STATE MONEY SWITCHES ROUSE VOTER SUSPICION

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, APRIL 12, 2013, OR THEREAFTER

BY THOMAS D. ELIAS

     “STATE MONEY SWITCHES ROUSE VOTER SUSPICION”

          One reason Gov. Jerry Brown’s Proposition 30 tax increases passed so handily last fall was that many voters became convinced that if they didn’t say yes to the new levies, the sky would fall.

          Schools would suffer, services for the elderly – already devastated by previous budget cuts – might disappear. Police and fire personnel levels could be devastated. And much more.

          Those fears were enough to overcome the revelation of only a few months earlier that state the Parks and Recreation Department secretly squirreled away more than $53 million by underreporting the amounts it held in special funds for 12 years.

          Private donors who ponied up millions of dollars to stave off budget-crunch closings of many park units were infuriated; some demanded their money back but didn’t get it.

          Brown’s office investigated and heads rolled. The state parks director was forced out, along with her second-in-command. But one finding of the investigation was that the Parks and Recreation malfeasance was an isolated case, even though department managers often hustle to spend every available dollar before the end of a budget cycle so those funds don’t automatically revert to the state’s general fund, as is supposed to happen with unspent dollars not sitting in special funds like the parks department’s Off Highway Vehicle Trust Fund, where $33.5 million was stashed.

          But a series of revelations since then give cause to question the notion that the parks department was all that unique.

          One example: Since 2005, the state Department of Forestry and Fire Protection maintained a separate account containing $3.66 million with the California District Attorneys Assn., paying the prosecutors’ group more than $370,000 in management fees. Some of the money was used to buy GPS monitors, printers and cameras, but the fund also paid for gatherings of firefolk around the state, including $33,000 for one conference in Pismo Beach.

          It’s unclear why that money was hidden, but this question didn’t much interest Brown, who called the whole story “relatively boring, to tell you the truth.”

          Then there was the underplayed story of misused school lunch money, with more than $165 million meant for free or reduced-price student lunches going for other purposes over the last few years. Meal money over the last decade was not stolen, but spent on other school needs like sprinkler systems and salaries of employees of one district’s television station. No one knows how widespread the misappropriation has been, but the state has already gotten refunds from school districts in Los Angeles, San Francisco, San Diego and Santa Ana, among others.

          Those were bait-and-switch style operations which deprived many poor kids of nutrition they needed to learn effectively.

          It would be surprising if, taken together, all these incidents didn’t cause voters to wonder where else money is being hidden or misspent.

          And there’s at least one more possible switcheroo in the works. This one involves the more than $1 billion a year to be raised by last fall’s Proposition 39, which closed some three-year-old corporate tax loopholes.

          The measure promised that money would go to “energy efficiency projects at schools and other public buildings…all projects shall be selected based on in-state job creation and energy benefits…”

          But just two months after 39 passed, Brown allocated all its money for energy projects at public schools and community colleges, the funds to passed out on a per-student basis.

          Brown gave no reason for leaving out all other public buildings and in a post-budget presentation press conference, Michael Cohen, chief deputy director of the state Department of Finance, said the per-student allocation was because “The data is not going to be there to weigh everything you want to weigh correctly.”

          So job creation would not be a criterion for this spending, as promised. Neither would maximum energy efficiency. At least on this one, there’s a credible solution in the works: a bill by Democratic state Sen, Kevin De Leon of Los Angeles to give all the money to K-12 schools, but specify the kinds of energy retrofits and let the state’s Office of Public School Construction – not local districts – manage the program.

          Besides that, Brown now proposes at least some reporting requirements for schools that will benefit from the extra money his budget would give schools with high percentages of English learner students.

          He’s asking that each school district create a yearly “local control and accountability plan” for the extra dollars. He would have the state Board of Education create new spending guidelines and require each plan be approved by the local county schools superintendent. School officials would also have to consult with parents, teachers and others in making their plans.

