From Philip M. Vermeulen, Golden State Builders Exchanges Legislative Advocate
Friday, November 14, 2014
In This Update
- Local Revenue Measure Election Results
- California’s new Legislature inexperienced but has more time to adjust
Insurance Commissioner recommends lower pure premium rate than suggested by workers’ comp rating bureau
Insurance Commissioner Dave Jones today adopted an advisory average pure premium rate of $2.74 per $100 of employer payroll for workers’ compensation rates effective January 1, 2015.
The adopted amount is lower than that proposed by the Workers’ Compensation Insurance Rating Bureau of California (WCIRB). The WCIRB’s proposed advisory average rate was $2.77 per $100 of payroll. After a public hearing and careful review of the testimony and evidence submitted, the Department of Insurance recommended adoption of a pure premium rate amount lower than the WCIRB on the basis that a greater reduction in medical losses should be used in the actuarial model due to the anticipated savings from
SB 863 (De León) signed in 2012.
The WCIRB’s proposed advisory average pure premium rate is 7.9 percent ($2.77 per $100 of payroll) above the industry’s average filed rates as of July 1, 2014 and the adopted pure premium rate ($2.74 per $100 of payroll) is 6.7 percent above the industry’s average filed rates as of July 1, 2014.
Commissioner Jones, the WCIRB and the public members’ actuary all agree that the overall impact of SB 863 continues to result in savings for the workers’ compensation system. The California Department of Insurance continues to observe that medical and indemnity losses are outpacing wage growth and consequently, the average advisory pure premium will increase in 2015.
Local Revenue Measure Election Results
The November statewide election included over 400 local measures including 268 seeking approval for taxes or bonds.
K-12 school districts and community colleges sought a total of $11.775 billion in 113 separate authorizations for bonds to construct facilities, acquire equipment, and make repairs and upgrades. There were just eight measures to increase or extend school parcel taxes. Final results show 80 percent of school bonds and 70 percent of city general taxes passed.
Among the 147 non-school local revenue measures, four measures were asking for a total of $555.5 million in bonds, including a $500 million transportation bond measure in San Francisco. There were 32 city, county and special district parcel taxes requiring two-thirds voter approval, including two library measures, three street/road improvement measures, four parks and open space measures, 16 fire, emergency medical response measures and five police/fire measures.
Fifty-five proposals sought to extend or increase local sales taxes, ranging from the renewal of a 0.1 percent tax for the Fresno Zoo to a 1 percent increase proposed in 15 cities. Thirteen of the 55 sales tax measures earmark the tax proceeds for a particular purpose, making them special taxes requiring two-thirds voter approval under Proposition 13.
California’s new Legislature inexperienced but has more time to adjust
The Sacramento Bee report, like fire clearing an old growth forest, last week’s election elevated a class of freshman lawmakers who will join last cycle’s surge of first-term legislators to form one of the least experienced Legislatures in years.
When the 2015-16 Legislature convenes later this year, a majority of lawmakers – 72 out of 120 – will arrive with at most two years of state-level experience. The critical mass of relative newcomers reflects a shift in California’s term limit rules with dual consequences: While the incoming class of lawmakers is sparse on state legislative experience, it could also remain largely intact for a decade.
“I think it’s probably the most profound change in the Legislature as an institution since term limits passed,” said David Lesher, director of government affairs at the Public Policy Institute of California.
Critics of California’s term limits have long warned of unintended consequences. Voters hoped to make the Legislature more accountable and to loosen the grip of long-serving politicians. But in the process, skeptics say, voters deprived their representatives of the experience and policy fluency that comes from years steeped in lawmaking.
“When the voters approved term limits they voted to limit the amount of experience the Legislature had,” said former Assembly Speaker John A. Pérez, D-Los Angeles. “Institutional memory is found outside of the building and the staff, which is not the best thing for democracy.”
It will take time to adjust, multiple newly elected members acknowledged in interviews with The Sacramento Bee. That process goes beyond learning the explicit mechanics of the Legislature.
“It’s a combination of both the formal rules about introducing bills and referral of bills and voting and all those things, but there’s also the more informal ones about how deals are brokered, and when you’re able to not vote with your party because of constituent concerns,” said Steve Boilard, a former Legislative Analyst’s Office staffer who is now the executive director of the Center for California Studies at California State University, Sacramento.
