Californians are fed up. After months of COVID-19, tempers are rising along with the thermostats outside. And as tempers rise, an economic storm is also brewing.
Californians are angry because the government has demonstrated that it views our freedom as dangerous. Over the past few months, it’s become clear that Gov. Newsom believes the people can’t be trusted and everything should be regulated.
The behavior of our governor and state officials during the coronavirus crisis is offering a timely reminder of why CPC exists and why our work is so essential.
They think the path forward lies in restricting and regulating your freedom. We know it lies in freeing people from governmental incursions on their individual and economic liberty.
CPC is pivoting to adapt to the developing COVID-19 situation and we’re poised to turn the massive economic disruption of the pandemic into a long-term windfall for liberty.
More than simply staying the course, CPC is also rising to meet the unique demands of the COVID-19 crisis by strategically adapting our core areas of focus.
For example, we’ve been hosting CLEO (California Local Elected Official) meetings online and have drawn four times the normal attendance. This might be partly because people have fewer time or travel constraints, but I think it’s also because local officials are particularly in need of guidance today.
In a similar way, CPC’s Parents Unions are proving more essential than ever before. Parents around California are conducting meetings over Facebook Live, sharing information and tips with fellow parents who were schooling their kids at home during the shutdown.
CPC is providing more value to Californians during COVID-19 than ever before.
But there is something far bigger brewing on the horizon.
You see, the economic consequences of the coronavirus shutdown didn’t just hit California workers and businesses. They lay bare the deepest problems in California public finance: The state income tax regime’s over-reliance on capital gains . . . local governments’ reliance on sales tax revenue . . . the pension funds’ increasing dependence on risky investments to meet unprecedented funding goals.
Finance experts predict this perfect storm will, in turn, generate a wave of California municipal bankruptcies beginning as early as September.
This is a problem CPC has seen coming for a long time. We’ve been sounding the alarm on California’s massively underfunded pension liabilities for over a decade. CPC recently estimated California’s public debt at a shocking $1.5 trillion.
Now with the bull market and sales tax revenue evaporating, the chickens are coming home to roost. And there’s only one viable solution to stave off total fiscal catastrophe: reforming the dangerously corrupt public employee pension systems.
Previously, that’s been all but impossible. But there is one way around the California Rule: Chapter 9 bankruptcy. And Chapter 9 bankruptcy, my friend, is exactly what’s being forecasted for many municipalities by this coming fall.
In bankruptcy, federal judges have showed a willingness to reopen collective bargaining agreements. Indeed, the mere threat of declaring municipal bankruptcy is sometimes enough to get public-sector union negotiators back to the bargaining table.
The California Policy Center is not going to let this opportunity pass by.
With guidance from a CPC-led coalition of experts in finance, law, and actuarial analysis, local government officials just might be able to transform their relationships to the powerful unions that run California. Together we can restore the Golden State to long-term fiscal health.
Throughout this process, you can count on CPC to be data-driven, outcome-oriented, prudent, and honest. We’re not playing games; we’re fighting for California’s future.
COVID-19 brought our state to a standstill. Together we have the capacity to get it moving forward again, towards real economic and individual freedom, after years of stagnation and decline.
Help CPC take advantage of an incredible opportunity to defeat the unions’ stranglehold on California politics by making your tax-deductible gift today!