CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, JULY 3, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"LOOK FOR MORE SURPRISES IN THE RUN FOR GOVERNOR"
There have already been plenty of surprises in the ongoing contest to become the next governor of California, and chances are there will be plenty more.
For 2010 marks the first campaign since 1998 with no incumbent involved, and that situation always invites the unexpected. No one guessed in 1998, for instance, that the underfunded Lt. Gov. Gray Davis, who spent less than $7 million in the primary, would triple the vote of Northwest Airlines mogul Al Checchi, who spent $39 million?
Or that state Attorney General Dan Lungren, who drew 34 percent of the vote in winning the Republican primary, would end up with just 4 percent more in the November runoff, losing to Davis by a whopping 57-38 percent margin?
One of this year's surprises has been the emergence of San Francisco Mayor Gavin Newsom as a serious candidate. Previously best known around the state for legalizing gay marriage early in his first term at City Hall, Newsom later became notorious for an affair with his best friend's wife, which ended barely a year before he married a movie starlet.
Another surprise was the lackluster showing of Los Angeles Mayor Antonio Villaraigosa in his city's early March election, when he could net just 55 percent of the vote in a reelection bid against several minor league candidates who lacked money, name recognition and any background in government. The 45 percent tally for those opponents demonstrated that Villaraigosa's base in his own city might not be strong enough for him to mount a solid campaign for governor.
Villaraigosa surprised again when local media revealed his affair with a TV news reporter, his second such involvement in two years. The first broke up his 20-year marriage.
Then there was stunningly straight talk from current Attorney General Jerry Brown, the ex-governor who plainly wants another shot at the job. "There's a lot of potential for failure," Brown allowed, saying there are no easy answers to California's fiscal problems, "just pain."
A far cry from the usual happy talk heard on the campaign trail.
And there was the dropout of Lt. Gov. John Garamendi, now running hard for a soon-to-be vacated seat in Congress that looks like a far easier goal for him to reach than the governor's office.
Getting less attention is Jack O'Connell, the state school superintendent also in the running. He could still pull some surprises, but not likely. None of these leading Democrats has much money of his own to toss into the campaign, a major shift from 2006, when two wealthy Democrats contested the nomination and one eventually lost to Schwarzenegger.
But there are two zillionaires on the Republican side in Insurance Commissioner Steve Poizner and former eBay head Meg Whitman.
Either could make the sums spent by Checchi and Jane Harman ($14.4 million) in the 1998 Democratic race won by Davis seem paltry.
But the Checchi example, plus those of past self-financed candidates like Michael Huffington (Senate, 1992), Norton Simon (Senate, 1970), Steve Westly (governor, 2006) and William Matson Roth (Senate, 1974), haunts them both.
Poizner hopes that holding state office for four years prior to the next vote gives him a leg up on his rivals. But that didn't help Westly, who was state controller before his failed run.
If there's a Davis-like shock on tap for the big-bucks Republicans in this race, it might come from Tom Campbell, the former Silicon Valley congressman, Stanford law professor, UC Berkeley business school dean and state budget director.
Like Davis, Campbell has run for statewide office before, so his name is familiar to many voters. Like Davis, he's counting on voters to favor experience when they contemplate the problems facing the next governor.
Campbell lacks substantial funds, but could surprise as the campaign moves along, especially if the extreme conservatives who dominate most Republican primaries split between his two big-money rivals. Or if one or both make serious mistakes. Whitman already made one faux pas, coming out against the state's initiative system, a rookie political error.
Ordinarily, a Democrat might be favored as the ultimate winner from this large field. But, says Bob Mulholland, chief campaign adviser for the state Democratic Party, "When you've got two billionaires, you can expect a competitive race."
Then there's the wild card, Democratic U.S. Sen. Dianne Feinstein. She now says she's unlikely to enter the lists, but doesn’t fully rule herself out. If she does run, look for substantial reshuffling as other Democrats settle for lesser offices. A Feinstein candidacy would surprise most Democrats, especially after she pulled back from the 1998 race partly because of "the difficulty of campaigning" and the "deteriorated nature of California campaigns." They certainly have not gotten easier or cleaner in the intervening 11 years.
But in this year of political surprises, Feinstein might pull the biggest one yet. If she does, she'll be the overwhelming favorite from the moment she gets in, billionaire opponent or not.
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
Wednesday, June 17, 2009
LESS THAN A YEAR FROM NOW: FREEDOM FROM IDEOLOGICAL GRIDLOCK?
CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, JUNE 30, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"LESS THAN A YEAR FROM NOW: FREEDOM FROM IDEOLOGICAL GRIDLOCK?"
A little more than 11 months from today, California voters will have a rare opportunity to free their government from the kind of ideological gridlock that leads to lengthy budget stalemates, one-sided elections and control of this state's politics by special interests at the extremes of both major parties.
The chance will come via a ballot proposition that doesn't yet have a number, but one that should be the No. 1 priority of every voter contemplating next year's election. For this could be more important to California's future than the outcome of the races for governor and U.S. senator that will headline the ballot.
The solution to many of California’s governmental problems is called the open primary, known to some as the Louisiana primary because that often-benighted state has had the same system for more than 50 years. An identical system now operates in Washington state, given a stamp of approval by the U.S. Supreme Court earlier in this decade.
Here's now it works: All candidates are listed together on the ballot in each primary election, just as they now are in special elections. Everyone can vote for whoever he or she likes, regardless of party affiliation for either voter or candidate. The top two vote-getters advance to a runoff in the November general election, while the rest stay home, regardless of party.
Here's how things now work: In almost all elections, candidates are listed by party in the primary and voters can only cast ballots for candidates in the party where they're registered. Because almost all legislative and congressional districts in this state are designed to be dominated by one party or the other, primary election outcomes are controlled by labor unions or the far left on the Democratic side and by the far right among Republicans.
This leads to a Legislature and a congressional delegation loaded with ideologues, boasting very few lawmakers willing to compromise on issues from taxes to abortion, immigration and the environment. Gridlock often results, with late budgets, late tax refunds, state office closures and great uncertainty the frequent result.
Voters gave themselves a reprieve from all this by passing Proposition 198 in 1996, a measure that let voters cross over and cast ballots in whichever party primary they liked. It produced moderate winners in some districts, much to the chagrin of hardliners in both major parties.