In the past, new members looked to their veteran colleagues to ease an initiation process that Kathy Dresslar, who was chief of staff to former Senate President Pro Tem Darrell Steinberg, D-Sacramento, likened to a “drink from the fire hose.” As term limits force those more seasoned members from the Legislature, Dresslar said, newer members are increasingly taking their cues from staff or from lobbyists.
“The new legislators today are still learning from the former members, but the former members are more likely to be lobbyists here in town,” Dresslar said. “So that perspective is passed down from the former members’ clients.”
Despite such concerns about a knowledge gap or power migrating to those who were not elected, people pointed to an upside. Elected officials, staffers and political experts expressed optimism about the time lawmakers will have to acquire expertise and shape sound policy.
Under California’s initial term limits scheme, lawmakers could serve a maximum of six years in the Assembly and eight years in the Senate. Now they can serve a total of 12 regardless of the house. That could mean less jostling for the next job and more time focusing on the issues.
“Now you have a large majority of these lawmakers that don’t have the pressure of trying to move up to the Senate within six years and have the ability to focus on long-term work and long-term relationships,” said Rob Stutzman, a longtime Republican operative. “It allows more focus on good policy as opposed to intraparty politics.”
At a reception for new lawmakers this week, members of the incoming freshman class had a similar message. A new primary system allowing the top two vote-getters to advance regardless of party has ensured a more diverse class – “business, mod (moderate Democrats), labor,” said Republican-turned-Democrat Assemblyman-elect Bill Dodd, D-Napa – that could be largely intact for years.
“Whatever downside there is for having so many relatively new Sacramento legislators, in time you’re going to see a lot of seasoned professionals that are really knowledgeable in many, many policy areas,” Dodd said. “There’s kind of the beginning, the middle and the end, but it gets better every year.”
Committee chairmanships offer a prime opportunity to cultivate policy authority. In the pre-term-limits era, Dresslar said, “members chaired the same committee for years, and they cared deeply about it and were very personally invested in the policy portfolio of those committees.”
Assembly members limited to six years “didn’t take ownership of the policies coming out of that committee because they were just passing through,” Dresslar said. Now, with members potentially having a decade on a given committee, “this will give people an opportunity to sit back, learn,” Dresslar said. “I think that’s actually a change for the better.”
In addition to longer tenures sharpening policy acumen, it could also alter the dynamics between legislators. Deals and compromises might be more likely to endure.
“The coin of the realm (before term limits) was your reputation and your integrity. If you made a commitment and you reneged on it, people would know that for however long you were going to be there,” said Bill Wong, who worked in the state Capitol for over two decades, most recently as chief of staff to Assemblyman Anthony Rendon, D-Lakewood. “With longer terms, people are going to think very long and hard before they renege on an agreement.”
On the horizon is a leadership transition that could shape policy emanating from Sacramento for a decade. Assembly Speaker Toni Atkins, D-San Diego, has only two years before she has exhausted her allotted time. Her successor – a topic already prompting whispered speculation – could be setting the agenda of Assembly Democrats for eight to 10 years.
“The anticipation is there will be a long-term speakership after Atkins,” Stutzman said. “Personally I think that’s a good thing as well – my observation is that a strong speaker is better for the chamber and better for the Legislature.”
While new members learn the ropes and mull their next leader, they will be serving under a governor who embodies experience. Just re-elected to an unprecedented fourth term, Gov. Jerry Brown could be in a position to outmaneuver members who are state politics neophytes.
“So much of politics is negotiation, it is appealing to the public, and those kinds of things come with experience. Jerry Brown has an awful lot more experience than the average member of the Legislature,” Boilard said. “So there’s an imbalance of power there that gives an edge to the executive.”
Taking the long view, Assemblyman-elect Kevin McCarty, D-Sacramento, envisioned a different outcome.
“I think the bigger picture is members, myself, people will have more patience to focus on issues knowing you really have years to achieve something,” McCarty said. “I think you have greater opportunity to change the balance of power back to the Legislature away from the third house and the administration, with members really digging in.”
Philip M. Vermeulen can be reached at PH (916) 784-7055 ● Fax (916) 784-2852 ● Web www.pvgov.com
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