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Out of Control Policy Blog Archives: 11.24.13–11.30.13

More Boasts from California Contractor Regulators For Wasting Time and Money

California's Contractors State License Board (CSLB) is at it again.

Since early October, the board's Statewide Investigative Fraud Team (SWIFT) busted 102 unlicensed contractors in sting operations across the state. SWIFT partners with local law enforcement agencies, which could otherwise be protecting and serving their communities, and sets up sting operations that resemble To Catch a Predator, but unlike the show, neither entertains nor does anything to protect anyone. To bust painters, fencers, and landscapers, SWIFT investigators pose as homeowners looking for basic home improvement projects on internet forums like Craigslist. They also make a point of searching through Craigslist to find unlicensed contractors to arrest as well--posting an advertisement for contract work without having CSLB licensure brings with it the additional misdemeanor charge of "illegal advertising."

The CSLB says all this in its most recent news release, which boasts that SWIFT criminalized "all first-time offenders" by "posing as homeowners requested bids for home improvement jobs including painting, cabinets, fencing, and flooring. Six of the eight suspects were identified based on ads posted on craigslist.org."

In justifying this, the CSLB spokesperson wrote that “not only are unlicensed contractors notorious for victimizing consumers, they also undercut legitimately licensed contractors, making it difficult for them to compete." Breaking down this statement reveals how silly these operations are.

The first justification is that unlicensed contractors are "notorious for victimizing consumers. While certainly some unlicensed contractors do rip-off or steal from consumers, none of the individuals busted in these sting operations are arrested for doing that. They are instead arrested for being unlicensed contractors. There is a reason that the CSLB busts hundreds of people every year: there is a market for contractors willing to work for less than licensed contractors. Fortunately, laws against fraud or theft exist, and in the event that someone, unlicensed contractor or otherwise, commits an action violating those laws, there are law enforcement mechanisms to ensure justice is served. But what justice is served in criminalizing people for being in the same line of work as some other people?

The second part of the CSLB statement reveals what the busts are really all about, and that is protectionism. Unlicensed contractors "undercut legitimately licensed contractors, making it difficult for them to compete." Why? Because homeowners are generally capable of evaluating the quality and competence of someone willing to paint their house, trim their trees, or put up some drywall, without a need for the CSLB license number to seal the deal.

Overall, it is unlikely that the protectionist, arbitrary, and unnecessary system of occupational licensing is going away anytime soon. As a result, more and more people looking for work are going to have to face the embarrassment of being arrested because they don't have the resources to jump through irrelevant hoops set forth by the CSLB.

For more on occupational licensing in California, read my Reason Foundation article on the subject. For more on occupational licensing nationwide, read Adam Summers' policy study here.

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Massachusetts State and Municipal Retiree Systems Costly, Underfunded

An October 10th bulletin by the Massachusetts Taxpayers Association has summarized the growing and challenging issue of underfunded pensions and retiree health care obligations on all levels of government in Massachusetts. According to the bulletin, the combined $98 billion state, teachers, and municipal pension systems were only 63% funded, with $36.37 billion in unfunded liabilities.

In addition to having only 63 cents for every dollar promised to public employees in pension benefits, state and municipal governments at best have 2 cents for every dollar promised in retiree health care obligations. In 2012, the combined state and municipal liability for retiree health care was $46.66 billion, with only about $300 million in actual funding.

Taken together, Massachusetts taxpayers, pensioners, and government officials have to deal with pension and health care systems that, combined, amount to $145.6 billion, with only $82.7 billion in funding. With only 43 cents for every dollar in promises made to public employees, the systems are in need of substantive reform.

Given the speculative nature of defined benefit pension accounting, it is also possible that the funding problem in Massachusetts is even worse than that. If calculations by State Budget Solutions are to be believed, than the funding levels for the state employee and teacher pension systems is actually drop to 33% funding. This yields an unfunded liability of $88 billion, which far exceeds the $21 billion unfunded liability identified by the Massachusetts Taxpayers Association for state and teacher pensions.

Whichever figures are used, it is clear that Massachusetts is yet another system in need of reform. Solving the problem will certainly be difficult, but failing to take on the problem now will only make it more difficult to deal with it later on. Should state and municipal governments insist on holding onto the defined benefit system, then more contributions are needed. In practical speak, this means either employees must contribute more of their salaries towards their pensions, taxpayers contribute more towards the system, or both.