So they went to court together and got the plan thrown out on the grounds that Republicans should decide their own primaries and Democrats theirs. California Democrats relented a bit afterward and allowed independents to vote in Democratic primaries. Republicans for years didn't allow independents into theirs.
The new plan is different because it takes primaries away from the parties while still showing party affiliations on the ballot. That small difference is the reason courts have upheld this system.
An almost identical proposal was defeated here three years ago as Proposition 62, when both big parties fought it. Similarly, the Louisiana and Washington plan lost in Oregon. Both parties opposed it there, and labor unions spent heavily to kill it.
The same interests will be at work here against the new proposal, which will be on the ballot only because Republican state Sen. Abel Maldonado of Santa Maria insisted on it as a condition of casting his deciding vote for a February state budget compromise.
New state Democratic chairman John Burton has vowed to lead the attack on the proposition, whatever its number turns out to be. He called the open primary plan "very devious," noting it will usually prevent minor party candidates from appearing on general election ballots. That, of course, would end when minor parties start running strong candidates.
Republicans take the same view, sticking up for minor parties for which they ordinarily have absolutely no use or sympathy.
Both big parties point out the open system could result in runoffs between two candidates from the same party. That, of course, is fine because when it happens, one will generally represent the extreme wing of the party and the other will be more of a moderate, producing a true contest in the runoff.
The bottom line: If voters want to make a real change in state government and get rid of the sort of deadlocks that have produced months-long budget delays and worse, they will have to see through the mud that will be slung at this proposal. That won't be easy with big money at work against it, but the bottom line is that if they defeat this measure next June, voters will have themselves to blame whenever California seems ungovernable.
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
FOR RELEASE: TUESDAY, JUNE 30, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"LESS THAN A YEAR FROM NOW: FREEDOM FROM IDEOLOGICAL GRIDLOCK?"
A little more than 11 months from today, California voters will have a rare opportunity to free their government from the kind of ideological gridlock that leads to lengthy budget stalemates, one-sided elections and control of this state's politics by special interests at the extremes of both major parties.
The chance will come via a ballot proposition that doesn't yet have a number, but one that should be the No. 1 priority of every voter contemplating next year's election. For this could be more important to California's future than the outcome of the races for governor and U.S. senator that will headline the ballot.
The solution to many of California’s governmental problems is called the open primary, known to some as the Louisiana primary because that often-benighted state has had the same system for more than 50 years. An identical system now operates in Washington state, given a stamp of approval by the U.S. Supreme Court earlier in this decade.
Here's now it works: All candidates are listed together on the ballot in each primary election, just as they now are in special elections. Everyone can vote for whoever he or she likes, regardless of party affiliation for either voter or candidate. The top two vote-getters advance to a runoff in the November general election, while the rest stay home, regardless of party.
Here's how things now work: In almost all elections, candidates are listed by party in the primary and voters can only cast ballots for candidates in the party where they're registered. Because almost all legislative and congressional districts in this state are designed to be dominated by one party or the other, primary election outcomes are controlled by labor unions or the far left on the Democratic side and by the far right among Republicans.
This leads to a Legislature and a congressional delegation loaded with ideologues, boasting very few lawmakers willing to compromise on issues from taxes to abortion, immigration and the environment. Gridlock often results, with late budgets, late tax refunds, state office closures and great uncertainty the frequent result.
Voters gave themselves a reprieve from all this by passing Proposition 198 in 1996, a measure that let voters cross over and cast ballots in whichever party primary they liked. It produced moderate winners in some districts, much to the chagrin of hardliners in both major parties.
So they went to court together and got the plan thrown out on the grounds that Republicans should decide their own primaries and Democrats theirs. California Democrats relented a bit afterward and allowed independents to vote in Democratic primaries. Republicans for years didn't allow independents into theirs.
The new plan is different because it takes primaries away from the parties while still showing party affiliations on the ballot. That small difference is the reason courts have upheld this system.
An almost identical proposal was defeated here three years ago as Proposition 62, when both big parties fought it. Similarly, the Louisiana and Washington plan lost in Oregon. Both parties opposed it there, and labor unions spent heavily to kill it.
The same interests will be at work here against the new proposal, which will be on the ballot only because Republican state Sen. Abel Maldonado of Santa Maria insisted on it as a condition of casting his deciding vote for a February state budget compromise.
New state Democratic chairman John Burton has vowed to lead the attack on the proposition, whatever its number turns out to be. He called the open primary plan "very devious," noting it will usually prevent minor party candidates from appearing on general election ballots. That, of course, would end when minor parties start running strong candidates.
Republicans take the same view, sticking up for minor parties for which they ordinarily have absolutely no use or sympathy.
Both big parties point out the open system could result in runoffs between two candidates from the same party. That, of course, is fine because when it happens, one will generally represent the extreme wing of the party and the other will be more of a moderate, producing a true contest in the runoff.
The bottom line: If voters want to make a real change in state government and get rid of the sort of deadlocks that have produced months-long budget delays and worse, they will have to see through the mud that will be slung at this proposal. That won't be easy with big money at work against it, but the bottom line is that if they defeat this measure next June, voters will have themselves to blame whenever California seems ungovernable.
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
Sunday, June 7, 2009
SUMMER WATER PICTURE LOOKS LIKE LATE '70S
CALIFORNIA FOCUS
1720 OAK STREET, SANTA MONICA, CALIFORNIA 90405
FOR RELEASE: FRIDAY, JUNE 19, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"SUMMER WATER PICTURE LOOKS LIKE LATE '70S"
We are starting to see the summer water picture for California -- and it's looking a lot like the late 1970s. Or, to put it another way, it's beginning to look a lot like Bolinas almost did.
That's right, chances are much of the rest of California will soon be following the plan put in place and later rescinded by Bolinas, the funky town not too far north of San Francisco in coastal Marin County. Best known for its populace of aging hippies, artists, lawyers and others seeking refuge from crowded urban life, Bolinas was rescued by an unexpected late-March storm that suddenly refilled its key reservoir.
Bolinas isn't often first with anything. But because it has no access to supplies from the state Water Project, the federal Central Valley Project or the San Francisco-owned Hetch Hetchy reservoir system and aqueduct, Bolinas uses only local supplies.
Before the unexpected late-season rains, the key Bolinas reservoir was at risk of running dry before the next rainy season, likely to start in November or December.
