Saturday, January 30, 2010




Every time Gov. Arnold Schwarzenegger confronts a budget shortfall, he seeks the same way out, always looking for short-term solutions that create long-term problems.

Schwarzenegger’s pattern began in 2004, less than five months after he won office in the 2003 recall of ex-Gov. Gray Davis. That’s when he sponsored $15 billion in “budget-balancing” bonds, vowing to “throw away the credit card” if they passed. They passed and repaying them now costs the state just short of $1 billion every year. It was a one-time budget “solution” that will keep on costing big bucks for 25 more years.

The latest example of Schwarzenegger’s lack of foresight is the great California real estate sale that’s just about to begin. Schwarzenegger plans to sell off 17 state-owned buildings in almost every part of California, with the estimated $2 billion proceeds going first to retire the bonds that paid for the buildings (about $1.35 billion) and the rest (another approximate $665 million) going toward easing this year’s budget deficit.

But there’s a rub. For this is a real estate sale unlike almost any other. When most office buildings are sold, the new owner gets few guarantees of future rental income. Many business leases are year-to-year and recession has spawned millions of vacant square feet, making office buildings a tough sell.

But anyone who buys these buildings won’t have those worries. For Schwarzenegger is guaranteeing the state will keep using them for at least 20 more years.

Which means selling these buildings won’t be very different from issuing bonds. Rental prices have not yet been set, but Republican Bill Leonard, a member of the tax-collecting state Board of Equalization, calculates the rent on a typical building involved in the sale would come to at least $300 million over two decades.

Which means, he says, “the extra rent that will have to be paid for just one of the 17 buildings being sold will equal half of the total profits from the proposed sales.”

But wait, say Schwarzenegger aides, there will be savings if the state should close other offices it now rents and move their functions into the space it will have to lease back until at least 2030.

“We need this money now,” says Eric Lamoureux, spokesman for the Department of General Services, which manages state buildings. “We will ensure that the leases we get are market rate.”

Market rate? When the state is guaranteeing 20 years of occupancy, the price ought to be far below market rate. But that’s not the way this governor has ever thought.

Maybe it’s because he knows the approximate $5 billion in rents he’s committing the state to pay in exchange for about $660 million worth of one-time budget benefit will all be paid out on someone else’s watch. Getting the one-time benefit might make his job easier this year; never mind how much it burdens the next three or four persons who inherit his current job.

That makes this a pure form of selfish and shortsighted behavior, the very opposite of paying things forward. This is moving debt forward onto other people’s backs.

The building sale also represents a major reversal in state policy, which has long been predicated on the notion that owning buildings is a lot cheaper than renting them, even when you have to pay for maintenance and interest on construction bonds.

“This is just another form of state debt, leaseback contracts instead of bonds,” complains Leonard, a former longtime legislator from San Bernardino County. “Long-term leases are one of the most expensive forms of financing a government or an individual can choose. It will also depress the market for other office buildings and make it more difficult for other owners to sell off buildings, because when occupancy is guaranteed in these buildings, who wants to buy places without those guarantees?

“It’s just another example of short-term gain bringing long-term pain.”

That, of course, has been the consistent Schwarzenegger pattern, beginning with his rolling back vehicle license fees to the tune of about $5 billion a year. Add up the lost revenue from that one move over Schwarzenegger’s six-plus-year term and you’d have just about enough money to cover both this year’s expected deficit and last year’s without raising any taxes or cutting any programs.

Don’t blame the bureaucrats for any of this, says Lamoureux. “We’re carrying forth what the governor directed us to do,” he said.

Which means we have seen the problem, and much of it is Schwarzenegger, perhaps the most short-sighted governor in the history of this state.

Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit




First came the massive 7.8 earthquake that hit China’s Sichuan province in the spring of 2008. That one flattened buildings in cities as much as 250 miles from its epicenter, including damage in major cities like Chengdu and Chongching (the former Chunking).

Schools took some of the heaviest damage there, and so a disproportionate number of the 100,000-plus dead were children.

There was no big response to all this here in always earthquake prone California. Maybe that’s partly because schools are not the most vulnerable buildings in this state, chiefly because of the Field Act, passed in 1933 after a disastrous quake hit Long Beach. Most schools have been retrofitted to withstand temblors measuring 7.0 or more on the Richter scale and new school construction has had to meet high seismic standards. Schools did not suffer much in either the 1989 Loma Prieta earthquake or the 1994 Northridge shock.

But hospitals are another matter. Anyone who saw the now-defunct Granada Hills Community Hospital the morning after the Northridge quake and watched both ends of the building sag while patients were wheeled out as quickly as possible on beds and gurneys knows how deficient it was. Fully 16 years later, Granada Hills still has a lot of company among California hospitals.

