U-T San Diego: "School bond reforms: More are still needed"
The 73-0 vote in the California Assembly to sharply limit school districts' use of insanely expensive capital appreciation bonds is more than just a blow for sanity. It also amounts to a specific rebuke to the leaders of Poway Unified and other districts which still defend issuing these bonds — even though they can't be paid off early and often delay any payments for decades, leading to cases where interest costs are 10 times as much as the amount borrowed.
But if state legislators really want to clean up school financing, they need to target another abusive practice: the use of 30-year "construction" bonds for costs that used to be and still should be covered by operating budgets. In San Diego Unified's case, a 2008 bond was used to buy nearly 100,000 laptops and iPads — equipment likely to last two or three years but that will be paid off over 30 years. Many districts also use 30-year borrowing to pay for the most routine of maintenance.
Why is this being done? To free up money in districts' operating budgets for compensation, especially for politically powerful teachers. This is outrageous. "Construction" bonds still should be about paying for long-term assets — not about expedience in service of union power.
Los Angeles Times: "California's dairy dilemma/A spat between dairies and cheese makers puts the focus on how the state regulates milk prices."
Although the recession drove many businesses into bankruptcy, times have been particularly hard for the state's dairy farmers. Almost 400 California dairies have closed in the last five years — 105 in 2012 alone — plagued by soaring prices for feed and an antiquated regulatory system that keeps their prices artificially low, at least in the farmers' view. The right solution for the long term would be to scrap the current approach in favor of a market-based one, but there's little political will to take such a disruptive step. Instead, policymakers are debating ways to help dairymen at the expense of cheese makers — and their customers.
The government has long meddled with the markets for agricultural products in an effort to sustain farmers, but its role in dairy products is extreme. The federal government and numerous states set minimum prices that milk bottlers and dairy processors — the companies that make cheese, butter and other products from milk — pay for the raw milk they buy. Processors can opt out of the federal system, but in California, all buyers of Grade A milk must pay the minimum price applicable to the category of product they're making. Cheese makers pay the lowest price, bottlers the highest.
The prices for each category are derived through complex formulas that try to mimic real-world production costs and yields, but ultimately are based on the government's estimates of what processors ought to be able to do with 100 pounds of milk. At the heart of the calculation is the market price of butter and 40-pound blocks of cheddar — the factor in the equation least influenced by regulators.
Why shouldn't farmers simply negotiate with processors, so that the price of raw milk rises or falls along with supply and demand? Because farmers have convinced lawmakers that processors always have the upper hand at the bargaining table. Cows have to be milked every day, and milk is bulky and perishable. Farmers who are unable to sell their milk can't simply put production on hold and store their inventory until the market improves. As a result, dairy farmers say, bottlers and processors can make lowball offers that farmers can't afford to reject.
Dairies tried to level the playing field more than 200 years ago by forming cooperatives, enabling farmers to pool their sales rather than competing with one another. Congress went further in the Depression-ravaged 1930s, establishing the price-setting system that now covers most of the milk sold by dairies in the United States. California launched a similar system in the 1960s, setting lower milk prices for processors in the hope of encouraging more investment in cheese plants. The more processors that set up shop in California, the more milk farmers produced and sold. And with farmers pooling their revenue, dairies didn't care where they sold their milk — they only cared how much they sold.
Now, California farmers find themselves locked into a system based on the economic realities of the 1960s, not the 21st century. Unlike dairies in other states that grow their own feed, California farmers typically occupy fewer acres and rely on low-cost feed from other suppliers. That approach allowed them to produce milk at lower cost than dairies in other states, at least at first. In the last seven years, however, the enormous global demand for corn — powered in part by the demand for corn-based ethanol fuels — has caused feed prices to almost double.
Meanwhile, California's minimum prices — especially the one paid by cheese makers — have fallen further and further below the federal system's prices. The main reason is that Washington assigns a higher value to whey, a byproduct of cheese making that can be turned into such things as protein supplements. State officials have been reluctant to raise the price that cheese processors pay for milk for fear of driving out smaller companies that can't afford the equipment needed to convert whey into marketable goods.
