Morrell Monthly: January 2017

Wednesday, February 1, 2017


Dear Friend,

This month, the governor released his state budget proposal for 2017-18 and also delivered his State of the State Address.

In recent years, the state has seen record-setting budgets. Unfortunately, the same cannot be said for working Californians and small businesses. Their hard-earned money does not go as far as it should and with legislative Democrats proposing higher taxes to pay for more bureaucracy, it will mean that families can invest even less in their futures. More taxes will also discourage businesses from opening or expanding here, aggravating an already difficult economic situation.

With the threat of another recession always looming around the corner, the focus needs to remain on growing our economy while continuing to pay down the hundreds of billions of dollars the state already owes in public pensions and other obligations. Absent major reforms, the debt situation is only going to get worse. Groups like the American Legislative Exchange Council peg our statewide unfunded liabilities at almost a trillion dollars.

As budget talks get further underway, the governor needs to recognize that additional taxes would only magnify the challenges facing California. Further into this newsletter, I have included other important facts to keep in consideration during these next several months.

Coming up in February is the deadline to introduce legislation for the year. In December I re-introduced legislation that aims to cut state government costs for veterans seeking occupational licenses in California (SB 27) as well as a resolution urging Congress to pass Kate’s Law (SJR 4). I’ll keep you posted on our progress.

As always, it is a privilege to represent you in the State Legislature.


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San Bernardino County students participate in mock trial

Picture of two people with a flag

This past fall, students from around San Bernardino County participated in the 35th Annual Mock Trial competition. It is an opportunity for young people to develop better understandings of our legal system and the important role each of us plays in making it work and upholding our Constitutional rights.

This fall’s participants did a phenomenal job! For highlights from the program you can click the photo above.

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Ark of Safety Forum - Disaster Preparedness

Picture from Ark of Safety Forumn

Over 200 people attended this year’s Ark of Safety Forum held at the Roman Catholic Diocese of San Bernardino. The free forum was geared for leaders in the faith community as they learned best practices for preparing to serve others in the event of a disaster.

Presentations included an active shooter training led by the San Bernardino County Sheriff’s Department as well as a discussion conducted by the Lions Club regarding local response to last year’s Blue Cut Fire. On hand were also representatives from the San Bernardino County Office of Emergency Services and other disaster readiness groups.

Thanks to our partner - nonprofit Building Resilient Communities - and Executive Officer Debra Williams for their work on bringing this program to San Bernardino!

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The Unforgettables Foundation - Annual Hearts Awards

Each year, I partner with The Unforgettables Foundation and my friend, Chaplain Tim Evans, to host the Unforgettable Hearts Awards. The event honors and highlights nonprofits in our region who do good work in the community, many serving children and families. This year, three events will take place around the Inland Empire - Redlands, Apple Valley, and Indio.

For more information, please click here.

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Patriots of the Past, Present, & Future - March 10

Picture of Sara Hector at Women of Distinction 2016

This spring, I will be hosting the fourth annual Patriots of the Past, Present and Future Recognition Ceremony and Dinner to honor servicemen and women of every generation and the local businesses and organizations that have supported them.

“Patriots” will be recognized in different categories, including Business, Education, Public Safety, Community Service, and Civic Engagement. There will also be a special recognition for young people who have done great work in our region.

Be sure to save March 10 to attend this event! This year it will be held at March Field in Riverside. Please contact our office for more information.

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Patriot Spotlight: Justin Crabbe

Photo Crabbe and SniffAt last year’s Patriots of the Past, Present, & Future, it was my honor to recognize Marine Corporal Crabbe as the 23rd Senate District Patriot of the Year. During his second deployment in Afghanistan in August 2011, Corporal Crabbe stepped on an improvised explosive device (IED), suffering several life-threatening injuries including the loss of both legs above the knee. He was also placed on a ventilator for 19 days as he battled a lung infection and pneumonia, which were complications from nearly drowning.

Throughout his recovery, Corporal Crabbe has been recognized for his example of courage and perseverance.