In choosing this option, employees will be left with less take-home pay and taxpayers will see more of their money going towards a system that may be as much as $88 billion unfunded. Alternatively, the state and municipal governments can go the way of states like Alaska and the private sector and implement a more sustainable defined contribution plan. In doing so, the retirements of public employees would be predicated on actual contributions rather than 20- to 30-year funding assumptions with speculative discount rates. This options would also require Massachusetts to pay off the unfunded liabilities as quickly as possible--which will ultimately save taxpayers in the long-run and ensure that public employees will receive retirement benefits promised to them.

Dealing with retiree health benefits is another challenge and warrants immediate attention. Massachusetts joins seemingly every other system in the country in failing to fund OPEBs and the 1% funding of its promises to public employees requires legislative attention at the very least.

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Innovators in Action (November 2013 edition): Pursuing Fiscal Self-Reliance in Utah

The latest interview in Reason Foundation's Innovators in Action 2013 series focuses on recent reforms enacted in Utah in the pursuit of fiscal self-reliance. One state that is increasingly recognizing its heavy reliance on federal funds is Utah, where over a quarter of total state revenues are derived from federal funding sources. A growing awareness of this reliance prompted the Utah state legislature to pass a package of bills in 2011 and 2012—known collectively as the “Financial Ready Utah” initiative—aimed at quantifying the amount of federal funding used by state agencies and making contingency plans in the event of a major cutback in the flow of federal funds.

Utah is also among those western states with significant federal land ownership—representing a majority of the total land area in several states. The greater the federal land holdings, the less land available for commerce and the more land off the tax rolls, making it more difficult for the western states to generate funding for education and other priorities.

Utah State Representative Ken Ivory has been a leader on both issues. He was a primary sponsor of the Financial Ready Utah bills, as well as the 2012 Transfer of Public Lands Act, which establishes a framework for the transfer of certain federal lands to the state of Utah in the coming years. Ivory also serves as president of the American Lands Council, a nonprofit advancing the cause of local control of land access, land use and land ownership.

I recently interviewed Rep. Ivory on the rationale behind the Financial Ready Utah bills and the Transfer of Public Lands Act, the history of federal control of western lands, and much more. Here's an excerpt:

Leonard Gilroy, Reason Foundation: Can you describe the thinking behind the Financial Ready Utah initiative?

Utah State Representative Ken Ivory: In my first session in the Utah House in 2011, I was concerned we didn’t seem to know exactly how much federal funding came into Utah. I heard a variety of guesses, but as we really started to look the numbers, we discovered that as much as 45% of our total revenue in the state of Utah comes from a federal government that is broke. The federal consolidated financial statement from the Government Accountability Office reports annually that federal finances are unsustainable. The GAO will not issue an unqualified financial statement on the United States. So, nearly 45% of Utah’s revenue comes from a federal governing partner that is fiscally reckless, as repeatedly demonstrated with each new debt ceiling or continuing resolution debacle.

So, we began looking at how to attain a level of economic self-reliance, and given increasing federal uncertainty, how do we assess the immediacy, severity and probability of the risk of a reduction in the amount or value of federal funds—what do we do at the state level? Also, how can we foster community preparation for the fiscal earthquake that is, in all likelihood, more probable than the physical disasters that we spend millions of dollars preparing for?

[...]

Gilroy: You’ve also been engaged on issues related to western lands—specifically the large amount of federal ownership of land in western states—which plays into this state self-reliance concept as well. How did you get involved in that?

Ivory: They evolved simultaneously. In the 2011 session—when we realized that over $5 billion of our state revenue comes from a federal government that’s broke—that’s when we started to flesh out how serious those numbers were. Something on the order of 40% of our state revenue comes from an unsustainable source in our federal governing partner. We looked at the magnitude of this risk and started to think about how we could broaden our revenue base and get to a point of economic self-reliance.

You’re not going to close a revenue gap in the billions of dollars by tweaking the tax code with minor adjustments; you’d have to more than double the income tax and kill the economy. You’d have to increase corporate taxes by more than 1000%, again, killing the economy in an attempt to close that gap. On top of the general fiscal gap, in Utah we are $2.6 billion below average in annual per-pupil funding. There’s no amount of nipping, tucking and tweaking in the tax code that even closes decimals on that gap. The magnitude is tremendous.

