TESLA is taking California taxpayer money for the car, wants money for space vehicles, but when it comes to really building a $5 billion battery facility—it will probably go to Texas—it will not go to California. Toyota is leaving the State, as is Occidental Petroleum. As leases run out, so do the corporations. This just in, Union Bank is moving its headquarters from California to New York—another State with high taxes, bad regulations and crazy lawmakers. Imagine how bad California must be for a bank to move to New York.

“Union Bank’s parent is moving its headquarters to New York from San Francisco as it pursues its national banking ambitions.”

Photo courtesy Rex Imperator, flickr

 

S.F. loses another HQ as Union Bank’s parent moves to New York

Union Bank CEO Masashi Oka will become executive chairman when the bank moves it headquarters from San Francisco to New York on July 1.

Mark Calvey, San Francisco Business Times, 5/29/14

TO SEE COMPLETE STORY CLICK ON HEADLINE

The bank’s holding company joins a long list of companies that once called San Francisco home, including Bank of America, (NYSE: BAC) Transamerica, Chevron (NYSE: CVX) and Visa. (NYSE: V)

Union Bank was eager this week to downplay San Francisco’s chances of playing a starring role on the next episode of “The Biggest Loser.”

We know that Guv Brown has been taking truckers fees, cap and trade taxes, using pretend money the State will never collect and other gimmicks to claim he has a balanced budget and a surplus. Of course the Democrat State Controller John Chiang says we have a $10 billion cash deficit—that is the real number. In other words, Brown has manipulated, misused and misplaced at least $10 billion that is does not exist or should be used for other purposes. Why hasn’t the media picked up on this fraud?

“The bad news is that the surplus is an illusion. It is true that the state government brought in a gush of cash in April — 2.2 percent more than predicted. This reduced the state’s cash deficit from $16.7 billion to $10 billion. That is an accomplishment, but it’s not a surplus.

While at a glance it looks as if Governor Brown thinks cash in the bank is the way one determines one’s fiscal position, he is not that naive. In fact, he shrewdly took $1 billion in truck weight fees —intended to fix roads and streets — and diverted them to make it appear he has a budget surplus.”

Jerry Brown’s Magical Mystery Surplus

A fourth term looms—and huge indebtedness.

By Peter Hannaford, American Spectator, 5/29/14

TO SEE COMPLETE ARTICLE CLICK ON HEADLINE

“And, according to the state’s nonpartisan Legislative Analyst’s office, California still owes $340 billion (that’s billion) in debts. In addition, the state has underestimated its public employee pension fund liabilities by approximately $500 billion.

Despite the dark clouds in the fiscal picture, Brown sees his magical mystery surplus as evidence he will leave the state in the black when he retires at the beginning of 2019.

No wonder the governor expects to cruise to a second term in November (actually his fourth when you include his two youthful terms). The latest Public Policy Institute of California poll (May 9-15) shows the leading Republicans, Assemblyman Tim Donnelly and former U.S. Treasury official Neel Kashkari at 15 and 10 percent, respectively”

 

Is the SEIU having membership problems? Do they have a problem with turnout for union leadership elections? The SEIU has hundreds of thousands of members, take in hundreds of millions in forced dues—and spend tens of millions on electing radical Democrats to public office—Obama is one of the more conservative of their candidates.

Other unions are suing them, some of their elections had to be overturned because of corruption. Now we find out in San Bernardino the SEIU holds elections for officers and a handful actually vote. Pass this information to your friends. I bet they have voter ID though!

“On February 5, 2014, the recent election of union officers and council members for SEIU Local 221 were nullified.  SEIU Local 221 represents 9,200 San Diego County employees. Although 4,500 county workers are full members of SEIU and eligible to vote, only forty-one (41) actually voted.  Yes, only 41. Rather than a mail ballot, SEIU set up ballot boxes. Trouble was that there were only 5 polling locations, no polls at worksites, only one day for voting, and very limited hours to vote.” 

SEIU continues to try and gain SBPEA membership.

Things you should know about SEIU…

San Bernardino Public EmpyeesAssociation, 3/12/14

Democracy – SEIU style On February 5, 2014, the recent election of union officers and council members for SEIU Local 221 were nullified.  SEIU Local 221 represents 9,200 San Diego County employees. Although 4,500 county workers are full members of SEIU and eligible to vote, only forty-one (41) actually voted.  Yes, only 41. Rather than a mail ballot, SEIU set up ballot boxes. Trouble was that there were only 5 polling locations, no polls at worksites, only one day for voting, and very limited hours to vote. As you can tell, SEIU is not member owned or member operated. Although the dues are about the same as agency fees, approximately one-half of the employees do not even want to belong to SEIU. In San Diego County, SEIU is a four-letter word.

