Freedom Line Blog

The Los Angeles Times‘ front-page headline Tuesday comes across as remarkably upbeat: “California is ahead of the game as Obama releases Clean Power Plan.”

But the story’s lead paragraph reads more like a threat than a promise: “President Obama’s plan to cut carbon pollution from power plants over the next 15 years will force states to address climate change by pushing them to act more like California.”

The president cited California’s example when he announced the plan on Monday, recalling the smog that hung over the Los Angeles basin in the late 1970s and early 1980s. “You fast-forward 30, 40 years later, and we solved those problems,” Obama said.

Well, yes, we did — and it’s a good thing, too. But the president is conflating those clean-air rules with policies of a more recent vintage.

California has led the way in pushing utilities to adopt renewable energy from sources such as windmills and solar panels in lieu of natural gas and coal-fired plants. According to the Times: “In 2013, the most recent year available, nearly 19% of California’s electricity came from renewable sources, while less than 8% came from coal, according to the California Energy Commission. In January, Brown proposed an ambitious target of 50% renewables by 2030.”

The story doesn’t mention, however, that the Golden State ranks close to the top in terms of energy prices. It’s no coincidence that the cost of renewable energy in California increased by 55 percent between 2003 and 2013, as the renewable portfolio standard was being phased in. And costs will continue to rise, in no small part because the state Public Utilities Commission earlier this year ordered changes in California’s tiered pricing for electricity, moving from four tiers to two. As a result, the first tier rate will increase significantly, and the second tier rate will rise marginally.

The Times also reports that California is on track to cut greenhouse gas emissions to 1990 levels by 2020 as required under AB 32, the “Global Warming Solutions Act” of 2006. Gov. Jerry Brown in January issued an executive order that would accelerate the mandate’s requirements, with the goal of reducing emissions by 40 percent from 1990 levels by 2030. Expect rates to go higher still.

Not surprisingly, Brown hailed Obama’s plan as “bold and absolutely necessary.”

But a new Manhattan Institute report by Jonathan A. Lesser of Continental Economics highlights the real consequences of California’s decarbonization efforts, some unintended, some not. Among Lesser’s key findings:

• California households’ electricity prices have risen as a result of the state’s renewable-energy mandates and carbon cap-and-trade program—and will likely continue to rise at an even faster rate in coming years.
• The aforementioned policies have created a regressive energy tax, imposing proportionally higher costs in certain counties, such as California’s inland and Central Valley regions, where summer electricity consumption is highest but household incomes are lowest.
• In 2012, nearly 1 million California households faced “energy poverty”—defined as energy expenditures exceeding 10 percent of household income. In certain California counties, the rate of energy poverty was as high as 15 percent of all households.

This is the model that President Obama lauds and his EPA wants to emulate. The EPA’s new regulations would mandate that states cut carbon emissions 32 percent from 2005 levels by 2030.

A tough Wall Street Journal editorial notes that the EPA’s final rule “is 9 percent steeper than the draft the Environmental Protection Agency issued in June 2014,” and opines: “The damage to growth, consumer incomes and U.S. competitiveness will be immense—assuming the rule isn’t tossed by the courts or rescinded by the next Administration.”

Steven F. Hayward, a professor of politics at Pepperdine University and an expert in environmental policy, observed in a post at Power Line on Monday, “By [EPA’s] own admission, full implementation of the emissions targets will avert only 0.018 degrees C of warming by the year 2100. I’m sure we’ll all notice that much change in temps!”

The final rule is nearly 1,600 pages long, and the regulatory impact analysis is nearly 400 pages, so needless to say it will take some time for the lawyers and wonks to sort everything out. But Hayward found an odd paragraph in near the middle of the impact analysis that led him to wonder if the government is putting us on:

As indicated in the RIA [Regulatory Impact Assessment] for this rule, we expect that the main impact of this rule on the nation’s mix of generation will be to reduce coal-fired generation, but in an amount and by a rate that is consistent with recent historical declines in coal-fired generation. Specifically, from approximately 2005 to 2014, coal-fired generation declined at a rate that was greater than the rate of reduced coal-fired generation that we expect from this rulemaking from 2015 to 2030. In addition, under this rule, the trends for all other types of generation, including natural gas-fired generation, nuclear generation, and renewable generation, will remain generally consistent with what their trends would be in the absence of this rule. [Hayward’s emphasis.]

