MOORLACH UPDATE — Final Hours For Bills — September 28, 2018

The Governor has a few more hours to sign or veto the remaining bills on his desk. I’ll try to give you an executive summary next week on how many of the 20 worst bills Gov. Brown actually did, thankfully, veto (see MOORLACH UPDATE — 2018 Top 20 Veto Worthy Bills — September 13, 2018).

One of the bills still on the Governor’s desk is AB 3120. It did not make it to the “Top 20” list, as a number of Republicans voted for it. I am half of the Senators that voted against it. I even spoke against it on the Senate Floor, warning about the potential repercussions implementing this bill will have on our school districts and nonprofits.

AB 3120 would extend the statute of limitations for filing abuse claims and lawsuits. This is righteous. But, it will be expensive.

School teachers who are perpetrators do not pay the damages, the school district does. Usually, the insurance companies provide the settlement funds. But, will they do so after all of the claims have already been settled and now the goal line has been moved? And, will they continue to insure school districts? If they do, how high will the premiums go? And, if not, where will the money come from?

School districts will have few choices if AB 3120 passes and more lawsuits are filed against them. They can litigate and hope to prevail. But, this is an even more expensive proposition if they lose the cases. They can file for Chapter 9 bankruptcy and have a Federal Court forgive the settlement amount, thus damaging further the claimants who have gone through an exercise permitted by this bill. But, we haven’t seen this bankruptcy strategy pursued in California, yet. They could go to Sacramento, which is funded by you, the taxpayers, with hat in hand. But, the general fund is spent out, with additional bond principle and interest payments on the horizon. Or, they could attempt to put an assessment on your property tax bill, again burdening you, the taxpayer.

And I haven’t even mentioned what it may do to nonprofits, who do not have the potential remedies that school districts have. That’s why I took the risk of opposing a powerful legislator’s bill.

These are probably not the politically correct arguments to make, but I represent all of the taxpayers and need to provide balance to what appears to be a vindictive remedy. So, I’ve provided my concerns in the Fox & Hounds piece below.

Another bill still on the Governor’s desk is my SB 656

(see MOORLACH UPDATE — Attaboy — January 22, 2018 ). SB 656 would make minor modifications to the Judicial Retirement System, Tier 2 (also known as JRS II). It is supported by more than one-half of the Superior Court Judges in California, including Judge Lance Ito, who has come up to Sacramento twice to testify on my bill’s behalf.

Orange County Superior Court Judge John Adams was the instigator of this two-year bill. CalPERS was a huge assist in writing the language. It addresses a work hardship concern for those in this pension plan and will provide the Governor either an opportunity to assist many of his appointees to the bench or to shut the door on any pension plan adjustments post his PEPRA legislation.

I’ll be on pins and needles this weekend.

Justice v. Retribution: AB 3120 Could Bankrupt Schools, Non-Profits

Senator John Moorlach

By Senator John Moorlach California State Senate, 37th District

http://www.foxandhoundsdaily.com/2018/09/justice-v-retribution-ab-3120-bankrupt-schools-pensions/#facebook-comments

Assembly Bill 3120 is aimed at the wrong target. I’m for justice, not retribution.

The bill by Assemblywoman Lorena Gonzalez Fletcher, D-San Diego, would increase childhood assault victims’ ability to sue both perpetrators and employers for claims that already have passed the statute of limitations. Yes, crimes committed against children are egregious, and deserve to be addressed swiftly without hesitation or disregard. I share the sentiment of the author. Something must be done.

Sexual misconduct allegations have prompted a series bills in the California Legislature, many of which I’ve supported. This legislation echoes a cry heard across the nation as the #MeToo movement exposed those who have abused positions of power to suppress the weak.

The need for justice is valid, but the vengeance unleashed when bills like this come into play negates the very issue it’s seeking to remedy. While trial attorneys may take 40-60 percent of the damages, schools and other non-profit organizations will be left with little to no resources to rebuild or repair.

That includes public schools, many of whose finances are in very bad shape. According to my analysis of California’s 940 K-12 school districts, about two thirds already suffer negative balance sheets. Even worse news will strike over the next year as, for the first time, their Comprehensive Annual Financial Reports must now include unfunded retiree medical liabilities.

For small school districts, one additional lost abuse lawsuit resulting from AB 3120 could lead to insolvency and the cancellation of those retiree benefits. Abuse victims also could receive reduced or no compensation from empty school treasuries.

Those districts that can make payouts will find it impossible to train or implement better procedures to ensure this doesn’t happen again as their budgets will be either completely drained, or greatly impacted from higher insurance premiums (if they can obtain insurance). We cannot even be certain the threat will be eliminated, as a considerable amount of time has passed and employees who perpetuated the abuse are most likely no longer to be present at the school.

We’ve seen this before. In 2002 the Legislature passed Senate Bill 1779 by state Sen. John Burton, D-San Francisco, opening up the statute of limitations retroactively for one year. Despite that, children continue to be abused and cover-ups still occur.

I’ve dedicated my public career to repairing the fiscal integrity of those municipalities I’ve served. In a time when schools are facing massive fiscal distress, I find it troubling the Legislature would even consider such a measure. This is a righteous cause, but it has the potential to devastate school districts and make obtaining insurance next to impossible.

California needs to focus on policies that prevent sexual misconduct so we don’t create more victims. This new legislation is a reactive approach to an issue that requires a proactive, preventative solution.

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