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March 7, 2014
Dangerous overcrowding can be reduced through basic reforms
It sure looks like California's prison crisis is going to drag out for at least another two years since a panel of federal judges recently issued an order giving the state until February 2016 to reduce overcrowding in its prisons. In 2011, the United States Supreme Court upheld a federal court order requiring California to reduce its prison population to 137.5 percent of capacity. Since then, federal courts have extended the deadline multiple times as California claimed it couldn't meet the goal.That's because California is barely trying.
Plan offers a mixed bag on outsourcing, asset privatization
Detroit's ongoing bankruptcy saga has now taken another turn with the long-awaited release of Emergency Receiver Kevyn Orr’s plan of adjustment. While considerable attention is understandably being paid to the treatment of creditors and pensioners in the overall plan—as well as pensions and benefits for employees and retirees moving forward—it’s also important to review how the plan addresses future city government operations, specifically with regard to the privatization of services and assets. In short, the more services and assets privatized, the more manageable the emergence from bankruptcy and the smoother the path to long-term fiscal and financial sustainability—which translate into improved quality of life for Detroit’s citizens and businesses. However, on both fronts—outsourcing and asset privatization—the proposed plan of adjustment is a mixed bag.
Detroit's proposed pension reform from last week has a chance to be precedent setting. The city's plan to "adjust" its $18 billion in debt by slashing as much as half of it before exiting bankruptcy includes cuts to already accrued pension benefits, as well as changes to how future public pension benefits are earned. The proposal also has less innovative, but important elements of good pension reform including forcing the city to use "market values" in accounting for its liabilities, using slightly more realistic investment return assumptions, and adjusting its defined-benefit system.
Pension reform, tax reform, privatization, asset leases can help put fiscal house in order
Detroit’s bankruptcy is inflicting much pain on the city. But this pain won’t be in vain if the city uses it to make structural changes that put its fiscal house permanently in order. Specifically, this would involve finding the most cost-effective way to provide city services, lowering taxes to stop the population flight, and keeping long-term government costs in check.
Why the “California Rule” is counterproductive
Ban would set back public health by discouraging smokers from seeking safer alternatives
On Monday, a Los Angeles City Council committee is set to consider an ordinance that would ban the use of electronic cigarettes anywhere that traditional cigarettes are prohibited under the city’s smoke-free air laws. The City Council already unanimously passed a law subjecting e-cigarette sales to the same regulations and restrictions as tobacco products — even though e-cigarettes don’t contain any tobacco. Not only does latest move to ban e-cigarettes run counter to public opinion, it would also set back public health by implicitly discouraging smokers from seeking safer alternatives.
San Jose has cleared a path toward reform that other financially distressed municipalities may use to avoid fiscal ruin
Starting in 2010, San Jose embarked on a series of pension reforms. These culminated with the passage of Measure B, under which retirement benefits were reduced for new employees, while current employees had to choose between switching to a plan with reduced benefits or contributing more of their salaries in order to maintain their existing benefits. In addition, the measure eliminated the “13th checks” that had been issued in the past when the pension investment fund had earned a return higher than a certain threshold, reduced the automatic annual cost-of-living adjustment from 3 percent to 1.5 percent, and required voters to approve any future benefit increases. With many other cities and states facing large unfunded liabilities for post-employment benefits, San Jose offers one possible model for reform.
Mileage-based user fees are a sustainable, fair and efficient alternative to the gas tax
This policy brief focuses on the challenge of developing a viable, user-friendly, per-mile charging system to replace fuel taxes for the nation's major highways. In doing so, it outlines 10 reasons why per-mile tolling is a better highway user fee than fuel taxes.
- California 2014 High Speed Rail Business Plan Is Off Track (3/6)
- The Intentionally Unrealistic FY2015 Budget (3/4)
- Shallal's Top-Down Plan for D.C. Schools Hurts Parent Choice (3/3)
- Richmond CARES? (3/2)
- Government Could Improve the Development of Vehicle to Vehicle Communication by Getting Out of the Way (2/27)
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