MOORLACH UPDATE — Working With the Governor-Elect — November 8, 2018

One of the more amazing aspects of Tuesday’s General Election results is the number of Republicans rioting in the streets upset that Gavin Newsom will be the next California Governor.

I jest, of course. Republicans are not the ones that react this way. There. I got that off of my chest.

Looking at the local election results, please note that Orange County is still Orange County. It voted against Prop 1, while the rest of the state’s voters approved even more debt. And the OC voted for Props 5 and 6, while the rest of the state wanted more taxes (with many complaining that the rent is to damn high). Orange County also voted for the Republican statewide candidates. Orange County is still Orange County.

What did we observe? Diane Harkey, who won in the OC, failed in her run to succeed Congressman Darrell Issa. She raised $1.7 million, only to face $17 million thrown at her opponent from around the nation. The joys of having so many liberal billionaires, like Michael Bloomberg, playing in our local campaigns. Expect more of this in future election cycles, now that they are emboldened.

The voters have spoken. Accordingly, I welcome our new Governor and extend an offer to work together on many critical areas facing the state of California in my submission to The Sacramento Bee. It will be in print tomorrow morning. It is also in the San Luis Obispo Tribune and is the first piece below. And, the Canada Free Press provides Katy Grimes’ election perspectives in the second piece below.

SOAPBOX

Gov.-elect Newsom, let’s work together, starting with housing the homeless

BY JOHN MOORLACH

Special to The Sacramento Bee
https://www.sacbee.com/opinion/op-ed/soapbox/article221325820.html

https://www.sanluisobispo.com/opinion/article221325820.html

 

Congratulations to Gov.-elect Gavin Newsom. I look forward to working with you on solving the state’s most pressing problems. These include our state’s sorry fiscal condition, massive debt foisted upon our children and grandchildren and ending the boondoggle of all boondoggles, the high-speed train that improperly uses cap-and-trade funds, while doing nothing of substance to reduce California’s carbon footprint.

You’ve been opposed to high-speed rail from time to time, but now you’ll be responsible for signing the budget that does or does not continue a multi-billion-dollar black hole. It’s time to redirect this misspending for other urgent needs.

Let’s start with addressing homelessness. Even before I became an elected official a quarter-century ago, I worked diligently to help those who could not find shelter. This issue is so close to my heart that upon my 2015 special election to the state Senate, I chose to be sworn in at the Orange County Rescue Mission in Tustin.

We both could rattle off previous bills on homelessness and some of the underlying issues most prevalent with mentally ill people in California. Yet the state has only taken small steps toward removing the barriers so the least among us can actually afford a place to live.

One of my recent legislative efforts came in a bill that I co-authored with state Sen. Kevin de Leon. Senate Bill 1206, the No Place Like Home Act, became Proposition 2, which voters approved on Tuesday. It authorizes the state to borrow as much as $2 billion against the state income tax on millionaires to build housing for homeless mentally ill individuals.

I also helped move forward the bipartisan Assembly Bill 488, which creates a long-needed Orange County Housing Finance Trust to fund the planning and construction of homeless housing. Orange County generates the second most personal income taxes among California’s counties, but also has to deal with a large mentally ill homeless population.

Looking forward to 2019, there is much more to be done. You have called for building 3.5 million new homes by 2025, a herculean task. But that certainly is possible in a state that once built the State Water Project and the world’s best public universities.

You are quoted as being proud of outraging activists by cutting welfare for single homeless adults and applying those funds to housing services while San Francisco mayor. Good for you.

Now I suggest an even bigger “Nixon goes to China” opportunity to move the dial on housing construction – reform the California Environmental Quality Act. Designed to protect the environment, CEQA instead has become a bureaucratic monstrosity and NIMBY tool that greatly increases the time and cost of building housing of any kind.

When the will is there, CEQA has been magically modified to expedite construction for sports stadiums and arenas, including exemption bills this fall for the Oakland A’s and Los Angeles Clippers. I did not vote for those bills because I oppose CEQA favoritism.