So Bolinas adopted California's toughest water rules: Residents were to use no more than 150 gallons per day, 4,500 per month. That amounted to about a 25 percent cutback from normal usage of about 208 gallons per day per water hookup. Violate the rule once or twice and nothing much would happen to residents. But supplies could be cut off on a third violation.
The Bolinas rules are now in abeyance, but they were only a little bit tougher than what many other places might soon be seeing, despite a few late rains.
In the Central Valley, cities like Folsom and Roseville are weighing water use cutbacks. Farmers are fallowing fields because allocations from the state Water Project and the federal Central Valley Project remain low. The East Bay Municipal Utility District, covering much of Alameda and Contra Costa counties, has now raised prices because water use there has been cut back so much. That's right: Use less and pay more.
But the most visible water-use reductions might be coming soon in Los Angeles, which has its own aqueduct running from the Owens Valley on the eastern side of the Sierra Nevada mountains.
Despite heavier than usual rains in February and March, Mayor Antonio Villaraigosa has not backed off proposed water use restrictions involving a tiered pricing system punishing consumers and businesses that fail to conserve even beyond today's levels, which see average use down almost 15 percent from the levels of the 1960s.
"The level of severity of this drought is still severe," he said. "We have to move quickly."
No one can be sure whether Villaraigosa's plan is not at least partially motivated by politics. Just reelected to a new four-year term as mayor, he may run for governor next year. If so, he'll be the only Southern Californian in a crowded field running for an office that's been held exclusively by Southern California politicians since the 1960s days of Edmund G. (Pat) Brown. Southern Californians in the office have included Ronald Reagan, Brown's son Jerry, George Deukmejian, Pete Wilson, Grey Davis and today's occupant, Arnold Schwarzenegger.
Among today's likely candidates, even ex-Angeleno Jerry Brown, the current attorney general, is now a confirmed Northern California resident based in Oakland, where he served two terms as mayor.
No Los Angeles mayor, not even the long-serving Sam Yorty or Tom Bradley, has ever been elected governor. That's been partly because of regional animosity stemming from a Northern California sense that water from that region has been "stolen" by Central Valley farmers and Southern California cities.
A vigorous approach to water rationing by Villaraigosa can only help him in the north, where Southern California is viewed as a profligate water waster - even by people who use unlimited water during droughts because their homes don't feature water meters.
Vigorous is surely an accurate term for what Villaraigosa has instituted: sprinkler use limited to twice a week, with a likely cut to once; no hosing of sidewalks or parking areas; water use in decorative fountains and ponds only if they feature a recirculating system; no washing cars with hoses without a self-closing shut-off device; no watering lawns between 9 a.m. and 4 p.m., and fines for allowing excess water to flow onto sidewalks, driveways, streets or gutters. If things get worse, there would be no refilling of swimming pools and spas.
All this implies imposing a "water cop" system like that employed in the '70s, when water department or water district inspectors roved widely looking for violations.
The ultimate penalty for repeated offenders would be a water supply cutoff.
That's the immediate water future for much of California. Not a pretty sight, but it worked in the 1970s and there's no reason to believe it can't work again - unless the rest of the state gets the same kind of reprieve Bolinas did.
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
1720 OAK STREET, SANTA MONICA, CALIFORNIA 90405
FOR RELEASE: FRIDAY, JUNE 19, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"SUMMER WATER PICTURE LOOKS LIKE LATE '70S"
We are starting to see the summer water picture for California -- and it's looking a lot like the late 1970s. Or, to put it another way, it's beginning to look a lot like Bolinas almost did.
That's right, chances are much of the rest of California will soon be following the plan put in place and later rescinded by Bolinas, the funky town not too far north of San Francisco in coastal Marin County. Best known for its populace of aging hippies, artists, lawyers and others seeking refuge from crowded urban life, Bolinas was rescued by an unexpected late-March storm that suddenly refilled its key reservoir.
Bolinas isn't often first with anything. But because it has no access to supplies from the state Water Project, the federal Central Valley Project or the San Francisco-owned Hetch Hetchy reservoir system and aqueduct, Bolinas uses only local supplies.
Before the unexpected late-season rains, the key Bolinas reservoir was at risk of running dry before the next rainy season, likely to start in November or December.
So Bolinas adopted California's toughest water rules: Residents were to use no more than 150 gallons per day, 4,500 per month. That amounted to about a 25 percent cutback from normal usage of about 208 gallons per day per water hookup. Violate the rule once or twice and nothing much would happen to residents. But supplies could be cut off on a third violation.
The Bolinas rules are now in abeyance, but they were only a little bit tougher than what many other places might soon be seeing, despite a few late rains.
In the Central Valley, cities like Folsom and Roseville are weighing water use cutbacks. Farmers are fallowing fields because allocations from the state Water Project and the federal Central Valley Project remain low. The East Bay Municipal Utility District, covering much of Alameda and Contra Costa counties, has now raised prices because water use there has been cut back so much. That's right: Use less and pay more.
But the most visible water-use reductions might be coming soon in Los Angeles, which has its own aqueduct running from the Owens Valley on the eastern side of the Sierra Nevada mountains.
Despite heavier than usual rains in February and March, Mayor Antonio Villaraigosa has not backed off proposed water use restrictions involving a tiered pricing system punishing consumers and businesses that fail to conserve even beyond today's levels, which see average use down almost 15 percent from the levels of the 1960s.
"The level of severity of this drought is still severe," he said. "We have to move quickly."
No one can be sure whether Villaraigosa's plan is not at least partially motivated by politics. Just reelected to a new four-year term as mayor, he may run for governor next year. If so, he'll be the only Southern Californian in a crowded field running for an office that's been held exclusively by Southern California politicians since the 1960s days of Edmund G. (Pat) Brown. Southern Californians in the office have included Ronald Reagan, Brown's son Jerry, George Deukmejian, Pete Wilson, Grey Davis and today's occupant, Arnold Schwarzenegger.
Among today's likely candidates, even ex-Angeleno Jerry Brown, the current attorney general, is now a confirmed Northern California resident based in Oakland, where he served two terms as mayor.
No Los Angeles mayor, not even the long-serving Sam Yorty or Tom Bradley, has ever been elected governor. That's been partly because of regional animosity stemming from a Northern California sense that water from that region has been "stolen" by Central Valley farmers and Southern California cities.
A vigorous approach to water rationing by Villaraigosa can only help him in the north, where Southern California is viewed as a profligate water waster - even by people who use unlimited water during droughts because their homes don't feature water meters.