Hayward poses a fascinating question: “if the electricity sector under this new regulation is going to unfold more or less along the lines of business as usual, why are we bothering with this regulation in the first place? Is the EPA seriously admitting that their regulation does nothing substantial at all, or that they’ve spotted a parade going down the street and decided to march at the head of it?”

The Wall Street Journal‘s editors encourage a vigorous legal challenge to the new rules, noting:

The Supreme Court did give EPA the authority to regulate carbon emissions in Mass. v. EPA in 2007. But that was not a roving license to do anything the EPA wants. The High Court has rebuked the agency twice in the last two years for exceeding its statutory powers.

“When an agency claims to discover in a long-extant statute an unheralded power to regulate a significant portion of the American economy, we typically greet its announcement with a measure of skepticism,” the Court warned last year. “We expect Congress to speak clearly if it wishes to assign to an agency decisions of vast economic and political significance.”

Congress did no such thing with the Clean Power Plan, which is a new world balanced on a fragment of the Clear Air Act called Section 111(d). This passage runs a couple hundred words and was added to the law in 1977, well before the global warming stampede. Historically Section 111(d) has applied “inside the fence line,” meaning the EPA can set performance standards for individual plants, not for everything connected to those sources that either produces or uses electricity.

When the EPA rule does arrive before the Justices, maybe they’ll rethink their doctrine of “Chevron deference,” in which the judiciary hands the bureaucracy broad leeway to interpret ambiguous laws. An agency using a 38-year-old provision as pretext for the cap-and-tax plan that a Democratic Congress rejected in 2010 and couldn’t get 50 Senate votes now is the all-time nadir of administrative “interpretation.”

“This plan is essentially a tax on the livelihood of every American,” the Journal‘s editorial concludes, “which makes it all the more extraordinary that it is essentially one man’s order.” As California goes, so goes the nation? Let’s hope not.

If you’re going to encourage massive immigration, you better build the infrastructure to sustain it.

That’s just one of the many insightful points in a new article by Victor Davis Hanson, a fellow at the Hoover Institution and a Central Valley farmer.

“A record one in four current Californians was not born in the United States, according to the nonpartisan Public Policy Institute of California,” writes Hanson. “Whatever one’s view on immigration, it is ironic to encourage millions of newcomers to settle in the state without first making commensurately liberal investments for them in water supplies and infrastructure.”

Over the last forty years, California’s environmentalists – aided and abetted by once and current Governor Jerry Brown – have systematically opposed the construction of water storage facilities that would have kept pace with the state’s population boom. To make matters worse, millions of acre feet of water that should go to households instead is flushed down riverbeds and into the ocean to create more swimming space for endangered fish.

With California entering another year of drought, environmentalists are applauding Governor Brown’s decision to mandate 25 percent reductions in water usage. They claim we just don’t have the water. The truth is they refused to build the storage capacity, and now we get draconian measures.

New issue, same problem: Liberals want all the benefits of a permissive social policy, but they refuse to accept responsibility for the costs.

California’s water crisis – and Governor Jerry Brown’s draconian response to it – could go a long way toward uniting middle class and elite urbanites in a revolt against political favoritism run amuck.

As Shikha Dalmia explains, “The best — and most sustainable — solution to California’s water woes would be full-bore markets in which prices can rise and fall with supply and demand. Under such a system, depleting water reserves would have led to price increases long ago, producing an automatic incentive to conserve. More importantly, this would have clearly signaled growing scarcity, spurring new technologies for affordable water generation. All of this would have allowed consumers and businesses to make small adjustments over time without letting the shortage reach a crisis point.”

“Moving overnight to a system of market-based water pricing is probably not doable,” she continues. “But if California has to make emergency cuts, it would make sense to impose the biggest cuts on the biggest users — which means the deepest cuts for fish-rescuing environmentalists, followed by water-hogging farmers, followed by residential users. Instead, Democratic Gov. Jerry Brown is doing the exact opposite.”

