Ham and Eggs | An Age-old pension movement in California


By Richard Colman

In the 1930’s, during the Great Depression, California had an old-age pension movement called the Ham and Eggs plan.  Under the plan, each person qualified to vote in California, age 50 or over, and unemployed would receive $30 every week.  To keep the plan funded, there would be weekly tax of two cents.

But is idea of the Ham and Eggs plan really dead in 2018?  The name Ham and Eggs may be gone, but the idea of a welfare (socialist) state lives on.

The Ham and Eggs movement received its name because the plan would presumably allow an eligible Californian to have a breakfast of ham and eggs instead of oatmeal.

In 1938, a statewide ballot measure to implement the Ham and Eggs plan was narrowly defeated at the polls. 

The Ham and Eggs plan was not the last time California got involved with big government.  In the 1950’s and 1960’s, California opted for big projects in the areas of education, transportation, and water delivery.

During this era, facilities for higher education expanded.  Under the Master Plan for education of 1960, campuses for the University of California, the State Colleges, and junior colleges grew enormously.

Also, during this era, freeways were built and State Water Project was constructed.  The water project called for the construction of dams and aqueducts to move water from Northern California to the Central Valley and Southern California.

During this so-called Golden Age, California was growing in population and wealth.  There was money to pay for enhanced government. 

Jobs were plentiful, especially in aerospace, education, and agriculture.  Perhaps no one symbolized this era of growth more than Edmund G. (Pat) Brown, governor of California from 1959 to 1967.  (Pat Brown’s son, Jerry Brown, served as governor from 1975 to 1983.  Jerry Brown was elected governor again in 2010 and 2014.  His 16-year reign as governor will end in January 2019.)

While California was growing, so were taxes.  In 1978, a tax revolt developed in the form of Proposition 13.  The proposition rolled back property taxes, placed a limit on how much property taxes could grow, and required local and regional elections to raise property taxes.  Initially, Proposition 13 required a two-thirds (or higher) majority to raise taxes.  In recent years, that two-thirds threshold, for some elections, has been lowered.

From 1980 to the present time, California, despite some economic downturns, continued to grow and prosper.  Perhaps the most spectacular growth was in the San Jose area, where Silicon Valley emerged.  Company names like Intel, Apple, Facebook, and Google became iconic symbols of Silicon Valley’s growth. 

Today, Silicon Valley has spread from the San Jose area to such Northern California cities as Fremont, Pleasanton, and San Francisco.  While growth was taking place in Northern California, the economies of Southern California also boomed.

As Silicon Valley and the rest of the state grew, so did taxation.  Today, California has the nation’s highest sales tax, highest gasoline tax, and the highest top bracket for the state personal income tax (13.3 percent). 

And as taxes rose, so did real estate prices.  A decent home in coastal California can cost $1 million to $2 million (or more) today.

As California grew, regulations expanded as well.  There were bans on plastic bags.  Under proposed legislation, plastic drinking straws will soon be prohibited.  In the future, cars are supposed to have better mileage.  New homes built in 2020 and beyond will be required to have rooftop solar power, adding $10,000 or $20,000 the cost of a home.

Perhaps most controversial are plans to expand the supply of housing.  The State of California is telling local communities how to act.  The state has plans to pre-empt local ordinances regarding building heights and building density (houses per acre).  In effect, local governments are becoming appendages of the state government.

In November 2016, Bay Area voters approved a $3.5 billion dollar bond for BART (Bay Area Rapid Transit). In November 2017, the state increased gasoline taxes by 12 cents a gallon.  Vehicle registration fees also went up.  In June 2018, Bay Area voters approved a measure that would, over a few years, increase tolls by $3 per vehicle on the San Francisco-Oakland Bay Bridge and other state-run bridges.

The state has been trying to force local communities to construct more high-rise, high density housing even if local residents don’t want such housing.

Government in California just keeps growing and costing more.

In recent years, pension obligations for California’s public employees have been escalating rapidly.  According to Dan Walters, the dean of California’s news columnists, California now has between $300 billion and $1 trillion in unfunded public-employee pension obligations.

While the Ham and Eggs plan failed in 1938, the government of California still wants to spend more money.

The Ham and Eggs plan has seemingly been replaced by new idea:  The government of California wants to redistribute income, offering champaign and caviar in the form of pensions for public employees.  The state also wants to mandate the building of special housing for low-income people. 

Soon, the average Californian, because of excessive taxation and regulation, may have to forget about having a decent breakfast (like ham and eggs) and eat oatmeal instead.

Richard Colman is the founder and president of Biomed Inc., a biotechnology, publishing, and informatics company.  He is a biochemist and earned masters and doctoral degrees from the University of California at Berkeley.  He lives in Orinda, California.

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