Yet, what we know from the U.S. Government Accountability Office is that there’s more recoverable oil in Utah, Colorado and Wyoming than the rest of the world combined. There’s a study from earlier this year by the Institute for Energy Research that there’s $150 trillion in mineral value locked up in the federally controlled lands throughout the West. Right now the forests—which were a renewable resource, with the revenue funding schools, roads and public safety—have been shut down to timber harvesting, and now they’re basically tinder boxes. We’ve got so much dead wood standing in the forests that, in fact, the FBI is even warning our state foresters that terrorists are encouraging wildfires as a form of jihad. The forests are so dense now that the trees can’t defend themselves and fend off natural diseases and pests, so forests throughout the West are largely dead or dying just waiting for any spark to ignite the next catastrophic wildfire.

So we looked at these conditions. And as you pointed out, more than 50% of all land in the western United States is owned and controlled by the federal government. This is in a nation that was founded on the principles of inherent, inalienable rights to life, liberty and property. World-renowned economist John Kenneth Galbraith made a statement in the mid-1980s that “where the socialized ownership of land is concerned, only the U.S.S.R. and China can claim company with the United States.” [...]

Check out the full interview here. Other articles featured in the Innovators in Action 2013 series are available here.

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Toledo Officials Tout Public-Private Partnership in Solid Waste Collection

I’m always on the lookout for examples of policymakers explaining how privatization helped them deliver benefits to taxpayers. Unfortunately, there are too few examples. But this great promotional video produced by Republic Services does just that, using first-hand testimony from local officials in Toledo, Ohio, where since 2011 Republic has provided solid waste management services under contract (via an agreement with Lucas County).

The video features Toledo Mayor Mike Bell, Toledo City Councilman Tom Waniewski, and several other local officials and city department heads discussing the rationale and benefits of their solid waste contract, covering residential trash and recycling collection. Key points from the video include:

  • According to Mayor Bell, Toledo was facing a $48 million deficit at the time. With citizens reluctant to pay higher taxes or fees and the city keen to preserve services and avoid layoffs, officials decided to identify ways to improve efficiency. The city approached Lucas County about teaming up on a solid waste contract. The combined entity made an agreement with Republic that would realize $6 million in annual savings.
  • 69 city-employed solid waste workers were impacted by privatization, but none became unemployed. They all either took a new position with the contractor or were transferred to other positions in city government. (Mayor Bell points out that the Teamsters union represented both the city’s solid waste workers and Republic’s workers, which likely played a role in facilitating a smooth transition.)
  • The city had some recently purchased waste haulage trucks on which it still owed $9.5 million. Republic bought those trucks, allowing the city to reduce its debt by $8 million (on top of the $6 million in annual savings).
  • Councilman Waniewski says that prior to privatization, the council’s constituent call tracker was logging thousands of complaint calls per year on solid waste issues, but he’s seeing no complaint calls now. Similarly, Crain’s Detroit Business reports that Mayor Bell told Detroit Emergency Manager Kevyn Orr that monthly complaints fell from between 300 and 500 down to five after Toledo contracted out collection.
  • The contractor implemented a recycling reward program for customers that provides coupons for local businesses. As Councilman Waniewski notes in the video, this is a “perk that a government entity could not offer the residents.”

Mayor Bell concludes that “for us, it was a perfect fit,” noting that the key is, “realizing what is best for the taxpayers that you’ve been voted in to represent.”

For more on solid waste contracting, see Reason’s recycling and waste research archive here.

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Support Builds for U.S. ATC Corporation

A growing number of U.S. aviation stakeholder leaders are expressing dismay with FAA's dire budgetary situation and the outlook for further cuts threatening NextGen, facility consolidation, and contract towers. As early as February, the FAA's own Management Advisory Council (MAC) had called for replacement of the current aviation funding system with one that is sustainable and independent of federal budget vicissitudes, as well as the creation of a governing board representing aviation stakeholders.

But in recent weeks, the MAC has moved beyond that initial position. FAA Administrator Michael Huerta had briefed the MAC's 11 members on some of the steps the agency has had to take this year to cope with budget cuts. They include:

  • Postponing various NextGen activities and due dates, including final implementation of ERAM and further progress on the Metroplex initiative;
  • Implementing a hiring freeze;
  • Temporarily closing the FAA Academy, halting the training of new controllers;
  • Deferring maintenance and stretching out inspection of navaids;
  • Shifting $253 million from the AIP grant program to the Operations account, so as to keep 147 contract towers from closing and ending controller furloughs.