What’s good for millionaire players and billionaire owners should be good for the middle class and the homeless. But Gov. Jerry Brown did little on CEQA reform as he presided over the worst housing situation in generations.

Gov.-elect Newsom, let’s push for substantive CEQA reform stop the expensive and unnecessary high-speed rail fiasco, address the state’s debt and care for the least among us.

John Moorlach, a Costa Mesa Republican, represents the 37th District in the state Senate. He can be contacted at Senator.moorlach.

California Blue Wave: Will it Lead to Insolvency Faster?

There is only so much we faithful, native Californians can take. How much beautiful weather is worth this leftist insanity, and/or before this leftism turns into liberty crushing authoritarianism? Just sayin…

Katy Grimes image

By Katy Grimes

https://canadafreepress.com/article/california-blue-wave-will-it-lead-to-insolvency-faster

The midterm elections have turned out as most observers expected, nationally, statewide, and in Sacramento. By historical standards, nationally, the Democrats underperformed and lost a number of high-profile races. There was no Blue Wave—more like a blue ripple.

However, California is another story, remaining as blue as can be, and headed right into insolvency. In the contest for governor, California voters chose Democratic politician Gavin Newsom over Republican businessman John Cox, who is not a politician.

California goes ‘Full Nuthouse’ as my friend Leslie Eastman reports at Legal Insurrection. In addition to electing Newsom, Eastman points out voters rejected a repeal of the gas tax, and says, “a majority of Californians are thrilled that Sacramento will squander more of their money.”

A friend pointed out “California is a state where everyone bitches about how poor they are and how they need rent control, and yet constantly vote to raise their taxes every chance they get. The voters of this state have never seen a tax increase or bond measure they didn’t love.”

Brilliant.

Californians also re-elected long-time incumbent Democratic U.S. Sen. Dianne Feinstein, rejecting Democratic State Senator Kevin de Leon (Los Angeles). Dumb and dumber was the choice there.

There were some surprises as well. California Democrats flipped three Republican districts: Rep. Steve Knight, (CA-25th District) lost to Democrat Katie Hill, Republican Diane Harkey lost Rep.Darrell Issa’s 49th District to Democrat Mike Levin, and Republican Rep. Dana Rohrabacher lost his race in the 48th District to Democrat Harley Rouda.

In statewide races, it appears Marshall Tuck has beat Assemblyman Tony Thurmond in the race for Schools Superintendent. Tuck is a real reformer. “Tuck made a name for himself in Los Angeles turning around high-poverty, low-performing charter schools before then-Mayor Antonio Villaraigosa recruited him to improve schools within the conventional public school system,” the San Francisco Chronicle Editorial Board said in their endorsement of Tuck. “Marshall Tuck is the clearest and most emphatic voice for reform in the field.”

Democrat State Senator Ricardo Lara and Steve Poizner appear in a near tie for Insurance Commissioner.

California’s Legislative Democrats appear poised to regain their super majority in the state Senate and retain the super majority in the Assembly.

Democrat Assemblywoman Anna Caballero beat Republican Rob Poythress in the race to succeed outgoing Republican Sen. Anthony Cannella in the Central Valley 12th Senate District.

Incumbent Republican State Senator Andy Vidak surprisingly lost his reelection against Democrat Melissa Hurtado in Senate District 14.

“Picking up both seats would give Democrats 28 seats in the Senate and restore the super majority they lost in June when voters recalled Josh Newman of Fullerton,sacbee.com reported.

The ballot initiatives were another surprise. Proposition 3, the water bond, was thankfully defeated. “With millions of dollars of unspent water bond money from 2006 and 2014 water bonds, why is there yet another a water bond on today’s June Primary ballot, and another on the November ballot?” I wrote in June 2018.