          Only time will tell if those requirements are enough to prevent part of the new English-learner money from being switched, as some lunch money was. But at least they figure to be a start toward the kind of transparency the fund-hiding and money-shuffling revelations of the last year demonstrate is a crying need.

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    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

WILL STATE GOP FOLLOW NATIONAL PARTY’S IMMIGRATION SHIFT?

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, APRIL 9, 2013, OR THEREAFTER

BY THOMAS D. ELIAS

“WILL STATE GOP FOLLOW NATIONAL PARTY’S IMMIGRATION SHIFT?”

          The dramatically tectonic nature of the national Republican Party’s shift on immigration policy wasn’t really clear until Kentucky Sen. Rand Paul, long a favorite of the ultra-conservative Tea Party, in late March suddenly came out for a pathway to citizenship for some illegal immigrants – even though he doesn’t want it called anything like that.

          In the very same speech to the U.S. Hispanic Chamber of Commerce, Paul – son of the Libertarian leader Ron Paul and himself a likely 2016 Republican presidential candidate – essentially denied the longstanding but unsupported claim that undocumented newcomers are “parasites” who cost state, local and national governments billions of dollars.

          “I have never met a new immigrant looking for a free lunch,” Paul said. “We should be proud that so many want to come to America…We should make it a land of legal work, not black-market jobs, work and not welfare. Our land should be one of assimilation, not hiding in the shadows.”

          Before Paul's talk, remarks like those would far more likely have come from Democratic politicians – almost any Democratic politicians trying to cement Hispanic votes into that party’s column.

          Especially in California, the Latino vote has been solidly Democratic since 1994, when Republican ex-Gov. Pete Wilson ran for reelection on a strident anti-illegal immigrant platform. The three years after that campaign saw more than 2.5 million legal immigrants become U.S. citizens and register as Democratic voters, shifting California from a swing state to one where only one Republican has been elected to a top-of-the-ticket job in the last 19 years.

          But many California Republican activists apparently are not yet ready to admit – as the national party now has conceded – that they must change in order to survive.

After last year’s election, where GOP presidential nominee Mitt Romney advocated “self-deportation” for millions and campaigned with the originator of Arizona’s draconian stop-on-sight immigration law, Latino voters went Democratic by a margin of almost 3-1, providing President Obama almost all of his reelection edge.

          Now, after years of apparently not noticing that Hispanics were becoming more and more active politically, the GOP at last has read the election returns.

          The party’s national leaders also appear to be heeding an early-March Latino Decisions poll indicating that 63 percent of registered Hispanic voters are personally acquainted with someone who is undocumented. That figure is up 10 percent over two years ago. The survey also found that 43 percent of Latinos who voted for Obama would consider voting Republican if the GOP leads the way on immigration reform with a doable path to citizenship.

          The same survey found one-fourth of all Latino voters know at least one immigrant who has faced detention or deportation.

          Said Gary Segura, a Stanford University professor who helps

operate the Latino Decisions polling firm, “That means for Latino voters, immigration is not just a policy debate – it’s personal.”

          Taking note, the Republican National Committee issued a “growth and opportunity report” the day before Paul’s speech, saying “the nation’s demographic changes (show) how precarious our position has become. Unless Republicans are able to grow our appeal (among Hispanics), the changes tilt the playing field even more in the Democratic direction…If we want ethnic minority voters, we have to show our sincerity.”

          But there’s considerable doubt many California Republicans are ready to buy into those themes or into adopting a kinder, gentler stance toward illegal immigration. True, the party’s new state chairman, Jim Brulte, says the GOP must recruit candidates who look and sound like the folks they seek to represent, adding that “the same conversations taking place in Washington are also going on in Sacramento.”

          But the activists at the party’s core don’t yet seem ready to bend. One barometer is the California Republican Assembly, an all-volunteer group that sends large numbers of delegates to state GOP conventions where policies and platforms are adopted.