The constituencies being hit the hardest by Brown’s mandatory water usage reduction order are rich enclaves like Beverley Hills and Newport Beach, and middle class urban residents who already pay the highest rates for water, but use the least when compared to other groups.

Those outside California may not remember that what ultimately led to Governor Gray Davis’ successful recall was his support for tripling the annual vehicle license fee. Californians will put up with a lot from politicians, but making it exorbitantly expensive to enjoy basic comforts like driving and water consumption could be just the disruption it takes to break the liberal stranglehold on state government and implement the kind of market-based reforms Dalmia is promoting.

We’ll see if Governor Moonbeam gets the hint, or sacrifices millions of people’s well-being for the sake of his beloved environmental movement. If he indulges the latter, there could be an opportunity for another California taxpayers’ revolt like the one that put a stop to annual property tax spikes in the 1970s.

A fight is brewing in California between state regulators and local water suppliers over how to cope with mandatory water usage reductions ordered by Governor Jerry Brown.

California’s State Water Resources Control Board received more than 200 letters from cities, counties, and water districts balking at the proposed regulatory structure for monitoring compliance.

Criticisms include:

• Monthly water usage rates are “meaningless” because varying temperatures and rainfall fluctuate dramatically during the year
• Lack of credit given to water agencies that have already reduced their usage rates through local conservation programs or locally financed desalinization projects
• Farmers outside the Central Valley – the state’s agricultural hub – being treated the same as urban districts which do not get an exemption
• Failure to subject public school and college campuses to the same water use restrictions imposed on cities, since the former often are able to “override local building and zoning codes”

Everyone in California is feeling the pinch of decades’ worth of neglected improvements to water storage capacity.

Thanks to ‘green’ environmentalism, much of California may soon be brown.

H/T: L.A. Times

California Governor Jerry Brown’s new water rationing edict is giving state regulators the cover they need to impose all kinds of nanny state restrictions on law-abiding citizens.

In addition to installing ‘smart meters’ on businesses and homes to monitor water usage and impose fines, the California Energy Commission is using Brown’s executive order to increase the use of low-flow appliances. Beginning in January 2016, all toilets and faucets sold in the state must conform to higher water efficiency standards.

“Wednesday’s vote also sets a 1.28 gallon maximum water flow for toilets, putting in place a limit included in a 2007 law but never formally translated into water-efficiency regulations,” reports the Sacramento Bee.

It’s hard to believe that a state so friendly to the environmental lobby as California would have failed to implement even more restrictions when it had the chance, unless doing so would be extremely burdensome and therefore unpopular. Now, however, they can simply claim an emergency and ignore the outcry.

“Nearly one-third of California’s total population – roughly 11.5 million people – will be enrolled in Medi-Cal next year, according to Gov. Jerry Brown’s administration,” reports the L.A. Times.

“Enrollment is expected to exceed previous estimates by 1.4 million, and administration officials said it would cost the state $1.2 billion more than originally thought.”

Brown’s health policy czar calls the jump in enrollment part of the “woodworking effect;” meaning that the media’s attention on ObamaCare’s insurance exchanges enticed many people to sign up, only to find out they already qualified for Medi-Cal (California’s name for its Medicaid program).

Readers may recall that ObamaCare expands eligibility for Medicaid into higher income brackets. To get states to go along, ObamaCare pays for all of the new spending associated with covering these new enrollees (at least until 2017). But for those who would have qualified under the old system – where states contribute 50 cents to every dollar spent – the state gets no relief.

This is the scenario California finds itself in as officials head into the budget negotiation season needing to find an additional $1.4 billion they didn’t plan for.

Ever the populist, Brown is reframing Sacramento’s miscalculation as a case of voters needing to fund their good intentions. “I’m proud we did it,” referring to the expansion as “a huge social commitment on the part of the taxpayers of California.” “But we also have to take into account this thing is growing.”

Toyota is moving its U.S. headquarters from Torrance, CA to Plano, TX. The move is estimated to generate a combined $140 million annually in local property and sales taxes for the Dallas suburb.

The announcement comes on the heels of at least 250 other California-based companies heading to the Lone Star State, according the Dallas Morning News.

Industry icons include Occidental Petroleum Corp. moving some of its facilities from Los Angeles to Houston; Raytheon Co. transferring aerospace units to McKinney from Southern California; and Trend Micro Inc. changing its corporate address from Silicon Valley to Irving.

