Cost Control

If California starts building a 130-mile segment of high-speed rail late this year as planned, it will enter into a risky race against a deadline set up under federal law. The bullet train track through the Central Valley would cost $6 billion and have to be completed by September 2017, or else potentially lose some of its federal funding. It would mean spending as much as $3.5 million every calendar day, holidays and weekends included -- the fastest rate of transportation construction known in U.S. history, according to industry and academic experts.

If California starts building a 130-mile segment of high-speed rail late this year as planned, it will enter into a risky race against a deadline set up under federal law. The bullet train track through the Central Valley would cost $6 billion and have to be completed by September 2017, or else potentially lose some of its federal funding. It would mean spending as much as $3.5 million every calendar day, holidays and weekends included -- the fastest rate of transportation construction known in U.S. history, according to industry and academic experts.

Thousands more California students will have to find their own way to school this fall, as districts slash bus routes to cope with budget shortfalls and high fuel costs. Critics worry that the cuts will increase traffic around schools, shift costs to parents already struggling with rising gas prices and prompt more absenteeism, hurting students' academic achievement. But paramount is the fear that the reductions will endanger students as more walk or drive to school.

California's projected budget deficit has ballooned to $16 billion, much larger than the $9.2 billion estimated in January, Gov. Jerry Brown said, and he warned of more painful spending cuts. "We will have to go much further, and make cuts far greater, than I asked for at the beginning of the year," Brown said in a video posted Saturday on YouTube. He plans to detail his revised spending plan in the Capitol on Monday. It's a significant setback for Brown, who began his return engagement in Sacramento by promising to get the budget back under control.

The annual college textbook rush starts this month, a time of reckoning for many students who will struggle to cover eye-popping costs of $128, $156, even $198 a volume. Caltech economics professor R. Preston McAfee finds it annoying that students and faculty haven't looked harder for alternatives to the exorbitant prices. McAfee wrote a well-regarded open-source economics textbook and gave it away -- online. But although the text, released in 2007, has been adopted at several prestigious colleges, including Harvard and Claremont-McKenna, it has yet to make a dent in the wider textbook market.

That parental advice to turn off lights when leaving a room is projected to help Santa Clarita save about $70,000 per year. Work crews from Honeywell Inc. are finishing retrofits this week to Santa Clarita's field services office, replacing fluorescent lights and installing separate lighting circuits.

The painful slump endured by California's aerospace industry finally appears to be over after six long years. Companies are landing new contracts again, massive layoffs are fewer and farther between, and production is picking up. But the aerospace industry--the backbone of a prosperous state economy a decade ago--now operates in a sober new world where fundamental changes have occurred.

On a recent winter night, while neighbors strung their Baldwin Park homes with Christmas lights, the Lams and their three children sat in front of a television set with rabbit ears sprouting out of the top. Wait a second -- rabbit ears? Is this 1950? No, it's almost 2010, and the Lams are a modern Los Angeles family that, like many in the region, are rediscovering the convenience -- and economics -- of the old-fashioned TV antenna. In the wake of the transition to digital television, Southland viewers are finding they can get nearly three times as many channels as they once could with an antenna.

In a first for a Japanese automaker, Nissan Motor Co. is curtailing its retiree health insurance and pension programs in the U.S., saying it needs to cut costs to "remain competitive." The move comes as concerns mount that such expenses are crippling the competitive efforts of U.S. automakers, particularly General Motors Corp. and Ford Motor Co. GM, for example, provides benefits for 1.1 million workers, their families and retirees.

At least four federal agencies will probably have to lay off thousands of employees this year unless Congress approves "buyouts" to speed voluntary departures, according to Clinton Administration officials. The Agriculture, Interior and Transportation departments and the Office of Personnel Management are at the most risk for reductions in force, or RIFs--the government jargon for layoffs--the officials said, primarily because of tight budgets this year.

President Obama embraced the idea of federal action to restrain the rapidly increasing cost of higher education, giving a boost to a long-simmering policy idea that has gained steam amid growing frustration with rising tuition. His proposal that colleges and universities cut costs or risk losing out on some federal aid was part of a larger package of ideas for college affordability unveiled by the president on Friday in a speech at the University of Michigan. Obama wants to increase funds for higher education, mostly through an expansion of federal loan programs.

The state retirement system has slashed the benefits of scores of top-paid local government officials as part of a review of overly generous public pensions prompted by the Bell scandal. Although the California Public Employees Retirement System has cut the benefits of individuals in the past, this review is its largest systematic effort to examine and possibly adjust high-end pensions. So far, the state retirement board has reviewed 2,250 retirement payments and found that 329 needed to be reduced, mostly because employers incorrectly reported employees' pay. They include a former general manager at the Serrano Water District in Orange County whose pension was reduced because the salary it was based on -- $206,668 -- was too high.

For the first time, California's largest nonprofit health insurer has released the salaries of its 10 highest-paid executives in response to a new state law intended to keep healthcare insurance costs under control. The top earner at Blue Shield of California was Chief Executive Bruce Bodaken, who made $4.6 million last year — more than four times the salary of his counterpart at the state's largest for-profit insurer, Anthem Blue Cross. San Francisco-based Blue Shield revealed Bodaken's salary in documents filed with the state's insurance commissioner, who had demanded the information under the law that allows regulators to examine executive salaries and other criteria to determine whether insurance rate increases are "unreasonable.

— Across California, state and local leaders are moving to confront the cost of public employee retirement packages — an escalating financial burden that threatens to choke off funding for other government services. Legislation now being debated in Sacramento would curtail pension benefits to future state employees. Elsewhere, city and county governments are looking at a variety of measures, including raising property taxes to cover shortfalls and reducing payments to retirement funds.

Taylor Sanford Jr., a 76-year-old Texan who fell in love with the Arizona desert, couldn't imagine being unable to visit Lost Dutchman State Park to see its scattered fields of golden wildflowers. So Sanford strode into a community meeting here recently and wrote a check for $8,000, the estimated cost of keeping the park open for a month. The retired airline captain is just one of many who are donating money or time in hopes of saving Arizona's suffering state parks. Since 2007, the Legislature has reduced park funding by almost 80%. Facing one of the steepest budget shortfalls in state history, Arizona lawmakers cut an additional $3.9 million from the system this month.

The slashing of Los Angeles' municipal arts offerings is underway, with seven layoffs to take effect April 1 and eight more expected when the fiscal year ends June 30, as City Hall tries to cope with a budget crisis. Olga Garay, executive director of the Department of Cultural Affairs, said Monday that she had to figure out how the Warner Grand Theatre in San Pedro and the William Grant Still Arts Center in West Adams will be staffed after the April 1 layoffs of their directors. And the City Council may get an earful at its meeting Wednesday from supporters of four neighborhood arts centers -- two in Barnsdall Park in Hollywood, two next to the Watts Towers -- that are among nine facilities City Hall wants to unload on private nonprofit operators, in hopes of cutting jobs.

In a five-star hotel here, Zhou Jianxiong rises from his seat to toast his new comrades from Southern California. He alludes to Xiangtan as the birthplace of Mao Tse-tung, who sowed the seeds of communism in the Middle Kingdom. "From this place, China's modern revolution spread all over the country," Zhou says, raising his glass of Great Wall red wine. "We also will influence the whole country, like a single spark igniting a prairie fire."

The Health Care Finance Administration in Washington, responsible for administering both Medicare and Medicaid, is moving ahead with new strategies to try to get better control over Medicare expenditures for physicians. So it should. Part B Medicare premiums, covering medical care, will increase from $17.90 to $24.80 a month in January--the largest increase in the history of the program.

Gov. Arnold Schwarzenegger, taking aim at what remained of a deficit-cutting package drafted by Democrats, said Tuesday he planned to veto $1.1 billion in projected savings realized largely through cuts to public transit. Democratic lawmakers had approved the measure as part of a package they said would have addressed $4 billion of California's estimated $20-billion deficit. Combined with Schwarzenegger's veto last week of a larger component of the plan, the announcement puts Capitol politicians back at square one on the deficit.

Critics of the comprehensive healthcare reform bills pending in Congress have trotted out a number of hyperbolic arguments against the legislation, some of which are easy to refute. It's not a government takeover of American medicine -- the bills retain the current system of private insurance and private-sector doctors and hospitals. And it's not an assault on the elderly -- although Medicare Advantage plans would lose their extra subsidies, prescription drug benefits would increase substantially.