California is set to establish a first-of-its-kind program that will automatically enroll nearly 7 million private-sector workers without retirement plans in a state-run savings account.
Gov. Jerry Brown will sign Senate Bill 1234, which enacts the Secure Choice program, at 9:30 a.m. in his Capitol office. The measure is a priority of Senate President Pro Tem Kevin de León, who has said it will bring stability in old age to the increasing number of workers who are not offered a retirement plan through their employers.
Secure Choice is an opt-out system that will take a portion of participants’ incomes and invest it as a fund, similar to California’s public employee pensions, but without a guarantee from taxpayers. It requires $134 million in up-front expenses from the state, which will be paid back over time.
Backed by organized labor and opposed by business and financial groups, SB 1234 advanced through the Legislature along largely partisan lines. Critics argue that the program will create new risks for a state that already faces hundreds of billions in unfunded pension liabilities, particularly if the Secure Choice investments take a hit in the stock market and pressure mounts to cover the losses.
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PENNED IN: The backlash to soaring EpiPen prices over the last decade continues. Mylan, the New Jersey-based pharmaceutical company that makes the lifesaving allergy device, has already been brought before Congress for a tense hearing, recommended to the Justice Department for a federal investigation, and even publicly slammed as “rapacious” by Brown in a bill-signing message. Now its practices that have driven the cost of the medication to more than $600 for a two-pen pack will be the subject of an inquiry by the Senate Health Committee, 10:30 a.m. at the Los Angeles Law Library. This is just the latest and most high-profile example of a phenomenon that is fueling tremendous outrage and, perhaps public policy, including an unsuccessful measure this session to discourage steep price increases and a November ballot initiative that would impose price controls on state drug purchases.
BOND, REVENUE BOND: One of Brown’s top priorities this November is to stop Proposition 53, an initiative requiring voter approval before the state issues revenue bonds worth more than $2 billion. Funded by the wealthy Stockton-area farmer Dino Cortopassi, it is viewed as a bellwether for the water conveyance tunnels that Brown seeks to build under the Delta, a proposal that is enormously unpopular in parts of the north state. The No on 53 campaign, supported primarily by construction trade groups, just launched a series of television ads tailored to each region of the state, warning that the initiative would undermine local control and possibly delay “critical road and hospital repairs” for years. Notably, the spots don’t mention the Delta tunnels.
RAISE THE ROOF: California’s housing crisis has gotten bad enough to catch policymakers’ attention, but they can’t agree on a solution. A $400 million affordable housing package in the Legislature this session fell apart over demands by Brown to relax local land-use rules and ease new home construction in California, which has among the highest housing costs in the country. So how did we get here and what can the state do about it? The California Apartment Association will bring together builders, economists and advocacy groups for a daylong forum on the lack of housing and its implications, starting at 10 a.m. at the Sacramento Central Library on I Street. Panelists include Assemblyman David Chiu, D-San Francisco, and Mac Taylor, the legislative analyst.