Lawmakers have offered at least two proposals to help dairy farmers squeezed by low prices and high costs. Assemblyman Richard Pan (D-Natomas) has introduced a bill that would require the state to factor into the minimum price of milk a much higher value for whey, bringing the price paid by cheese makers in line with the federal government's minimum. That could increase minimum prices $2 per hundred pounds of milk sold, or about 20 cents per pound of cheese. Although the bill would exempt small cheese makers, cheese producers complain that it could still put about a dozen processing plants out of business. They also argue that it would hurt their ability to compete as well as pinching consumers' pocketbooks.
Meanwhile, in Washington, six House Republicans from California are backing a bill that, if dairy farmers approved, would create a new federal milk marketing order for California that would incorporate some unique complexities of the existing state system. The change would make the dairies' milk subject to higher minimum prices, but it would also allow cheese processors to opt out of the pooling arrangement. Such flexibility wouldn't necessarily help the dairies, but it would move the system a step closer to letting buyers and sellers determine prices without the government's manipulations.
The potential drawback with simply raising the price that cheese makers must pay is that it would encourage more milk production at a time when there's arguably too much supply. Only recently has California's milk production begun to dip, despite prices that farmers say are ruinously low. Even in a market as distorted as this one, the low price paid by cheese processors is a sign that there's still too much supply. A crude and painful way to correct that problem is to maintain the status quo, reducing the supply of milk by driving more dairy farmers out of business.
The farmers' allies argue that even if the system needs a thorough overhaul, dairies need help in the near term. Nevertheless, policymakers need to step carefully to avoid inducing farmers to increase production far beyond the demand for milk or the processors' capacity to use it. They should also ask why in the 21st century we're still relying on a decades-old regulatory system that causes more problems than it solves.
Lompoc Record: "Rebuilding education's big machine"
Seeing a graph of recent enrollment trends for California's community college system is like looking at the foot-of-the-bed medical chart of a hospital patient on life support.
The lines begin with a steady upward climb, then there are some up-and-down blips, followed in the past few years with what appears to be a stairway leading down.
College officials reported last month that enrollment has hit a 20-year low, and the number of course offerings are at their lowest point in the past decade and a half.
It's not difficult to pinpoint the cause of this precipitous decline in both course offerings and enrollment. Like just about every other education institution in California — and in much of the rest of the nation for that matter — state government's budget problems are being relayed to the services and programs government is legally obligated to provide and support.
The Great Recession of 2007-08 torpedoed just about every institution, but it slammed the state's community college system especially hard — more than $1.5 billion in funding was pulled from California's 112-campus system. Every school — including our own Allan Hancock College — took significant hits.
The economic turnaround, which is painfully slow but at least is happening, plus voter approval of Proposition 30 last November will pump an estimated $210 million more funding into community colleges this fiscal period. But $210 million is far from the $1.5 billion sliced from college budgets at the height of the recession.
The effects of the recession/state budget crisis have been singularly obvious for Hancock College.
Enrollment figures date back to 1979, when AHC had 9,760 students. By 2008 — before the full impacts of the Great Recession were felt — Hancock's enrollment peaked at 16,058. Since then, however, enrollment figures have been on that downward run, settling for the past two years around 12,500.
The lines on the enrollment graph correspond with fee increases and budget cuts. The former makes it more difficult for low-income students to afford college; the latter reduces student course choices. When either of those dynamics are in play, students stay away in droves.
And that is serious bad news for business owners and government agencies here on the Central Coast, and for all of California.
Community colleges are the launch pad for students to the next level, and a four-year degree. Just as important is the community college function as work-force trainer.
If all the Hancock College grads and certificated students were to suddenly vanish, the Central Coast would be a ghost region. Businesses wouldn't have trained workers. Police and fire departments wouldn't have enough personnel to function properly. Hospitals and doctors' offices wouldn't have the manpower to provide adequate health care.
