MOORLACH CAMPAIGN UPDATE — Vote No on Proposition 68 — May 5, 2018

The June Primary is on the horizon, only a month away. This period of time is affectionately referred to as “silly season.” Consequently, even though I am not on the ballot this year, I am still pulled into various races and, this year, ballot measures. Therefore, I note my e-mails as “MOORLACH CAMPAIGN UPDATE” for you to know that the content for those with this label are politically oriented.

Many ask me for my ballot recommendations every cycle. For the June Primary it can be found at MOORLACH CAMPAIGN UPDATE — June Primary Antics — April 28, 2018.

For the U.S. Senate race, the pundits believe the two names that will appear on the November ballot are that of the incumbent, U.S. Senator Dianne Feinstein and State Senator Kevin de Leon. The San Diego Union-Tribune Editorial Board engaged Senator de Leon in a lengthy interview where he mentions me. It can be read and/or listened to at As the segment where I am mentioned discusses SB 1206, I may provide that snippet in a future UPDATE (see MOORLACH UPDATE — OC Housing Trust — May 1, 2018).

Proposition 68 is another bond measure and today’s subject. It was Senator Kevin de Leon who asked me to write the ballot argument in opposition (see MOORLACH CAMPAIGN UPDATE — Proposition 68 — March 23, 2018).

I decided to provide the largest unrestricted net deficits for the states, based on the information I had at the time. I also provided the updated per capita unrestricted net positions recently (see MOORLACH UPDATE — 2017 State Per Capita UNPs — April 2, 2018).

But, to make things more visual, here is the history of California’s unrestricted net position over the past nearly two decades:

Governor Wilson left a nice “surplus,” the last real “surplus” this state has seen. The state jumped into the red in 2002, under Gov. Gray Davis, who was recalled in 2003, largely for mismanaging the state’s finances through the energy crisis and pension spiking. Then the unrestricted net position kept getting worse under Gov. Arnold Schwarzenegger, as he endured the Great Recession with little success. He also abandoned pension reform efforts. Yet today he tediously keeps lecturing other Republicans about “moderation,” even as we try to clean up the mess he left behind.

With the requirement that unfunded pension liabilities be added to municipality balance sheets, California experienced another big jump in 2015. With the unfunded retiree medical, which will be added to municipality balance sheets next year, California is upside down by a quarter trillion dollars!

The last thing the Golden State needs is another debt. It should be focused on reducing its liabilities, not increasing them.

Our state is number one in another wrong category: unrestricted net position. How does it compare? Here are the 50 states in numerical order, from worst to best audited balance sheets:

Rank State UNP (Thousands) Year of CAFR
1 California $(169,499,683) 2017
2 Illinois $(161,239,415) 2017
3 New Jersey $(148,863,714) 2017
4 Massachusetts $ (63,992,915) 2017
5 Connecticut $ (52,826,131) 2017
6 New York $ (45,599,000) 2017
7 Kentucky $ (40,157,358) 2017
8 Maryland $ (27,010,946) 2017
9 Texas $ (25,170,339) 2017
10 Pennsylvania $ (21,275,848) 2017
11 Florida $ (12,401,193) 2017
12 Louisiana $ (11,949,852) 2017
13 Ohio $ (10,571,925) 2017
14 Michigan $ (9,848,197) 2017
15 Wisconsin $ (8,361,432) 2017
16 Colorado $ (8,359,538) 2017
17 Hawaii $ (7,996,567) 2017
18 Alabama $ (7,578,278) 2016
19 Mississippi $ (6,058,425) 2017
20 Missouri $ (5,787,207) 2017
21 Virginia $ (5,344,284) 2017
22 Arizona $ (5,341,848) 2017
23 Indiana $ (5,319,406) 2017
24 Georgia $ (5,210,957) 2017
25 Minnesota $ (5,029,153) 2017
26 Rhose Island $ (4,581,514) 2017
27 West Virginia $ (4,455,964) 2017
28 Delaware $ (3,622,572) 2017
29 South Carolina $ (3,497,642) 2017
30 Washington $ (3,376,575) 2017
31 Kansas $ (3,205,914) 2017
32 Oregon $ (2,482,259) 2017
33 Vermont $ (2,263,168) 2017
34 Arkansas $ (2,160,882) 2017
35 Maine $ (1,885,023) 2017
36 New Hampshire $ (1,683,141) 2017
37 Nevada $ (1,580,030) 2017
38 Iowa $ (999,603) 2017
39 Montana $ (971,795) 2017
40 New Mexico $ (326,978) 2016
41 South Dakota $ 267,296 2017
42 Nebraska $ 550,525 2017
43 Utah $ 819,880 2017
44 Idaho $ 1,146,468 2017
45 Oklahoma $ 1,484,206 2017
46 North Carolina $ 1,822,821 2017
47 Tennessee $ 2,736,079 2017
48 Wyoming $ 4,518,976 2017
49 North Dakota $ 5,989,501 2017
50 Alaska $ 14,558,125 2017

You know I’m singing off the right song sheet when the LA Times Editorial Board has a support position for Proposition 68.

The Associated Press has published an article on this subject and it is the first piece below, found in The Seattle Times and The Modesto Bee.