Independents v. SEIU SEIU has been losing more members every year than the number of new members recruited. These losses are mostly to independent associations with lower dues. Independent associations, such as SBPEA, do not pay money to an International Union in the form of per capita taxes. Recent Examples: By a wide margin, the County of San Diego’s Construction, Maintenance, Operations and Repair Unit voted last year to decertify SEIU and to certify the new independent union, the Association of San Diego County Employees (ASDCE). (Many believe ASDCE will replace SEIU in San Diego in two years.) Employees of the Coachella Valley Water District voted to pull out of SEIU and form their own labor association. In a vote last year, about 90% of the employees who have been represented by SEIU 721 voted to form the new Coachella Valley Water District Employee Association, to elect officers their own officers and hold regular meetings through the independent association. In a landslide victory, the City of Chico Classified, Technical and Professional employees unit voted to get rid of SEIU and recognize the newly formed Chico Employees Association as their new representative. Employees of Riverside County have contacted SBPEA to help them form their own independent association or join with SBPEA. Both Riverside and San Diego County employees now regret ever losing their independence to SEIU.

SEIU LEADERSHIP Last year, SEIU President Tyrone Freeman was found guilty sentenced to 33 months in federal prison for stealing tens of thousands of dollars from his low-income members to finance an expensive lifestyle that included being married to two women at the same time. Alejandro Stephens, the head of SEIU, Local 660 in Los Angeles, was previously sentenced to four months in prison and three months of home confinement. Stephens defrauded a nonprofit organization called the Voter Improvement Project out of $52,000, which he used to launch his union reelection campaign. In a plea bargain, Stephens pleaded guilty to mail fraud and tax evasion for his failure to report the stolen money. Local 660 was then merged into Local 721.

The good news is that with so many SEIU representatives behind bars, SEIU has been able to organize the Prison License Plate Workers, Local OMG CYA..

Prepare to Be Accosted! There are organizers from SEIU in Los Angeles roaming about the County and Courts parking lots, buildings, and visiting your homes wanting you to sign up with them so they can be your union. SEIU organizers are telling employees to vote “NO” on any agreement. They don’t care what’s in it, they want people to vote “NO” because they think it gives them an opportunity to take over. Now that’s a union that really cares about employees, isn’t it? Nationally, SEIU has been losing more members every year than the number of new members recruited. And SEIU Bylaws say that 20% of the locals’ budgets must be spent on organizing. Organizers will tell you anything to coerce you into signing a card because they are organizers, not labor representatives, and their jobs depend on getting cards signed. They say SBPEA is not a union – WRONG! They say SBPEA staff members are County employees – WRONG! They say SEIU is a Democratic union – WRONG! They say that you are without a contract – WRONG! They say their members are happy – WRONG! Just ask employees in Riverside and San Diego counties who are dumping SEIU. You do not have to talk to them. You do not have to take anything from them. More importantly, don’t sign anything because these organizers truly don’t know what they’re talking about. More to come…

 

When you build “affordable” housing you assure market value housing is artificially high, to pay for the loss of building affordable housing. So instead of helping the housing market, affordable housing directly makes it worse. Los Angeles County is the home of the largest number of illegal aliens in any county in the nation. Is it possible that the affordable housing problem would be resolved if law enforcement, the Governor and President lived up to their oaths of office.

This is a crisis because of a failure by government to enforce our immigration laws. We don’t need more affordable housing, we need honest office holders that uphold the law.

“KPCC reported on in April: Median rents in Los Angeles County increased by 25 percent between 2000 and 2012, while the median income declined by 9 percent. Making the situation worse: State and federal funding for affordable funding has fallen by half a billion dollars during the last six years in L.A. County.”

LA rents: County faces shortfall of 490,340 affordable homes, most in state

Ben Bergman, KPCC, 5/29/14

Los Angeles County is facing the largest shortfall of affordable housing in California – 490,340 homes – according to a new report from the California Housing Partnership Corporation, which says L.A. County is home to seven of the 10 ZIP codes with the worst housing overcrowding in the nation and 64 ZIP codes that are in the worst half percent for housing overcrowding.