Vigorous is surely an accurate term for what Villaraigosa has instituted: sprinkler use limited to twice a week, with a likely cut to once; no hosing of sidewalks or parking areas; water use in decorative fountains and ponds only if they feature a recirculating system; no washing cars with hoses without a self-closing shut-off device; no watering lawns between 9 a.m. and 4 p.m., and fines for allowing excess water to flow onto sidewalks, driveways, streets or gutters. If things get worse, there would be no refilling of swimming pools and spas.
All this implies imposing a "water cop" system like that employed in the '70s, when water department or water district inspectors roved widely looking for violations.
The ultimate penalty for repeated offenders would be a water supply cutoff.
That's the immediate water future for much of California. Not a pretty sight, but it worked in the 1970s and there's no reason to believe it can't work again - unless the rest of the state gets the same kind of reprieve Bolinas did.
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
DUMP STATE PROGRAMS; THEN LEARN WHY THEY'RE NEEDED
CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, JUNE 16, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"DUMP STATE PROGRAMS; THEN LEARN WHY THEY'RE NEEDED"
Ancient Egyptians first observed that only when we eliminate traditions do we discover why they became traditions in the first place.
We modern Californians who now appear likely to eliminate scores of government programs may be about to discover the truth of that old saying. The cuts are coming because of a budget deficit estimated to exceed $21 billion over the next two years even with the $16 billion worth of increased sales, income and car taxes approved by state legislators last February.
Once those programs are gone, we will likely learn why many of them were deemed necessary by voters and legislators of the not so distant past. Not even public employee union contracts will save tens of thousands of workers from layoffs.
This was assured when Propositions 1A-1E lost by large margins in the May special election, a result interpreted by Gov. Arnold Schwarzenegger as a public mandate to abandon previous plans for raising more than $5 billion via revenue anticipation warrants, a method by which state and local governments often borrow on Wall Street.
Some basic items are now on the chopping block. One proposal would eliminate the Healthy Families program that covers 942,000 children in families barely above the official poverty line. Do this and the state risks epidemics of diseases like measles and mumps, onetime scourges now kept in check by vaccinations. Do this and emergency rooms - which by federal law cannot turn most patients away - could be swamped. It's uncertain who would pay them for their work. Don't pay them and widespread hospital closures may ensue. "No analysis (of this) has been done," conceded state finance director Mike Genest.
Medi-Cal cuts also are contemplated, with as many as 1.9 million Californians of all ages losing health care coverage over the next three years, according to the non-partisan California Budget Project. This also imperils hospitals and emergency rooms.
Public schools will increase class sizes and might have to cut as much as a week and a half off the school year. Most are cutting back sharply on summer schools. Only time will tell how these moves affect pupil performance and the state's economic future.
Then there are state parks, visited by 79 million persons last year. Schwarzenegger's immediate post-election budget proposal called for cutting all their state funding for two years, leaving them to operate with nothing more than entrance and parking fees. The visitor tally means the average Californian visited a state park more than twice last year. About 200 state parks could be closed if current entrance and parking fees remain stable. Parks officials now are contemplating price increases of as much as 100 percent in order to keep some units open.
Not that the public couldn't get into closed state parks by climbing fences or skirting around closed gates. But they wouldn't have parking facilities, rest rooms, campgrounds, lifeguards and other amenities normally deemed necessary. Imagine California without jewels like Emerald Bay at Lake Tahoe, Torrey Pines Reserve near San Diego or the Hearst Castle near San Luis Obispo.
Then there's the proposed $750 million cut to the state's university systems, which would lead not only to lower enrollment, but also could spur a brain drain if frozen salaries drive off first-rate faculty. Add to this the proposed elimination of Cal-Grant scholarships long given low-income students and Cal State and University of California campuses might become the the exclusive property of the rich and upper middle class.
Also contemplated are an end to or suspension of the state's welfare-to-work program, release of tens of thousands of nonviolent prisoners and an end to poison control programs, just to name a few. It's easy to imagine the outcry if these cuts produce deaths from poison or a crime wave, as could happen. This at the same time cities and counties shrink police forces and fire departments because of a planned $2 billion "revenue shift" from their coffers to the state.
Many of these cruel moves, of course, do not have to happen. Change the rules under which some real estate now escapes reassessment to current market values when it changes hands and state and local governments might gain as much as $12 billion in yearly revenue. Consider going to a "split roll" property tax system where businesses pay more than residential properties and much more could be raised.
But so far, lawmakers have not even contemplated those moves. Nor have they yet eliminated several barely useful commissions and boards that often serve as halfway houses for termed-out legislators. Perhaps examining the grave consequences of the contemplated budget cuts will open legislative eyes to the possibility of defying the powerful industrial and real estate lobbies that resist logical changes to the current taxation system. Or, more likely, not.
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
FOR RELEASE: TUESDAY, JUNE 16, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"DUMP STATE PROGRAMS; THEN LEARN WHY THEY'RE NEEDED"
Ancient Egyptians first observed that only when we eliminate traditions do we discover why they became traditions in the first place.
We modern Californians who now appear likely to eliminate scores of government programs may be about to discover the truth of that old saying. The cuts are coming because of a budget deficit estimated to exceed $21 billion over the next two years even with the $16 billion worth of increased sales, income and car taxes approved by state legislators last February.
Once those programs are gone, we will likely learn why many of them were deemed necessary by voters and legislators of the not so distant past. Not even public employee union contracts will save tens of thousands of workers from layoffs.
This was assured when Propositions 1A-1E lost by large margins in the May special election, a result interpreted by Gov. Arnold Schwarzenegger as a public mandate to abandon previous plans for raising more than $5 billion via revenue anticipation warrants, a method by which state and local governments often borrow on Wall Street.
Some basic items are now on the chopping block. One proposal would eliminate the Healthy Families program that covers 942,000 children in families barely above the official poverty line. Do this and the state risks epidemics of diseases like measles and mumps, onetime scourges now kept in check by vaccinations. Do this and emergency rooms - which by federal law cannot turn most patients away - could be swamped. It's uncertain who would pay them for their work. Don't pay them and widespread hospital closures may ensue. "No analysis (of this) has been done," conceded state finance director Mike Genest.
Medi-Cal cuts also are contemplated, with as many as 1.9 million Californians of all ages losing health care coverage over the next three years, according to the non-partisan California Budget Project. This also imperils hospitals and emergency rooms.