He also reported that deferred maintenance already totals $6 billion. And there is good reason to expect the budget situation to be even worse next calendar year, assuming the next sequestration cuts are not averted by an overall budget deal in Congress.

Building on three years of discussions on FAA budget and governance issues, the MAC has now adopted by unanimous vote a revised set of four guiding principles for reform (which I am reproducing verbatim from MAC member Stephen VanBeek's recent article from LeighFisher's Global Outlook (Oct. 11, 2013):

  1. Create a sustainable financial future for the FAA: The most important goal is to establish a funding system that provides dedicated and sufficient user-based revenues to pay for FAA obligations. MAC members believe that general fund support for the aviation industry should be phased out as soon as possible in order to insulate the agency and the provision of user services from day-to-day politics.
  2. Separate a new commercialized Air Traffic Organization (ATO) from the FAA: Modeled after other Air Navigation Service Providers (such as Nav Canada), separate the service-oriented ATO from the FAA and appoint a board consisting of users and aviation stakeholders to oversee [the ATO's] work. MAC members strongly believe that ATO reform must be accompanied by overall aviation policy reform due to the links between policy and funding decisions.
  3. Assess and codify FAA authorities and programs: Simplify statutes, regulations, and policy by reviewing existing rules and procedures and eliminating redundant regulatory oversight. MAC members believe that this process will result in significant savings to the FAA and will obviate the need for a near-term increase in user revenues after the phase-out of general fund support.
  4. Reform the tax structure: Eliminate the current mix of AATF taxes and fees and replace it with transparent schedules of cost-based fees that provide sufficient funding for services such as air traffic control and aircraft certification. MAC members believe that new schedules should be (1) revenue neutral and (2) flexible in their administration in order to gain the confidence of stakeholders and facilitate the transition to the new system.

VanBeek closes his article by mentioning MAC discussions with aviation stakeholders, whose response to these ideas has been generally positive. That's because the stakeholder groups appreciate the dire (and worsening) situation facing the FAA, the ATC system, and NextGen. This situation has not gone unnoticed overseas. The latest Global Competitiveness Report of the World Economic Forum ranked the U.S. 31st out of 142 nations in the quality of its ATC infrastructure, down from 12th in 2008

The think tank community is also stepping up its involvement in ATC reform. The Eno Transportation Center released a report this month, "Addressing Future Capacity Needs in the U.S. Aviation System." Among other things, it calls for separating the ATO from FAA and possibly corporatizing it as a nonprofit corporation. The Hudson Institute next month will release a study assessing the relatively low level of innovation in the US ATC system and recommending reform of ATC governance and funding.

FAA Administrator Michael Huerta has opened the door for discussions along these lines. In a much-discussed speech before the Aero Club of Washington, he called upon his aviation audience as follows: "One thing I think is vitally important is for the aviation industry to start having serious conversations about the structure of our aviation system, as well as the way we fund it, In the past, we have had debates over how to fund our system. I have heard from many of you that these discussions, which have historically been difficult, are starting to happen. And that's significant."

Having written about ATC reform since the early 1980s, I have never seen conditions so ripe for major change.

Note: Steve VanBeek's article is available at www.leighfisher-globaloutlook.com/feature/Aviation/Americas/1615/Now-is-the-time-for-aviation-policy-reform

See more at: http://reason.org/news/show/air-traffic-control-newsletter-108#sthash.LJwfXYGz.dpuf

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Sasha Volokh on Philosophical Objections to Prison Privatization in Israel

Sasha Volokh has an interesting new article on Reason.org discussing a 2009 decision by the Israeli Supreme Court striking down a law authorizing the use of private prisons. As Volokh explains in the intro:

This opinion is interesting for Americans for a number of reasons. First, it held private prisons unconstitutional based on the most general of constitutional provisions, the rights to “liberty” and “dignity,” and based on very high-level political theory—rather than predictions about how the different sectors might violate inmates’ rights, which one would expect in the U.S. constitutional tradition. Second, the decision is part of an emerging series of recent rulings by foreign courts on private delegations of coercive power [...]. Third, the Israeli Supreme Court enjoys substantial respect in comparative constitutional law circles worldwide, so there’s a possibility that similar reasoning will spread to other countries.

