State Retirement Funds Post Large Returns

The nation's two largest public employee retirement funds, the California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement System (CalSTRS), both posted their largest annual returns in more than a decade for the 12-month period ending June 30. CalPERS and CalSTRS, with earnings of 20.7 percent and 23.1 percent, respectively, saw their total assets under management grow substantially after losing nearly 30 percent of their value at the height of the recession in 2008. After the most recent gains, CalPERS has crept back up to about $237 billion in assets in its portfolio, while CalSTRS is up to approximately $154 billion. As significant as these gains were for the funds that are responsible for managing the retirement benefits of more than 2.4 million state and local retirees, they remain only about 70 percent funded and are a combined $55 billion below their pre-recession high.

State Budget Saga Continues

Last week, California Controller John Chiang delivered bittersweet news about the fiscal outlook for California just three weeks after the state budget was signed into law. Revenues continue to exceed projections for the state's three largest revenue sources (sales, personal income and corporate taxes), with June revenues coming in almost $440 million above forecasts, yet revenues remain almost $350 million below assumptions made by Gov. Jerry Brown and Democratic legislators in the recently signed 2011-12 state budget. While increased revenues underscore an improving state economy, if state revenues do not pick up in subsequent months, additional cuts will be triggered in a host of state programs ranging from higher education to Medi-Cal provider reimbursements.

Legal challenges could further reduce state revenues. Last week, the California Redevelopment Association, the League of California Cities, and the cities of San Jose and Union City filed a lawsuit asking the state Supreme Court to halt the disbanding of redevelopment agencies, claiming that their elimination through a budget trailer bill runs afoul of the recently passed Prop. 22, which bans any raids by the state on local revenues. Almost $1.7 billion in revenue is set to be redirected for general purpose for local governments through the elimination of redevelopment agencies. The second legal challenge was a request for title and summary by online retailer Amazon on a proposed referendum on the recently passed “Amazon tax”, which would require out-of-state retailers to collect sales taxes on purchases made by California residents. The new law, which assumes nearly $200 million in revenues, was strongly opposed by Amazon and other online retailers who, until recently, were not required to collect states sales taxes on purchases by California residents. As predicted, California Attorney General Kamala Harris gave proponents approval on Monday to try and collect the requisite number of signatures for the referendum to qualify for the 2012 ballot. If the referendum qualifies, it is likely to provoke a fierce battle with Walmart and public employee unions on one side and Amazon and Overstock.com on the other.

Redistricting Commission Gearing Up for Legal Battle

Since its inception, the California Redistricting Commission has been criticized from all corners of the political realm. With the most recent revision of their maps decreasing the number of congressional and state legislative seats in the Los Angeles area, splitting Orange County communities of interest, decreasing the number of viable seats for black legislators and with Democrats poised to secure a two-thirds majority in each house of the state Legislature, many groups are challenging the commission in the courts and at the ballot box. Minority groups, aided by former Senate President pro Tem Don Perata, have so far refrained from pursuing a lawsuit, but have indicated a willingness to pursue legal challenge if deemed necessary. In particular, the African American Redistricting Collaborative has stated that they have the documents ready to file should the final maps not meet their approval. Additionally, the California Republican Party, led by Chairman Tom Del Beccaro, has said the party is likely to pursue a referendum to place the maps before voters for approval should they maintain the current draft lines. In anticipation of these impending legal challenges, the commission has already begun interviewing lawyers for a $500,000, one-year contract for legal defense. A full list of the current draft districts before the California Citizens Redistricting Commission can be viewed here.

California Universities Forced to Raise Tuition

After being hit with a combined $1.3 billion in state funding cuts this year, both the University of California Regents and the California State University Board of Trustees voted to raise tuition within the two California higher education systems with increases of 9.6 percent and 12 percent, respectively. As the state has grappled with ongoing revenue declines, the two state university systems have seen regular cuts to their funding, and, as a consequence, have raised tuition several times after losing nearly a quarter of their state funding. In addition to raising tuition, UC campuses plan to expand enrollment of out-of-state students, who pay almost three times as much as in-state enrollees. These tuition increases are likely to have a significant impact on students, though attempts were made to cushion the blow to low- and middle-income students at the UC by exempting students whose families earn less than $90,000 annually from paying tuition, with the university subsidizing the rate increase for students whose families make less than $120,000 annually.