Public schools will increase class sizes and might have to cut as much as a week and a half off the school year. Most are cutting back sharply on summer schools. Only time will tell how these moves affect pupil performance and the state's economic future.
Then there are state parks, visited by 79 million persons last year. Schwarzenegger's immediate post-election budget proposal called for cutting all their state funding for two years, leaving them to operate with nothing more than entrance and parking fees. The visitor tally means the average Californian visited a state park more than twice last year. About 200 state parks could be closed if current entrance and parking fees remain stable. Parks officials now are contemplating price increases of as much as 100 percent in order to keep some units open.
Not that the public couldn't get into closed state parks by climbing fences or skirting around closed gates. But they wouldn't have parking facilities, rest rooms, campgrounds, lifeguards and other amenities normally deemed necessary. Imagine California without jewels like Emerald Bay at Lake Tahoe, Torrey Pines Reserve near San Diego or the Hearst Castle near San Luis Obispo.
Then there's the proposed $750 million cut to the state's university systems, which would lead not only to lower enrollment, but also could spur a brain drain if frozen salaries drive off first-rate faculty. Add to this the proposed elimination of Cal-Grant scholarships long given low-income students and Cal State and University of California campuses might become the the exclusive property of the rich and upper middle class.
Also contemplated are an end to or suspension of the state's welfare-to-work program, release of tens of thousands of nonviolent prisoners and an end to poison control programs, just to name a few. It's easy to imagine the outcry if these cuts produce deaths from poison or a crime wave, as could happen. This at the same time cities and counties shrink police forces and fire departments because of a planned $2 billion "revenue shift" from their coffers to the state.
Many of these cruel moves, of course, do not have to happen. Change the rules under which some real estate now escapes reassessment to current market values when it changes hands and state and local governments might gain as much as $12 billion in yearly revenue. Consider going to a "split roll" property tax system where businesses pay more than residential properties and much more could be raised.
But so far, lawmakers have not even contemplated those moves. Nor have they yet eliminated several barely useful commissions and boards that often serve as halfway houses for termed-out legislators. Perhaps examining the grave consequences of the contemplated budget cuts will open legislative eyes to the possibility of defying the powerful industrial and real estate lobbies that resist logical changes to the current taxation system. Or, more likely, not.
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
Sunday, May 31, 2009
FEINSTEIN FARM JOBS BILL MAY LEAD TO IMMIGRATION FIX
CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, JUNE 12, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"FEINSTEIN FARM JOBS BILL MAY LEAD TO IMMIGRATION FIX"
There's a slowdown all along the Mexican border. Border Patrol agents caught fully 27 percent fewer illegal immigrants trying to sneak into the United States between November 1 and April 30 than during the same six months a year ago.
Some of this slowdown stems from intensified enforcement efforts ranging from expansion of the physical and electronic border fence that's growing daily. The Department of Homeland Security's E-Verify program, allowing employers to tell quickly whether job applicants enjoy legal immigration status, also is a factor.
But America's economic miseries are behind most of the slowdown. Construction, hotel and many other categories of jobs often taken by illegal immigrants have dried up, so there's less of a magnet for people coming here.
In this climate, one employment category steadily features surplus, untaken job openings: agriculture. California farms don't have the kind of worker shortage they suffered two years ago, when many crops rotted on trees and vines for lack of labor to pick them. But many still report they're short of reliable workers and would like two things to correct a situation that has caused them to fallow more than 500,000 acres of fertile farmland for lack of hands to plant and pick crops:
Assurance they can keep bringing back experienced workers (many of them illegals) for seasonal jobs, and a paperwork speedup in the federal H-2A program that allows some farm workers to enter legally on temporary visas.
Now comes Democratic U.S. Sen. Dianne Feinstein with a plan to fix these problems. "In a sense, this might set a pattern for overall immigration reform," she said in an interview. Feinstein would allow illegal immigrants already here to achieve temporary legal status if they can prove they've worked at least 150 days in each of the last two years or 100 days in each of the last five. She would allow no more than 1.35 million such legalizations (families of legalized workers could also apply). After three more years of steady work (at least 150 days per year), the former illegals and their families could apply for green cards conferring permanent legal residency.
Before giving green cards, though, Feinstein's bill would assess a $500 per person fine for breaking the law by entering America illegally. It would also demand that immigrants prove they are current on all taxes and have clean criminal records.
Her proposal is co-sponsored by 16 other Democratic senators. Conspicuously absent is Republican John McCain of Arizona, who carried a wider-ranging immigration reform and amnesty bill during the year before he became his party's 2008 presidential candidate. An identical bill in the House is co-sponsored by Democratic U.S. Rep. Howard Berman of Los Angeles and Central Valley Republican Reps. George Radanovich of Mariposa and Devin Nunes of Visalia, among many others.
This plan is backed by most regional and national agriculture organizations, including the Western Growers Assn., the Dairy Farmers of America and the National Council of Agricultural Employers. The United Farm Workers union also is aboard.
But opponents call the measure just another amnesty plan that would eventually grant illegal immigrants access to all U.S. jobs even though they in effect jumped the line for entering this county legally. There's also the claim this would allow farms to keep exploiting the cheap labor of illegals who can't protest.
"These workers are here," Feinstein said. "Yes, there are enforcement issues, but we know this much for sure: if there are questions over whether workers will be allowed to come back in future years, they will simply stay here, legally or not, and won't return home when it's off-season for farm jobs."
Feinstein acknowledges the farm labor shortage of two and three years ago is less severe now, partly because many illegal immigrant workers are back in field work, their jobs in construction and other areas gone. "That's just a short-term thing," she says. "The long-term shortage is still there. We have billions of dollars a year in lost production right now, we have California farmers leasing land in Mexico to grow crops and we are importing more foreign produce because of it, which comes with certain health hazards."
When it comes to wages, the Feinstein measure would freeze the federal Adverse Effect Wage Rate, which requires California farmers to pay legal seasonal workers in the H-2A program at least $9.72 per hour. This rate would stay the same for three years after her bill becomes law, if that happens. The AEW rate, of course, does not apply to illegals, who often receive the state's minimum wage of $8 per hour, or less.
The bottom line: Feinstein's bill would probably solve farm labor shortages for years to come and provides a balanced model for the wider-ranging immigration reform that President Obama says he wants. But its fate in Congress is completely uncertain, because of that buzz word "amnesty."
