State Treasurer Chiang on Taxes and the Economy

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

With the rising conversation about extending Proposition 30 taxes, I asked state Treasurer John Chiang if he would advise that the taxes be continued. Chiang said that a promise was made that the taxes would be temporary and circumstances would have to change, such as the economy tanking, to justify continuing the taxes.

Chiang spoke to the Town Hall Los Angeles Thursday reviewing his actions as state Controller and reporting that California went from dire fiscal circumstances to the “most robust economic recovery on the planet.”

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Is Texas Gov. Greg Abbott California’s New Best Friend?

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

The new governor of Texas seems intent on making California more competitive with his own state – even though he may not realize it.

Greg Abbott, as both a candidate last year and a governor this year, has been warning Texans against efforts to “California-ize” the Lone Star state. Those warnings were broad and rhetorical, but now he’s getting specific. He’s lashing out at Texas cities that go their own way and enact policies at odds with state policy and with his conservative politics.

To stop these cities, Gov. Abbott and the Republican legislature are enacting laws to reduce local control on many issues – from business, to energy to spending and taxes. That’s bad news for Texas communities—but it’s good news for California’s own communities.

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LA Time Gets It Wrong – Again – on Sumps Issue

Catherine Reheis-Boyd
President of the Western States Petroleum Association

Thursday, the Los Angeles Times published an article about a number of sumps – or ponds – that exist in oil production regions in the lower San Joaquin Valley.  It’s an important issue but certainly not the scandal portrayed in the Time’s inaccurate report.

The members of the Western States Petroleum Association are aware the Regional Water Quality Control Board is evaluating oilfield operations in the San Joaquin Valley in conjunction with the Board’s basin planning efforts, including the use of sumps, or ponds, to capture fluids used in the oil production process.  

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Electric Shock

Charles Crumpley
Editor of the Los Angeles Business Journal

Is Kevin de León trying to kill off what’s left of California’s manufacturing?

He must. The leader of the California Senate a couple of weeks ago introduced a package of bills that call for a 50 percent reduction in petroleum use by cars and trucks and a 50 percent increase in energy efficiency in buildings, and demands that 50 percent of the electricity generated in the state must come from renewable sources, all by 2030.

All this earns him the warm applause of his base – he was accompanied by environmentalists, union folks and renewable energy entrepreneurs at his press conference – as he pushes the state’s businesses out into the cold.

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The Impossibility of a Republican US Senator

Tony Quinn
Political Analyst

Democratic Attorney General Kamala Harris is becoming more and more the inevitable successor to Sen. Barbara Boxer, but one thing will assure Harris’s election, and that is if a Republican ends up in the top two runoff against her.  It is impossible for any Republican to be elected United States Senator from California.

That is because federal offices have become the symbol of our polarized nation.  Consider Sen. James Inhofe, Republican of Oklahoma.  Inhofe is congress’s leading climate change denier; he regularly calls global warming a fraud and a hoax.  So you would think he would be seriously challenged when he ran for re-election last year, but you would be wrong.  Inhofe won re-election in Oklahoma by 68 percent.

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Will the 2016 Tax-apalooza Force the Chargers Out of California?

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

Two stories, one statewide and one local, are about to intersect.

The statewide one is the now familiar scheming and debate over what sorts of tax-related initiatives and measures should go on the November 2016 ballot. One way or another, California voters are going to be asked whether they want to raise and reform various kinds of taxes.

The local issue is about football. The San Diego Chargers last week announced plans to build a stadium jointly with the Oakland Raiders in L.A. County. That’s put new focus on hot-and-cold efforts by San Diego to find a way to build a stadium and keep the team.

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Razing Anti-Business Roadblocks, In Reagan’s Name

Harold Johnson
Attorney, Pacific Legal Foundation

For most of us, the trip from California to Nevada can be a hassle-free jaunt.

Not for small-business owner Steven Saxon.  He has hit a surprising regulatory roadblock at the state line.  His fight to raze it bears watching if you think government’s proper role is to smooth the path for honest entrepreneurs, not blockade their hopes and dreams.

Steve is founder and operator of Affordable Moving and Storage in Sacramento.   Thousands of satisfied customers around the River City have given him a thumbs’-up over the past 13 years.  Now, he wants to build on that success by opening a branch in Reno, which his son Patrick would operate.

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The Glass Jaw of Pension Funds is Asset Bubbles

Ed Ring
Executive Director, California Public Policy Center

“Calpers argued that the California constitution’s guarantee of contracts shielded pensions from cuts in bankruptcy. The fund also asserted sovereign immunity and police powers as an ‘arm of the state,’ including a lien on municipal assets.” –  Wall Street Journal Editorial, “Calpers Gets Schooled,” February 8, 2015

If you want powerful evidence of crony capitalism at its worst, look no further. In the Stockton bankruptcy trial, the pension fund serving that city’s employees threatened to seize municipal assets to pay pension fund contributions. They’ve made similar threats to other cities that protest against the escalating contribution rates. And they’ve made the cost to exit pension plans confiscatory. It is hard to imagine a bigger or more blatant example of collusion between business interests and government employees at the expense of ordinary private citizens.

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Assembly Subcommittee Flunks UC Budget

Dave Roberts
Contributing editor to CalWatchDog and long-time Bay Area newspaper reporter

Tuition hikes marched to the head of the class at a recent hearing of California Assembly Budget Subcommittee No. 2 on Education Finance. Assembly members balked at a 28 percent tuition hike advanced by UC President Janet Napolitano and approved by the University of California Board of Regents.

According to the Los Angeles Times, “Neither the governor nor the California Legislature has the authority to force the UC regents to rescind the tuition increase.” However, the tuition hike is not included in the January budget proposal of Gov. Jerry Brown, himself also a regent, for fiscal year 2015-16, which begins on July 1.

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California Transportation: A New Way of Thinking, Not New Taxes

Carson Bruno
Research Fellow, The Hoover Institution

Earlier this month, Assembly Speaker Toni Atkins of San Diego made a bold proposal – add another vehicle fee to the books. Californians typically punish their elected officials for tampering with their vehicle fees. Just ask former Governor Gray Davis, whose tripling of the vehicle license fee became a central argument for his eventual recall. But unlike Davis’s budget Hail Mary, Speaker Atkins’ proposal aims at fixing California’s inadequate transportation system.

According to the American Society of Civil Engineers (ASCE), California receives a C- for the state’s transportation infrastructure “due to existing conditions and the lack of adequate funding.” Moreover, California’s low quality transportation infrastructure is contributing to the state’s poor business climate. In the 2014 CNBC America’s Top States for Business report, California ranks 24th in the nation for its transportation infrastructure, a drop of 5 spots from 2007. Overall, the ASCE recommends that California increase annual transportation funding by $10 billion for ongoing maintenance and invest almost $37 billion in upgrades and new construction.

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