That should not be the case, and now the utterly disastrous 7.0 Haiti earthquake with its estimated 200,000-plus dead (the majority crushed in pancaked buildings) demonstrates yet again why retrofitting California hospitals ought to become a far higher priority than anyone has made it. How can this state ignore the pictures of makeshift trauma centers set up in tents and groves of trees outside the ruins of Haiti’s few major hospitals? How can we downplay the scenes of American doctors performing amputations with ordinary hacksaws in the first post-quake days because sophisticated equipment those hospitals once possessed lies beneath tons of rubble?

But that’s what we’re doing, as California once again appears heedless of what looks like an explicit warning.

Two years after the 1971 Sylmar earthquake caused the collapse of the Olive View Hospital in the San Fernando Valley suburbs of Los Angeles, legislators got around to passing the Alfred E. Alquist Hospital Facilities Seismic Safety Act, which mandates strong standards for new hospital buildings.

The Northridge quake demonstrated graphically that law provided insufficient protection for the thousands of patients who lie in hospitals at any given time. After that temblor showed the inadequacy of California’s codes, lawmakers passed a follow-up to the Alquist act known as SB 1953. It demanded that any hospital not retrofitted by 2008 – two years ago – and posing any risk of collapse or significant loss of life during an earthquake could only be used for non-acute care. The idea was that non-acute patients may be more mobile than those getting urgent treatment and presumably can more readily escape a collapsing building.

But most affected hospitals now operate under five-year extensions of the deadline and complain they don’t have enough money to retrofit. A 2007 report from the Oakland-based California HealthCare Foundation and the Rand Corp. think tank in Santa Monica found almost half the state’s hospitals not in compliance. There has been only small improvement since.

Meanwhile, the U.S. Geological Survey estimates an 80 percent to 90 percent likelihood of a 7.0 earthquake in Southern California and a 62 percent chance of a similar-size one in Northern California before 2030. A 7.0 temblor like the one that hit Haiti would pack about double the power of the Northridge quake and roughly three times the energy of Loma Prieta, which knocked down buildings, freeways and bridges as far as 40 miles from its epicenter near Aptos.

Many hospitals lack both the money and the will to comply with the law, which says there can be no more extensions for them after 2030. But odds are good even 2030 will be too late to save lives. It’s gross negligence for this situation to continue.

Yet voters and politicians have not acted. They passed a high speed rail bond in 2008, essentially okaying $9.95 billion for what amounts to a luxury item, while hospital safety is as basic as anything can be and far more urgently needed.

If legislators don’t place something on the ballot soon enabling hospitals to finance somehow their needed retrofits, and if voters don’t pass it, lives will be surely lost. Chances are it won’t be as many as in Haiti or China, but still plenty.

The lessons of Sichuan and Port-au-Prince ought to be crystal clear: Wake up soon, California, or a lot of people will be killed or injured. It’s as simple as that.

Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit

Saturday, January 23, 2010




It would not be surprising if voters who read the latest report of California’s High Speed Rail Authority feel more than a little bit bait-and-switched.

Let’s look at the ways this report ( differs from the way Proposition 1A was hyped in November 2008, when $9.95 billion worth of state bonds for high speed rail passed by a narrow 52-48 percent margin.

Even then, the bonds were expected to cover less than one-fourth of the cost of this system, which aims by 2035 to carry more than 120,000 riders per day at speeds topping 200 mph. The rest of the money is to come from federal funds, private investors and possible revenue bonds that would be paid off with money from fares.

Less than 18 months after voters approved the high speed rail system, it’s tentatively planned to run from San Diego to Los Angeles to San Francisco via Pacheco Pass and San Jose, with an eventual spur line to Sacramento and stops in places as disparate as Anaheim, the Inland Empire east of Los Angeles, the Antelope Valley and Bakersfield.

Most of that was envisioned in the proposition voters approved. But the latest fare forecast was not. As presented in 2008, fares were to run about $55 one-way between Los Angeles and San Francisco, designed to be competitive with airfares that now often hover just under $60, even though cheaper ones can occasionally be found.

But the new plan calls for a one-way charge of $105, about 83 percent of the $125 the rail authority predicts airfares will run in 2035. That near-doubling of prospective fares would reduce expected ridership by almost one-third. In short, as much fun as high speed trains are to ride, they would probably never be affordable for vast numbers of Californians.

Meanwhile, no change is anticipated in the $647 million annual cost of repaying interest and principal on the bonds. That money that will be paid not just by riders and residents of areas the project might serve, but also by non-riders and residents of the vast portions of California who would have to travel as much as several hundred miles just to glimpse a high-speed train zip past. From the moment the first of the bonds are issued, repaying them will become a higher priority for the next 30 years than any state program except public schools.

And then there are the environmental questions. Cities like Menlo Park and Atherton are already fighting a plan for an above-ground line dividing their cities along the route between San Jose and San Francisco, where 31,000 riders daily are expected to enjoy commute times of 31 minutes or less. At the time of the vote, the route was known; not the notion of a 15-foot divider splitting many cities on the San Francisco Peninsula. The need to widen existing rail rights of way, spawning likely eminent domain takeovers of an as-yet-unknown number of homes, was also not advertised.