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
FOR RELEASE: FRIDAY, JUNE 12, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"FEINSTEIN FARM JOBS BILL MAY LEAD TO IMMIGRATION FIX"
There's a slowdown all along the Mexican border. Border Patrol agents caught fully 27 percent fewer illegal immigrants trying to sneak into the United States between November 1 and April 30 than during the same six months a year ago.
Some of this slowdown stems from intensified enforcement efforts ranging from expansion of the physical and electronic border fence that's growing daily. The Department of Homeland Security's E-Verify program, allowing employers to tell quickly whether job applicants enjoy legal immigration status, also is a factor.
But America's economic miseries are behind most of the slowdown. Construction, hotel and many other categories of jobs often taken by illegal immigrants have dried up, so there's less of a magnet for people coming here.
In this climate, one employment category steadily features surplus, untaken job openings: agriculture. California farms don't have the kind of worker shortage they suffered two years ago, when many crops rotted on trees and vines for lack of labor to pick them. But many still report they're short of reliable workers and would like two things to correct a situation that has caused them to fallow more than 500,000 acres of fertile farmland for lack of hands to plant and pick crops:
Assurance they can keep bringing back experienced workers (many of them illegals) for seasonal jobs, and a paperwork speedup in the federal H-2A program that allows some farm workers to enter legally on temporary visas.
Now comes Democratic U.S. Sen. Dianne Feinstein with a plan to fix these problems. "In a sense, this might set a pattern for overall immigration reform," she said in an interview. Feinstein would allow illegal immigrants already here to achieve temporary legal status if they can prove they've worked at least 150 days in each of the last two years or 100 days in each of the last five. She would allow no more than 1.35 million such legalizations (families of legalized workers could also apply). After three more years of steady work (at least 150 days per year), the former illegals and their families could apply for green cards conferring permanent legal residency.
Before giving green cards, though, Feinstein's bill would assess a $500 per person fine for breaking the law by entering America illegally. It would also demand that immigrants prove they are current on all taxes and have clean criminal records.
Her proposal is co-sponsored by 16 other Democratic senators. Conspicuously absent is Republican John McCain of Arizona, who carried a wider-ranging immigration reform and amnesty bill during the year before he became his party's 2008 presidential candidate. An identical bill in the House is co-sponsored by Democratic U.S. Rep. Howard Berman of Los Angeles and Central Valley Republican Reps. George Radanovich of Mariposa and Devin Nunes of Visalia, among many others.
This plan is backed by most regional and national agriculture organizations, including the Western Growers Assn., the Dairy Farmers of America and the National Council of Agricultural Employers. The United Farm Workers union also is aboard.
But opponents call the measure just another amnesty plan that would eventually grant illegal immigrants access to all U.S. jobs even though they in effect jumped the line for entering this county legally. There's also the claim this would allow farms to keep exploiting the cheap labor of illegals who can't protest.
"These workers are here," Feinstein said. "Yes, there are enforcement issues, but we know this much for sure: if there are questions over whether workers will be allowed to come back in future years, they will simply stay here, legally or not, and won't return home when it's off-season for farm jobs."
Feinstein acknowledges the farm labor shortage of two and three years ago is less severe now, partly because many illegal immigrant workers are back in field work, their jobs in construction and other areas gone. "That's just a short-term thing," she says. "The long-term shortage is still there. We have billions of dollars a year in lost production right now, we have California farmers leasing land in Mexico to grow crops and we are importing more foreign produce because of it, which comes with certain health hazards."
When it comes to wages, the Feinstein measure would freeze the federal Adverse Effect Wage Rate, which requires California farmers to pay legal seasonal workers in the H-2A program at least $9.72 per hour. This rate would stay the same for three years after her bill becomes law, if that happens. The AEW rate, of course, does not apply to illegals, who often receive the state's minimum wage of $8 per hour, or less.
The bottom line: Feinstein's bill would probably solve farm labor shortages for years to come and provides a balanced model for the wider-ranging immigration reform that President Obama says he wants. But its fate in Congress is completely uncertain, because of that buzz word "amnesty."
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
ALTER TWO-THIRDS STANDARD A BIT; DON'T TOSS WHOLE STATE CONSTITUTION
CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, JUNE 9, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"ALTER TWO-THIRDS STANDARD A BIT; DON'T TOSS WHOLE STATE CONSTITUTION"
No sooner were the latest special election results in than the call went out from the left to dump California's requirement of a two-thirds vote in both houses of the Legislature to pass a state budget.
Never mind that voters had just resoundingly defeated a tax extension plan that had barely won the needed two-thirds support from lawmakers. Never mind an April poll showing 70 percent of Californians want to keep the steep supermajority.
Asked what evidence there is that Californians want to get rid of the two-thirds rule for budgets, Rick Jacobs, chairman of the liberal Courage Campaign, which claims 700,000 members, came up with a complete non-sequitur:
"The special election had a very low turnout," he said. "The message there is that people don't feel things are democratic now."
That's supposed to indicate a groundswell of support for getting rid of the two-thirds barrier, which in recent years has let the relatively small Republican minority in the Legislature make tough demands that would have been laughed off without the rule?
And yet…there is no doubt the two-thirds rule produces perpetual late budgets and makes Sacramento decision-making more complex than in any other state capital. There is also some validity to the simple-majority argument, since that's what applies in almost every other matter except votes for tax increases both in local elections and the Legislature.
Let a simple majority decide matters, this argument goes, and if the voters don't like the result, they can throw the bums out.
This, of course, ignores the current gerrymandered political district lines that assure virtually no legislative seats ever change parties, even when incumbents are termed out. Only time will tell if the revised system for drawing district boundaries approved by voters last year will make much difference. Many demographers believe California's population is so clustered by ethnicity and political preference that even a complete change in how lines are drawn won't alter the party-line makeup of the Legislature.
Jacobs and others advocating an end to the two-thirds rule know they could change it via a ballot initiative, but they're not eager to try that route. Jacobs' excuse: "We need many changes and doing initiatives on one issue at a time may take too long." Translation: he knows a simple-majority proposition would lose.
But here's a plan that might win: Require only simple majorities to pass budgets that raise spending by no more than the percentage of population increases and the rate of inflation. For spending any more, stay with two-thirds.