Read the rest of the article here, where Volokh goes on to explore several weaknesses in the Court's arguments. And for more, all of Volokh's recent legal analyses written for Reason Foundation on an array of privatization-related topics are archived here.

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A Major Setback for California's High Speed Train

Following up on my post yesterday about the court ruling on California's bullet train project, Ken Orski at Innovation Briefs writes a nice summary of the court ruling and its implications. Here's the whole thing:

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The future of the California High Speed Rail project hangs in a precarious balance as a result of two rulings handed down by Sacramento Superior Court Judge Michael Kenny on November 25. "The Judge's ruling will prevent the [California High-Speed Rail] Authority from spending bond measure funds for construction until the funding plan is brought into compliance," said Michael Brady co- lead attorney on the case. But because that would require finding at least $25 billion in extra funds, Brady believes compliance seems "virtually impossible." They need to step back and rethink their whole approach," added co-lead attorney Stuart Flashman.

The Authority’s Chairman, Dan Richard, tried to cast the Court decision in a more positive light. "The judge did not invalidate the bonds as approved by the voters," he said. "Like all transformative projects, we understand that there will be many challenges that will be addressed as we go forward in building the nation’s first high-speed rail system."

The Court rulings are the culmination of prolonged litigation. It began two years ago when two aggrieved individuals, farmer John Tos and homeowner Aaron Fukuda joined Kings County Board of Supervisors in filing a lawsuit asserting that the Authority failed to comply with certain statutory requirements in its 2011 funding plan. Oral arguments were held on May 31of this year and on August 16 Judge Kenny ruled that the Authority failed to comply with the requirements of Proposition 1A in two fundamental respects:

(1)  It was unable to certify completion of all the environmental clearances for the 300-mile Initial Operating Segment (IOS) extending from Merced to San Fernando Valley. (To date, only a 29 mile stretch of initial construction from Merced to Fresno has been examined); and 

(2)  It was unable to identify "reasonably expected" sources of funds required to complete the Initial Operating Segment. (See our column, "A Major Court Rebuke for the California Bullet Train," August 20, 2013)

As to the second defect, the Authority estimates that the Initial Operating Segment (IOS) will cost about $31.5 billion. It currently has only about 20 percent of that sum or $6 billion---$3.25 million in federal funds and $2.7 million in Proposition 1A bond funds appropriated to match the federal funds.

In its November 25 opinion, Judge Kenny did not explicitly address this potential funding deficiency nor did he agree to rescind existing contracts with Tutor-Perini and Caltrans or rule on the propriety of using federal grant money, as requested by the plaintiffs. Instead, he ruled that the Authority cannot "proceed to commit and spend Proposition 1A bond proceeds for construction or property acquisition" until it has complied with the requirements stated in his August 16 ruling.

At a November 8th hearing on the remedies, Deputy State Attorney General, Michele Inan, stated that the Authority was spending only federal money pursuant to an agreement with the federal authorities to "front load" expenditure of federal funds. However, she acknowledged that by April 2014 the project will need Prop 1A bond funds to match the federal contributions. Given the Court’s ruling, it is questionable whether state bond funds will be available to provide that match. Without access to the bonds, the Authority would need other sources of public or private funds in order to complete construction of the initial 29-mile stretch (estimated at $2 billion) and continue building the line. .

In a related decision, the Court declined to issue a blanket validation for the sale of Proposition 1A bonds, as requested by the Authority. Without such a validation, State Treasurer Bill Lockyer’s office said the state can’t sell Prop 1A bonds (as reported in the LA Times), thus putting the future of the project even more in doubt.

All of this should give the federal government pause and cause it to reconsider whether to put more of its funds at risk, say William Grindley and William Warren, independent analysts and authors of thirty-eight reports on the high-speed rail project. "The Federal Rail Administration’s oversight of the Authority’s actions appears short of legal due diligence. By binding itself to and funding the Authority’s action the FRA has become party to those actions. ...FRA’s legal position seems cloudy at best," the two analysts wrote in a recent briefing paper, "DOT/FRA Has Several Reasons to Withhold Further Funding from California's High-Speed Rail Project," November 2013. 