Anyone who’s ridden the high speed trains of France, Spain, Belgium, England and Japan knows how comfortable and convenient and enjoyable they can be. But given the revised fare structure and accompanying ridership estimates, it’s fair to wonder whether they should be partially funded in California by tax money from millions of people who may never ride them.

Another question is whether all this is worth it in order to get the flashy transport system that would result and the approximately 600,000 high-paid new jobs the new report says bullet trains would create. Those issues will hang over this plan from now until the system actually opens.

All of which means it might be wise for the Legislature, which put last year’s Proposition 1A on the ballot, to submit the plan revisions to another statewide vote.

That’s never before been done with any bond issue. Once passed, every bond approved by California voters has eventually been sold, one reason the state (not counting local governments) now has a total bond debt of $89 billion and makes yearly debt payments of about $10 billion.

There’s no question in anyone’s mind that having high speed rail would be good for California, taking traffic off freeways, offering a spectacular new tourist attraction and speeding travel for millions of riders yearly.

The question is whether Californians feel the system now planned is the one they voted to pay for and whether they still believe it’s worthwhile after two years of budget problems like no American state has ever endured.

The only way to answer that fairly is to stage another vote. But legislators usually frown on re-dos, so don’t hold your breath waiting for one.

Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit




Tom Campbell admitted it quite frankly the morning he dropped out of the run for governor and into a crowded race for the Republican nomination to challenge three-term Democratic U.S. Sen. Barbara Boxer next fall:

“Pragmatism told me I could no longer continue in (the governor’s) race,” Campbell soberly said. “I never had the opportunity to make a lot of personal wealth.”

Campbell has been a law professor, state senator, business school dean, spent nine years in Congress and a couple as the state budget director. None of those posts are noted for their low salaries, but they won’t usually make anyone a billionaire, either.

The bottom line won out as Campbell switched to a lower-priced race. He could not compete with the two zillionaires left in the Republican race for governor (one admits to be being a billionaire; the other denies it, but plainly is close). Both Meg Whitman and Steve Poizner talk a lot about how many others have contributed to their campaigns. But there’s no denying that Whitman’s $19 million contribution to her campaign and Poizner’s $15 million donation to his drove the ultra-qualified Campbell away. The checks Whitman and Poizner wrote to themselves dwarf the totals all others have given them.

So it is now certain there will be no triangulation effect this year like the one that gave then-Lt. Gov. Gray Davis the 1998 Democratic nomination for governor over two ultra-wealthy self-funded candidates, former Northwest Airlines chairman Al Checchi and Los Angeles Congresswoman Jane Harman.

The question now is whether anyone will ever again manage to compete against the super-rich in a party primary election for a major office. So far, all the self-funded except Arnold Schwarzenegger have lost in runoff elections. The corps of the defeated over the last 40 years includes the likes of Norton Simon, William Matson Roth, Michael Huffington, plus Checchi and Harman. But costs for airing television commercials are higher than ever. So are the transportation costs so vital to a campaign.

It may be that the only way for the non-wealthy to compete effectively against unlimited big money is to pre-empt the primary election competition in your own party so that you can raise money in both the primary and general election seasons without spending much. Then add millions funneled through local, state and national party organizations. Chances are even that won’t bring in more money than a billionaire like Whitman can dump into a campaign. But it might bring enough.

Current state Attorney General Jerry Brown is now testing that pattern. Other Democrats (Orange County Congresswoman Loretta Sanchez, U.S. Sen. Dianne Feinstein, Harman) may have briefly considered running against Brown, but none of their trial balloons stayed aloft very long, even though Brown hadn’t even officially declared his candidacy as of mid-January.

That’s because Brown has built a following among Democrats and some independent voters over four decades and need not spend any money making his name recognizable. He may be unique in that way.

So Brown will likely have at least $30 million to spend next fall, and that will buy a lot of air time. Because stations have only so many commercial slots available, the Brown war chest will probably prove adequate for a strong campaign.

But what if Brown were like Campbell, not as well known as he actually is and engaged in a three-way race against virtually bottomless wallets?

Would he be able to compete today? Could a Gray Davis phenomenon occur again? Davis himself raises doubts. He enjoys chuckling over the benefits he thinks he got from Checchi’s many spots. One of them blasted career politicians and featured a Davis photo. “When that aired, I got calls from people saying they had just seen my latest commercial,” Davis smiled while telling his version of ’98. Checchi’s ads actually helped Davis.

It’s a tale straight from the old “I don’t care what you say about me, just spell my name right” school of publicity. Don’t count on anyone repeating Checchi's mistake.

