The Union newspaper asked me for an op-ed piece and ran it today. It’s a bit more summarized than the earlier blog post, so I’ll put it here as well.

For years, California has been living beyond its means, spending more than its revenue, and using a variety of accounting gimmicks to paper over the problem. In the last year, it has become readily apparent that the music has indeed stopped, and it’s time to pay the piper.

The lack of any more “tricks in the bag” caused the state to pass community college funding cuts last September that blew a $9.8 million hole in the 2009-10 Sierra College budget. Literally, the state eliminated funding for classes that had already been scheduled and were filled with students.

Because of the efforts we’ve made to work together and build fiscal discipline, our Board of Trustees had built $6.5 million in new reserves over the last five years. While we had originally set these reserves aside for a “rainy day,” this was much more like a fiscal hurricane — and the storm is still raging.

» Read the Entire Op-Ed

(Feed and e-mail readers, click through for the video.)

Special Board Meeting Details:

• February 2, 2010 at 4:00PM
• Sierra College Rocklin Campus, Dietrich Theater
• Main agenda items begin at 4:00PM, public comment for items not on the agenda afterward
• Meeting Agenda

This board meeting is all about solving the massive budget problem presented by the state’s cuts in community college funding. The background of the problem is here, and the solution proposed by our management team and college governance groups is here.

Use the comments below to answer the Question of the Month! (You can “log in” with your Facebook or Twitter account with a single click, or just fill in your name and e-mail address to leave a guest comment.)

What is your response to the budget cuts proposed by the college’s management team and governance groups, made up of faculty, classified and students? Did they cut too much, or not enough? What other ideas should be considered?

It’s good to know that in the midst of bad news at Sierra College, there are still some exciting and positive initiatives going forward. I think it’s a testament to the dedication of our team there.

My colleague Nancy Palmer and I came back from a trustee conference about a year ago, armed with news of what some other college districts had been doing with solar power at their campuses. In addition, Placer County Supervisor Kirk Uhler had briefed us months earlier on some ideas he had generated in his role with a solar company.

All of this came together at our last board meeting when the board agreed to issue a request for proposal to build a solar system that would generate enough power to take around 20% of Rocklin Campus and 90% of Nevada County Campus off the grid, at zero cost to the district, and generating savings of $75,000 to $125,000 annually.

Here’s how it works:

• A private company enters into a contract with the college to build this solar installation (primarily on roofs, and new covered parking spaces across many of our parking lots) at their own cost.
• The private company goes out and brings on investors to put up the money to build the solar installation.
• Sierra College agrees to buy the power generated by the solar installation at a fair price, with strict limits on the annual increase that the college will have to pay (right now, the college is at the mercy of the power companies, with rates increasing between 6% and 15% some years).
• Through solar tax credits and arcane IRS rules, the private company pays a return out to investors over time.
• After about 30 years, the power purchase agreement expires. The college and the private company can either renew the agreement, or remove the solar installation from the college.

This is an exciting opportunity to cut costs at the college while maintaining our commitment to be good stewards of the planet we’ve been entrusted with. It’s been great to play a role in moving this project along while sitting on the Board Facilities and Planning Committee.

Now, we’re expecting a variety of private companies to step forward to compete for the right to build this project for the college. We look forward to the chance to work with them to save the college a lot of money while they make a profit for their work.

UPDATE: If any solar companies are reading this and would like to bid on the project, please e-mail jpelton@sierracollege.edu for a RFP packet. Thanks!

Every semester, Sierra College has Convocation. It’s a celebration of our incredible team and the kickoff to the semester. Normally, I attend the event, but I was traveling that day and unable to make it.

I’m currently listening to the audio of the event via CD in my car, but I wanted to share the slide deck with you that our President, Dr. Leo Chavez, used to present the budget package that he and his team have been working to build. (You can learn more about the underlying principles that the board helped establish here.)

Some of these slides may lack context, but I think you’ll get the picture and be able to understand the gravity of the problem, and some of the thinking behind the proposed solution.

In what will not come as a surprise to many, Sierra College has scheduled a special board meeting on February 2 at 4:00PM (it will be held in Dietrich Theater to facilitate heavy attendance) to close the nearly $9 million dollar deficit in our 2010-11 budget.

We are not here because of the decisions that Sierra College has made. As evidenced by the generation of $6.5 million in new reserves from 2005-2009, our board and staff have been very fiscally responsible. We have truly lived within our means, and saved for a rainy day.

The simple fact is that the State of California’s severe mismanagement, driven by a dysfunctional legislature and a Governor who can’t decide on his political identity, has finally brought California to the end of its rope.

The state tried raising tax rates to bring in another $10 billion dollars in revenue; proving that there is a finite amount of tax revenue available from the people who pay taxes, revenue actually went DOWN by $13 billion.

Read the rest of this entry »

I’ve written about fiscal gravity a few times on this blog (I even used this cartoon before). By “fiscal gravity,” I mean the unchangeable force ensuring two things: first, there’s a finite amount of tax revenue out there…raising tax rates won’t let you defy gravity. Second, you can’t engage in the unsustainable practice of spending more than you make…at least for very long.

California state government has been trying to defy fiscal gravity for years. Now it’s time to pay the piper, and as the Sacramento Bee’s Dan Walters illustrates, the state’s elected officials still don’t get it. (Hat tip to Fred for sending this my way!)

As the week began, a legislative committee heard state Treasurer Bill Lockyer describe, in blunt terms, why the state finds it increasingly difficult to market its bonds. Briefly, its budget is chronically unbalanced, it has floated too much debt, and it’s now forced to pay higher interest rates on its debts than many Third World nations.