Nor is this the end of the litigation. A second phase of the case is to begin shortly over allegations that the project has strayed significantly beyond the 2008 promises of the Proposition 1A bond measure and that the Authority's plan for a "blended system" of high-speed trains on Caltrain's commuter tracks in the Bay Area and Metrolink tracks in the south cannot meet the performance requirements of Proposition 1A---notably a nonstop trip between Los Angeles and San Francisco in 2 hours 40 minutes and provisions that the system operate without public subsidies.

Whatever the ultimate consequences of the two Court rulings, their impact on public opinion and on the confidence of the financial community in the project’s fiscal integrity are unquestionable. Further delays in the project’s groundbreaking (already more than a year behind schedule), the prospect of multiple challenges over bond validation, Congressional opposition to provide further federal funds, and inability to identify credible sources of non-federal money to complete the entire Initial Operating Segment all add up to a very uncertain future for this "transformative" project.

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How California Counties Are Using Prison Realignment Funding

California is projected to distribute $4.4 billion to California counties by 2016-2017 in order to facilitate the significant overhaul of the California corrections system known as "Realignment." Passed in 2011 as AB 109, Realignment seeks to shift increasing responsibility for incarcerating and managing offenders from the state level to the county level. Notable reforms under AB 109 include an end to automatic returns to state prisons for parole violations and redirecting non-violent, non-sexual, non-serious offenders to serve their sentences in county jails instead of stare prisons. As part of the goal of shifting increasing responsibility on the county level, AB 109 also provides for significant funding streams to counties to adjust to the increased responsibilities, with significant leeway provided to county governments in how to allocate the funds.

Last week, the Stanford Criminal Justice Center released a report entitled "Follow the Money: How California Counties Are Spending Their Public Safety Realignment Funds," that identifies trends in how California counties are allocating funds pursuant to AB 109. In particular, the report breaks down characteristics of counties that allocate more funding to either Sheriff and Law Enforcement spending categories or Programs and Services categories.

The report found that counties are allocating more funding towards law enforcement agencies when:

  • The imprisonment rate for drug felonies is higher.
  • The serious (Part I) crime rate is higher.
  • The county has a relatively high number of full-time law enforcement personnel.
  • The county has recently gained a relatively large number of law enforcement personnel.
  • The concentration of high-risk parolees is lower.
  • The drug offense arrest rate is lower.

Among the countries included in this category are Kern, Los Angeles, Tehama, Tulare, Yolo, and Yuba counties. Grouped as "Enforcement Cluster 4" in the report, these counties were identified as having "high arrest rates for drug crimes and a high number of law enforcement personnel—a number that has grown in recent years." Further, these counties "have a relative preference for imprisonment on drug crimes and face above average serious crime rates."

Among the interesting trends identified in the report is that "many of the most famously liberal/progressive counties in the state rate above average on drug arrests, including Los Angeles, Alameda, Santa Cruz, and San Francisco Counties." It should be noted that while California has reduced penalties for marijuana and methamphetamine possession, Governor Jerry Brown recently vetoed legislation that would have allowed local prosecutors greater discretion in charging drug offenders with either misdemeanors or felonies. As a consequence, a potential shifting of law enforcement priorities was squandered in order to resume the dubious criminalization of forbidden substances.

Meanwhile, the report identified general characteristics of counties that have directed more funds towards programs and services spending categories when:

  • The sheriff has received more electoral support.
  • The Black unemployment rate is higher.
  • District attorney expenditures are lower.
  • Probation expenditures are lower.

To the first point, the report speculates that "key law enforcement officials in these counties feel liberated by public support to pursue programs that meet the intended goals of Realignment, instead of feeling the need to curry favor with the public by shoring up enforcement apparatuses." With regards to black unemployment, the report suggests that counties shift more funding towards reentry programs in order to address the reality that black Americans are disproportionately impacted by the criminal justice system.

Among the counties that seem more inclined to  pursue "treatment as a solution to crime problems" are Alameda, Humboldt, Lake, Lassen, Shasta, and Sonoma counties.

Pages 18 and 19 of the report are useful maps breaking down the relative allocation of funding to either law enforcement expenditures or programs/services.

With billions of dollars on the line and countless lives at stake, how these different strategies to dealing with realignment play out warrants careful attention.

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Judge Rules CA Bullet Train Plan, Spending Must Stop

California Superior Court Judge Michael Kenny issued two rulings today that put the brakes on the state's bullet train project. 