This doesn't satisfy Jacobs and others. So he's joined the current call for a state constitutional convention to get rid of the two-thirds standard and make other changes. He's allied his group with the big business-funded Bay Area Council to demand legislators place measures on the November 2010 ballot setting up such a convention.
"Everything should be on the table there with a majority vote," Jacobs said. Neither he nor anyone else knows who might participate in such a convention, how they'd be chosen and what they might produce.
All that's known is that Article 18 of the current California Constitution allows the Legislature - and only the Legislature - to place a proposition on the ballot calling for such a convention - if the voters say yes to the idea. But - and here's that supermajority thing again, written into the state Constitution more than 100 years ago - it takes a two-thirds vote to put such a measure on the ballot.
Not to worry, say convention advocates, who come in all political colorations. If legislators won't put it to a vote, we'll run an initiative to take that exclusive power away from lawmakers. And they just might run a companion measure at the same time calling for a convention and spelling out who would be in it.
"A convention should be broad and diverse; it should look just like the population of California," said Jacobs. Does this mean he's suggesting racial, religious and political affiliation quotas for convention delegates? He doesn't say.
The fact is, no one now can say much about what a convention would look like or what it might propose (any new constitution would have to be submitted to the voters for a simple majority up-or-down verdict). Would it eliminate the Proposition 13 property tax limits? Would it remove privacy protections that now give Californians more abortion rights than apply in most other states? Would it set up a simple majority or some other standard for passage of budgets and new taxes?
The answers to these and many other questions can't be known until the convention goes to work, if it ever does. Which makes the entire notion a Pandora's Box better left unopened - even if that does inconvenience Democratic politicians who would like the ability every year to ram through whatever spending plan they like.
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
FOR RELEASE: TUESDAY, JUNE 9, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"ALTER TWO-THIRDS STANDARD A BIT; DON'T TOSS WHOLE STATE CONSTITUTION"
No sooner were the latest special election results in than the call went out from the left to dump California's requirement of a two-thirds vote in both houses of the Legislature to pass a state budget.
Never mind that voters had just resoundingly defeated a tax extension plan that had barely won the needed two-thirds support from lawmakers. Never mind an April poll showing 70 percent of Californians want to keep the steep supermajority.
Asked what evidence there is that Californians want to get rid of the two-thirds rule for budgets, Rick Jacobs, chairman of the liberal Courage Campaign, which claims 700,000 members, came up with a complete non-sequitur:
"The special election had a very low turnout," he said. "The message there is that people don't feel things are democratic now."
That's supposed to indicate a groundswell of support for getting rid of the two-thirds barrier, which in recent years has let the relatively small Republican minority in the Legislature make tough demands that would have been laughed off without the rule?
And yet…there is no doubt the two-thirds rule produces perpetual late budgets and makes Sacramento decision-making more complex than in any other state capital. There is also some validity to the simple-majority argument, since that's what applies in almost every other matter except votes for tax increases both in local elections and the Legislature.
Let a simple majority decide matters, this argument goes, and if the voters don't like the result, they can throw the bums out.
This, of course, ignores the current gerrymandered political district lines that assure virtually no legislative seats ever change parties, even when incumbents are termed out. Only time will tell if the revised system for drawing district boundaries approved by voters last year will make much difference. Many demographers believe California's population is so clustered by ethnicity and political preference that even a complete change in how lines are drawn won't alter the party-line makeup of the Legislature.
Jacobs and others advocating an end to the two-thirds rule know they could change it via a ballot initiative, but they're not eager to try that route. Jacobs' excuse: "We need many changes and doing initiatives on one issue at a time may take too long." Translation: he knows a simple-majority proposition would lose.
But here's a plan that might win: Require only simple majorities to pass budgets that raise spending by no more than the percentage of population increases and the rate of inflation. For spending any more, stay with two-thirds.
This doesn't satisfy Jacobs and others. So he's joined the current call for a state constitutional convention to get rid of the two-thirds standard and make other changes. He's allied his group with the big business-funded Bay Area Council to demand legislators place measures on the November 2010 ballot setting up such a convention.
"Everything should be on the table there with a majority vote," Jacobs said. Neither he nor anyone else knows who might participate in such a convention, how they'd be chosen and what they might produce.
All that's known is that Article 18 of the current California Constitution allows the Legislature - and only the Legislature - to place a proposition on the ballot calling for such a convention - if the voters say yes to the idea. But - and here's that supermajority thing again, written into the state Constitution more than 100 years ago - it takes a two-thirds vote to put such a measure on the ballot.
Not to worry, say convention advocates, who come in all political colorations. If legislators won't put it to a vote, we'll run an initiative to take that exclusive power away from lawmakers. And they just might run a companion measure at the same time calling for a convention and spelling out who would be in it.
"A convention should be broad and diverse; it should look just like the population of California," said Jacobs. Does this mean he's suggesting racial, religious and political affiliation quotas for convention delegates? He doesn't say.
The fact is, no one now can say much about what a convention would look like or what it might propose (any new constitution would have to be submitted to the voters for a simple majority up-or-down verdict). Would it eliminate the Proposition 13 property tax limits? Would it remove privacy protections that now give Californians more abortion rights than apply in most other states? Would it set up a simple majority or some other standard for passage of budgets and new taxes?
The answers to these and many other questions can't be known until the convention goes to work, if it ever does. Which makes the entire notion a Pandora's Box better left unopened - even if that does inconvenience Democratic politicians who would like the ability every year to ram through whatever spending plan they like.
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
Sunday, May 24, 2009
BIG PART OF BUDGET SOLUTION STILL STARING STATE IN FACE
CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, JUNE 5, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"BIG PART OF BUDGET SOLUTION STILL STARING STATE IN FACE"
And so California's seemingly endless budget battles resume, with no convenient end in sight. That's one early result of the voters' Tuesday rejection of Proposition 1-A and several others intended to straighten out the state's balance sheet.
Another possibility - slim, but still present - is that lawmakers and Gov. Arnold Schwarzenegger will finally give serious consideration to one change that could begin to spell the end of all the repeated budget crises. All they need to do is revise the regulations that now permit some real estate to change hands without being reassessed.
For sure, plenty of draconian tactics will be suggested in the coming days and weeks. Schwarzenegger has already called for selling off landmark state lands and buildings, and that might be a fine idea for properties which are useless now and show no promise of ever doing much for citizens. But you can only sell off land or buildings once. When you do it, you are in a sense selling off your patrimony. This makes it a desperation tactic that won't solve the underlying spending and revenue problems behind the repeated budget crises.