          “The CRA has not changed its position,” says conservative blogger Stephen Frank, former president of the group, “What the Republican National Committee is trying to suggest is that we need a new policy that contradicts the law. That does not work.”

          Frank also suggested that Democrats have “bought the votes” of Latinos by making it easier for them to come or stay here illegally.

          “The American people deserve to have their laws respected and enforced,” he said.

          That’s a bit discouraging for Californians who believe a strong and viable two-party system is essential for good government. Right now, Democrats so dominate the Legislature and other state offices that the GOP is all but irrelevant. If the state party proves unwilling to change, that’s probably how things will stay.

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Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

THE FALSE ASSUMPTION THAT PASSING TAXES WILL BE EASY

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, APRIL 5, 2013, OR THEREAFTER

BY THOMAS D. ELIAS

“THE FALSE ASSUMPTION THAT PASSING TAXES WILL BE EASY”

          Spend more than $30 million to pass a temporary tax increase proposition. See a governor put his entire political capital on the line to pass it, including airing countless television commercials featuring that man almost begging voters for a yes verdict. Threaten draconian cuts to schools and colleges that have already seen programs pared to the bone.

          Result: The measure – last fall’s Proposition 30 – passes by a 55-45 percent margin, with every exit poll showing that, as Field Poll director Mark DiCamillo reported, “White non-Hispanics divided their votes evenly…but ethnic voters (Latinos, Asian-Americans and African Americans) collectively supported it by a 20-point margin, giving it its entire margin of victory.”

          Another result: A sudden presumption that passing tax increases in California has become easy.

          One product of this new assumption is a $2.2 billion per year tax increase proposition now being circulated primarily by liberal Democrats. This one – likely to be voted on in November 2014 – would add 2.5 cents per gallon to the already sky-high price of gasoline, tax alcoholic beverages varying amounts between a nickel and $1.65 per gallon and add a new levy on tobacco sales of 1.25 cents per individual cigarette.

          The money would all be earmarked for higher education, with 80 percent going to the University of California and the Cal State system and the rest to community colleges.

          One thing for sure about this proposal: If it gets the 807,615 valid voter signatures it needs to reach the ballot, you won’t see Gov. Jerry Brown staring into a television camera and imploring all Californians to vote yes.

          For Brown himself would almost certainly share the ballot with this proposition, and he’s not likely to stake the outcome of what's likely to be his final political campaign on the outcome of a tax proposition.

          Yes, two tax measures did pass last fall: both Proposition 30 and the unrelated Proposition 39, which is now raising $1 billion yearly by closing some tax loopholes gifted to international corporations by ex-Gov. Arnold Schwarzenegger as part of a 2009 budget deal.

          While the effort to pass 30 was difficult and in doubt until Election Night, many voters saw 39 as a no-brainer because it essentially taxes companies on their California profits, ending the previous shell game that allowed them to doctor their books by moving profits made here to other countries where taxes might be lower. Even at that, about 40 percent of voters still said no.

          The fact those two measures passed at a time when state government had pled poverty for years and voters had seen roads deteriorate while many other services were cut does not mean passing more taxes will be easy.

          Especially when the taxes proposed, as in the plan now circulating, would be permanent, unlike the levies of Proposition 30, which expire after four years unless voters okay an extension. The presumption behind 30 is that the economy will improve, eliminating the need for most of its taxes.

          Schwarzenegger learned as recently as May 2009 how difficult it can be to pass even a temporary new tax, when his sales tax increase Proposition 1A lost by a 65-35 percent margin in a special election.

          The makeup of the electorate has surely changed a bit since then, with more Latinos and Asian-Americans now on the rolls. But any such change does not come close to accounting for the huge difference between that outcome and the Proposition 30 win.

          A sense of near panic over what might happen to schools, colleges, roads, water quality and many other state functions is about the only thing that can account for what amounts to a 20 percent swing in the vote between the two elections.