Proposition 5 was defeated, which would have allowed homeowners age 55 and older to sell their current homes, purchase a replacement property anywhere in the state and transfer the property tax assessment from the home they sold to the home they bought. The opposition lied and claimed that the state would have lost millions of dollars if Prop. 5 passed. Not so—Prop. 5 would have encouraged empty-nesters to sell their large family homes and downsize without being penalized. And it would have meant more money with the sale to the new owners.

Proposition 6, the gas tax repeal was also defeated—California’s high gas taxes and high car registration fees will remain. Sadly. Prop. 6 would have also amended the state constitution to require voter approval of all future increases in fuel and vehicle taxes or fees.

Proposition 8, which would have authorized State Regulation of Kidney Dialysis Clinics, was defeated. Thankfully.

Proposition 10, repeal of Costa-Hawkins, was defeated. Prop. 10 would have allowed state government to regulate rent, and would actually have created an even worse housing shortage in California.

Sacramento’s Measure U sales tax increase, a slush fund for greedy politicians, was passed by voters, despite that Sacramento city revenues are more than $120 million up from 2010, and up 16 percent in just the past two years.

Measure U doubles the 2012 half-cent sales tax increase and makes it permanent, raising Sacramento’s sales tax to 8.75 percent.

Mayor Darrell Steinberg and most of the members of City Council can’t or won’t be honest about their gross spending and particular taste for other people’s money. Despite promising to spend the Measure U tax increase money wisely, the additional $50 million will likely go straight to unfunded city pensions, which are expected to increase by $60 million a year and are projected to hit $129 million by 2022-23.

What is needed is spending discipline rather than continuing to pick the pockets of the taxpayers and business owners.

Buried at the end of the SacBee article on Measure U’s passage, is this little gem:

“Even with Measure U’s passage, the city’s budget is still projected to be in the red. The city deficit is estimated to be $7.6 million in fiscal year 2019-2020 and $28 million in 2022-23, according to the city budget. If Measure U had failed, the city’s deficit was projected to grow to $47.3 million in fiscal year 2019-2020, and to $80 million in 2022-23.”

Will California’s Blue Wave lead to insolvency faster?

Costa Mesa Republican Sen. John Moorlach’s fiscal report, “Financial Soundness Rankings for California’s Public School Districts, Colleges & Universities” finds 2/3 of California’s 944 School Districts bleed red ink. That report follows his March 2018 reports on the state’s 482 cities that found 2/3 of them in the red; of 58 counties, 55 suffered deficits and only three enjoyed positive balance sheets. His May 2018 report on the 50 U.S. states found only nine were financially healthy, with California ranked among the worst, in 42nd place.

There is only so much we faithful, native Californians can take. How much beautiful weather is worth this leftist insanity, and/or before this leftism turns into liberty crushing authoritarianism? Just sayin…

image18.png?w=660&h=165

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.

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MOORLACH UPDATE — Facing Fiscal Realities — October 30, 2018

Since I submitted this piece, Cal State Fullerton economists have also predicted an economic cooling down on the horizon. But, Sacramento cannot afford a leveling off or a downward economic trend with the growing fiscal obligations it will be facing.

I provide my take on what lies ahead for California’s next Governor in the CalMatters submission below.

And, it’s not only the next Governor who will be facing a potential financial squeeze. It will be all of those elected to Orange County’s local governing bodies as well (see MOORLACH UPDATE — Trick or Treat? — October 26, 2018).

My turn: Next governor will face hard fiscal realities

151109_Moorlach_HeadshotL-e1540839597664-150x150.jpg
By John M. W. Moorlach, Special to CALmatters

As next Tuesday’s election approaches, here’s something disconcerting that all candidates should keep in mind: the California economy.

It has been a juggernaut of growth since 2013, but now is slowing while the national economy is expanding. Let’s review some of the ominous signs publicly available data portend.

California’s annual growth rate has dropped to 2 percent, from more than 3 percent from 2013 to mid-2016, according to a new forecast by California Lutheran University’s Center for Economic Research and Forecasting. The Center for Economic Research and Forecasting projects 2.9 percent national growth for the next two years.

