MOORLACH UPDATE — Oops! — January 19, 2017

The Senate had its first Budget and Fiscal Review Committee hearing first thing Monday morning at 10 a.m. I wasn’t provided with an agenda, other than being informed that it would be a general overview.

I asked a few questions of the Deputy Director of the Department of Finance. One of them related to the effectiveness of the Committee and whether or not items discussed actually had an impact on shaping the Governor’s budget. In what may be described as a patronizing response, I was kindly assured that the process was very beneficial and definitely a collaboration between the Legislature and the Governor’s office. So, I then asked for an "a ha" moment from last year’s budget process where something was discussed and it made an impact on the budget. "I’ll have to confer with staff and get back to you." Another patronizing way to say "no, probably not."

Then Sen. Richard Pan surprised us all with a question about a $1.4 billion "calculation" error (though the headline indicates that it was a $1.9 billion error). He received a similar dismissive response. "We found the error and everything is fine–nothing to see here–let’s move on."

Except that it IS a big deal. Further, as a former local elected official, I take great umbrage when the Governor or the Legislature thinks that it can mess with county budgets. Orange County will bear a big cost because of this error. (I’ll leave the reversal on the Coordinated Care Initiative for another time.)

If the Governor, Legislative Analyst’s Office and Legislature all missed this significant error, how many other errors are missed? Where’s the oversight?

The Associated Press covers this minor "budget dust" miscalculation (the size of the projected deficit!!) and the story is national, including in the Merced Sun-Star and the OC Register, in the first piece below.

In the second piece, the antagonism of those in California’s majority party towards the next leader of the free world, who is registered with the majority party that controls Congress, continues. This time they are poking the incoming Administration with a frivolous mandate to teach about the alleged involvement by Russia in the November elections. Forget about how the United States has been interfering in the conduct and leadership of neighboring nations during my entire life. Will the bill be amended to require textbooks be edited to include that inconvenient information?

When I was in the ninth grade, I enjoyed debate class. My debate partner was Brent Scarborough (who would enjoy a long career with the County of Orange’s Auditor-Controller’s Office). Our course topic during that year was whether the United States could utilize unilateral intervention with smaller nations, in particular those in South America. The U.S.A. has been meddling in the politics and elections of dozens (that we know about) of other countries for decades.

I get criticizing Russia. But, our nation is not blameless in this regard. And, by the way, the test scores of our state’s students is nothing to brag about. Let’s focus on proficiency in the core areas, please. The San Jose Mercury News provides the details in the second piece below.

BONUS: Senate Resolution 8 was on this morning’s Senate Session Agenda. Hostile amendments were submitted yesterday evening that were tantamount to a poison pill. So I passed on bringing up the measure for a vote on the floor today (see MOORLACH UPDATE — Ready to Rumble — January 14, 2017 january 14, 2017 john moorlach).

I will work with the majority party in negotiating their amendments and hope to achieve a satisfactory resolution by Monday afternoon. In the meantime, I thanked President Obama and Vice President Biden on the Senate Floor and welcomed President Trump and Vice President Pence and wished them a peaceful transition. Enjoy the Inauguration tomorrow.

$1.9 billion error adds to California deficit projection

BY JONATHAN J. COOPERAssociated Press

Gov. Jerry Brown’s administration miscalculated costs for the state Medi-Cal program by $1.9 billion last year, an oversight that contributed to Brown’s projection of a deficit in the upcoming budget, officials acknowledged this week.

The administration discovered accounting mistakes last fall, but it did not notify lawmakers until the administration included adjustments to make up for the errors in Brown’s budget proposal last week. The Democratic governor called for more than $3 billion in cuts because of a projected deficit he pegged at $1.6 billion.

"There’s no other way to describe this other than a straight up error in accounting, which we deeply regret," said H.D. Palmer, a spokesman for the Department of Finance.

The agency followed its normal practice by waiting to report the errors in the governor’s next budget, he said.

Brown’s deficit projection was driven by more than just the accounting error, Palmer said, noting that California tax collections came in below expectations for most of the first half of the fiscal year.

The massive hole in the Medi-Cal budget surprised state lawmakers.

"It makes you wonder what else is not right. … When something like this happens, the trust factor gets eroded, and you lose confidence in what’s being provided to you," said Sen. John Moorlach, a Republican from Costa Mesa who serves on the Senate budget committee.

Making up for the Medi-Cal shortfall will mean the state can’t spend money on other priorities, such as college scholarships or paying down long-term pension liabilities, Moorlach said.

The Medi-Cal program, California’s version of Medicaid, is jointly funded by the state and federal governments to provide health coverage for people with low incomes.

It covers one in three Californians, at a total cost of more than $100 billion annually. About a sixth of the money comes from the state general fund and most of the rest from the federal government.

The Department of Finance said it did not account for $487 million in rebates from drugmakers that the state must pay the federal government to reimburse Washington for its share of Medi-Cal drug costs.

The state also miscalculated costs for the Coordinated Care Initiative, an experimental program in seven counties to improve care for a group of high-needs patients eligible for both Medi-Cal and Medicare, the federally funded health plan for seniors and people with disabilities.

Officials double-counted some of the expected savings, leading to a budget hole of $913 million, and undercounted the costs in San Mateo and Orange counties by $573 million.

In his spending plan, Brown proposed eliminating the Coordinated Care Initiative because he said the program was not cost effective, angering counties that said the change would shift $550 million in costs to them.

The initiative’s accounting problems did not affect the administration’s finding that the program should be eliminated, Palmer said.

California lawmaker wants

schools to teach children about

Russian interference in election

The next time California schools update their history textbooks, a Marin County legislator wants to be certain they include a lesson that President-elect Donald Trump has been reluctant to learn: How Russian hackers interfered with the 2016 presidential election.

A bill from Assemblyman Marc Levine, D-San Rafael, will ask the state to adopt high school history curricula based on a recent national intelligence assessment that Russia tried to influence the election by producing fake news and hacking into Democrat Hillary Clinton’s campaign.

In testimony this month, National Intelligence Director James Clapper did not say the alleged Russian hacking changed the outcome of the race, but nevertheless called the actions “an existential threat” to the United States.

High school students need to learn about that threat, Levine said in an interview Wednesday. “We need to make sure that we treat this attack on American democracy with the appropriate significance it has in our nation’s history,” he said.

In 2014, California passed a law requiring the state board of education to consider adopting social studies lessons on the significance of electing the nation’s first black president, Barack Obama. Similarly, Levine said, the state’s Instructional Quality Commission would be asked to develop a lesson on Russian influence in the 2016 election and recommend it to the state board during its next revision of history and social studies standards.

“I’m not going to write the history book myself,” he said.

Another bill, introduced last week by Sen. Bill Dodd, D-Napa, would require schools to teach children “media literacy” — including how to tell the difference between “fake news” and real news.

“During the final, critical months of the 2016 presidential campaign,” Dodd’s bill states, “20 top-performing false election stories from hoax Web sites and hyperpartisan blogs generated 8,711,000 shares, reactions, and comments on social media.”

One Republican lawmaker, Sen. John Moorlach, of Costa Mesa, called the proposed Russian-interference lesson “petty,” an example of “showmanship.”

Asked whether kids needed to learn the difference between real and fake news, he said, “I’d just be happy if we taught kids how to read and write and do arithmetic.”

Read more here: http://www.mercedsunstar.com/news/state/article127304554.html#storylink=cpy

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