All of which means the Campbell switcheroo could be a very bad sign for the future of public affairs in California. Yes, the not-so-wealthy can still get elected to down-the-ticket jobs like lieutenant governor or treasurer, where they can hope to build enough name recognition to let them compete against the inevitable self-funded candidates of the future.

But there’s no guarantee that will ever again be enough to beat people who are otherwise unqualified, but can buy all the ads they like, as – for example – Whitman has with her ongoing months-long, seemingly ubiquitous blitz of radio commercials.

Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit

Saturday, January 16, 2010




With just four major candidates left in this year’s run for governor, the race is beginning to shape up as a bonanza for “oppo” (opposition) researchers, the folks who dig up dirt on candidates, information that often winds up in negative campaign commercials.

For this time around, chances are they’ll find plenty of dirt. That’s because this is no ordinary corps of candidates. Each has a long record in business or government, or both, and most have taken controversial stands or actions that opponents will be sure to use against them.

For the moment, Democrat Jerry Brown appears exempt from all this. As last year ended, he had yet to spend a cent on advertising or publicity, and nevertheless managed to scare off every intra-party rival who stuck his or her head up, while holding decent poll leads over all three significant Republican hopefuls.

One area his eventual GOP rival will examine closely is how he winds up acting in the ACORN scandal, where workers for the controversial community organizing and voter registration group were captured in an underground video allegedly helping a supposed pimp figure out ways to smuggle Mexican women into this country to work as prostitutes.

OtherBrown actions will also be scrutinized, everything from trying to overturn the voter-passed Proposition 8 ban on same-sex marriage to supposedly misleading titles his office applies to ballot propositions he doesn’t like.

But Brown may have less to worry about than the two zillionaires competing for the GOP nomination to run against him.

They will likely do plenty of oppo research on each other, material Brown can later use.

Meg Whitman, usually described as a billionaire because of all the stock options she acquired while chief executive of the eBay online auction house, doesn’t even deny the company steadily refused under her leadership to provide lists of its California-based sellers to the state Board of Equalization, which says many eBay sellers evade paying sales taxes.

Over her 10-plus years at eBay, the board estimated, that has cost cash-strapped California between $500 million and $2 billion, while also placing law-abiding merchants who collect and pay sales taxes at a competitive disadvantage.

This revelation last fall was overwhelmed by Whitman’s months-long barrage of unanswered radio ads, financed mainly by the $19 million she kicked into her campaign kitty early on.

But there is other material on her, too. Questions abound about what Whitman knew, when she knew it and what she did about the common sales of counterfeit knockoff goods from golf clubs to autographs on eBay. The same questions apply to “shill-bidding,” where sellers set up more than one eBay account and fraudulently bid up the prices in their own auctions. The more they sell and the higher the prices, the more money eBay makes.

“Counterfeits are illegal and not welcome on any of eBay’s sites,” the company insists, and campaign spokeswoman Sarah Pompei says eBay under Whitman “went to great lengths” to fight these practices, but many eBay sellers and customers claim they continue and court statements in London last fall called the counterfeit golf equipment sales “a conspiracy of a truly global nature.”

Meanwhile, rival Steve Poizner, the state insurance commissioner who denies being a billionaire but put $15 million into his campaign last month, stands accused by consumer advocates of making decisions undermining the 1988 Proposition 103 insurance rate rollback initiative.

The Consumer Watchdog advocacy group has claimed some decisions favor insurance companies over consumers, something Poizner vigorously denies. Bet on Whitman hashing all this out if Poizner draws close to her during the spring.

If all this seems unusual, it is. But not unprecedented. Yes, it was a newspaper, not opposing candidates, that during the 2003 recall campaign dredged up information about current Gov. Arnold Schwarzenegger’s groping of women, information he never denied.

Newspapers also dug up the Oracle scandal that plagued Schwarzenegger’s predecessor, Gray Davis. That’s the one where the computer software firm handed a $25,000 campaign donation to a Davis operative the day before the state awarded it a big contract. But it was oppo research that effectively killed the 1992 Senate candidacy of conservative talk show host and family values advocate Bruce Herschensohn with allegations about attending strip clubs in Hollywood.

The bottom line: the closer this campaign becomes and the nearer Election Days draw in both June and November, the more negatives will likely emerge. Some material is already out there, and major candidates are paying their oppo researchers to find more.


Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit



It’s always music to the ears of Californians when their governors gripe about the obvious inequity between what citizens of this state pay to the federal government and what they get back.

The likes of Ronald Reagan and Jerry Brown, George Deukmejian, Pete Wilson and Gray Davis all argued that California should get more. In recent years, the state has seen 78 cents spent here for every dollar California taxpayers put in, although Democratic Sens. Barbara Boxer and Dianne Feinstein say federal stimulus and recovery spending have lately pushed that figure up.

Butno one ever made this kind of whining a major theme of an annual state of the state speech until Arnold Schwarzenegger tried it the other day.