One key indicator is accelerating domestic out-migration—163,000 more California citizens are expected to leave for other states in 2018 than those expected to come here for the sun and fun, and the accompanying high taxes and regulations. In 2014, the net out-migration number was only 117,000. The trend is getting worse.

The Center for Economic Research and Forecasting report indicates culprits include increased onerous taxes and regulations of all sorts. California’s gasoline taxes lag only Hawaii.

The state’s sales tax is ninth highest, at 8.55 percent, just a shade less than the highest rate, 9.46 percent, in Tennessee. California’s top income tax rate is the nation’s highest, 13.3 percent.

If voters approve Propositions 1, 3 and 4 on Nov. 6, expect more strain on the state’s general fund budget. Those are bonds for, respectively, housing, water, and hospitals. And the debt payments will need to be made over decades.

If the majority votes for Proposition 10, cities could impose much more stringent rent control. Cal Lutheran notes San Francisco’s 1994 expansion of rent control cut the supply of rental properties by 15 percent. It’s Economics 101: cut supply and the price must rise, which would not be helpful in San Francisco where the average rent is $3,520 per month.

Another gigantic fiscal threat driving down the highway is public-employees’ defined-benefit pension liabilities.

I have issued fiscal rankings of the 50 U.S. states and every California city, county, school district, and university system. My latest, “Financial Soundness Rankings for California’s Public School Districts, Colleges & Universities,” scored two-thirds of these public school districts and all three college and higher education systems to be in fiscal distress, largely due to the burgeoning pension crisis.

Full employment is a solution. But while Silicon Valley and most coastal areas of the state are booming, other areas of California are not doing as well. Six of the 10 worst U.S. job markets are in California, with unemployment numbers that range from 6.6 percent in Fresno to 20 percent in El Centro.

Not everybody in California is a Silicon Valley internet millionaire. But California state finances depend too much on the most volatile tax sources, those derived from income and capital gains. Even a blip downward in the stock market could evaporate recent state surpluses.

Gov. Jerry Brown’s final report for the “California State Budget 2018-19,” which began on July 1, estimated a shocking 9.2 percent increase in spending from the previous fiscal year, nearly double the 5 percent average increases of his previous seven budgets.

Although the rainy day fund will be filled at $13.8 billion, that would vanish fast in one economic down cycle. Budgets are crucial because, lacking sound finances, all the nice things candidates propose can’t happen: more health care, better schools, modern roads, even tax cuts.

Whether he likes it or not, the next governor will spend most of his time dealing with the financial crises forming off the coast like a tsunami. Jerry Brown will scoot out in the nick of time. His successor will face the vice grip of a slowing economy and rising costs for pension-plan contributions and more bond payments.

Screen Shot 2018-10-30 at 4.53.07 PM

 

 

MOORLACH UPDATE — Haven for Hope — January 19, 2018

Greetings from San Antonio, Texas (Bexar County), where I’m touring the Haven for Hope facilities (see MOORLACH UPDATE — Legislative Efforts — June 29, 2017).

It’s bill introduction season, and The Daily Breeze and Daily Democrat, in the first piece below, provide the details of an effort by Senator Pat Bates, that I endorse. And, it fits in with the reason for my being here in Texas.

The second piece, from the Pinetree Net, provides the details of an award I was presented this week. It’s very humbling and gratifying to be recognized by my former Supervisorial colleagues around the state. I am most appreciative of the relationships that I formed with them over my eight years as an Orange County Supervisor. Also see MOORLACH UPDATE — Burning Year End Issues — December 15, 2017.

The third piece provides another perspective on the Governor’s proposed budget and is found in the San Gabriel Valley News and the Press Enterprise (see MOORLACH UPDATE — Budget and Legacy Priorities — January 11, 2018 and MOORLACH UPDATE — 2018-2019 Budget Recommendations — January 4, 2018).