For his part, California Governor Jerry Brown isn’t concerned. “We’ve got a few problems, we have lots of little burdens and regulations and taxes, but smart people figure out how to make it [in the state],” he said at an event when asked about Toyota.

Then again, maybe smart people will opt for pro-business locations that don’t inflict “lots of little burdens and regulations and taxes.”

This won’t make California Democratic Governor Jerry Brown happy.

On the same day a state court blessed a settlement between Brown’s high-speed rail authority and Central Valley farmers that clears the way to begin construction on a Los Angeles-to-San Francisco bullet train, the federal Surface Transportation Board announced it is claiming jurisdiction over the multi-billion dollar project, according to the San Jose Mercury News.

California officials have filed for an exemption, but that might not be an easy sell since the state has angered environmental activists by seeking exemptions from several state regulations already. I wouldn’t be surprised if the assertion of jurisdiction by STB is the result of some closed door lobbying at the federal level to slow down Brown & Co.’s runaway rail project.

Either way, California taxpayers may get an unexpected ally if STB maintains a presence. Originally approved by voters in 2008 with an advertised price tag of $10 billion, the proposed rail line is now estimated to cost at least $68 billion. If the project is made to comply with the federal versions of state regulations California has exempted itself from, the cost of the program will climb higher still.

Further cost overruns and delays could become California’s version of ObamaCare – an idea with a cost structure too big to work that gives partisans on both sides something to hate.

If conservatives want to make headway in Golden State politics, cheering on the train wreck that is Governor Brown’s high-speed rail boondoggle could be one of the ways to start.

It’s an interesting time to follow California politics.

Last month, Democratic Governor Jerry Brown announced that, thanks to the voter-approved tax hikes from last November, the state looks poised reap budget surpluses for the first time in years.

But instead of using those projections as an excuse to restore funding for programs pared back by budget cuts, Brown is promising to set aside the money in a rainy day fund.

Moody’s and S&P rewarded Brown’s announcement by upgrading California’s credit rating.

Now Brown faces an even bigger test.

There’s an estimated 15.4 billion barrels of oil in California’s Monterey Shale formation, or four times as much as North Dakota’s Bakken Shale reserves.  Another way to put it is that California is home to two-thirds of America’s projected shale oil reserves.  Opening it up would be a game changer for the nation’s oil security and California’s economy.

But here’s the rub, according to Walter Russell Mead:

The intrigues in this drama are many. Does California’s Democratic Party come down on the side of low income Californians, who desperately need the jobs and state services new oil extraction will fund? Or does it come down on the side of a green lobby that is heavily backed by some of the wealthiest people in the state? To what extent does the wealthy coastal elite control the future of the inland poor in California? Can the GOP use the issue as a wedge to rebuild its credibility in a state it once dominated? Will black gold bail out big blue California?

Bring lots of popcorn. This is going to be a terrific show.

Steven Greenhut in City Journal has an update on California’s nascent pension reform deal:

Despite its relatively modest contents, AB 340 has been bitterly denounced by public-employee unions. “The pension proposals outlined today represent a retreat from collective bargaining and basic principles of retirement security,” said one firefighter-union official in a press statement. Union officials obviously don’t want the state capping pensions. The unions would prefer to work out “reforms” at the collective-bargaining table, where they exert the most power and often control both sides of the negotiation (union officials and city staffers sometimes belong to the same union, and many city council members get elected with union support).

But just because the plan is angrily opposed by unions doesn’t make it a good one. “Let’s be clear,” said assembly Republican leader Connie Conway, “the Democrat proposal is no substitute for serious reforms to get our public employee pension crisis under control. This is no time for the liberal majority to pat themselves on the back and say the job is done.” Indeed, AB 340, designed mainly as a fig leaf for a big tax increase, won’t fix the state’s massive pension problem. It’s a minor reform at best—and sadly par for the course with this governor and legislature.

All true.  But I submit there is still a silver lining.

Last week I posted some thoughts on this issue.  In those remarks I said that any real reform is welcome, if only to set the table for larger, more substantive changes in the future.

