June 5, 2012

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Prop. 29: If You Ask Me, ‘Sin Taxes’ Are …

a small angel smoke a cigarette

"Sin taxes" are sometimes used by governments to deter people from harmful behaviors. Image: Getty Images

On June 5, Californians will be asked to vote on Proposition 29. If approved, the measure would increase cigarette taxes by $1.00 per pack, with the revenue going toward cancer research and smoking prevention programs.

This tax is an example of a “sin tax,” an excise tax used by governments to deter harmful behaviors.

We’re asking you: Should the government impose “sin taxes” on behaviors that have societal costs?

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Prop. 29 Explained in Five, Ten or Thirty Minutes

a doctor eats an apple

Most of us don't have time for lunch, let alone time to research propositions. Photo: Getty Images

You’re busy. We get that. But you also want to be an informed voter. We definitely get that. So we put together this list of resources on Proposition 29 with your calendar in mind.

If you have five minutes:

Read the State of Health’s blog post on Prop. 29. It’s a quick look at the proposition and why it may pass or why it may fail.

Tease:

The Centers for Disease Control has found increasing the price of cigarettes reduces demand. Teenagers are especially sensitive to price, so if the tax is approved, fewer of them would pick up the habit. Right now about 12 percent of Californians smoke. That rate could drop significantly if Prop 29 is approved.

If you have 10 minutes:

KQED’s Lowdown blog explains the initiative and provides context like how much other states pay in tobacco taxes, the societal cost of smoking, and who’s financing campaigns on either side of the issue.

Tease:

California’s current cigarette excise tax (an excise, by the way, means a tax levied on specific commodities) is pretty low compared to most other states (18th lowest, to be precise): right now the tax here is 87 cents/pack, almost 60 cents lower than the national average and a whopping $3.50 less than in New York, whose tobacco tax is $4.35, the nation’s highest.

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Forum: Prop. 28 Seeks to Reform Term Limits

The California Capitol building.

Opponents of Proposition 28 say that it will prevent fresh faces and ideas from coming into the capitol. Photo: Justin Sullivan/Getty Images

Proposition 28, an initative on the June 5 ballot, seeks to alter California’s term limits for legislators. Currently, legislators can serve a total of six years in the state Assembly and eight years in the state Senate — or two three-year terms and two four-year terms, respectively. Prop. 28 seeks to change that limit to 12 years in either the Senate or Assembly or a combination of both.

On Wednesday, KQED’s Forum discussed the pros and cons of Prop. 28. Guests included Dan Schnur, Director of the Jesse M. Unruh Institute of Politics at the University of Southern California and Steven Baric, Chairman of the California Republican Party. Here are highlights from each guest:

Dan Schnur:

I would argue, as most proponents of the original term limits initative believe, that getting fresh perspective in Sacramento, getting a broader range of not just demographic but professional diversity, has been [a] benefit [but] it hasn’t magically fixed any problems. I would say for those that oppose term limits, for those who are deeply suspicious, you are entitled to vote against this initiative — certainly. But one of the greatest concerns I hear from opponents of term limits is the disruption in the lack of continuity and we think this 12 year fix addresses that problem.

Steve Baric:

Only 8 percent of legislatures since term limits have been inacted, have actually served their full tenure in both houses. I don’t think it’s really correct to say it’s going to reduce it from 14 years to 12. The studies have shown — that were done by US Term Limits — that it will actually increase the amount of time legislatures spend in Sacramento. And I think that’s the concern a lot of Californians have. Because, quite frankly, a lot of Californians don’t think the folks in Sacramento are doing a good job and shouldn’t be rewarded with additional time up in Sacramento.

Want more? Listen to the full show yourself — it lasts about 24 minutes:

San Jose Voters to Decide On Pension Reform Measure

by Peter Jon Shuler

Downtown San Jose (Helene Labriet-Gross/AFP/Getty Images)

Downtown San Jose (Helene Labriet-Gross/AFP/Getty Images)

San Jose voters will face Measure B (pdf) on June 5, a ballot initiative aimed at reining in the city’s pension costs. But although Measure B has become a divisive political issue, San Jose’s pension problems are not that unusual.