Bill aims to plug holes in addiction treatment industry

By tsaavedra,tsforza and sschwebke | Orange County Register

https://www.dailybreeze.com/2018/01/17/bill-aims-to-plug-holes-in-addiction-treatment-industry

http://www.dailydemocrat.com/article/NI/20180118/NEWS/180119848

Outraged by reports of “patient brokering” and neighborhood turmoil, Sen. Pat Bates introduced legislation Wednesday to start addressing dangerous and deadly practices in California’s poorly-regulated addiction treatment industry.

“For more than 20 years, several bipartisan efforts to address the challenges surrounding the state’s drug rehab history have gone nowhere due to opposition from vested interests,” said Bates, R-Laguna Niguel.

“While I’m under no illusion that pursuing greater oversight will be any easier this year, doing nothing is not acceptable for constituents who have contacted me on this issue. The Southern California News Group’s thorough 2017 investigation into the industry makes it clear that reforms are needed.”

SCNG’s probe found that as opioid addiction has soared, unscrupulous rehab operators have rushed in to take advantage of mandatory mental health treatment coverage required by the Affordable Care Act. Broke and homeless heroin addicts are worth hundreds of thousands of dollars each in the form of insurance payments, and many are bought, sold and exploited in an underworld rife with kickbacks, drug use and fraud that can end in death.

Addicts around the country are enticed to California with offers of free travel, rent, cigarettes and even manicures, often landing in centers that would not be allowed to open elsewhere. California’s hands-off approach to regulating the industry makes it easy for almost anyone to open a treatment center and charge insurance companies hundreds of thousands of dollars per client, without being required to show evidence that their treatment helps rather than harms. The concentration of facilities is so dense the Los Angeles basin has been dubbed the “Rehab Riviera.”

“Creating substantive and positive change in the drug rehab industry will take time,” Bates said in the statement. “But as a former social worker who once worked in some of our state’s most economically deprived neighborhoods, I take inspiration from Winston Churchill’s mantra of ‘Never, never, never give up.’ And as long as I’m around, I won’t. Stay tuned.”

The bill, SB 902 is still a work-in-progress, she said, with language to be crafted with the help of those involved. She wants to improve patient well-being and increase public safety of neighborhoods hosting rehabs and sober living homes, she said, and aims to stop the industry’s bad actors, not those with strong records of helping people.

In 2016, the Senate Health Committee rejected her SB 1283 that would have allowed a city or county to craft health and safety standards specifically for sober living homes.

In November, a bipartisan group of the U.S. House of Representatives’ Energy and Commerce Committee asked California and five other states for information on allegations of patient brokering.

The parents of several young adults who have died in treatment centers have called on Gov. Jerry Brown to lead on this issue. Brown’s office declined to comment on Bates’ push for action.

“Our office does not typically weigh in on pending legislation,” said deputy press secretary Ali Bay by email. “If that changes in this case, I’ll let you know.”

Sen. John Moorlach, R-Costa Mesa, represents an area that’s home to one of the densest concentrations of rehabs in the state.

“I will be as supportive as I can be,” said Moorlach. “As with any industry, there are bad players. And they’re the ones that need to be addressed.”

RCRC Installs 2018 Officers and Presents Rural Leadership Awards. TC Supervisor Hanvelt Installed as Vice Chair

http://thepinetree.net/index.php?module=announce&ANN_user_op=view&ANN_id=55325

Sacramento, CA…The Rural County Representatives of California (RCRC) installed its 2018 Officers and presented its Rural Leadership Awards at their annual reception in Sacramento yesterday. Humboldt County Supervisor Rex Bohn was installed as Chair, Tuolumne County Supervisor Randy Hanvelt was installed as First Vice Chair, and Inyo County Supervisor Matt Kingsley was installed as Second Vice Chair. Tehama County Supervisor Bob Williams remains an Officer as Immediate Past Chair. The newly installed 2018 Officers will lead the organization in championing policies on behalf of California’s rural counties.