Initiatives and Referendums

This week, several initiatives and referendums were cleared for circulation and signature gathering after receiving title and summary from Attorney General Harris. Large ballot fights have become a biennial occurrence in California, and 2012 is shaping up to be no different than previous years. The legal questions that could be put before California voters if they qualify for the ballot range from the legalization of marijuana to the elimination of public employee collective bargaining rights to changes in how insurers can offer discounts for automobile insurance. A full list of the initiatives and referendums can be found here.

SPEAKERS ADDED: Take This Pill and Tweet Me in the Morning, Aug. 4

CHI recently added new speakers to "Take This Pill and Tweet me in the Morning: How Advances in Social Media and Mobile Health are Creating Consumer-centric Healthcare,” to be held at the Salk Institute on Aug. 4, from 11:30 a.m. to 6:30 p.m. A representative with the FDA's Center for Devices and Radiological Health (CDRH) was recently added to the program. Bakul Patel, a policy advisor with CDRH's Office of the Center Director, will join the program via video conference to speak about FDA's potential oversight of mHealth tools and participate in a Q&A session with attendees. Naser Partovi, founder of San Diego-based Sanitas Inc., will speak about its first product, Wellaho, a personalized outpatient management system that provides solutions to health care providers and the most effective treatment protocols for both patients and care providers. Also added recently is Anthony Costello, chief operating officer of Mytrus, which is conducting the first-ever internet-based clinical trial approved by the U.S. Food and Drug Administration for Pfizer's overactive bladder drug Detrol. Mytrus is also employing social media in patient recruitment in innovative ways and its proprietary technology platform enables patient verification and confidentiality via the Internet.

CHI is offering its Twitter followers a discount on registration. All you have to do is follow CHI and retweet our tweets about the event and you could receive $25 off the event registration. The hashtag for the event is #takethispill. For details on how to receive the discount, click here .

Featuring a keynote by CHI board member Eric Topol, M.D., this event will bring together hundreds of leaders from California's biotechnology industry and academic research community, entrepreneurs, investors, healthcare providers, policy experts and patient advocates. Advances in social media and mobile health technologies (“mHealth”) are giving consumers more influence than ever over their health and healthcare. The pharmaceutical and life sciences industries have officially taken note, working to understand how consumer-centric healthcare will affect their markets, and considering how they can use social media and offer mHealth tools and services. This event will address the significant policy and economic questions associated with the transition to consumer-centric healthcare.

For sponsorship opportunities please contact Molly Ingraham, vice president of business development (Ingraham@chi.org or 858-456-8884).

SPONSORSHIPS AVAILABLE: California Healthcare Policy Forum in San Francisco, Nov. 3

New sponsorship opportunities are being offered for CHI's annual California Healthcare Policy Forum taking place in San Francisco at the Julia Morgan Ballroom on Nov. 3. The Healthcare Policy Forum is an annual statewide conference focused on the relationship between biomedical innovation and public policy. This year's theme is Shifting Sands: Forces Reshaping the Biomedical Innovation Business Model and will bring together hundreds of leading executives from biotechnology, medical device and pharmaceutical companies as well as leaders from the state's academic research community with policy makers to discuss critical issues and opportunities facing the biomedical community.

Besides the traditional platinum, gold and silver-level sponsorships, there is also an exclusive Board of Directors dinner sponsorship opportunity, and the ability to sponsor a certain portion of the day, like coffee and networking breaks, the media or speaker room and the CEO photo booth, where we will be recording key opinion leader thoughts on the trends affecting industry growth and competitiveness in California.

For more information or to sponsor, contact Molly Ingraham (Ingraham@chi.org or 858-456-8884).

For more CHI events or current happenings, visit www.chi.org.