His talk was full of unrealistic goals, some lofty and some not. There was the concept of a constitutional amendment to ensure the state always spends more on four-year colleges and universities than it does on prisons. There was the idea of privatizing much of the state prison system.

But nothing in the Schwarzenegger vision was less realistic than his demand that the federal government give back far more to this state than it now does.

“Federal funds have to be part of our budget solution because the federal government is part of our budget problem,” the governor intoned. “When President Clinton was in office, California got back 94 cents on the dollar from the federal government. Today we only get 78 cents back.”

There are a lot of reasons for that difference, if it still applies. They demonstrate why Schwarzenegger, to whom much seems fantastic, was fantasizing.

For one thing, California didn't get 94 cents back on the dollars it put into the federal pot until after the 1994 Northridge Earthquake. The figure rose only when Clinton pumped more than $15 billion over three years into recovery efforts. These included payments topping $1,000 apiece to thousands of homeowners. There were also emergency highway and bridge retrofits, including the quick rebuilding job on a fallen bridge that disabled the Santa Monica Freeway in Los Angeles, at the time the nation’s busiest highway.

Does anyone want the kind of Katrina-style disaster needed to bring another cash infusion on that scale?

For another thing, Schwarzenegger – who blames California senators and members of Congress for not bringing home enough bacon – ignores the ABC factor. ABC – Anywhere But California. That’s how representatives of other states often feel about contributing anything to California, which has more representation in the Capitol than any state ever. Fearing domination by Californians, denizens of other states constantly try to put major federal projects elsewhere.

That’s why the National Earthquake Research Center went to Buffalo, NY. It’s one reason the supercolliding supercollider went to Texas. It was a factor in California taking by far the biggest hits of any state during the military base closures of the 1990s and early 2000s. All those decisions lower California’s return on its tax dollars.

No one seriously believes Schwarzenegger’s long and loud whines can change the ABC attitude. More likely, he’s providing satisfaction to senators from other states, who often steer projects away from California.

That doesn’t mean Schwarzenegger and his predecessors have been wrong about unfunded federal mandates like the cost of imprisoning criminal illegal immigrants, a longtime sore point first raised prominently by Wilson in the early ‘90s.

“We can no longer ignore what is owed to us or what we are forced to spend on federal mandates,” said Schwarzenegger. “We need to work with the feds so that we can fix the flawed formula that demands the state spend money that we do not have.”

The structure of the Senate, where tiny (in population) Alaska and Wyoming have as many seats as giant California, guarantees any demands from large states will get skeptical hearings. The proximity to Washington of states like Maryland and West Virginia, which get back far more federal dollars than they pay in because they host so many federal agencies, buildings and bases, is another reason California doesn’t get back what it puts in.

Is there a solution to this? There might be if the huge 53-person California House delegation so feared by other states could somehow work together. But that’s fantasy, too, since Californians in Congress are more deeply divided by ideology and regional differences than representatives of any other state. It’s almost laughable to think that extreme liberals like Henry Waxman of Los Angeles and Pete Stark of Hayward could ever work closely with extreme conservatives like Ken Calvert and Gary Miller from the Inland Empire area or Wally Herger of Butte County. But that’s what California would need to get its full share of the pie.

All of which makes this yet another Schwarzenegger fantasy, fun to talk about but not likely to prevent any state budget cuts.


Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit

Saturday, January 9, 2010




Look at the leading candidates now running for high office in California and you’ll see more hopefuls than ever who took little or no interest in public affairs before they began wanting public offices for themselves.

They are following a precedent set by current Gov. Arnold Schwarzenegger, who voted in just six of 11 statewide and presidential elections during the 11 years before he won office in 2003.

There’s a reason for this phenomenon and for its being concentrated among Republicans. The party has a very short bench.

Through the 18 years since the 1992 election of former Gov. Pete Wilson, Republicans have held either one or two statewide offices at any time, never more. There’s only one Republican statewide official eligible to run for governor today, and he currently trails one of the non-voters. That would be Insurance Commissioner Steve Poizner, who fell behind ex-eBay chair Meg Whitman during her autumn-long radio advertising blitz.

Normally, occupants of offices like lieutenant governor, attorney general, controller, treasurer and secretary of state are former legislators or leading local officials who have developed both political antennae and understanding of state issues.

At the same time, unless you’re a movie star like Schwarzenegger or Ronald Reagan or George Murphy, it’s tough to win a top-of-the-ticket job like governor or U.S. senator if you have not previously run statewide.

Lesser statewide offices can serve as useful apprenticeships or stepping stones. Poizner, a super-wealthy Silicon Valley entrepreneur who has not yet begun to advertise heavily, took this route. Whitman wants to skip all that.

She didn’t bother voting in the vast majority of elections where she could have participated before running for the state’s top office. Neither did Carly Fiorina, the former Hewlett-Packard CEO now running for the Republican Senate nomination.