RCRC_logo.jpg

“There are a lot of challenges facing California’s rural counties this year, and I am honored that my fellow rural county leaders have entrusted me to navigate RCRC’s efforts as Chair,” said Supervisor Bohn. “I look forward to the opportunity to work with RCRC Board Members and staff on strategies and opportunities that raise the level of awareness of rural communities in Sacramento and Washington, D.C., and advance the policies set forth by the organization.”

In addition to the Installation of Officers, Rural Leadership Awards were presented to two officials who have demonstrated an understanding of, and leadership in, rural issues and the unique challenges that rural communities face.

Assembly Member Anna Caballero (D-Monterey) was the first recipient of the 2017 Rural Leadership Award.

“We are honored to present Assembly Member Caballero with the 2017 Rural Leadership Award as her actions continue to reflect her passion for ensuring California’s rural counties have a voice,” said Anthony Botelho, San Benito County Supervisor. “From opposing AB 1250 and SB 649, to authoring AB 577, which would have secured a more equitable definition of disadvantaged communities, we thank Assembly Member Caballero for her leadership, and look forward to working together this year to continue fighting for California’s rural counties.”

“I am thankful for the opportunity to represent rural California, and honored to receive the RCRC Rural Leadership Award,” said Assembly Member Caballero. “Rural California plays an important role in our state, and those of us who live and work there contribute to the prosperity of California. Agriculture feeds the country, and the forests and rangeland provide important recreational opportunities and habitat. It takes advocates who appreciate and will defend rural communities. Thank you RCRC for giving rural communities a voice.”

Senator John Moorlach (R-Orange) was the second recipient of the 2017 Rural Leadership Award.

“It is my privilege to present Senator John Moorlach with the 2017 Rural Leadership Award,” said Bob Williams, RCRC Immediate Past Chair and Tehama County Supervisor. “In addition to his advocacy on several legislative proposals of importance to rural California, Senator Moorlach authored SB 1463, which would have required the California Public Utilities Commission to prioritize areas that have increased wildfire hazards posed by overhead electrical lines and equipment. The Senator has also shown that he understands the importance of local-control regarding cannabis issues – a priority for RCRC. Rural advocacy from legislators representing more urbanized districts showcases true leadership, and we thank Senator Moorlach for his support.”

“With more than 20 years of experience at the county-level, I know firsthand the challenges faced by local government leaders,” said Senator Moorlach. “These challenges are only multiplied in our rural communities. In my current role, I rely heavily on my county relationships to inform my legislative priorities.”

In addition to the 2018 Officers, five regional representatives were appointed at the RCRC Board of Directors meeting in December 2017. These representatives join the RCRC Officers to make up the full 2018 RCRC Executive Committee. The regional representatives were appointed as follows:

Region 1: Supervisor Michael Kobseff (Siskiyou)
Region 2: Supervisor Aaron Albaugh (Lassen)
Region 3: Supervisor Diane Dillon (Napa)
Region 4: Supervisor Stacy Corless (Mono)
Region 5: Supervisor Daron McDaniel (Merced)

Details on RCRC’s 2018 Executive Committee and other Committee Chairs can be accessed here.

ABOUT RURAL COUNTY REPRESENTATIVES OF CALIFORNIA (RCRC)

The Rural County Representatives of California (RCRC) is a thirty-five member county strong service organization that champions policies on behalf of California’s rural counties. RCRC is dedicated to representing the collective unique interests of its membership, providing legislative and regulatory representation at the State and Federal levels, and providing responsible services for its members to enhance and protect the quality of life in rural California counties. To learn more about RCRC, visit rcrcnet.org and follow @RuralCounties on Twitter.