While more can and should be done to address California’s $500 billion in unfunded pension liabilities, this kind of “fig leaf” is welcome, if inadequate.

Here’s one reason to be cautiously optimistic about a pension reform deal announced between California Governor Jerry Brown and state Democratic lawmakers:

California’s public pensions are currently governed by a patchwork of contractual agreements and retirement-system rules. The deal, likely to win approval in the Democratic-controlled Legislature, would bring most of those systems under the same pension standards.

Yes, as critics correctly point out, Brown’s deal with his fellow Democrats is “insufficient to cut billions of dollars in unfunded obligations on governments’ books.”

But the value in Brown’s pension reform deal is that for the first time most of the state’s public employees will be under the same set of pension rules.

This is important for at least two reasons.

First, it makes the pension liability problem more understandable for everyday Californians.  Sure, we all know the state’s unfunded liabilities are huge – around $500 billion according a Stanford study – but what good does knowing that number do if reform opponents can sidetrack reasonable debate by citing a dizzying array of competing pension rules?  By consolidating most public employees under the same standards, citizens can begin to see the pension crisis in a simpler, more straightforward way.

The other potential improvement is related to the first.  Brown’s deal sets the table for a future reformer to make the changes Brown’s critics want now.  No one expects Brown to be that guy, so why not welcome a plan that at least moves the ball in the right direction?

Besides, a pension reform deal like Brown’s that puts most of California’s public employees under the same standards means that a future governor will have that many less obstacles to achieve the cost savings the state needs to get back its golden sheen.

H/T: Governing.com

Last week, I posted here about the fact that the growing crisis in the supply of American doctors is driven partially by structural deficiencies in Medicare. A new piece out today in the Wall Street Journal (subscription required) illuminates another key part of the puzzle: the growing tendency of doctors to refuse new patients under Medicaid — the vehicle that the Obama Administration intends to use to insure millions more Americans under Obamacare:

Some 31% of physicians in a sample of 4,326 said they wouldn’t accept Medicaid beneficiaries, economist Sandra Decker of the National Center for Health Statistics reported in an article in the journal Health Affairs published Monday. Most of the doctors cited the low reimbursement from Medicaid.

…

The health law passed by Democrats in March 2010 was supposed to expand coverage to around 16 million low-income people by signing them up for Medicaid. The Supreme Court decision in June effectively gave states the chance to opt out of the expansion. It isn’t yet clear how many will do so, although it’s likely to be a hot political issue. Either way, the coverage gained by low-income Americans could be less useful if they are unable to find a doctor to see them.

There are problems at the macro level too. Consider what Democratic(!) governors have been saying about the Medicaid expansion. Kentucky’s Steve Beshear has said “I have no idea how we’re going to pay for it.” California’s Jerry Brown has called it “devastating.” And Montana’s Brian Schweitzer — a man often touted by Democrats as a potential presidential candidate — has warned, ” I’m going to have to double my patient load and run the risk of bankrupting Montana.”

As Thomas Sowell is fond of saying, one of the hallmarks of liberalism is judging intent rather than outcomes when it comes to public policy. Thus do we get decades-long wars on poverty that do next to nothing for the impoverished, and stimulus programs of which it is always claimed that they would have worked if they only been a little bit bigger.

I’m not sure the abject failures of Obamacare will get a free pass based on good intent though. Theses sorts of consequences — patients unable to find doctors, states teetering on the verge of bankruptcy — are nearly impossible to ignore … no matter how desperately the White House will try.

Michelle Steel, the Republican Vice Chair of California’s Board of Equalization – an independent tax gathering arm of state government – found a pernicious little wood tax tucked away in Democratic Governor Jerry Brown’s recent budget proposal (emphasis below is mine):

The new tax is expected to raise $30 million annually, but that revenue won’t go to the general fund or to debt payments. According to the revised budget, lumber tax revenue will go to support the regulatory activities of the Departments of Forestry and Fire Protection, Fish and Game, Conservation, and the State Water Resources Control Board related to Timber Harvest Plan review.

California’s forest practice regulations are the most restrictive of any state in the nation. Regulatory compliance costs California forest-landowners more than 10 times what it costs similar companies in Oregon and Washington. According to a recent Cal Poly San Luis Obispo study, “California’s regulatory environment is having the unintended consequences of harming forest health,” by making it so difficult to manage timberland that owners are selling their land to housing developers.