          There is no longer any such sense, nor a great likelihood that any substantial political figure will even attempt to encourage one.

          So the notion that passing yet another tax measure will be easy holds no water. Which suggests the newest tax increase effort is doomed long before it even qualifies for a vote.

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     Email Thomas Elias at tdelias@aol.com. Elias is author of the current book "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It," now available in an updated fourth printing. For more Elias columns, go to www.californiafocus.net

MAKING THE MOST CONSTRUCTIVE TAX CHANGES

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, APRIL 2, 2013, OR THEREAFTER

BY THOMAS D. ELIAS
          “MAKING THE MOST CONSTRUCTIVE TAX CHANGES”

          From the moment it passed in 1978, there has been little doubt that Proposition 13 is unfair. On any given block, residents who bought their homes on or before the magic 1975 assessment date contained in the landmark tax-limitation initiative pay far less property tax than neighbors in similar homes who bought later.

          These differences can run as high as $10,000 per year in coastal counties where houses that sold for about $50,000 in 1975 now bring upwards of $1 million.

          Just as unfair are parcel taxes. In almost all cases, these levies assess an identical amount on each piece of property in a given city, county or school district. So a 1,000 square foot house pays the same tax as a 500,000 square foot resort hotel.

That’s patently unfair, and the only reason parcel taxes are so popular today – mostly among school districts – is that when voters okay ordinary property tax increases for schools, only a small part of the new money stays with the local district. Parcel tax money, however, all stays home, the reason why – inequitable as that levy may be – more than 55 percent of such proposals in recent years have passed and almost all have won more than 50 percent of the vote.

          The simple reality that both Proposition 13 and parcel taxes are unfair, though, is no reason for state legislators either to make things even more inequitable or to do something more stupid.

          For sure, trying to force a change to a “split roll” in Proposition 13 would not be a smart move today. Some California businesses already feel beleaguered by state taxes. A split roll would exacerbate this sense. It would leave property assessment methods unchanged for residential property while taxing commercial real estate on the basis of current market values rather than basing them on the most recent sales price of any property.

          It’s understandable that some businesses feel burdened, with California’s sales tax the nation’s highest and its gasoline, income and corporate levies among the highest.

          Plus, there’s a better way to reform Proposition 13 than split roll, which could not take effect without passage of another ballot measure. That would be to change some of the assessment rules and definitions adopted by legislators in 1979, just after Proposition 13’s passage. This would take only a simple majority in each house of the Legislature, not a popular vote or the two-thirds needed for lawmakers to place a proposition on the ballot.

          The rules now allow some commercial and industrial properties and apartment buildings to evade reassessment when they’re sold, so long as no one individual controls more than a 50 percent stake in the new ownership.

          Estimates of how much this could raise vary between $5 billion and $12 billion additional each year, not as much as a split roll might bring in, but still a boost to state coffers about equal to what last year’s Proposition 30 tax hikes accomplished.

          This change would also be eminently fair: Residential properties are always reassessed when they change hands, the new tax amounting to 1 percent of the sale price, with increases in the tax limited to 2 percent yearly. Why should other types of property get better treatment?

          But instead of looking seriously at this reform, the huge Democratic majorities in the Legislature instead have talked up the notion of helping schools by dropping the margin needed for passing a parcel tax from the current two-thirds majority to 55 percent.

          That would be the same margin needed now to pass school construction bonds, a major difference being that school bond repayments are not assessed as a flat fee, all properties paying the same amount, as with most parcel taxes.

          What’s more, if legislators fixed the Proposition 13 reassessment loopholes created in 1979, the money raised could obviate much of the need for local parcel taxes.

          Sure, there would be resistance to fixing the assessment rules, but not nearly as much as the blowback from trying to impose a split roll.

The bottom line: If legislators want to provide more money for schools and other services, there is a way to do it fairly and without making life harder for homeowners, renters or most California businesses.

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Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net