Targeting a lower office – secretary of state – is another non-voter, former Stanford and NFL football player Damon Dunn, 33, now a wealthy real estate developer. Fiorina has voted in just six of 14 elections since 2000, Whitman in fewer and Dunn only once in his life. While Whitman and Fiorina apologize for their abysmal voting records, Dunn does not. “If I can get past this voting issue, what do they have on me?” he asked a reporter last fall.

A more pertinent question might be what can he bring to the office that manages all state elections when he’s got virtually no experience participating in them?

At times, non-voter candidates can demonstrate a startling insensitivity that experienced politicians avoid. Whitman, who makes vague promises about running the state like she did eBay, still stands by her company’s shielding the identities of California-based eBay sellers from the state Board of Equalization, which wants to collect many millions of dollars in back sales taxes from them. What these sellers owe probably makes up a significant part of the approximately $40 billion in back sales taxes now due to the state (about $2 billion per year over the last 20 years) – which there is little hope of collecting. Whitman thus promises fiscal responsibility while taking no responsibility for her company’s contribution to a problem she vows to solve.

At the same time, she excuses her miserable voting record by saying she was “concentrating on raising a family.” Of course, while she wasn’t voting, millions of other moms voted every chance they got.

Fiorina, similarly, possesses no qualification for high office other than having run Hewlett-Packard, which fired her in 2005. While an advisor to losing Republican presidential candidate John McCain in 2008, she opined that vice presidential nominee Sarah Palin would not be qualified to run H-P.

“But that’s not what she’s running for. Running a corporation is a different sort of thing (than running the country),” Fiorina said. Is it also different from making decisions for the entire nation, as a senator often must?

Fiorina observed after laying off more than 10,000 H-P workers that she grossly underestimated their pain. Easy to do when your own contract calls for a huge golden parachute (she got more than $40 million).

Most non-voter candidates trying for high California office have said they want to run the state like a business. It is not. One difference: Unlike a business, where CEOs issue orders and underlings obey or get fired, governors often find few will heed their orders.

Schwarzenegger, who also promised to run the state like a business, tried telling Attorney General Jerry Brown which lawsuits to file, and when, only to see his “orders” ignored. He eventually learned he could horse-trade with legislators, but not order them about. His “businesslike” approach of constant borrowing via bonds and budget gimmicks helped put California into its worst fiscal hole ever – just like the scores of business executives who borrowed their companies’ way into eventual bankruptcy during the leadup to today’s financial crisis. So much for running the state like a business.

In fact, non-voters and folks who promise a business-style approach to government usually flop, with Schwarzenegger a prime example.


Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit




Infrastructure has become a magic word for government as politicians try to lower unemployment with a new wave of public projects.

Development spawned in large part by federal economic stimulus and recovery dollars goes beyond traditional projects like adding carpool lanes to freeways, water purification and creating parks. There are also high-tech and “green” plans for things like high-speed rail, more wind energy and huge new solar energy projects covering thousands of acres.

But almost all these new proposals are drawing old-style opposition. Call it NIMBYism – for Not In My Back Yard.

NIMBYism arises among people of all kinds when they don’t want a big new public project placed near them. Until fairly recently, the rich did far better than the poor at fighting off LULUs (Locally Unwanted Land Uses). Example A: Less than three months after Ronald Reagan become governor in 1967, a freeway long planned to link Pacific Coast Highway and the Hollywood Freeway in Los Angeles via the toney Pacific Palisades (home to Reagan and many of his friends), Bel Air and West Hollywood areas suddenly disappeared from California’s highway blueprint.

But poorer people have also learned to stiff arm LULUs, as when the newly powerful Latino caucus in the Legislature fought off plans for two large prisons in East Los Angeles during the 1990s and early 2000s.

NIMBYism remains alive and thriving all over California today.

In San Bernardino County, where a Pacific Gas & Electric Co. contractor plans a huge solar power plant in the Ivanpah Valley southwest of Las Vegas, advocates for the desert tortoise are rising up. Never mind that this project could help PG&E meet the state mandate for producing 33 percent of its electricity from renewable sources within the next 10 years. Never mind that it would create hundreds of jobs.

Go elsewhere, say county Supervisor Brad Mitzelfelt and several environmental groups. “It’s habitat for a lot of critters,” a Sierra Club San Gorgonio chapter spokesman told a reporter. No one, however, says what site might be better than the almost-always sunny Ivanpah.

The same alternative energy mandate spurred plans for two putative wind farms along Interstate 8 in southeastern San Diego County, where strong gusts blow almost continually. By itself, one project called Tule Wind could produce 200 megawatts – about one-tenth of San Diego’s typical daily electric consumption.

But NIMBYs complain that most of its power would be used 60 miles away. “The energy won’t be used in this area,” one resident griped during a public hearing. “If they want power to the coast, let them put up windmills offshore.” Somehow, we don’t hear these same folks objecting to water that comes from hundreds of miles away.