Excessive environmental regulations are turning our forests into suburbs. Yet, instead of saving tax dollars by reducing regulation, the governor has chosen to compound the problem by increasing the funding of an inefficient regulatory program.

California tax policy: deforesting the woodlands in order to save them.

H/T: Jon Fleischman’s FlashReport

Joel Kotkin sees the groundwork being laid for a grand political restructuring (i.e. perestroika) in California now that each branch of the state’s ruling class is fracturing.

Environmentalists are split over Governor Jerry Brown’s decision to shield the multi-billion dollar high-speed rail train from California’s tough environmental review process.  Facebook’s disastrous IPO means liberals in Sacramento can’t bank on tech industry riches to finance tax hikes.  And with serious pension reform being enacted in San Jose and San Diego last week public sector unions are no longer guaranteed to win every election.

All that’s needed now is a Democratic leader to stand up and acknowledge that California’s system is broken and needs major restructuring.

Too bad Jerry Brown is no Mikhail Gorbachev.  The latter risked a revolt from his party to save his people from economic disaster.  Brown just announced a truce with the public employee unions to raise taxes even higher than he originally envisioned.

Nevertheless, Kotkin predicts that California is fast approaching a moment where the citizenry will be poised to reward “a coherent vision – from either Independents, centrist Democrats or Republicans – that can unite business, private sector workers and taxpayers around a fiscally prudent, pro-economic growth agenda.”

If that sounds impossible, remember that the Soviet Union fell without a shot being fired.  All that’s needed is the right man with the right message at the right moment.

Businessweek provides a snapshot of California state government’s fiscal insanity:

California Governor Jerry Brown is seeking a 38,000 percent spending increase for a proposed high- speed rail system, even as he plans to raise taxes, cut state worker pay and reduce social programs to narrow a $15.7 billion deficit.

The “38,000 percent” translates into a requested budget increase from $15.9 million to $6.1 billion for construction costs of California’s fantastical high-speed rail project.  The kicker: all that money builds only the first 130 miles of an estimated 800 mile route from Los Angeles to San Francisco.

A lot of internet ink has been spilt rightly decrying this total waste of taxpayer money.  What I want to emphasize in this post is that Governor Brown’s budget request should anger liberals even more than conservatives.

Can it really be true that with California’s budget deficit recently surging from $9.2 billion to more than $15.7 billion that welfare and salaries must be cut and taxes raised so that someone’s bullet train dream can come true?

This is insane.  If Californians – the unions included – can’t rouse themselves to kill high-speed rail for the sake of preserving food stamps and health care for the poor, the rest of the nation should wash its hands of the state and let it implode.

Ending any and all spending related to the L.A.-S.F. bullet train should be done today.  It’s a no-brainer.  Unfortunately, that’s also true of the folks in charge of the public fisc.

California, as has become universally known in recent years, has become a fiscal and political basket case. Take a look at the state as it stands in the spring of 2012: it has a $9.2 billion budget deficit, approximately half a trillion dollars in unfunded public pension liabilities, and a business environment ranked worst in the nation by Chief Executive magazine (in 2010, the periodical referred to the state as “the Venezuela of North America”).

Part of the problem, of course, is the liberal-labor union coalition that dominates Golden State politics, in which the most nefarious force is the California Teachers Association, the hulking union that overwhelmingly outspends any other special interest in the state. Now, in the midst of this economic crisis, the CTA is getting behind Governor Jerry Brown’s proposal to increase state sales and income taxes, a move that would only hasten the state’s decline.

I tackle the issue in my new column for City Journal California. From the coda:

CTA officials contend that Brown’s proposal—an extra quarter of a cent added to the sales tax and up to three extra percentage points on the state income tax, depending on income levels—represents only a modest increase, a cost that the Golden State’s economy can easily absorb. But the margin of the increases is less significant than the final rates they will produce. If Brown’s package passes, California would have both the highest state sales tax in the nation and the highest top income-tax rate. That will only continue to drive economic activity out of the state, a trend that recent IRS data shows cost California $27 billion in tax revenue from 1999 to 2009.