In December, a deeply divided City Council approved the controversial measure for the June ballot. It was a big win for Mayor Chuck Reed, who had been pushing it for months.

“This is an important step the council is taking,” Reed said after several hours of public testimony and debate. “To try to solve the cost of skyrocketing retirement benefits which have driven us to cut services year after year.”

The mayor points to the fact that the city’s pension costs have tripled in the last decade. And if left unchecked, the city’s pension plans would face billions of dollars in unfunded liabilities.

So what went wrong? Some of it can be blamed on the dot-com bust and the mortgage collapse cutting into the value of the retirement funds. The pensions were based on the assumption that funds would continue to rise, and so in hindsight they were underfunded. San Jose State political science professor Terry Christensen says it can also be traced back to attempts to compete with the private sector.

“Ten years ago, 15 years ago, public sector employers were worrying about how do we get cops and librarians? How do we hire staff?” says Christensen. “Well, one way is you offer good pay and benefits. And so we dug ourselves into this hole. It turns out to be a hole, but I guess it didn’t look like it 10 or 15 years ago. And of course San Jose is not the only city facing the problem.”

Cities from San Francisco to Los Angeles face the same quandary. San Diego has a measure before voters this election. And the state of California is in the midst of its own pension debate.

In San Jose, Measure B would require employees to make additional contributions to their plans — up to 16 percent of their pay — to help cover projected shortfalls.

The measure allows employees to avoid the extra fees by opting into a less generous plan with smaller payouts and later retirement ages.

Public workers say it’s unfair to expect them to the bear the brunt of a problem they didn’t create. And they say most retirement pensions are not luxurious. The average for San Jose is about $40,000 a year with a cost of living allowance of three percent.

Like many city employees, 48-year-old Jordan Ciprian is worried about the changes. Ciprian, a watershed protection manager, stops to talk just after work as he leaves city hall on his way to his car.

“How I planned for our retirement was based on the pension and when I first came here,” he says. “Roughly 12 years ago I moved from the biotech industry over to the city with a cut in lieu of the pension, kind of planning on that. So it would impact us pretty significantly.”

Ciprian lets out a deep sigh. Along with other city employees, he recently took a 10 percent pay cut. Measure B, he says, would just make that worse.

“I’d have to look for probably secondary employment, something like that,” he says. “As well as looking for a different job altogether, outside of the city, that would bring my income back to at least on par with what I used to have.”

Measure B would provide new employees with a stripped-down retirement plan, but leaves the details for the city council to decide later. Councilman Pete Constant, who supports the measure, notes that it would leave existing pension commitments intact.

“I think it’s very important that the employees and the residents of San Jose know one thing,” says Constant. “And that is every dollar that has been earned and accrued by our employees and our retirees is protected by Measure B. Measure B only makes changes prospectively in the future.”

Even opponents of Measure B agree the city needs to overhaul the terms of employee retirement benefits. But they say putting it on the ballot has turned the conversation over pension costs in San Jose into an ugly feud.

“We do need to work on pension reform and it has to be done now,” says Councilman Ash Kalra. “But it needs to be done in a way that is thoughtful and collaborative and that actually is legal. And instead we’re going forward in a way that’s divisive, destructive when the reality is the situation is not as dire as they’re making it out to seem.”

Kalra points to cases like San Francisco, where city officials and union leaders eventually sat down together to come up with a pension reform plan. But political scientist Christensen says that’s not likely to happen in San Jose’s current political environment.

“I think Mayor Reed and some of his allies would say San Francisco really kicked the can down the road with what they did, rather than really ultimately solving it,” says Christensen. “And Mayor Reed is pushing harder for a more substantial solution.”

The 11 San Jose public employee unions are already rallying their membership to help defeat Measure B. But union workers remain a minority in a city of a million people — many of whom saw their own retirement plans vanish years ago.