MOORLACH UPDATE — Millionaires and Billionaires — July 17, 2018

Yesterday afternoon, my staff had the privilege to meet and listen to Orange County resident Robert Arnott. I’ve known Rob for years through my role as a trustee of the Orange County Employees Retirement System while I served as the Orange County Treasurer-Tax Collector from 1995 to 2006.

His page on the PIMCO website says the following:

Mr. Arnott is the founder and chairman of Research Affiliates, a subadvisor to PIMCO. In 2002, he established Research Affiliates as a research-intensive asset management firm that focuses on innovative asset allocation and alternative indexation products. He previously served as chairman of First Quadrant, as president of TSA Capital Management (now part of Analytic Investors), and as vice president at The Boston Company. He also was global equity strategist at Salomon Brothers. He has published more than 100 articles in journals such as the Journal of Portfolio Management, the Harvard Business Review and the Financial Analysts Journal, where he also served as editor in chief from 2002 through 2006. He graduated summa cum laude from the University of California, Santa Barbara, in 1977 in economics, applied mathematics and computer science.

Mr. Arnott wrote me recently to inform me that he is leaving a beautiful and massive ocean view home overlooking Newport Harbor to relocate to a new home in Miami, Florida.

So I asked him to visit with me and share why. He not only shared his personal story, he also shared his good fortune and career history in California, and his concerns about the unfunded pension liabilities facing U.S. citizens in every state.

To appreciate the discussion, read his piece, “The Great Tax Migration,” at

For background on the justification of his move, see MOORLACH UPDATE — SB 227 — January 15, 2018 .

For more fun, here is a PowerPoint slide that I have been using in recent speeches that California Democrats should let sink in:

Or maybe the majority should ponder on what has been occurring in Connecticut:

Better yet, New Jersey has a similar situation to that of Mr. Arnott:

I share this to point out that the Flashreport piece below is not an exaggeration. It is not hyperbole. And, while the good ship California has a massive leak, its Democratic legislators have not been willing to even put a cork into it. The closest they have come is the embarrassing attempt to make state tax payments deductible as contributions (see the link above).





Katy Grimes

CA Dems Paint Rosy Picture of Failing California

Posted by Katy Grimes

The future of California is not looking as rosy as the state’s Democrat Party politicians want us to believe. Whenever challenged on the stability of his economy, Gov. Jerry Brown’s knee-jerk retort is, “California is the fifth largest economy on the planet,” as if the size of the economy in the most populous state in the nation is relevant. With nearly 40 million people, California now feels and looks like a Banana Republic in the cities, as well as rural areas in the state.

A homeless camp at Market Street and 5th Street is photographed on Thursday, May 18, 2017, in Oakland, Calif. (Aric Crabb/Bay Area News Group) (camp 20)

Whether you are forced to check the public defecation map to navigate the streets of San Francisco, are on the 57 freeway in Santa Ana looking at miles of homeless tent cities and camps, or you are dodging heroin-addicted homeless zombies around the State Capitol and on residential streets in Sacramento, the results are the same — Nearly one-third of the nation’s homeless population lives in California.

California today is not the California I grew up in. And our Democrat politicians keep telling us to just get used to it.

Too many tax-paying Californian earners are leaving California for lower tax, higher-liberty states, willing to forgo the beautiful California weather for more freedom. This does not bode well for California’s future any longer, with the tone deaf Socialist-Communist-Democrats saying we’d all better get used to this. And lest I forget to mention it, this is Jerry Brown’s California where our four-term governor wants to outlaw private ownership of automobiles, supports universal single-payer health care, and issues in-state “visas” for illegal aliens… and constant tax increases are the only way the state and its largest cities seem to operate.

Even while watching the significant outmigration of the middle class, as well as hundreds of millionaires and billionaires, nearly every city has a tax increase on the November ballot.

Solving Growing City Budget With Tax Increases – AGAIN

In 2012 when Jerry Brown was getting his Proposition 30 sales and income tax increase on the wealthiest Californians, Sacramento city voters also passed Measure U, a “temporary tax” to allow the City to enact a half-cent sales tax for six years with all revenue going to the City’s General Fund.