OPINION

Sacramento’s next battle – how

to spend a $6.1 billion budget

surplus

By KERRY JACKSON

https://www.sgvtribune.com/2018/01/18/sacramentos-next-battle-how-to-spend-a-6-1-billion-budget-surplus/https://www.pe.com/2018/01/17/bill-aims-to-plug-holes-in-addiction-treatment-industry/

Gov. Jerry Brown has proposed the biggest state budget in history. He wants to spend $131.7 billion from the general fund, about 5 percent more than is being spent from the $125 billion 2016-17 budget he signed last year. His 16th and final budget also includes a surplus, which some lawmakers are looking at the same way a starving man looks at cheeseburger.

“It’s a strange world where politicians are celebrating that the government took too much money from taxpayers, but that’s exactly what is happening with this budget surplus,” said Assembly Republican Leader Brian Dahle.

The celebrants aren’t in full agreement over where that surplus should be applied, though. There might be some rising tensions between those who want to put it away and those ready to spend it. But that would be the wrong argument anyway.

Brown’s proposed budget, which is actually a $190 billion spending package when bonds and special funds are included, projects a $6.1 billion surplus. Brown wants to use the surplus to boost the state’s Rainy Day Fund, which was the result of a bipartisan deal between Gov. Brown and then-Assembly Republican Leader Connie Conway and was approved by voters in 2014. His proposal would boost fund reserves to $13.5 billion.

“It’s not exciting, it’s not funding good and nice things,” Brown said of the money he wants to shovel into the Rainy Day Fund, “but it’s getting ready and that is the work of a budget.”

Those should be welcome words, since most politicians are impulsive. They prefer to spend taxpayers dollars on new, shiny — “exciting,” in Brown’s words — objects as soon as they get their hands on taxpayers’ money rather than attending to the affairs that are already under their administration. This mindset is why California’s roads have become such a rolling disaster. They have been neglected while policymakers have focused on more high-profile projects.

Such as high-speed rail. It doesn’t take a grizzled cynic to think that Brown might be putting away money for his over-budget “bullet train.” Republican Sen. John Moorlach, R-Costa Mesa, certainly believes that could happen, and his suspicions are justified. The Assembly Transportation Committee recently rejected a bill written by Assemblyman Jim Patterson, a Fresno Republican, that would prohibit lawmakers from raiding fuel taxes collected for road repair and using the dollars to make bond payments on the high-speed rail project. If they’ll move money from the state’s highway account to the train, they’ll take it from the Rainy Day Fund for the same purpose.

While Brown says he wants to bank money, some Democratic leaders are almost salivating over the prospect of spending the surplus right away.

“We have a very different approach,” said Assemblyman Phil Ting, chairman of the Assembly Budget Committee and a San Francisco Democrat. “Our focus, the people who we think need tax relief, are the working Californians who are making less than $25,000. That’s where we want to spend our money, making sure they have money to pay rent, to pay for food.”

One might think that there would be an intense demand for the surplus to instead be returned to taxpayers in the form of rebates. There isn’t. But this is where any argument about the surplus should be centered. The taxpayers were overcharged and that money belongs to them.

While lawmakers such as Ting believe the surplus belongs to them, the law says otherwise. Proposition 4, which established the “Gann limit” in 1979, not only imposes restrictions on state spending, it requires Sacramento to issue rebates when, according to the Legislative Analyst’s Office, revenues exceed the limit that Prop. 4 set “to keep inflation- and population-adjusted appropriations under the 1978-79 level.”

Though uncommon, rebates would not be unprecedented. Gov. George Deukmejian sent refunds in 1987. If none are issued for this surplus, the LAO says the state could be “highly vulnerable” to litigation because Brown is violating “the spirit of Proposition 4” by not counting “$22 billion of school-related spending toward the state’s appropriations limit” established by the law.

The threat of a lawsuit isn’t likely to move Sacramento. So if no rebates are coming, the surplus would be put to better use by dedicating it to paying down the state debt, which has reached $221 billion, according to the California Policy Center — and funding public employee pensions, which could be underfunded by $600 billion.

Sacramento, though, is programmed to spend. As usual, this won’t end well for the taxpayers.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

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.

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