In essence the Judge finds that the high speed rail authority's plan violates the law that California voters approved along with agreeing to a bond to fund the project.  The state will have to bring its plan for the project in line with the law before it can legally spend any more of the state bond funds. But without those funds, billions in federal funding are at risk. So this boondoggle may just be dead at last.

[Full disclosure--my colleage Bob Poole and I were each expert witnesses in this lawsuit]

 

 

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Streetsblog Throws Temper Tantrum After Transit Experts Recommend not Building Rail in Wake County, NC

What do you do if you are a rail advocacy group and a national panel of experts has just told you that rail is the wrong solution for a specific area? If you are Angie Schmitt of Streetsblog, you question the merits of the professionals and claim that the Reason Foundation is somehow pulling the strings behind the scenes in a conspiracy theory similar to the one that contends Lee Harvey Oswald was not the only shooter in JFK’s assassination. 

What exactly is Streetsblog talking about? The Wake County Commission is examining how to improve its transit system. (Wake County, NC is home to Raleigh.) Neighboring communities (Chapel Hill in Orange County NC and Durham in Durham County NC) are planning on building a light-rail line between Chapel Hill and Durham. Certain elected officials are also interested in building rail lines between Chapel Hill and Raleigh, and Durham and Raleigh. In order to get some non-political advice, the Wake County Commission brought in three transit experts, Cal Marsella, former Chairman of the Regional Transit District in Denver and current transit consultant, Steve Polzin, Director of Transit Research at the University of South Florida’s Center for Urban Transportation Research and Sam Staley, Managing Director of the DeVoe Moore Economic Center at Florida State University 

For some reason Ms. Schmidt is convinced that anybody who does not agree with her is wrong. And she implies that Sam Staley and Steven Polzin are not “independent” professionals. 

Let’s just take a look at the backgrounds. Sam Staley, is Managing Director of the DeVoe Moore Center at Florida State where he teaches urban planning and urban economics classes. He has a PhD in Public Administration with a focus in Urban Planning from Ohio State University and Bachelor’s and Master’s Degrees in Economics. He works with academic planning professionals including the chair of the Transportation Research Board (TRB) light-rail committee. In 2012, he organized first transit conference in Florida State University’s history. Staley also has own blog on Planetizen. 

Steven Polzin has multiple engineering degrees including a PhD in Civil Engineering from Northwestern University. In his previous positions he has served in many roles including as a Senior Rail Planner. Polzin is on the editorial board of the Journal of Public Transportation and serves on several American Public Transit Association and Transportation Research Board Committees including Data Information Systems and Data Requirements and Programs. Polzin and the University of South Florida were recently awarded the honor of writing the Commuting in America series, a publication of the National Academy of Sciences. Polzin also contributes to Planetizen. 

Ms. Schmidt did not complain about Cal Marsella, former Chairman of the Denver Regional Transit District. And with good reason. Rail lobbyists assumed that Marsella who oversaw construction of FastTracks in Denver would support the Wake County train. But instead he agreed with Polzin and Staley that rail is not appropriate for Wake County. It is surely difficult to criticize Marsella who oversaw Denver’s rail system as an anti-rail type. 

And Mr. Marsella is not alone. Another rail friendly transportation planning professor John Pucher also does not think rail in Wake County will work. Pucher teaches at Rutgers but is spending a semester at the University of North Carolina-Chapel Hill. He notes, “The commuter rail plan and the light rail plan just don't make sense to me," "It's just so difficult in this very decentralized, very sprawled metropolitan area." And responding to the claim that Wake County officials have deliberately delayed the project “The county commissioners of Wake County, in a way, have done the right thing," Pucher said. "I don't think you can expect the voters to understand all the details and analysis." 

I searched transportation experts—not politicians or industry lobbyists—and could not find a single transportation expert who thinks rail in Wake County is a good idea. Based on that finding, the commissioners did an excellent job—they could not find a transportation research professional who supports rail in Wake County, NC because such people do not exist. Perhaps what Angie Schmidt and others are upset about is not the views of the transportation experts but their inability to strong-arm a community into what appears to be a bad project. However, this is no excuse to throw a temper tantrum and accuse anybody who does not agree with your world-view of being a poopy-head. I look forward to the next Streetsblog column which discusses the facts instead of engaging in conspiracy theories. 

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