And it gets worse. The report also points out the doubly whammy affordability problem KPCC reported on in April: Median rents in Los Angeles County increased by 25 percent between 2000 and 2012, while the median income declined by 9 percent. Making the situation worse: State and federal funding for affordable funding has fallen by half a billion dollars during the last six years in L.A. County.

More than 143,000 new renter households have entered the Los Angeles market since 2006, many because of displacement during the foreclosure crisis, according to the report.

So what can turn things around?  Here are the partnership’s three recommendations for local solutions:

1. Replace lost redevelopment funds by dedicating to affordable housing a significant percentage of the hundreds of millions of dollars in recaptured annual property tax revenue that now go to the county.
2. Expand the supply of permanent supportive housing for homeless individuals, families and youth by a) implementing “Pay-for-Success” financing for supportive housing and b) providing the homes and services called for by the United Way’s Home for Good plan to end chronic and veteran homelessness in L.A. County by 2016.
3. Ensure that the Los Angeles County Metropolitan Transit Authority adopts policies that encourage affordable development on LACTMA-owned land so that the most likely transit riders have access to transit and that environmental goals are realized.

 

The cost of ObamaCare is causing tens of thousands in the California workforce being cut to part time work from full time. Many more are losing their jobs due to the heavy cost of mandated healthcare. The Legislature Analyst Office says that if we increase the minimum wage to $10.10, we lose hundreds of thousands of jobs—imagine what a $13 figure brings. If I wanted to assure poverty, joblessness and dependence on government, Senator Leno (his legislation is as funny as Jay’s jokes—except Marks’ become law)

Almost no publicity about this increase—as if no one cares—the media has had a blackout on SB 935. Oh, yesterday, it passed the State Senate it is now on its way to the Assembly.

 SB 935  $13 Minimum Wage

Introduced by Senator Leno (Coauthors: Senators Steinberg and de León De León) (Coauthor: Assembly Member Ting)

February 03, 2014

 

An act to amend Section 1182.12 of the Labor Code, relating to wages.

LEGISLATIVE COUNSEL’S DIGEST

 

SB 935, as amended, Leno. Minimum wage: annual adjustment.

Existing law requires that, on and after July 1, 2014, the minimum wage for all industries be not less than $9 per hour. Existing law further increases the minimum wage, on and after January 1, 2016, to not less than $10 per hour.

This bill would increase the minimum wage, on and after January 1, 2015, to not less than $11 per hour, on and after January 1, 2016, to not less than $12 per hour, and on and after January 1, 2017, to not less than $13 per hour. The bill would require the automatic adjustment of the minimum wage annually thereafter, to maintain employee purchasing power diminished by the rate of inflation during the previous year. The adjustment would be calculated using the California Consumer Price Index, as specified. The bill would prohibit the Industrial Welfare Commission (IWC) from reducing the minimum wage and from adjusting the minimum wage if the average percentage of inflation for the previous year was negative. The bill would require the IWC to publicize the automatically adjusted minimum wage.

The bill would provide that its provisions not be construed to preclude the IWC from increasing the minimum wage to an amount greater than the calculation would provide or to preclude or supersede an increase of the minimum wage that is greater than the state minimum wage by any local government or tribal government.

The bill would apply to all industries, including public and private employment.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO

Bill Text

The people of the State of California do enact as follows:

 

SECTION 1.

Section 1182.12 of the Labor Code is amended to read:

1182.12.

(a) Notwithstanding any other provision of this part, on and after January 1, 2015, the minimum wage for all industries shall be not less than eleven dollars ($11) per hour, on and after January 1, 2016, the minimum wage for all industries shall be not less than twelve dollars ($12) per hour, and on and after January 1, 2017, the minimum wage for all industries shall be not less than thirteen dollars ($13) per hour.

(b) (1) Except as provided in paragraph (3), the minimum wage shall be automatically adjusted on January 1 of each year, commencing on January 1, 2018, to maintain employee purchasing power diminished by the rate of inflation that occurred during the previous year.

(2) The minimum wage adjustment shall be made by multiplying the minimum wage in effect on December 31 of the previous year by the percentage rate of inflation that occurred during that year, and by adding the product to the wage in effect during that year. The resulting total shall be rounded off to the nearest five cents ($0.05). The Industrial Welfare Commission shall publicize the automatically adjusted minimum wage.

(3) The Industrial Welfare Commission shall not adjust the minimum wage pursuant to this subdivision if the average percentage of inflation for the previous year was negative.