The lesson should be clear: the kind of punitive taxation that Brown’s initiative promotes is precisely what depletes the tax base necessary to finance California’s public schools and pay the salaries of CTA members. Raise rates and you only dim the prospects for public education further.

In a 2009 piece for National Affairs, I noted that, “from 2004 to 2007 more people left California for Texas and Oklahoma than came west from those states to escape the Dust Bowl in the 1930s.” Yet in the intervening years California’s political class has done nothing to improve conditions for those who might be tempted to leave the beauty and cultural dynamism of the Golden State behind for more economically palatable environs. One wonders exactly what natural disaster they’ll have to approximate before the lesson sinks in.

More bad news from the Tarnished State:  A memo circulated by Democratic Assembly leaders pegs California’s budget deficit for next year at $8 billion, more than double the $3.1 billion Governor Jerry Brown and legislative Democrats projected just a few months ago.  In (un?)-related news, Brown’s office shut down a transparency website from the Schwarzenegger-era that made far-flung government documents easily available.  Now, visitors are redirected to some of the relevant primary sources, but many others are not listed.

In both cases, the price of reliable information seems to be too little, too late.

Perhaps a head nod to Hot Shots fans will lessen the depressing (but by no means surprising) analysis from the Sacramento Bee’s Alan Autry on the dismal failure of Jerry Brown’s resurrected governorship:

The governor has signed nearly 745 bills, most aimed at yet more micromanagement of every aspect of our lives from Sacramento or at satisfying the interests of the organizations that funded his election. The Los Angeles Times said, “When the dust settled on Gov. Brown’s first legislative session in nearly three decades, no group had won more than organized labor.”

There you have it, the product of Brown’s first year in office: signing off on campaign payoff obligations, more Sacramento micromanagement, vetoing of bipartisan common sense reforms to increase government efficiency and effectiveness, procrastinating on regulatory reforms to help job creation, and signing a gut-and-amend bill that will ensure even more partisan gridlock – this from the man who ran on breaking the “morass of poisonous partisanship.”

The canary is dead and the coalmine is collapsing.  If you run a business and you have an option outside of California – take it.

For every crisis, there is an opportunity:

As part of the June budget agreement, the state will transfer to the 58 counties responsibilities for managing low-level offenders, as well as providing mental health, substance abuse and child protective services. It’s a Reaganesque approach – the idea that we can deliver better service at less cost by moving government decision-making closer to the people. Or, as Gov. Jerry Brown described Thursday, “It’s a bold vision of a new relationship between the state and local governments.”

It’s also a bow to fiscal reality.  Here’s to more (forced) bold thinking that gives local officials the power to best serve their neighbors.

California Democratic Governor Jerry Brown appointed Michael Rossi, former Bank of America executive and GMAC subprime mortgage guru, to be his unpaid “jobs czar.” Brown hopes that Rossi will be able to tell Brown how to revive the state’s sagging economy.

It’s telling that Brown chose a career Big Business executive instead of a successful entrepreneur.  The two types of people – and their skill sets – couldn’t be more different.

Rossi’s path to success involved managing large corporate structures that focus heavily on exploiting government-created revenue streams, such as subprime mortgages that but for government-owned Fannie Mae and Freddie Mac’s guarantee would never have been made.  It also doesn’t help that today BofA is announcing its second straight year of layoffs (3,500 employees this year alone).

It would be far better for Brown to enlist the help of an entrepreneur with success starting and growing businesses.  As the Kauffman Foundation showed in a study released last summer, “new firms add an average of 3 million jobs in their first year, while older companies lose 1 million jobs annually.”

Here’s the Kauffman Foundation’s explanation:

Most notably, during recessionary years, job creation at startups remains stable, while net job losses at existing firms are highly sensitive to the business cycle.

“These findings imply that America should be thinking differently about the standard employment policy paradigm,” said Robert E. Litan, vice president of Research and Policy at the Kauffman Foundation. “Policymakers tend to focus on changes in the national or state unemployment rate, or on layoffs by existing companies. But the data from this report suggest that growth would be best boosted by supporting startup firms.”

If Governor Brown wants to create jobs he should consult the people creating jobs – not those managing a declining workforce.