Counterintuitively, state schools chief Jack O’Connell a day later urged the Legislature to approve a big new bond issue for school construction, followed quickly by a warning from economists at California Lutheran University that the state may have to default on some of its existing debt.

But it gets better. This nearly insolvent state is borrowing $10 billion dollars to fund the first 20% of work on a new bullet train that no private industry would ever undertake because it makes no economic sense whatsoever.

About a fifth of the nearly $50 billion in unsold state bonds would finance a proposed bullet train, but that $9.95 billion bond issue is less than a fourth of the train’s projected costs, a newly released “business plan” said.

The document raised project costs and lowered ridership estimates – but still insisted that it’s economically viable. However, ridership numbers still appear high, and the projected fare structure is based on airline fare data that don’t square with what airlines actually charge.

After noting that California is some $11 billion behind in repairing its existing roads and highways, Walters sums it up well.

Meanwhile, a commission that hands out stem cell research money from a $3 billion bond issue tripled the salary of its part-time vice chairman, former Democratic Party Chairman Art Torres, to $225,000.

…So we’re squandering our limited debt capacity on nonessential things such as stem cell research and bullet trains while our existing infrastructure is crumbling, demand from an increasing population grows, politicians’ credibility is almost nil, and bankers deservedly treat us like a Third World country.

I thought this is what we hired the last guy to fix? Something has got to change.

Is California’s state government fixable? What reforms do you think are the most critical ones to break the gridlock and get this problem solved once and for all?

I didn’t do Twitter much in 2008…really started in the first few months of 2009. I’m told by several people that I wrote some funny stuff last year. Here’s a review of some of the ones that got the most laughs:

• The White House has announced that the Chevy Malibu will be available in a beautiful forest green next year. (June 1, after GM was taken over by the feds)
• My wife, @caceyklein, thinks we should raise $ to send Abel Maldonado on a cruise for next 2 years. With luck, he’ll be captured by pirates. (June 9, after Maldonado caved in and voted to raise taxes yet again)
• From a friend…BREAKING NEWS: Chicago has announced that Senator Edward Kennedy is now eligible to vote in their fine city. (Aug 31, after Senator Kennedy’s passing)
• Biden just grabbed the mic from the President and told the crowd “Ronald Reagan had the best missile shield OF ALL TIME….” (Sep 17, when President Obama announced he was eliminating President Bush’s missile shield project, just a few days after Kanye West stole the show at the MTV Awards)
• Reading the Roman Polanski story. Intl fugitive flies to another country, arrested at airport. He hasn’t seen this in the movies? (Sep 28)
• http://twitpic.com/krcmo – Huh. Somebody printed Google and delivered it to my office. (Oct 8)
• I just pumped 20 gallons of fossil fuels into my car, but I saved the environment by hitting no when it asked if I wanted a receipt. (Oct 13)
• Hapa Sushi has pretty good food. I’m guessing each order is hand delivered from Japan, given how long it took to arrive. (Nov 14)

I will continue to do my best to keep you all entertained in witty 140-character snippets in 2010 as well. Clearly that full-time job would be far easier if I knew what you think my best tweet of 2009 was.

So now it’s your turn to decide – cast your vote in the comments below. And yes, if you think my sense of humor is just lousy, you can vote for “none of the above.”

Well, if tonight’s election results in Massachusetts – a state that hadn’t elected a Republican to the United States Senate since 1972 – don’t wake up President Obama and the Democrats, I don’t know what will. This could have been a clue as well.

The era of big government is over…again. After a rough start in 1993 and 1994, President Clinton figured that out in 1995 and rode it to re-election in 1996.

President Obama now has the opportunity to pull back from a far-left agenda and start focusing on solving the problems voters care about – jobs, the economy, creating competition and driving down health insurance costs – rather than trying to figure out ways to spend a trillion dollars to provide subsidized health care for all.

Will he listen to the voters?

I hope so.

Question: What realistic ways could President Obama adapt his policy agenda to introduce legislation that you could support?

Photo Credit: YouTube.com

Martin Luther King Day was important to us even before we became the parents of a beautiful African-American daughter. As I like to tell people, “we’re just your typical Korean-Ethiopian-American family.” Dr. King’s vision – individuals being judged by the content of their character – is a profound one for us.

As one of my favorite authors, Randy Alcorn, wrote today, “…it is about a vision, a movement, a value of reconciliation between people of every tribe, nation and language.”

The earliest symptoms of racial division were slavery, and years later, we’re still dealing with its dark legacy around the world. Look no further than Haiti – a nation colonized by the French with African slaves in the mid 18th century. That country’s desperate poverty and the conditions that led to such utter devastation after last week’s earthquake can be traced directly to the bitter root of slavery.

President Lincoln is revered today for his role in making slavery illegal in the United States, but slavery was only the most virulent symptom of racial division. It took another hundred years to change enough hearts and minds to end segregation in this country, and many more years after that to heal many wounds of that era.

And while some will always try to use race to divide rather than unite, we now live in the era of the first African-American President of the United States. While his loss a year ago wouldn’t necessarily have been evidence of racial division, his victory was certainly evidence of its near-absence – and proof that the United States of America is an incredibly exceptional country.

Thank you, Dr. King, for dreaming of racial harmony. Because of your life and work, we live in a nation and a world that is a little bit closer to the equality and respect for our common humanity that God intended from the beginning.