(4) For purposes of this subdivision:

(A) “Percentage rate of inflation” means the percentage rate of inflation specified in the California Consumer Price Index for All Urban Consumers, as published by the Department of Industrial Relations, Division of Labor Statistics and Research, Office of Policy, Research and Legislation or its successor index.

(B) “Previous year” means the 12-month period that ends on August 31 of the calendar year prior to the adjustment.

(c) The Industrial Welfare Commission shall not reduce the minimum wage prescribed by this section.

(d) This section shall not be construed to preclude an increase of the minimum wage by the Industrial Welfare Commission to an amount that is greater than the rate calculated pursuant to subdivision (b) or to preclude or supersede an increase of the minimum wage that is greater than the state minimum wage by any local government or tribal government.

(e) This section applies to all industries, including public and private employment.

 

Even union run, nonprofit health care programs are having problems keeping the doors open. ObamaCare really wasn’t thought out, at all. Here we have the farmworkers about to lose their health care, which has been excellent, because it does not meet the Obama standards—whatever they are. Instead, if the State of California does not subsidize the program, more than 10,000 farm workers will lose their health care. Who hasn’t Barack harmed?

“The Robert F. Kennedy Medical Plan does not meet ACA standards because it caps annual benefits at $70,000. The health plan has received a waiver to continue offering its non-compliant coverage until September.

The health plan is requesting a state subsidy to cover any costs that exceed the $70,000 cap so that farmworkers and their employers will not be responsible for the costs.”

Nope. They want the California taxpayers to pay for the farm workers extra costs! Why are people leaving California? The poor and middle class paying for the health care of farmworkers, because Obama changed the rules!

Farmworkers’ Health Plan Asks for State Subsidy To Comply With ACA

California Healthline, 5/29/14

A health plan that provides coverage for farmworkers in California is asking the state to provide a one-year, $3.2 million subsidy to help it comply with Affordable Care Act requirements, the Los Angeles Times reports.

Without the subsidy, farmworkers say that 10,700 individuals could lose their health coverage.

Details of Health Plan

The Robert F. Kennedy Medical Plan does not meet ACA standards because it caps annual benefits at $70,000. The health plan has received a waiver to continue offering its non-compliant coverage until September.

The health plan is requesting a state subsidy to cover any costs that exceed the $70,000 cap so that farmworkers and their employers will not be responsible for the costs.

Changing coverage would increase costs by 35% to 80%, according to a legislative analysis based on information provided by the health plan. If supplemental coverage is not provided, half of the health plan’s members likely would shift to a government health program, which would cost $4.7 million — or $1.5 million more than the proposed subsidy, according to the analysis.

Last week, a legislative panel recommended that the state offer the subsidy to RFK Medical Plan.

Meanwhile, Mark Hedlund, a spokesperson for Senate President Pro Tempore Darrell Steinberg (D-Sacramento), said the health plan is seeking an extension of its waiver, to give it more time to become with the health reform law.

Reaction

The subsidy is being pushed by the United Farm Workers union group and is backed by Steinberg and Sen. Ellen Corbett (D-San Leandro), who said the subsidy could be paid for with money from cigarette taxes.

However, other organizations that have changed their coverage to comply with the ACA question whether RFK Medical Plan should be granted the subsidy.

Clare Einsmann — executive vice president of the United Agricultural Benefit Trust, which provides health coverage to 35,000 farmworkers — said,” Our plan absorbed the cost” of switching to ACA-compliant coverage. She added, “Creating a special set of rules for one plan, I don’t know if that’s appropriate.”

Aaron Coen, an analyst in the state Department of Finance, also expressed concern about the subsidy “setting a precedent for other plans” (Megerian, Los Angeles Times, 5/26).

 

Sacramento Democrats have decided that 195,000 jobless in the Central Valley need to be on welfare instead of holding well-paying jobs. The Denizens of Sacramento have also determined that they prefer to raise taxes instead of creating revenues and taxes from the jobs and companies that come along with the fracking industry—worse they have determined it is important Californians pay the highest cost for gasoline, this side of Honolulu.

If you hear a Democrat say they want jobs, ask if they approve of fracking. When you hear a legislator claiming they want to raise taxes, ask if oil drilling is the better way to go? What do you prefer—fracking or welfare—Democrats choose welfare.

“About 100,000 people are currently employed by California’s oil production industry, not including jobs associated with refining and distribution, Hull said. Conservative estimates suggest that 195,000 jobs would be created from new wells opening within the Monterey Shale, the jobs concentrated in the Central Valley, he said.”