The Public Policy Institute of California recently issued a report showing that community college enrollment statewide is down a half-million students since 2008. The report also expresses the belief that it will take years for the college system to recover.
We really can't afford that kind of time frame. Community colleges are simply too important to the state, regional and local economies to be allowed to languish. The PPI report suggests local communities consider alternative funding sources for colleges in their midst, such as parcel taxes, or perhaps charging higher fees for those who can afford it — a notion adamantly opposed by community college administrative leaders.
Like most of California government institutions, the community college working model needs an overhaul. In fact, we can say without hesitation that the state's future depends on it.
Santa Cruz Sentinel: "Brown all aboard high-speed rail"
What's $100 million between friends?
Certainly not enough to put the steam brakes on California's high-speed rail plan, which is continuing down the tracks generally unimpeded despite the fact no one can truly say how California is going to pay for this $69 billion boondoggle.
That $100 million of which we speak — $97 million, to be more accurate, but this is California's high-speed rail plan, so we can play with the numbers a bit and apparently no one will care — are extra planning costs for the project that came to light earlier this week.
The state's rail boosters said the money is needed for additional office and field work to design the rail line, which has seen its construction estimate double to $69 billion since voters backed the plan in 2008. Rail officials say the extra cash is because of delays to the project's aggressive timeline and the need to study alternative plans to appease the concerns of communities along the San Francisco-to-Los Angeles rail corridor.
Incidentally, that now puts the pre-construction planning budget at $878 million.
If you haven't been paying attention, Gov. Jerry Brown loves high-speed rail, enough to continually push for a plan that voters and money watchers have expressed serious doubts about. We think those doubts are warranted.
California, up until the passage of Proposition 30 this past fall, couldn't even afford to pay for schools, much less this publicly funded folly.
Consider that the High-Speed Rail Authority, the organization created to manage the project, has expressed serious doubts about the plan, while the nonpartisan Legislative Analyst's Office has cited the project's "highly speculative" funding.
Public polls, meanwhile, have shown that a majority of state voters, who five years ago backed what now looks to be no more than a rough sketch of the project, wouldn't mind another crack at turning down the plan.
In fairness, the federal Government Accountability Office late last month gave good grades to the authority's business plan, saying ridership and revenue forecasts were reasonable, but it also could not assess whether the authority's projected costs are feasible. The feds also noted that little money problem — a funding gap of $39 billion unlikely to be filled by the federal government given the current political climate in Congress.
It's not like the governor is thinking small.
Brown wants to build a massive twin-tunnel canal system to carry water from the Sacramento-San Joaquin River Delta to Southern California farms and cities, wading into a huge fight between environmentalists and developers.
He wants to revamp the California Environmental Quality Act, the decades-old law that requires environmental impact studies for building projects, over the objections of his Democratic allies.
He is looking to turn the school finance system on its head, tossing confusing funding formulas and local mandates.
And he wants to lay the first tracks of a California high-speed rail project.
We appreciate the big thinking. It's what California needs.
But we'd like fiscal responsibility to be part of the Brown legacy, and fiscal prudence appears to be sitting this high-speed rail project out.
The Record Searchlight: "Probation takes big step toward making prison shift succeed"
When California launched its aggressive court-ordered prison drawdown in 2011, the scariest part was the sheer speed of the transition.
Even relentless critics of Assembly Bill 109, such as state Sen. Jim Nielsen, concede that California could well improve the way it punishes and rehabilitates felons — and that local, community-based solutions are often more promising than trying to accomplish anything useful in the notoriously dysfunctional California Department of Corrections and Rehabilitation.
But all at once? Before counties had stocked their toolboxes and developed the know-how to manage thousands of new former state parolees under "community supervision"? It's a path to disaster.
And indeed, cities across the state saw a widespread surge in crime — mainly petty and property crime, thankfully. Redding's rise in thefts and burglaries is by no means unique.
