Dan Walters

Dan Walters: Ignored issues undercut Legislature’s better image

Dan Walters
Dan Walters

Approval ratings of the California Legislature, as measured in periodic polling, were in the teens a few years ago but have since improved.

A recent poll by the Public Policy Institute of California says that 40 percent of all adults – but just 29 percent of likely voters – like the Legislature’s performance.

A couple of balanced budgets probably account for the Legislature’s better public standing. However, the next time you hear someone crow about what a bang-up job the Legislature is doing, consider these glaring shortcomings:

• The state’s Unemployment Insurance Fund was weakened in the last decade when the Legislature sharply increased benefits without raising revenues to pay for them. So when recession hit, and more than a million jobs vanished, the UIF took a beating and the state began borrowing from the federal government, eventually running up a $10 billion tab.

Many other states also borrowed, but according to a recent report from the Pew Charitable Trusts, most raised payroll taxes and/or reformed benefits to clear their debts and rebuild reserves.

Gov. Jerry Brown has sought action, but the Legislature has ignored him. Meanwhile, the state is paying hefty interest charges on the debt and the feds have raised payroll taxes on employers to nibble away at the principal.

• The Legislature has ignored another, even larger hole in the State Teachers Retirement System.

It has a $70 billion-plus unfunded liability that grows by about $20 million a day and says it needs $4.5 billion more each year from someone to restore solvency.

As Legislative Analyst Mac Taylor points out, the STRS deficit is just a third of $200 billion in mounting debts that are being ignored, such as $60 billion-plus in unfunded state retiree health care costs.

Brown is now floating a plan to make STRS solvent, but it would take a big bite out of schools’ financing down the road, school officials don’t like it, and its chances are mediocre at best.

• The federal government has exempted underwater mortgage balances that are written off by lenders from income taxes, and the state did it for one year, 2012.

However, legislation to extend the tax break became entangled in a political stalemate over another issue, and many Californians who had received mortgage relief were hit with big state tax bills.

A bill to belatedly erase those bills for 2013 seems to be moving after a months-long delay, but even if it makes it into law, it would compel affected taxpayers to file amended returns and seek refunds.

This is an issue of equity and sympathy for Californians facing tough times that could – and should – have been resolved months ago, but legislators stiffed them as they pursued other trivial business.

And that folks, has been your Legislature in action – or, more accurately, inaction.