California fracking moratorium bill could add to sting of critical report

Allen Young, Sacramento Business Journal, 5/28/14 

Lawmakers in the state Senate will decide this week on a law that would halt fracking in California until state government officials deem it safe – a move that could prevent the creation of some 195,000 jobs, according to figures provided by the oil industry.

But a federal report issued this month cast doubt on the economic benefits of fracking in California because only a sliver of the shale oil that was thought to be available in the state’s Monterey Shale may actually be recoverable.

According to the U.S. Energy Information Administration, hydraulic fracturing can extract just 600 million barrels of oil from the shale deposits that extend from the Bay Area to Southern California — not 13.7 billion as was previously projected.

The findings add momentum to the fracking moratorium proposed by Sen. Holly Mitchell, said her spokesman.

“What’s the urgency? Let’s find out whether or not fracking can be done safely in California … We’ve got time,” said Charles Stewart, a spokesman for Sen. Mitchell, a Los Angeles Democrat.

A spokesman for the Western States Petroleum Association said the oil industry was unsurprised by the federal report because it’s widely accepted that fracking the Monterey Shale requires technologies that haven’t yet been created, but will eventually.

“We have confidence that the men and women in the industry will figure those challenges out and bring that oil to market, but we don’t know when that day will come,” said Tupper Hull of the Western States Petroleum Association.

But once the technologies are created, the Monterey Shale will create “lots of jobs,” said Hull. “There’s no question about that.”

The thorn in the oil industry’s side is now Mitchell’s Senate Bill 1132, which would halt fracking until three state departments assess its safety and report back to the Legislature. Legislators could then extend or remove the ban based on that information.

About 100,000 people are currently employed by California’s oil production industry, not including jobs associated with refining and distribution, Hull said. Conservative estimates suggest that 195,000 jobs would be created from new wells opening within the Monterey Shale, the jobs concentrated in the Central Valley, he said.

Fracking is the process of injecting high-powered fluid into the ground in order to break apart shale rocks and release the natural gas inside. The Monterey Shale, which runs down the center of California beginning in the Sacramento area, contains oil that is deeper in the ground than in North Dakota and Texas, where fracking is more common.

The challenges associated with California fracking explain why the industry has directed minimal resources here, said Hull.

The environmental community states that fracking causes a host of problems including water contamination and carbon release, leading to climate change.

Last year, a report from the University of Southern California and funded in part by the Western States Petroleum Association predicted that Monterey Shale could produce 2.8 million new jobs and generate up to $24.6 billion per year in new tax revenue by 2020.

But Hull said that study took a “very optimistic” forecast and that the creation of 195,000 jobs in the Central Valley, where the bulk of shale gas exists, was more realistic.

 

Union members are forced to give part of their salary to unions. That money, without asking was used to elect Democrats to Congress, who then used the money, at the urging of the unions to pass ObamaCare. They thought they would get a special deal, almost free health care and the rest of the public would pay for it. Now, they find out they will pay much more for health care than before, and in 2017 start paying TAXES on a large portion of their coverage—because they got bad coverage, but at an exorbitant price.

So unions do, what unions do—they whine and then strike. The better answer is for the workers to throw out the union leadership and become fiscally responsible. All of us are paying for the radical excesses of the union—the union members are finding out what we all knew—union leaders represent themselves, not the workers or common sense.

“Last year, I noted the case of Delta Air Lines, which told the Obama Administration that it would be spending $100 million more on health insurance in 2014 relative to 2013, mostly driven by Obamacare. Obamacare’s “slacker mandate” requiring plans to cover adult children under 26 means higher net costs for all of their workers, an especially bad deal for the large majority without children in that age bracket. The law’s “Cadillac tax” applies a 40 percent excise tax to health plans whose value exceeds a certain threshold. Other provisions of the law, like the individual mandate, drive up costs by increasing the number of people who sign up for Delta’s health insurance packages.”

A Labor Union Prepares To Strike, As Obamacare Ups Health Insurance Costs By 5.0-12.5%

Avik Roy , Forbes Staff, 5/27/14 

Labor unions have, of course, been among President Obama’s most reliable supporters. Unions’ support was critical to the passage of Obamacare in 2010. But unions are continuing to learn, to their apparent surprise, that their members will bear many of the costs of the new health law. Now we learn that some laborers are preparing to strike, if they are forced to absorb the higher health-insurance costs that the Affordable Care Act requires.