Canine Companions for Independence (also an honoree at last year’s event) donated a service dog to Corporal Crabbe, and the nonprofit Homes for Our Troops built a custom, specially adapted house for Corporal Crabbe, his wife Casey, and their baby girl. This home, combined with the help of his service dog, Gnome, has enabled Corporal Crabbe to maintain his independence.

Please join me in thanking Corporal Crabbe for his service!

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Image of New Hemet City Council Members
New Hemet City Council Members. The League of California Cities holds trainings for new City Council members from around the state following an election. While in Sacramento, City Council Members Michael Perciful and Karlee Meyer of Hemet both visited my office.

Image of students receiving scholarship

Image of students receiving scholarship
Student leaders visit the Capitol. Early this month, the student government of Inland Leaders Charter School in Yucaipa made its annual trip to Sacramento and included a stop at the Capitol. It was a pleasure meeting the students and getting to spend time with them answering their questions. Thanks to the parents and their advisor Ms. Jacqui Reseigh for bringing them up here!

Image from event 1 Image from event 2
Walk for Life Hemet. I had the privilege of being a part of this year’s Walk for Life in Hemet. Thanks to the Valley Pro-Life Organization for organizing the 2017 program and for their work.

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Worth Reading: Lincoln’s Second Inaugural Address

Photo of Abe LincolnDuring the recent inaugural ceremonies, I was reminded of a number of my favorite speeches delivered by past presidents.

Perhaps one of the greatest is the address delivered by Abraham Lincoln in 1865 on the occasion of his second inauguration, just weeks before the Civil War ended and he was assassinated.

His remarks, though short by today’s standards, are poignant and still ring true. One of its most famous passages is the charge he leaves us:

With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation’s wounds, to care for him who shall have borne the battle and for his widow and his orphan, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations.

I encourage you to read his entire speech here.

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Fiscal Realities Facing California

  1. California’s Net Financial Position

    California’s “net” unrestricted financial position is a $169 billion deficit ($4,375 per person) according to the most recent Comprehensive Annual Financial Report (CAFR). This figure should be positive for healthy organizations. It is derived by tallying the state government’s assets (monetary funds, investments, buildings, roadways, bridges, parks, etc.) and subtracting its obligations. The last positive position California had was during Governor Pete Wilson’s final term where the state had $1.5 billion in unrestricted net assets. California is now ranked the worst state, below Illinois, whose net position is a negative $143 billion, or $11,174 per person.
  2. Estimates of California Unfunded Pension Liabilities

    CalPERS: $114.5 billion
    CalSTRS: $76.2 billion
    UC Pensions (UCR): $12.1 billion

    *NOTE: For the 2015/16 fiscal year, CalPERS planned for a 7.5% rate of return, but only managed to achieve a 0.6% rate of return. Seven percent of a $400 billion liability means a shortfall of $28 billion (some 20% of Governor Brown’s general fund budget).

  3. Current Unfunded Retiree Medical Liability

    California has the nation’s highest unfunded retiree medical liability at $74.1 to $80 billion.
  4. California’s Transportation Infrastructure

    California’s 57 cent/gallon gas taxes are the nation’s 4th highest. When cap and trade taxes are added, California has the nation’s second highest taxes behind Pennsylvania.

    California spends 3 times the national average on maintenance per mile of roadway, yet California’s roads rate among the nation’s worst in pavement condition and congestion.
  5. California’s Business & Economic Competitiveness

    California has the nation’s highest personal income taxes. California also has the highest corporate tax in the Western United States. According to the Tax Foundation’s 2016 Facts and Figures, California is ranked 48th overall.

    The Governor raised the minimum wage last year to $15 per hour. His own estimates show that it will cost the budget $4 billion per year in additional personnel costs.

    For the 12th year in a row, California was named the worst state for business in a survey of 500 CEOs by Chief Executive Magazine.
  6. Pension Crisis

    Lackluster investment returns are forcing CalPERS to re-evaluate the validity of their assumptions and admit investments alone may not be enough to cover pension costs.

    While many other states have pension problems, California is at crisis level.

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