MOORLACH UPDATE — Talking Pension Tax — January 4, 2017

The new year is starting out with a bang. The Marin Independent Journal, in the first piece below, gives a nice shout out for my "pension tax" stance (see MOORLACH UPDATE — Thumbs Down on Pension Tax — December 27, 2016 december 27, 2016 john moorlach and MOORLACH UPDATE — Pension Tax Begins — December 21, 2016 december 21, 2016 john moorlach).

I discussed the pension tax with John and Ken on KFI yesterday afternoon. I made their headline — "It’s our first show of the year! Ghoul Pool 2016 results, Ghoul Pool 2017 picks, Pension reform with Sen. John Moorlach, and more!" (Listen to my interview HERE).

The second piece is from the Daily Journal and sets up the fun bills the Legislature will be debating in the coming days and weeks as California begins to react to our new incoming United States President (also see MOORLACH UPDATE — Peaceful — December 19, 2016 december 19, 2016 john moorlach).

Marin IJ Editorial: At least one lawmaker is talking about ‘pension tax’

Credit Orange County lawmaker John Moorlach for shining a bright spotlight on a surprise tax increase that starting in April will be on car owners’ registration bills.

Moorlach, a Republican and a staunch critic of the way the state has handled workers’ pensions, says a $10 increase, buried in the state budget, will go toward covering the state’s rising tab for the California Highway Patrol officers’ retirement plan.

Moorlach says the state, with lawmakers’ and the governor’s blessing, is using the state car tax to raise the revenue needed to cover its growing cost — an estimated $415 million this year.

The governor’s office said in June the increase is needed to cover the rising cost of CHP pensions and to prevent “significant” cuts to CHP’s ranks and to Department of Motor Vehicle offices.

The increase was approved with little public attention, maybe because it’s only $10, at least to start, and because we don’t know how many other state fees are being quietly raised because of the state’s rising pension costs.

Our local representatives, Assemblyman Marc Levine and state Sen. Mike McGuire, did little to inform their constituents of the increase, both before and after the budget was voted for and signed.

It is an expense that the owners of 27.7 million vehicles in California now have to cover, keeping promises made to CHP officers, who play an important role in helping keep our state safe. But that doesn’t mean state taxpayers have to be happy about those promises made with little oversight and less foresight that are taking bigger and bigger bites out of the state budget.

The state’s annual bill for CHP pensions has grown from 13 percent of the cost in 2000 to 50 percent today. That’s largely due to changes approved in 1999 that allowed officers to retire at age 50 with pensions, as much as 90 percent of their highest compensation for as long as they live.

It wasn’t supposed to cost taxpayers more. Lawmakers said returns from state investments would cover the cost of the change. Then the dot-com stock bubble burst — there was a national recession.

Of course, lawmakers’ strategy of quietly approving the increase and not having it go into effect until April might ease the political heat.

Built into the increase is an annual, automatic cost-of-living increase.

Moorlach, a public pensioner himself, deserves credit for being forthright and honest about the increase, its purpose and its importance, both in covering a growing budget gap and a budgetary maneuver that we are all paying for.

Incoming attorney general may be granted new powers

By Malcolm Maclachlan
Daily Journal Staff Writer

California will soon have a new attorney general, who may have several new powers and responsibilities if the state Legislature gets its way.

Gov. Jerry Brown officially nominated U.S. Rep. Xavier Becerra, D-Los Angeles, on Tuesday after Kamala D. Harris took her oath of office as a U.S. senator.

Becerra, whose intended nomination was announced last month, was quickly embraced by a state Democratic establishment as a key opponent for the incoming administration of President-elect Donald J. Trump.

Within a day, Becerra had issued his much-quoted challenge to Trump to "come at us."

Sen. John Moorlach, R-Costa Mesa, said he is worried that Democrats’ desire to pick fights with Trump could result in the federal government withholding or delaying funds the state depends on in its "precarious" budget situation.

Brown, Moorlach said, has been a fiscally conservative Democrat whom many Republicans have seen as someone they could work with. But the nomination of Becerra and the rhetoric around it are potentially worrying signs, Moorlach added.

"That might be a signal that he is ready to be combative," Moorlach said. "Now he has to figure out what the plan will be if Donald Trump is not amused."

The state Legislature is clearly in a feisty mood. When they reconvened on Dec. 5, Democrats quickly introduced several bills that appeared designed to provoke the Trump administration — and a resolution charging him with pursuing "policies of ethnic cleansing."

More substantively, several bills seek to enable a more activist attorney general’s office.

At least two could pit the office against federal immigration officials. SB 29 would prohibit local law enforcement in California from housing people detained on immigration charges in private facilities.

It would also give the attorney general and district attorneys the power to bring civil actions against immigration detention facilities that violate the rights of detainees.

SB 54 would repeal current law that calls on local law enforcement to inform federal immigration officials when they arrest noncitizens on drug charges — and would charge the state Department of Justice with creating "model policies" for local police to follow instead.

Bill O. Hing, a law professor and director of the Immigration and Deportation Defense Clinic at the University of San Francisco, said he could envision scenarios where SB 29 or other legislation aimed at Immigration and Customs Enforcement could lead to court battles with the federal government.

"I do believe an aggressive Trump Department of Justice might challenge some of the state’s provisions that call for non-cooperation with ICE," Hing said.

Cameron Smith is a former legislative counsel for the man Trump has announced as his pick for U.S. attorney general: Sen. Jeff Sessions, R-Alabama.

Court battles over immigration may be less likely than some think, Smith said.

"It’s important to remember, Sen. Sessions is a federalist," said Smith, now general counsel and state programs director for the R Street Institute, a conservative research organization. "He believes in states’ rights."

Unless a law called for local police to directly interfere with ICE, Smith said, Sessions probably wouldn’t sue. One example he cited would be a law stating that California would not recognize deportation orders or turn over people specifically demanded by federal authorities.

Hing and Smith agree that Sessions would have little grounds or inclination to challenge two much-publicized bills seeking to provide better legal representation for people facing immigration proceedings.

AB 3 would provide money to train immigration lawyers. SB 6 would establish a legal fund to pay immigration defense attorneys.

Smith instead pointed to the decision by California voters to pass Proposition 64 legalizing marijuana. There is "a pretty clear conflict between federal and state law" that would allow Sessions to intervene using the Supremacy Clause of the U.S. Constitution, Smith said.

Prop. 64 also gives new duties to the state attorney general, including pursuing civil penalties against licensed marijuana companies that violate the law, periodically reporting on the industry, and interpreting conflicts between federal and state law.

Several newly-proposed bills also give new watchdog power to the office. SB 19 would force the Public Utilities Commission to get the attorney general’s approval before hiring outside legal counsel.

AB 43 would impose a tax on those who contract with state prisons, then charge the attorney general with ensuring it was not passed on in higher fees. AB 72 would appropriate funds for the attorney general to enforce fair housing laws.

But much of Becerra’s time could also be spent on an area where Harris was active: environmental policy.

In fact, his battles could resemble fights Harris fought against the George W. Bush administration early in her tenure. For instance, Harris sought a waiver for California to impose tighter emissions standards on cars. The waiver was eventually granted by the Barack Obama administration, and runs out in 2020.

UC Davis School of Law Professor Albert C. Lin said California and several other states are likely to sue if Trump seeks ways to reverse Massachusetts v. Environmental Protection Agency, 549 U.S. 497 (2007), the U.S. Supreme Court decision that forced the U.S. Environmental Protection Agency to regulate greenhouse gases as a pollutant.



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