“When we first supported the calls for health-care reform, we thought it was going to bring costs down,” a lawyer for the Laborers International Union of North America, or LIUNA, told Kris Maher and Melanie Trottman of the Wall Street Journal. But that’s not what’s happening. Maher and Trottman today discuss several cases where unionized workers and their employers are being forced to absorb higher costs as a result of the law.

Large employers frustrated that Obamacare doesn’t decrease health costs

Last year, I noted the case of Delta Air Lines, which told the Obama Administration that it would be spending $100 million more on health insurance in 2014 relative to 2013, mostly driven by Obamacare. Obamacare’s “slacker mandate” requiring plans to cover adult children under 26 means higher net costs for all of their workers, an especially bad deal for the large majority without children in that age bracket. The law’s “Cadillac tax” applies a 40 percent excise tax to health plans whose value exceeds a certain threshold. Other provisions of the law, like the individual mandate, drive up costs by increasing the number of people who sign up for Delta’s health insurance packages.

Other large employers share Delta’s concern. A new survey from the American Health Policy Institute, of the chief human resource officers of 360 large employers finds that 82 percent disagree with the statement that “the ACA will help my company more effectively control health care costs,” while another 82 percent disagree with the statement that “the ACA is improving the efficiency of the health delivery system.” On the other hand, while many HR chiefs expect their costs to increase at a faster rate than the historical trend (42 percent), a plurality expects costs in 2014 to remain in-line with historical increases (48 percent).

Nonetheless, 63 percent agree that “the ACA will make it more difficult for my company to control health care costs,” while 60 percent disagree that “the ACA will ultimately make the U.S. health system better.”

The study was jointly sponsored by the HR Policy Association, the public policy association of chief human resource officers (CHROs). The American Health Policy Institute, led by Tevi Troy, does health policy research on behalf of large employers including IBM, Johnson & Johnson, McDonald’s, and American Express.

When the respondents were asked why they were so pessimistic that the ACA would improve the health-care system, by far their number-one complaint was that the law was expanding coverage “without making significant improvements in the efficiency and affordability of that system” (85 percent). Number two was “limitations on employer flexibility to design cost effective health care programs” (75 percent).

Employers seeking to increase deductibles, co-pays

What are the strategies that large employers want to use to rein in costs? 36 percent are seriously considering a defined contribution strategy, such as giving workers a fixed-dollar sum to shop for coverage on a privately-sponsored health insurance exchange. Most others are looking to increase deductibles and co-pays.

Jim Ray, the LIUNA lawyer, told the Journal that construction-industry health insurance costs have increased by 5 to 10 percent because of Obamacare. Employers are responding by lowering wages and designing contracts that protect them from future cost increases.

It’s these cost-sharing techniques that have union members hopping mad. According to the Journal, 2,000 housekeepers, waiters, and other Las Vegas casino workers voted to strike on June 1 “if they don’t reach agreements on a series of issues, the thorniest of which involve new ACA-related cost increases.” UNITE HERE, the union representing such workers nationwide, estimates that adding 14,000 adult children to its health plan has increased its costs by $26 million since 2011.

Similarly, flight attendants at Alaska Airlines have rejected a contract offer from their employer, in part because it exposed them to higher Obamacare-related insurance costs.

Public-sector unions fighting to foist costs onto local taxpayers

5,000 transit workers in Philadelphia are at loggerheads with the Southeastern Pennsylvania Transit Authority, or SEPTA, over their new contract. SEPTA estimates that the Cadillac tax alone will increase its health-insurance costs by $15 million a year, an increase of 12.5 percent.

The Cadillac tax is, in general, a good thing, because it ends the unlimited tax exclusion for employer-sponsored coverage. It will incentivize many employers to revise their health plans in order to become more cost-efficient. But public-sector executives are far more reluctant to fight the unions on this point.

Asks Richard Burnfield, CFO of SEPTA: “The options you have are you just suck it up and pay for it, or you look at plan design. Do you increase employee contributions?”

That’s what the private sector is doing.  But SEPTA’s largest union, Transport Workers Union 234, says “suck it up.” Its members balked at increasing their own spending by 1 percent in order to help defray the government’s higher costs.

If you’re Richard Burnfield of SEPTA, the incentives are obvious: roll over. If Philadelphia’s buses and trains stop running, you’re the one who gets the blame. If you give in, however, local taxpayers are on the hook for the bill. On the other hand, the Cadillac tax is a tax, meaning that those extra Phiadelphia costs will flow to Washington in the form of tax revenue.