The publisher of the Orange County Breeze provides her endorsement for a “no” vote on this measure in the second piece below.

I am fully aware that bond measures pass nearly 90 percent of the time in this state. The majority of voters live with a credit card mentality. I also understand that California’s population continues to grow, so future residents can share in the repayment efforts.

But, the truth be told, internal growth is slowing down and this state is experiencing a net out migration of its residents to other states. If growth is stabilizing, then Sacramento is making a huge mistake with the issuance of more debt. Bondholders are never stiffed, so currently budgeted programs will be contracted and/or taxes will be raised should the economy level out or decline.


Ballot measure aims to preserve Salton Sea, help air quality


The Associated Press

SACRAMENTO, Calif. (AP) — A project to protect Californians who live near the Salton Sea from deteriorating air quality could sink or swim based on the outcome of a June ballot measure.

Proposition 68 would allow the state to borrow $4 billion through bonds to fund parks and environmental protection projects, including $200 million for a plan to preserve the rapidly shrinking Salton Sea.

California’s largest lake has been evaporating since San Diego’s regional water agency stopped sending it water this year. Falling water levels increase the lake’s salinity and expose thousands of acres of dusty lakebed, which wind sweeps into nearby farming communities. The dust worsens air quality in the Imperial Valley, where childhood asthma rates are already among the highest in the state.

“It is an environmental time bomb that is ticking,” said state Sen. Kevin de Leon, who authored the bill to place the measure on the ballot. “This is a down payment to begin the process of restoring and revitalizing the Salton Sea.”

The measure would also fund parks in underserved parts of the state and projects to protect against flooding and to clean up water supplies. There are four other propositions on the June 5 primary ballot, including state constitutional amendments about how to spend money from the state’s recent gas tax increase and cap-and-trade fees.

Flooding created the Salton Sea after the Colorado breached a dike in 1905. It sits about 150 miles (240 kilometers) southeast of Los Angeles. It is home to hundreds of bird species including pelicans and cormorants, but rising salinity and pollution have depleted populations of fish and the birds that eat them.

The conservation project would build ponds and channels or pipelines around the edges of the lake to control dust and create bird habitats. The project’s first phase has $80 million of the roughly $410 million needed.

The $200 million from the bond measure “would be a healthy additional dose of funding to build these projects and the benefits could be quite large,” said Pacific Institute researcher Michael Cohen, who studies the Salton Sea.

Proposition 68 would authorize general obligation bonds, which must be repaid with interest over time.

State Sen. John Moorlach said the state shouldn’t add more bond debt.

“There is already too much debt on the books in California,” said Moorlach, a Costa Mesa Republican. “A bond means that a tax is coming.”

The state currently spends a little less than 5 percent of its general operating budget on debt. The Legislative Analyst’s Office predicts that if Proposition 68 passes, annual spending on debt could remain below 5 percent through 2025.

Proponents argue the state isn’t overly burdened with debt and that Proposition 68 would fund vital projects.

The ballot measure would also provide $725 million to build parks in underserved neighborhoods. A similar bond measure in 2006 also promised to build parks, but more than a decade later about a fifth of those parks still aren’t finished.

Twenty-eight neighborhood park projects funded by the 2006 measure remain in progress, two of which are still in the planning phase, according to data from the California Natural Resources Agency.

De Leon, a Los Angeles Democrat, said he hopes the lessons learned from implementing the 2006 bond measure will ensure parks are built more efficiently if Proposition 68 passes.

“We want to make sure that the dollars go out the door sooner rather than later because our children can’t wait longer to have access to Mother Nature, nor should they,” de Leon said. “I have great confidence that that will happen.”

June 5, 2018 primary election: Proposition 68


Proposition 68 was put on the ballot by the California State Legislature — meaning that the State Legislators didn’t feel like doing their job, or were scared to do their job. That’s a black mark against it.

It began its life as SB 5, sponsored by Kevin De León. He represents the 24th State Senate District and served as the State Senate President pro tempore from Oct. 15, 2014, to Mar. 21, 2018. He is currently running to unseat Dianne Feinstein as one of two Congressional Senators. Feinstein is currently California’s senior United States Senator. Our junior senator is Kamala Harris, who refused to defend Proposition 8 at the Supreme Court when she was California’s Attorney General.

Proposition 68’s official summary:

Authorizes $4 billion in general obligation bonds for: parks, natural resources protection, climate adaptation, water quality and supply, and flood protection. Fiscal Impact: Increased state bond repayment costs averaging $200 million annually over 40 years. Local government savings for natural resources-related projects, likely averaging several tens of millions of dollars annually over the next few decades.

All you need to know about general obligation bonds is that they represent another form of taxation — a prolonged and exquisite torture over forty years to repay them!

If Californians want to spend money on parks, natural resources protection, climate adaptation, water quality and supply, and flood protection — all fine common goods to spend the common treasury on — the spending should appear as current expenses in the budget that the governor and legislature cooperatively craft each year.

I see that I have good company in opposing Proposition 68. California State Senator John Moorlach continues to be a solitary voice, crying in the wilderness, against spending what ya ain’t got. Go, Big John! (Senator Moorlach is about two feet taller than I am.)

I will vote no on this.

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