The LAO’s annual California Spending Plan publication includes detailed descriptions of this year’s state budget package, as approved by the Legislature and the Governor in June and early July. Included are highlights from the administration’s official scoring of the budget package. Today’s preliminary electronic version of the California Spending Plan will be updated and printed in the fall to incorporate legislative and gubernatorial actions later this year.
That’s not to say Summers is a sure thing. His confirmation would be far tougher than Yellen’s, as Republicans will make him answer for the stimulus and the bailouts, and progressive Democrats have a list of grievances going back to financial deregulation in the Clinton-era. There’s also the simple fact that appointing Yellen would break a significant glass ceiling — and do so in an administration that hasn’t always been great about appointing women to top economic positions.
California’s Employment Development Department (EDD) released new numbers on Thursday showing stark improvements in the state’s employment situation. EDD reports California’s unemployment rate fell to 8.5 percent and nonfarm payroll increased by 30,200. To look at this report with a wide lens, this time last year California’s unemployment was at 10.6 percent. 2.1 percent in a year is moving at a pretty good clip. However, EDD indicates that 1.8 percent of the year-to-year change is real job growth, meaning 0.3 percent fell out of the workforce.
Comparing the Golden State to the rest of the nation is a past time for Californians so let us go through that exercise.
US unemployment in June is still lower than California’s as a whole at 7.6 percent, but its year-to-year improvements are not as impressive improving only six-tenths of a percentage since June ’12.
So what do all these percentage points mean as it relates to real people?
Since 2010 California has created 803,400 jobs, bringing the state’s total employed to 14,648,700.
You can dive further into the numbers yourself by checking out the EDD release.
One last and totally depressing note, Imperial County is still having a rough time. 23.6 percent (!)
On Tuesday, the Sacramento Bee reported about the State Water Resources Control Board warning the state of possible cutbacks because of drought level water reserves.
The Northern Sierra Nevada region, which provides much of California’s total water supply through snowmelt, experienced the driest January-through-June period in 90 years. Major reservoirs in the region, the largest in the state, are at about 80 percent of average capacity and shrinking rapidly.
From the CalPERS press release:
The California Public Employees’ Retirement System (CalPERS) today reported a 12.5 percent return on investments for the 12 months that ended June 30, 2013, outperforming its benchmark by 1.5 percentage points. CalPERS assets at the end of the fiscal year stood at more than $257.8 billion.
The gain was led by strong performances by CalPERS global public equity and real estate investments. Investments in domestic and international stocks returned 19 percent, outperforming the CalPERS custom public equity benchmark by nearly one percentage point. Investments in income-generating real properties like office, industrial and retail assets returned 11.2 percent, outperforming the Pension Fund’s real estate benchmark by 1.4 percent.
“When things got rough we didn’t panic,” said Joe Dear, CalPERS Chief Investment Officer. “We stuck with our exposure to growth assets and applied the lessons we learned from the past. The numbers show us that our approach is working.”
CalPERS 12.5 percent return is well above the Fund’s discount rate of 7.5 percent, the long-term return required to meet current and future obligations. CalPERS 20-year investment return is 7.6 percent, while its return since 1988 is 8.5 percent.
“We’ve taken many steps to strengthen our internal investment controls and risk management to drive better performance,” said Rob Feckner, President of the CalPERS Board. “I’m very proud of the reforms that our Board has made and the resiliency of our investment staff to remain focused on our long-term goals.”
From the CalSTRS Press Release:
Steady growth in the global equity market fueled a 13.8 percent investment return at the California State Teachers’ Retirement System (CalSTRS) to close the 2012–13 fiscal year. However, CalSTRS still faces significant long-term funding challenges.
The picture for the fiscal year spanning July 1, 2012 to June 30, 2013 shows investment returns well above the actuarial assumed rate of 7.5 percent. On a long-term, portfolio-wide basis, CalSTRS returns follow:
- 12.6 percent over three years
- 3.7 percent over five years
- 7.5 percent over 10 years
- 7.5 percent over 20 years
The CalSTRS Investment Portfolio’s market value for the fiscal year ending June 30, 2013 was $165.8 billion.
“These numbers are very encouraging,” said CalSTRS Investment Committee Chairman Harry Keiley. “While we take great pride in the dedication and acumen of our investments staff at CalSTRS, the reality is that even good investment performance addresses only part of the long-term needs of the fund, which suffered a severe setback in the crash of 2008.”
Investment returns have been erratic over the past several years. The current performance followed a lackluster year with the fund returning only 1.8 percent in 2011–12, preceded by a 23.1 percent return in 2010–11. As of June 30, 2012, CalSTRS was 67 percent funded with an unfunded actuarial obligation—or funding gap—of $70 billion.
By far the most important thing happening in California water policy.
Gov. Jerry Brown’s plan to build two massive water diversion tunnels in the Delta has hogged the spotlight in the crowded theater of California water issues. But
contract negotiations going on backstage could prove just as significant.
The state and federal water agencies that control most of Northern California’s water are negotiating new contracts with their 279 farm and urban water buyers. These contracts will govern those relationships – and extend the government’s obligation to provide water – for decades.
How the new contracts are shaped will affect water rates for millions of Californians. It also will change how taxpayers at large continue to subsidize the many dams and canals that deliver water.