In the private sector, Burnfield’s colleagues have tougher choices. As more of their cash flow gets spent on health care, they can either hire fewer workers, pay those workers less, charge higher prices to their consumers, or stop investing in their businesses. So far, they have been doing all of the above in order to keep premiums down.

But money doesn’t grow on trees, and the extra money these employers and their workers are spending on health care will continue to drag on the Obamacare economy.

*    *    *

 

Great news for someone. Perverted sex offenders that abuse kids, and are teachers in the Los Angeles Unified School District are not immediately fired. They do not immediately stop being paid. They continue getting benefits as well. In LAUSD they have at the downtown headquarters a “rubber room” where bad, abusive teachers report, read newspapers, play video games and generally enjoy life—at the expense of the children and the taxpayers.

Now it gets better. Instead of being fired, suspended without pay or told to get lost, the bad teachers get to collect their salaries and benefits without leaving their home. Of course, that means no more free coffee, as the punishment. Angry yet?

“The practice highlights a series of sore spots for public education in Los Angeles and, more broadly, in California. On the one hand, teachers guilty of firing offenses are detained for an extraordinarily long period of time – 127 days on average. On the other, the vast majority of accused teachers lose their jobs and benefits when their investigations concluded. Only about 20 percent leave “rubber rooms” and pick up where they left off.”

LAUSD sends ‘rubber room’ teachers home
By James Poulos, Calwatchdog, 5/27/14

The Los Angeles Unified School District has decided to end one of its most controversial practices.

Instead of putting a damper on criticism, however, the move could intensify it.

Starting today, teachers under investigation will not be sent to detention in holding facilities known as “rubber rooms” or “teacher jails.” The LAUSD decision was made administratively, without the need for school board approval, according to LA School Report. Teachers will be permitted to go to their homes, where they must remain unless summoned as part of an investigation.

During school hours, they cannot leave their houses except in case of an emergency. And at the start and finish of their “shifts,” teachers must check in and check out. Nevertheless, the new rule offers a sweeping change of pace for investigated teachers, who had access to few amenities in the old facilities.

For those advocating on behalf of investigated teachers, “rubber rooms” created a grim and dehumanizing environment. One inarguable point against putting teachers in their rooms, instead of suspending them without pay, is their cost.

In addition to the “rubber room” teachers’ continuing salaries, more than $800,000 was spent to supply substitutes, according to the Daily News. What’s more, almost $1.5 million went to pay for teacher investigations and for the salaries of the teachers under investigation.

The practice highlights a series of sore spots for public education in Los Angeles and, more broadly, in California. On the one hand, teachers guilty of firing offenses are detained for an extraordinarily long period of time – 127 days on average. On the other, the vast majority of accused teachers lose their jobs and benefits when their investigations concluded. Only about 20 percent leave “rubber rooms” and pick up where they left off.

Last year, that inspired a so-called “protest for justice.” Teachers held a vigil that placed more attention on the teachers under investigation than on the students allegedly abused by some of those teachers.

Statewide struggles

While no parent or administrator wants to see guilty teachers return to work, the system raises big questions about why the burden of such an inefficient process has been placed on taxpayers, investigators and the school district as a whole. On the policy front, there may soon be some answers.

Los Angeles is not alone in facing the problem, which has attracted statewide attention. One reform effort, Assembly Bill 375, was vetoed last year by Gov. Jerry Brown. The year before, a bill aimed at firing offending teachers more quickly was snuffed out. Senate Bill 1530 would have made it easier to get rid of teachers who abused students sexually, physically or with drugs. Thanks to intense lobbying and efforts by the California Teachers Association, the bill failed.

Unions and their critics, however, are now awaiting the outcome in the pending Vergara vs. California case. There, the plaintiffs allege union job protections for teachers are to blame for poor results among California students — especially minority students from lower-income families.

The Vergara case has divided California Democrats, who often find themselves pushed into uncomfortable positions by uncompromising teachers’ unions. In the race for California Superintendent of Public Instruction, for instance, the supporters of challenger Marshall Tuck portray incumbent Tom Torlakon as a creature of teachers’ unions whose bankroll ensures he opposes needed reform. Both Tuck and Torlakson are Democrats.

Pressure on unions

Amid the current contentious climate, teachers’ unions are likely to face continued scrutiny, inside and out. Last year, three teachers’ groups went so far as to vote to decertify the CTA, opting for independent representation.

With job protections heating up the election-year climate, “rubber room” reform could be seen in two competing ways. Teachers’ advocates will interpret LAUSD’s move as a much-needed change for the better.