Shasta County probation, however, has finally passed a milestone in its transition to the new system, 18 months after the prison realignment began.
This morning, a long-awaited day reporting center will open for business on Court Street in downtown Redding. The center will keep tabs on higher-risk probationers, offer a variety of service, and provide offices for BI Inc. — a private contractor hired by the county to assess felons' risk of committing new crimes and find ways to keep on the straight path.
The shortage of jail cells to hold Shasta County's crooks is well known — and persists — but the broader goal of the prison realignment is not merely to put prisoners behind a different set of bars, but to more intensively focus on rehabilitation and crime prevention, at least for those crooks who are willing to try to change their lives.
Can it work? That's pure speculation at this point, and many are skeptical, but for the past generation we've tried to solve nearly all of our criminal — and social — problems by locking up more crooks for longer sentences in tougher conditions.
To a point, you can say that approach has worked. Crime did drop.
But the cost to the taxpayers has been absolutely staggering, even as the state built a prison system so crowded and inhumane that the federal courts intervened to say, "Enough."
If probation can succeed in its new mission, it will curb crime and improve the lives of both its charges and the law-abiding residents of Shasta County.
At least it's now geared up and ready to do a proper job.
The Sacramento Bee: "State not done fixing prison mental health"
An asylum of last resort. That is what California's state prisons have become for the seriously mentally ill since the state began emptying its state psychiatric hospitals in the late 1960s.
And while conditions clearly have improved since the 1990s, U.S. District Judge Lawrence Karlton in Sacramento was scathing in his April 5 rejection of Gov. Jerry Brown's attempt to free the state prisons from federal oversight.
Though California still has a way to go in implementing the "remedial plan" that it agreed to in 2009, a spokesperson for the Department of Corrections and Rehabilitation was quick to say that the state would appeal the decision. Yet there's a smarter way forward.
Brown himself stated in March that the money the state is spending on court costs "could be spent on rehabilitation programs for inmates, where it's really needed." He should stop spending taxpayer funds on fruitless appeals - remember the 2011 loss at the U.S. Supreme Court? — and implement the recommendations that would return the prison system to the state.
Our prisons have a constitutional obligation to provide adequate mental health treatment that used to be the province of state hospitals. With the emptying of state hospitals, California's 33 state prisons now have 33,777 inmates who are seriously mentally ill — nearly 30 percent of the prison population of 119,500.
New Secretary of Corrections and Rehabilitation Jeffrey Beard told The Bee's editorial board that while he "would like to see more mental health options in the community," he "doesn't see the percentage of seriously mentally ill inmates in prison changing."
Judge Karlton acknowledges that the state has "made significant progress" in remedying "unconscionable delays in access to inpatient care." But many recommendations repeated periodically since 1999 still have not been implemented.
For example, the U.S. Supreme Court noted California's 2006 inmate suicide rate was "nearly 80 percent higher than the national average for prison populations." Today, inmate suicides are occurring at virtually the same rate. Last year's prison suicide rate was 23.72 per 100,000 inmates, a rate substantially higher than the national average of 16 per 100,000 inmates.
The judge noted that more than 70 percent of inmate suicides in California still involve significant inadequacies about which the state has known for years.
Not surprisingly, the judge found that mentally ill inmates placed in isolation units known as "administrative segregation," where they are locked up in a cell for 23 hours a day sometimes for longer than 90 days, don't get adequate treatment and show "statistical overrepresentation of completed suicides."
It took more than a decade to get agreement on a remedial plan between state prison officials and the special master and his experts. That blueprint remains the guidepost for getting the mental health system in California prisons out of federal receivership. If the state would comply with that plan, federal oversight would no longer be needed.
Alternatively, the governor could have asked the judge to reconsider some of the elements of that plan. Since he did not, the state has an obligation to meet its provisions.
As the governor well knows, large-scale imprisonment of the mentally ill clearly has come at a cost in California. But trying to escape that cost by evasion will not pass constitutional muster.