One legitimate question for the NIMBYs in these cases: If renewable energy development can’t go into some of California’s most deserted, desolate places, how can the renewable mandate ever be met?

But high-speed rail is the single planned project that brings out the most NIMBYs, primarily because it is a LULU in the most places. This rail line ultimately would stretch from San Diego to San Francisco, with branches running to Las Vegas and – perhaps – Sacramento. For anyone who has ridden bullet trains in Spain, France, Great Britain and Japan, it’s enticing to think of riding from Los Angeles to the Bay Area in less than three hours without leaving the ground.

Plenty of voters loved the idea in November 2008, when a high-speed rail bond issue passed by a 52-48 percent vote. But some are now beginning to feel bait-and-switched, as they learn the project’s pricing and ridership might not be as advertised and as they discover more about the routes.

NIMBYism over the rail project is active in Los Angeles, the San Joaquin Valley and Orange County, but strongest on the San Francisco Peninsula, where bullet trains of the future might zip from San Jose to San Francisco at about 200 mph using either the current Caltrain right of way or something adjacent. That’s a region where the $45 billion bullet train proposition won 60 percent approval.

Now activists urge tunneling under much of the Peninsula for fear of noise, collisions with cars or trucks and worries about two-level stacks of train tracks splitting their communities. The cities of Atherton and Menlo Park would like the route off the Peninsula altogether. They prefer it to run through East Bay cities like Oakland and Livermore, reaching San Francisco through a new underwater tube. Some activists have even suggested slowing trains to 5 mph for one stretch. Some bullet.

The bottom line: If California wants to continue leading the world in green energy and technology as well as create many thousands of new jobs and open new transportation options, the NIMBYs will have to compromise. If no one ever accepts a LULU, the problem of how to bring progress and recovery will become even more of a lulu than it already is.


Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit

Saturday, January 2, 2010




When it comes to describing the true source of California’s current troubles, one of the late, great cartoonist Walt Kelly’s swamp-dwelling characters may have said it best: “We have met the enemy and he is us,” declared Pogo in 1971.

He could have been lamenting the irresponsible way we Californians have spent this state into a deep hole over the last 30 years.

Each depredation seemed laudable enough in its time – from passing mandatory prison sentencing laws by large margins to okaying virtually all bond issues proposed on statewide ballots.

Here’s some of the bleak picture:

n California – once the paragon of smooth roads – now has the second worst pavement conditions in America, according to the Washington, D.C.-based Road Information Program. Its latest report says this state spends $11 billion a year less than what’s needed to maintain good roads.

n State prisons are so overcrowded courts repeatedly find they violate constitutional protections against cruel and unusual punishment. As many as 40,000 prisoners may have to be released in the next year.

n California’s public university systems have unprecedented numbers of qualified applicants for admission at the same time they’re reducing student slots. They’ll turn away about 150,000 qualified people this year. This amounts to all but abandoning the state’s 50-year-old master plan for higher education.

n California now has about $89 billion in long-term bond debt, with more probably on the way. Merely making payments on what we owe costs about $10 billion a year, money that can’t go to schools, parks or anything but debt service.

It’s easy to blame “dysfunctional” state government for all this and
more. But things are not so simple. Our system of government didn't get us into our current $20 billion deficit hole, nor did the fact the current Legislature works full-time.

It was us. We did it. We the voters elected lawmakers and governors who pushed programs and okayed public employee union contracts and pensions that now have us strapped. We the voters changed state government’s priorities by mandating high levels of public school spending. We the voters believed get-tough-on-crime rhetoric and passed things like the “three-strikes-and-you’re-out” law.

We the voters okayed bond issues for everything from park expansions to high-speed rail (okay, the $9.9 billion in bonds for that project have not yet been sold). We the voters passed initiatives demanding higher water quality and coastal protection and mass transit. We the voters reduced property taxes at the same time we demanded more public services. We thought we could do all these laudable things without providing at new tax dollars to pay for all we wanted.

Some opportunistic politicians and big business lobbyists like to blame today’s situation on greenhouse gas cuts authorized by the 2006 AB 32, which requires emissions be reduced 15 percent by 2020. But no AB 32 tactic has yet taken effect, so how can that law be the culprit?

And yet, we the voters can also pull the state out of its current mess. Or we could if presented with candidates for high office willing to speak truth to today’s very tough issues.

Here are some realities: California can’t repair roads and water infrastructure without spending more money. But gas taxes and gas prices are already so high they cut some people’s mobility. California colleges can’t take more students without spending more money. Yet, tuition and fees will already be far higher than ever next fall. California must pay the interest on its current debt and bonds already okayed but not yet sold, and voters this year will be asked to increase that debt by at least $11 billion for water projects alone. Meanwhile, no one even contemplates an interest-free pay-as-you-go system for building anything.