But in the larger context of union opposition to education reform, objections likely will be raised to keeping investigated teachers on salary in the comfort of their own homes for months on end.

 

Sometimes bad people do good things, by mistake. In an effort to control the costs, profits and entrance into health care in California, Democrats have a ballot measure that would take free choice and the free market totally out of the mix for citizens. Instead, government will control all aspects of the health care industry—including pricing. Yet, the unintended consequence is that Covered California might then, by definition, be illegal. It would create chaos we have never believed possible for patients, families and business. It would make ObamaCare look responsible.

“Under Prop. 103, consumer “intervenors” can file challenges to rate hikes. They can recover “reasonable costs and fees” under certain circumstances for mounting a challenge. Intervenors do this now, on occasion, with the other types of insurance covered by Prop. 103.

But under the ACA, the individual market for health insurance is now sold only during an open enrollment period — just several weeks out of the year, not year-round like auto or homeowners insurance is.

Larry Levitt, senior vice president at the Kaiser Family Foundation, called the intervenor process “a real wild card” if approved for health insurance rates. “There is the potential for some real messiness here if rates are challenged and not finalized before open enrollment begins.”

This is what happens when government tries to make decisions for citizens, it steps on itself—big time.

Insurance Commissioner Defends Health Insurance Initiative

KQED, 5/28/14

In this lull between the end of the first open enrollment for Covered California and the release of rates for next year — expected to be made public in July — San Francisco’s Commonwealth Club invited the state’s Commissioner of Insurance Dave Jones to talk about the state of the health care overhaul in California.

The commissioner closed his remarks by pitching for the rate review ballot initiative coming up in November. As moderator of the discussion following, I fielded several questions from the audience about the upcoming initiative. To recap the basics: If passed, the initiative would give the insurance commissioner the authority to reject excessive health insurance rate increases.

The insurance commissioner already has that authority over auto, homeowner, property and casualty insurance — via voter-passed Proposition 103 back in 1988. Many voters are surprised, Jones said, to find out he cannot also reject health insurance premium increases.  He called this lack of explicit authority a “major missing piece of the Affordable Care Act.”

“Californians have suffered from repeated health insurance rate hikes year after year,” Jones said. “On average (health insurance) rates in the last 10 years have gone up over 150 percent. That’s five times the rate of inflation.”

Jones also noted that 35 states have given their insurance commissioners “the authority to reject health insurance rate hikes, but not California.”

It’s a measure that likely sounds appealing to plenty of voters, but a report earlier this month determined that, if passed, the initiative could destabilize Covered California, the state’s Obamacare exchange. The report was written by consultant Jon Kingsdale, the former head of the Massachusetts health exchange who has also been an advisor to the Obama administration on the Affordable Care Act. It was funded by Californians Against Higher Health Care Costs, which includes the California Association of Health Plans.

Under state law, Covered California can negotiate with insurers and can reject plans from participating in the exchange. This leverage may have helped to moderate rates in the exchange’s first year. Still, Covered California must submit accepted plans to the state’s regulators for certification.

And here’s where we get into the weeds of certifying insurance rates and what this initiative would do.

Under Prop. 103, consumer “intervenors” can file challenges to rate hikes. They can recover “reasonable costs and fees” under certain circumstances for mounting a challenge. Intervenors do this now, on occasion, with the other types of insurance covered by Prop. 103.

But under the ACA, the individual market for health insurance is now sold only during an open enrollment period — just several weeks out of the year, not year-round like auto or homeowners insurance is.

Larry Levitt, senior vice president at the Kaiser Family Foundation, called the intervenor process “a real wild card” if approved for health insurance rates. “There is the potential for some real messiness here if rates are challenged and not finalized before open enrollment begins.”

That messiness would extend beyond just the premium. Under the ACA, subsidies are set according to the cost of the second lowest-cost premium. “Worst case,” Levitt said, “you enter open enrollment without final rates, for at least some plans, so you don’t know what the second lowest-cost silver plan is, so you’re not certain of the benchmark for the premium subsidies.” In other words, you could have people picking plans at rates that might change down the line.

Jones insisted that worry was overblown, pointing out that his department has about 7,000 rate filings annually for property and casualty insurance. Only about 12 of those filings are challenged by intervenors, “so .2 percent of all the rate filings have an intervenor,” Jones said.

His department gets about 100 health insurance filings a year. “I’m confident that we can review those and accommodate public input … to meet the timelines of the exchange,” he said.

Covered California is expected to release its analysis of the initiatives impact in the next several weeks.