Proponents claimed the “temporary measure” was needed to stop the loss of city services and jobs blamed on the recession. The City of Sacramento said Measure U was needed to restore and protect City services. “The intent was to restore police and fire services, park maintenance and other essential services that were cut between 2008 and 2013.” The city made it appear unthinkable that voters would deny police, fire and parks their rightful budgets.

Most city residents already noticed the loss of city services along with skyrocketing city utility/services bills.

“Budget officials initially projected the tax would generate $31.8 million in the current fiscal year,” reported in 2015. “Instead, Measure U dollars are now expected to reach $41.5 million this year and remain nearly $10 million above original projections for the next four years.”

But Measure U is set to expire in March 2019. So what does Mayor Darrell Steinberg and the City Council do? They put Measure U back on the ballot for November, to double the size of the tax and make it permanent, saying “inclusive economic growth” makes it necessary. “I’m confident when people see what we can do with a full penny, they will respond favorably,” Steinberg said.

If you aren’t familiar with “inclusive economic growth,” you may want to pour a whiskey when you read,”Inclusive growth is economic growth that is distributed fairly across society and creates opportunities for all,” according to many “Sustainable growth” organizations. It’s largely used in third-world countries, so I’m curious why Sacramento Mayor Darrell Steinberg chose this feel-good wording… unless perhaps he agrees that Sacramento is turning into a third world city.

In 2017, a city report found a 30 percent spike in homelessness over the past two years, which many in the region felt underestimated the problem.

And to our south, L.A.’s homelessness surged 75% in six years .

At the root of the financial problem in nearly every California city, as well as at the state, is swelling pension obligations, — though no one in Sacramento City Hall wants to admit this is what the Measure U tax increase is really about. “As the costs of pensions and employee salaries increase, the city of Sacramento is forecasting budget deficits beginning next year, reported. “Those gaps are expected to reach $25 million by 2022.”

In April, legislative Democrats killed three bipartisan bills that would have made significant changes to the future of California’s pension system. Rather than agreeing to reduce the risk taxpayers face in the $1.2 trillion public pension and health obligations, particularly if we face another recession, Democrats killed the bills, opting to grow the state employee pyramid scheme instead. “Sen. Connie Leyva, D-Chino, countered that she wanted to find ways to encourage more people to join pension programs instead of 401(k) plans,” reported. “I just think we need to do everything we can to get our young people into defined-benefit plans,” she said, proving that their only plan is to bring in more state employees.

“CalPers, CalStrs and the State health plan have a total of $1.2 trillion in unfunded liabilities. For years CalPERS has been lying about their return on investment, claiming it to be 7.5%. Instead in 2014-15, per State Senator John Moorlach, it is actually 2.4%.”

The pension overhaul bills the committee rejected were:

 Republican Sen. John Moorlach’s Senate Bill 1032, which would make it easier for local governments to separate from CalPERS without paying the hefty termination fees that CalPERS charges to fund pension obligations for defunct agencies. If an agency quits CalPERS without paying the fees, CalPERS slashes the pensions it provides to the agency’s former workers.

Moorlach’s SB 1031, which would prohibit pension funds from providing cost-of-living adjustments to retirees if the pension fund has less than 80 percent of the assets it would need to pay the benefits it owes. Most retired public employees can receive cost-of-living adjustments of 2 percent each year, but some contracts allow up to 5 percent. Moorlach’s proposal would have applied only to state workers hired after Jan. 1, 2019.

Democrat Sen. Steve Glazer’s SB 1149, which would have allowed new state workers to opt for a 401(k) plan instead of a pension. The concept is attractive to younger workers who do not intend to be career civil servants. The University of California is offering a similar plan, and 37 percent of new workers are choosing 401(k) plans instead of pensions.

Which came first – the explosion of homeless on California streets, rivers, parkways and highways, or the unfunded pension crisis? Irresponsible politicians created both.