Where could all the needed money come from? One source might be the bloated prison budget, now at more than $8 billion a year, or about one-tenth of overall state spending. Releasing aged and/or non-violent convicts is one way to start. Making three-strikes apply only to violent crimes is another. But voters have not okayed these things, and might never. So we want to be tough on crime, but not pay for it.

Another source might be somehow reducing pensions. But that would be an illegal bait-and-switch for most present government workers and retirees, whose payments are guaranteed by contracts approved by folks we elected. We could raise taxes, but no one thinks that’s a good idea amid record high unemployment.

We want government services galore, yet every poll shows the vast majority of us don’t want new levies to pay for them.

Which leaves us with choices. We – not our politicians – put ourselves into this spot. Getting out will require sacrifices, but no politician now seeking high office has asked for any, except from state employees and the powerless, including battered women. Which will leave us stuck in this situation until our ideas and presumptions become more realistic.


Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit




Until now, the horrifying losses absorbed over the last two years by California’s largest public employee pension plan were mostly bad news that didn’t really affect anyone.

Here, for example, is what the California Public Employees’ Retirement System, better known as CalPERS, told its retired members early in the fall of 2008, when it had lost more than $70 billion on its investments so far that year, more than one-fourth of the previous $260 billion value of all its investments:

“It is important for you to know that the current credit crisis does not directly affect your retirement benefits, which are securely protected by law, or our ability to pay benefits.”

Translation: Not to worry; the taxpayers will have to bail us out.

In fact, retired public employees from the 2,000-odd cities and counties that contribute to the plan have not seen a nickel’s reduction in their stipends. CalPERS paid out $10.88 billion in retirement benefits in 2008, plus an estimated $5.7 billion in health benefits.

This meant, for instance, that in the small San Francisco suburb of San Bruno alone, 12 retirees received benefits totaling at least $100,000, with the top city retiree getting $187,358 for the year. Plenty of larger cities and counties had many more six-figure pensioners.

But until now, those cities and counties have not been forced to cut services and work forces or seek new taxes. That’s because the setting of CalPERS “dues” generally lags two years behind investment performance. Rates paid by member cities and counties have been flat during this fiscal year, because fiscal 2007 was a very good year for CalPERS investments, the peak of the real estate bubble producing gains of 19.1 percent on the huge fund’s often-risky investments.

That fat year is long past, and CalPERS will be challenged this year to attain the 7.75 percent annual gain on investments it has said it needs to meet its obligations. That’s where things get back to the reassuring statement the fund sent its pensioners 15 months ago.

For pensions are protected by law and contract, even when the pension fund can’t pay. Where does the money come from in such times? Cities and counties, of course. Us.

So CalPERS has warned state, city and county governments their annual pension contributions could increase by nearly one-third – the same percentage as the losses in the value of the fund’s investments during the disastrous 2008-9 nosedive of stocks, bonds and real estate. No one is quite sure what the fund will actually dun its contributors, though, as stock and bond markets might rebound before next summer even more than they already have. The CalPERS portfolio has recovered about $40 billion of its former value since bottoming out early last year along with the markets.

Contributions from cities, counties and special districts now come to about 13 percent of payroll, but that could rise anywhere from 2 percent to 5 percent of payroll despite efforts to spread the losses and increases in contributions over 30 years. “If investments perform well, then rates go down. If not, then rates have to go up,” Edward Fong, a CalPERS spokesman, told a reporter.

For a city like Fullerton, in Orange County, that could mean $5.5 million a year for four years in added payments that have to be made regardless of other obligations. Payments by larger cities might increase far more even as they’re seeing big drops in tax revenues from 2007 levels because of recession and the housing bust. For sure, labor unions won't willingly give back any pension rights.

The result will be that hundreds of cities and counties will have to tap their rainy-day funds – if there’s anything still in them after two tough years. Some local governments will surely seek to cut employee pay, decreasing both direct expenses and pension contributions.

Because public employee pensions of all but a few cities, counties and other public entities are administered by CalPERS, the crunch will be felt in every part of the state – unless CalPERS’ investments suddenly pick up.

With that in mind, the fund has lately taken new risks, hoping to resolve its crisis internally rather than pass it along to participants. The beleaguered CalPERS board, under fire for making large payments to middlemen who steered it into bad investments in the past, has authorized a big increase in the percentage of plan holdings that can be invested in private equity funds – which took even bigger losses than publicly-sold stocks during the crash. The hope is that these funds will also recover faster than stocks – but that’s only a hope.

In the end, taxpayers stand to pay plenty for all this, either through increased local taxes or diminished public services – closed libraries and shelters for battered women, fewer trash pickups, shuttered courts, slower police and fire response times, more potholes, early county jail prisoner releases and much more – if local governments see layoffs and furloughs as their only way out.

Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit