process to various departments." And, here according to Hertzberg and his team, is where things go wrong.
"The Attorney General has a diligent process in place when it comes to these types of donations," said Hertzberg. "We here in the State of California must (strive) to have the same," he added.
Moorlach agreed as he again noted with his CPA and financial background of expertise "there shouldn’t be a new bureaucracy, he said, to handle something that is no big stuff." During his more than 22 years in finances and public office, he has witnessed a lot. For example, when Orange County Treasurer-Tax Collector Robert Citron’s risky investment strategies lead to bankruptcy. Moorlach’surgings for caution as we could see what was coming, were ignored. Yet, as he had surmised, in 1994, Orange County went into bankruptcy. Becoming, at that time, the largest municipal bankruptcy in U.S. history.
Overall, Moorlach said he thought the committee hearing went well. "Bob (Hertzberg) was well prepared (with the topics discussed) and went over 13 areas of needed improvement." Moorlachspoke frankly when he said, "the hearing did not resolve anything. But I think it helped set a (possible) template for the future."
Hertzberg said that money going to various departments "never should have," especially money that was clearly dedicated to a selected charity by the taxpayer. He reiterated several times this is clearly a situation to be fixed; "and we are going to fix it." To learn more about California State Senator’s commitment to fix the "check off" taxpayer donation situation, visit his web site.

This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of

image001.png?w=660image002.png?w=660image003.jpg?w=660image0041.png?w=660This e-mail has been sent by California State Senator John M. W. Moorlach, 37th District.

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