There is so much that’s wrong with California, but not so much that it could not be fixed if we could just rid ourselves of the irresponsible, selfish, malignant, unstable Democrats in government – the same Democrats who put labor unions over people, illegal aliens over citizens, and their own power over the well-being of their constituents. Even New York Magazine agrees: Democrats Must Be More Ruthless — When They Have Power – NYMag.

For more information about California’s public pension crisis, visit Sen. John Moorlach’s PENSION CRISIS page – the only CPA in the California Legislature tells the unvarnished truth.

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 a request to do so.

Also follow me on Facebook & Twitter @SenatorMoorlach

MOORLACH UPDATE — Perspectives On Liberal Agendas — July 9, 2018

A recent Sacramento Bee editorial submission really set off reporter, columnist, and author Katy Grimes and gave her the opportunity to really let loose; and I mean really. You can find the instigation of Ms. Grimes’s rebuttal at

This is not the first time Ms. Grimes has expressed her opinion about the job Governor Brown has done (see MOORLACH UPDATE — Devastating Legacy — October 11, 2017).

Her latest rendition is found in the Canada Free Press, and it is the first piece below.

The second piece is not an editorial, per se, but a truncation of my interview with the world famous Larry O’Connor. Larry is an old friend and he is the most listened to radio talk show host in Washington, D.C. He is also a frequent guest on The Ingraham Angle Show on FOX. He substituted for Doug McIntyre this morning and I was invited on KABC 790 AM to discuss the recent ruling by Federal Judge Mendez on California’s status as a sanctuary state.

I opined that former California State Senate President Pro Tem Kevin de Leon used the election of President Donald Trump as a bully pulpit in 2017 to generate media attention for his planned run for U.S. Senate. However, an unexpected thing happened on his way to D.C., Sen. Dianne Feinstein announced she was rerunning for yet another term. In her mid-80s, who would have guessed?

Consequently, I see the hiring of former United States Attorney General Eric Holder and the numerous legislative and legal activities that resulted last year, as a way for the then-President Pro Tem to garner better statewide name recognition. It was classic showmanship and grandstanding and I gave him high marks for the strategy. But, it came at considerable taxpayer expense and the jeopardizing of public safety for California’s residents.

The brief synopsis of my interview is provided by KABC 790 AM in the second piece below.


Governor Brown’s aberrant style of leadership has been as maniacal as a third-World dictator, and his legacy is a complete and total failure, tainted by frequent lunatic ravings.

Jerry Brown’s California: Socialist, Climate-Conscious Open Borders Utopia

By Katy Grimes

Food or Fish, Liberty or Oppression, Victim or Fighter? We Californians have many decisions to make about our future, thanks to our maniacal third-World wanna-be dictator-Governor Jerry Brown—a childless Marxist, who cares only about himself. Brown has never lived a life that calls upon one to sacrifice for the benefit of one’s own family and children. And it shows.

The narcissistic manic Gov. Jerry Brown, California’s four-term Democratic Governor is mostly responsible for the decline of the state. The once-golden state is now a socialist, climate-conscious utopia with open borders. This has occurred, cheered-on and virtually uncriticized by California’s mainstream media—almost as if the media is state-run.

Brown, who wants to outlaw private ownership of automobiles, supports universal single-payer health care, and issues in-state “visas” for illegal aliens, hates the Californians who have “little green lawns,” are climate deniers, and “freeloaders.” California is a cesspool and Jerry Brown offers  absolution to criminals through hundreds of pardons and commutations.

Narcissists have several telltale diversion tactics they use to escape responsibility:

Intimidate/Blame. Accuse/Project. Argue/Exhaust. Deny/Rewrite. Divert/Attack. Fear/Avoid.

We’ve witnessed California’s ludicrous Governor Jerry Brown use all of these tactics to divert responsibility for the demise of the once great Golden State. Yet California is a glaring example of radical leftist policies to avoid, and in far too many places resembles a third-world banana republic. In 2017, Brown said the world needs ‘brain washing’ on climate change. Sounding indeed brainwashed, Brown said, “The problem…is us. It’s our whole way of life. It’s our comfort…It’s the greed. It’s the indulgence. It’s the pattern. And it’s the inertia.”

California has one of the worst failing education systems in the country, the highest income taxes, highest gas tax, highest poverty in the nation, a billion dollar budget deficit, the state pension system is underfunded by $1 trillion, and violent crime is on the rise. But we now have transgender bathrooms, and a new law that says knowingly transmitting HIV to a partner will no longer be a felony offense.

According to Republican State Senator John Moorlach, a CPA, many of California’s 482 cities are in financial distress, facing a tipping point to insolvency mainly due to unfunded pension liabilities. Moorlach says:

Those are the facts. Yet a recent op-ed by Bonnie Castillo, the Executive Director of the radicalized California Nurses Union, summed up what she says is wrong with California. Only she claims “these glaring needs are a testament to the worst inequality in the United States since the Great Depression,” ignoring that it is the Democrat Party’s own socialistic policies which gave us:

  • a major affordable housing and homelessness crisis;
  • a lack of jobs that pay a living wage;
  • a health care system that leaves behind millions of Californians because they have no health coverage or because they have exorbitant out-of-pocket costs for health insurance;
  • escalating public college and university tuition that limits educational opportunity or leaves students weighted down with debt for decades.

Her solution? More and higher taxes. “Legislators should continue to require the wealthiest among us to contribute to the societal common good,” Castillo said. She also took a shot at Proposition 13, which cut property taxes down to 1 percent and limited the growth rate of future assessments to 2 percent. Even with Proposition 13, California is ranked 17th out of all 50 states in property taxes, according to

High Taxes = Outbound Migration By Millionaires

Ms. Castillo’s and Jerry Brown’s socialistic attacks on the wealthy have so dramatically impacted California, that according to new research from Stanford University and members of the California Franchise Tax Board, California lost an estimated 138 high income individuals due to the passage of the Proposition 30—a tax hike pushed by Gov. Jerry Brown and approved by voters in 2012, reported. Prop. 30 retroactively raised taxes on the state’s highest earners to 13.3%, leaving California top-earners with the highest state income tax rate in the country. It also hiked the tax rate on income between $300,000 and $500,000 by 2%, while raising the tax rate on income over $500,000 by 3%.

“How viable are millionaire taxes when lower-tax states are a short distance away?” the study asks. “Can states sustain these new millionaire taxes without suffering out- migration of top tax payers? How attached are millionaires to the places where they currently earn their income?”

Water Lies

Droughts are nature’s fault; they are naturally occurring. Water shortages are the fault of government officials, and California’s water shortages fall squarely on Jerry Brown. The state of California hasn’t significantly invested in water storage since the 1970s when Jerry Brown was governor the first time around. “This is an era of limits and we all had better get used to it,” Brown said upon being elected governor in 1975, embracing the “small is beautiful” way of thinking. Since then, California’s population has doubled, as have environmental demands. And, more than fifty-percent of the state’s water resources are allowed to flow out the San Francisco Bay to the Pacific Ocean.

Rather than build the desperately needed infrastructure projects to collect and store water during the wet years, Gov. Jerry Brown recently signed into law a new water conservation act that will limit each citizen to just 50 gallons per person per day by 2050. According to the San Jose Mercury News, Governor Brown “signed two bills, SB 606 by Sen. Robert Hertzberg (D-Van Nuys) and AB 1668 by Assemblywoman Laura Friedman (D-Glendale), that require cities, water districts, and large agricultural water districts to set strict annual water budgets, potentially facing fines of $1,000 per day if they don’t meet them, and $10,000 a day during drought emergencies, Daily Wire reported.

The truth is that 50 percent of California’s water goes toward environmental purposes. Of the rest of the water, only about 10 percent goes to “urban” uses for homes and businesses, and 40 percent is used by agriculture. A full 50 percent of the water is used for environmental purposes.

Democrat lawmakers and federal environmental regulators have authorized more than 81 billion gallons of water to flow out to the ocean, instead of being used for human consumption. This is environmental extremism at its worst, and it is killing California agriculture.

More than 80,000 acres of farmland could be back into production, if only farmers and ranchers had the 81 billion gallons of water running off into the ocean.

In 2015, when California’s 5-year drought was still in full force, Gov. Brown’s hand-picked appointees at the State Water Resources Control Board  ordered the release of massive amounts of water from the New Melones Reservoir and Lake Tulloch, to save a dozen fish. This occurred at the same time Brown was threatening to fine residents who water “their little green lawns,” and for lingering in the shower too long.

So while the governor and his environmentalist water gatekeepers were going to empty reservoirs to save a few fish, farmers have been deprived of water.

“Friday, the board’s regulators released their plan to disrupt a century of California water law and demand twice as much water flow down the Tuolumne, Stanislaus and Merced rivers in a purported effort to save salmon,” Mike Dunbar wrote in the Modesto Bee over the weekend. “This is a water grab, pure and simple. And we must fight it, not just talk about it.”

“This declaration of economic war is not just about water. It’s a war over our homes, our jobs and our children.”

California is home to one-third of the nation’s welfare recipients. California is home to the most residents living below the poverty line in the country. And now with our politicians’ disregard for federal immigration laws, more than a quarter of the 38 million Californians were not even born in the United States.

California’s Oligarchs

“Why would a labor union, for example, support open borders?” Ed Ring wrote in a recent op ed. “Don’t they understand that if you continue to import low-skilled workers, wages will remain low? But maybe these labor organizations don’t want things to improve for California’s low income communities. Maybe the worse things get, the more members they’ll recruit, the more resentment they’ll exploit, the more agitators will join their army. Maybe this is just about power.”

Governor Brown’s aberrant style of leadership has been as maniacal as a third-World dictator, and his legacy is a complete and total failure, tainted by frequent lunatic ravings.

Brown says humankind would face dire straits if his climate change policies are not fulfilled. “Maybe not in my life, I’ll be dead…Most of you people, when I look out here, a lot of you people are going to be alive,” Brown said  at a legislative hearing one year ago extending his cap and trade legislation for another decade, despite no evidence of air quality improvements. “And you’re going to be alive in a horrible situation. You’re going to see mass migrations, vector diseases, forest fires, Southern California burning up. That’s real guys. That’s what the scientists of the world are saying.”

“I’m not here for some cockamamie legacy that people talk about,” Brown  added. “This isn’t for me. I’m going to be dead. It’s for you. It’s for you and it’s damn real.”

Katy Grimes is an investigative journalist, Senior Correspondent with the Flash Report, ReaganBabe, and Senior Media Fellow with Energy and Environmental Institute. A longtime political analyst, she has written for The Sacramento Union, The Washington Examiner,, The Pacific Research Institute’s CalWatchdog, The San Francisco Examiner, The Business Journal, E&E Legal, The Sacramento Bee, Legal Insurrection, Canada Free Press, and Laura Ingraham’s LifeZette, and can be heard regularly on many talk radio shows each week.


OC GOP Senator: Kevin de León pushed sanctuary state movement for personal ambition

By Sandy Wells


California’s “sanctuary state” laws survived a legal challenge by the Trump administration last week after a federal judge declined to block state measures aimed at confounding cooperation with Washington’s crackdown on illegal immigration. However, Judge John Mendez of U.S. District Court in Sacramento diluted his ruling with an injunction that bars California officials from imposing fines of up to $10,000 on employers who grant immigration officials access to a private workplace or to employment records.

John Moorlach, Republican State Senator from Orange County, says the statewide sanctuary movement has been driven by the political aspirations of former State Senate President pro tem Kevin de León (D-Los Angeles).

“So he uses last year – 2017 – and his reaction to Donald Trump being elected – he uses it as a bully pulpit to start hammering on Donald Trump. Almost every week we had a new resolution on the senate floor on some component. I think he saw it as an opportunity to start building his campaign for U.S. Senate.”

But he says de León’s gambit has not paid off.

“Now where is he in the polls? He’s just about nowhere.”

John Moorlach was a guest on McIntyre in the Morning.

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 a request to do so.

Also follow me on Facebook & Twitter