There will be calls for cuts to education, where 10 percent increases in state college and university tuition and fees are already coming, while even legislators who have long backed public schools over anything else appear ready to accept reduced public school funding.
Not to mention cuts to state parks, health care for uninsured children and a host of other items that could cause real pain for many Californians.
Meanwhile, sitting out there in the wings is a budget solution first proposed by former Democratic state Sen. Martha Escutia of East Los Angeles as far back as 2003. She's long-since termed out, one reason her sensible proposal hasn't gotten much attention in years. The idea is this:
Amend the rules that allow real estate to change hands without being reassessed if the new owner is a partnership where no one person holds more than a 50 percent ownership stake. Some property involved in corporate mergers and acquisitions is also exempt.
This part of the rules for carrying out the Proposition 13 property tax system was adopted by legislators in 1979 amid strong lobbying by commercial real estate interests and the state Chamber of Commerce. It is plainly obsolete.
In 2006, the last time a legislative committee took a close look at changing the rules, sponsors of the change estimated it could produce between $3 billion and $12 billion per year. All affected properties would be either commercial real estate or apartments, so the change would cost individual owners of residential property nothing. All it would do is put affected land and buildings on an equal footing with houses, condominiums and other commercial and industrial property.
Why has this sensible idea never gotten much traction? Mostly because of claims change would be bad for business, a notion usually accompanied by contentions that Californians are overtaxed. In fact, this state is far from the top of the list in per capita tax collection, according to a springtime U.S. Census report.
California now ranks 12th in taxes paid, at $3,193 per person per year. Alaska is tops at $12,276, followed by the likes of Vermont, Wyoming, Hawaii, Connecticut, New Jersey, New York, Massachusetts and Minnesota. Changing the reassessment rules would not even move California up one notch.
What about the real estate bust of the last 20 months? It has not brought values down to anywhere near the levels at which the affected properties are now taxed.
The key thing here is that this change would not endanger even one provision of Proposition 13. This is not the "split-roll" proposed so often. That would tax commercial and industrial property at different rates from homes. Rather, this change would level the playing field, remove pressure for sales tax and income tax increases like those imposed this spring and still fill much of today's budget hole.
All of which means the defeat of Proposition 1A and its companion measures plus a fresh $8 billion to $9 billion budget problem caused by reduced state tax receipts this spring need not create panic, despite election results leaving the state with a deficit of about $15 billion.
For this could be the very kind of crisis that forces good sense on lawmakers. Making the change Escutia suggested would not be a tax increase, but merely tax equalization. It would not be a burden on homeowners. It would be a permanent source of revenue. It is one key part of the answer, if anyone cares or dares to notice.
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
FOR RELEASE: FRIDAY, JUNE 5, 2009, OR THEREAFTER
BY THOMAS D. ELIAS
"BIG PART OF BUDGET SOLUTION STILL STARING STATE IN FACE"
And so California's seemingly endless budget battles resume, with no convenient end in sight. That's one early result of the voters' Tuesday rejection of Proposition 1-A and several others intended to straighten out the state's balance sheet.
Another possibility - slim, but still present - is that lawmakers and Gov. Arnold Schwarzenegger will finally give serious consideration to one change that could begin to spell the end of all the repeated budget crises. All they need to do is revise the regulations that now permit some real estate to change hands without being reassessed.
For sure, plenty of draconian tactics will be suggested in the coming days and weeks. Schwarzenegger has already called for selling off landmark state lands and buildings, and that might be a fine idea for properties which are useless now and show no promise of ever doing much for citizens. But you can only sell off land or buildings once. When you do it, you are in a sense selling off your patrimony. This makes it a desperation tactic that won't solve the underlying spending and revenue problems behind the repeated budget crises.
There will be calls for cuts to education, where 10 percent increases in state college and university tuition and fees are already coming, while even legislators who have long backed public schools over anything else appear ready to accept reduced public school funding.
Not to mention cuts to state parks, health care for uninsured children and a host of other items that could cause real pain for many Californians.
Meanwhile, sitting out there in the wings is a budget solution first proposed by former Democratic state Sen. Martha Escutia of East Los Angeles as far back as 2003. She's long-since termed out, one reason her sensible proposal hasn't gotten much attention in years. The idea is this:
Amend the rules that allow real estate to change hands without being reassessed if the new owner is a partnership where no one person holds more than a 50 percent ownership stake. Some property involved in corporate mergers and acquisitions is also exempt.
This part of the rules for carrying out the Proposition 13 property tax system was adopted by legislators in 1979 amid strong lobbying by commercial real estate interests and the state Chamber of Commerce. It is plainly obsolete.
In 2006, the last time a legislative committee took a close look at changing the rules, sponsors of the change estimated it could produce between $3 billion and $12 billion per year. All affected properties would be either commercial real estate or apartments, so the change would cost individual owners of residential property nothing. All it would do is put affected land and buildings on an equal footing with houses, condominiums and other commercial and industrial property.
Why has this sensible idea never gotten much traction? Mostly because of claims change would be bad for business, a notion usually accompanied by contentions that Californians are overtaxed. In fact, this state is far from the top of the list in per capita tax collection, according to a springtime U.S. Census report.
California now ranks 12th in taxes paid, at $3,193 per person per year. Alaska is tops at $12,276, followed by the likes of Vermont, Wyoming, Hawaii, Connecticut, New Jersey, New York, Massachusetts and Minnesota. Changing the reassessment rules would not even move California up one notch.
What about the real estate bust of the last 20 months? It has not brought values down to anywhere near the levels at which the affected properties are now taxed.
The key thing here is that this change would not endanger even one provision of Proposition 13. This is not the "split-roll" proposed so often. That would tax commercial and industrial property at different rates from homes. Rather, this change would level the playing field, remove pressure for sales tax and income tax increases like those imposed this spring and still fill much of today's budget hole.
All of which means the defeat of Proposition 1A and its companion measures plus a fresh $8 billion to $9 billion budget problem caused by reduced state tax receipts this spring need not create panic, despite election results leaving the state with a deficit of about $15 billion.
For this could be the very kind of crisis that forces good sense on lawmakers. Making the change Escutia suggested would not be a tax increase, but merely tax equalization. It would not be a burden on homeowners. It would be a permanent source of revenue. It is one key part of the answer, if anyone cares or dares to notice.
-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net
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