Leave it to California's union-friendly Democratic leaders (OK, that's all of them) to take a reasonably good idea and turn it into a way to increase the size of government and pad union members' paychecks. Senate President pro tem Darrell Steinberg of Sacramento has introduced a bill based on the concept of Social Impact Bonds. Such bonds -- popularized by British conservatives who sought to impose market pressure on government services -- seek private investment to fund public services provided by non-profits. The return on investment is based on measurable standards. California's version of this concept, as I detail in my latest Bloomberg column, leaves out the non-profit aspect of this. It's basically a plan to circumvent voter approval for more borrowing to fund existing bureaucracies. No matter how poorly government performs, the state's leaders want even more of it.

A new report from the California Public Policy Center concluded that "The total outstanding government debt confronting California's taxpayers is bigger than is generally known." The total outstanding debts soar above $800 billion when all forms of debt are accounted for. The study also shows that if the state's retirement systems used a realistic rate of return on their investments (4.5 percent), then the unfunded pension liability soars to $1.1 trillion. California's Democratic leaders -- and only Democrats are leaders here these days -- insist that the pension problem is behind them. They are looking for new ways to raise taxes so that they can keep the spending train going. Even the state's Democratic "moderates" have no appetite for pension reform. Things are going to get worse here before they get better.

Michigan's newly minted right-to-work law is set to go into effect next week (March 28). Under the law workers can no longer be required to pay agency or fair share fees to unions if they do not wish to become union members. Clearly, not being able to force workers to pay into union coffers threatens unions' finances. Therefore, the unions are racing to place "union security provisions" (read: agency fees) in current contracts, some of which would be good for up to 10 years, such that employers in the state, both public and private, would still have collect monies from union members and non-members alike. State lawmakers are threatening cuts if the contracts go through and the lawsuits have started. It may turn out that actual right-to-work status in Michigan will take longer to materialize. 

The California Public Employees' Retirement System has been enmeshed in one scandal after another -- pay-to-pay deals, disastrously bad real-estate investments, off-the-mark investment predictions that burden the taxpayers and politicized investing policies. Given that this is a government entity and that California taxpayers and governments have to bear the brunt of CalPERS' mistakes and misbehavior, one would think that the agency needs more transparency. It's an obvious point that transparent decision-making offers the best oversight and protection of tax dollars, especially in a free society. But instead a South San Francisco Democrat is pushing a bill that would shut the door on public and media oversight of most of CalPERS and other retirement systems' decision making with regard to real estate. AB382 is pushed by the retirement systems' trade group as a means to keep outsiders from getting a competitive advantage. CalPERS is supposedly neutral on it. But it's a clear attempt to protect CalPERS and others from revealing embarrassing information. The Secrecy Lobby strikes again.

Gov. Jerry Brown would like us to believe that California's fiscal issues are behind it because he offered a budget that is, at least superficially, balanced. But the Brown budget is just another evasion, a "kick the can down the road" plan that ignores that the state is running into that so-called "wall of debt." In my latest column for Bloomberg, I argue that it's wrong to think that the state's fiscal problems are behind it or to think that raising taxes is the simple answer to the problem. California raised its taxes, but the Legislature hasn't been in session long enough to squander the new dollars. And do you know any California millionaires who aren't making contingency plans?