How to Solve CA Problems? Why Obligate/Tax/Regulate Business, Of Course!

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

With the revelation that the cost of a single payer health care system in California at $400 billion would dwarf the state budget, an analysis of the bill suggested some of the money could be captured with a 15% payroll tax. All of a sudden the Fight for 15 has a new meaning. Those minimum wage workers who do eventually earn $15 an hour after the successful Fight for 15 campaign in California will yield a lot of that new income if they have to pay the payroll tax.

Lawmakers speak passionately about supporting workers. It’s business they expect to carry the load for much of the progressive agenda pushed in Sacramento. Yet, workers often suffer under programs that are designed to affect business.

Payroll taxes are taxes paid on the wages and salaries of employees. Payroll taxes are usually split between the employer and the employee but as the Tax Foundation explains, “Perhaps one of the best-kept secrets of payroll taxes is that employees effectively pay almost the entire payroll tax, instead of splitting the burden with their employers. This is because tax incidence is not determined by law, but by markets.”

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Budget Anorexia: Feds Soon Will Cut Payments to California

John Seiler
Former Editorial Writer at the Orange County Register

President Trump’s proposed budget would likely result in billions of dollars of cuts to vital health and human services programs in California, state Democratic lawmakers and advocates for the poor said Tuesday,” reported the Los Angeles Times,

“It’s unconscionable and un-American,” blasted Gov. Jerry Brown, who himself slashed state social spending to balance the budget.

In announcing the May Revision to his budget proposal for fiscal year 2017-18, Brown warned, “We have ongoing pressures from Washington and an economic recovery that won’t last forever.”

Actually, to use a line from another California governor, Ronald Reagan: You ain’t seen nothin’ yet. The cuts in California programs soon will be much larger than those in Trump’s proposal, and they will strike whether or not he’s president, or the White House occupant is Elizabeth Warren or the ghost of Lyndon Baines Johnson. Nor will it matter if Nancy Pelosi again becomes House speaker and is joined by Chuck Schumer as Senate majority leader.

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Trump Provides California Water Solutions as Gov. Brown Focuses on his Legacy

Aubrey Bettencourt
Executive Director, California Water Alliance

On May 13, 2017, Governor Brown outlined his revised budget proposal focusing the state’s financial resources on his High Speed Rail legacy project and renewing its efforts to fight the Trump Administration on multiple fronts. While he may have dropped the mic with an antagonistic $183 billion budget, points on the scorecard went to the Trump Administration that day.

As Governor Brown unveiled his budget, Interior Secretary Zinke authorized grants awarding California $21 million for the state’s “planning, designing and constructing water recycling and reuse projects; developing feasibility studies; and researching desalination and water recycling projects.”

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Can You Still Really Run Against San Francisco From Georgia?

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)

If you haven’t seen this independent expenditure attack ad against the Democratic candidate for Congress in an Atlanta-area district, Jon Ossoff, you should take a look.

Yes, it’s fake—fake people saying that San Francisco loves Ossoff and is funding him. It’s a century-old technique (employed famously in the 30s by Hollywood types who had phony hobos praise gubernatorial candidate Upton Sinclair).

But does running against San Francisco really draw blood? Perhaps only in one way, by tying Ossoff to Nancy Pelosi, San Francisco’s congresswoman. Pelosi has presided over a decade of national party losses, and should leave national leadership, if not her seat, to yield to a new Democratic leadership.

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Fixing the housing problem:  leave the state out of it.

Timothy L. Coyle
Consultant specializing in housing issues

On these pages recently, Joe Matthews penned an essay advocating more state intervention in local housing markets.  Matthews should be forgiven for endorsing such an absurd proposition.  After all, it’s true that in California, as Matthews writes, housing approvals are left up to locals, who regularly play havoc with their land-use and permitting power.

Local governments get away with murder.  They can slow the permitting process down to a virtual crawl; they can require ever-changing building design standards; they charge outrageous fees for the privilege of developing in their communities – over $160,000 per unit in one Northern California haven; and, if all else fails they will look the other way while NIMBY (Not In My Backyard) groups rise up and, using state law and municipal courts, grind building progress to a halt.

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End Run Around Spending Limit Likely Headed for the Courts

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

The state’s nearly 40-year-old spending limit law is on the fast track to a date in court. While the state senate budget committee yesterday agreed  with the governor’s framework for the budget, which excludes $22 billion from the spending limit, a number of lawyers have concerns or outright disagree.

I expect the courts will be called on to referee different interpretations of the spending limit.

If critics of Gov. Brown’s position are correct in their interpretation of the Gann spending limit, named after chief proponent and anti-tax activist Paul Gann, then cuts in the budget are sure to follow with funds returned to taxpayers and shared with schools.

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Lack of Transparency in Public Contract Negotiations Would Lead to Higher Taxpayer Costs

Kerry Jackson
Kerry Jackson is a Fellow at the California Center for Reform at the Pacific Research Institute.

No state needs to reform the relationship that governments have with public-employee unions more than California. Yet lawmakers keep going in the wrong direction.

Contract negotiations between government and the labor unions who represent the public employees should be transparent. Too often, both sides are working toward a common goal – a generous deal for the unions.

Simply put, there isn’t much bartering between state and local governments and the public-sector unions. Union bosses secure the contracts they want because there is little push back during collective-bargaining sessions. This arrangement has been finely tuned. Unions have for decades delivered cash and manpower to elect friendly candidates to state and local office. 

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The Best Politicians in California Aren’t In Politics

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)

“It is all wrong,” wrote Aristotle, “that a person who is going to be deemed worthy of the office should himself solicit it.”

That little blast as politicians resonates in California today. When you look around the state, our most effective politicians are those who haven’t sought elective office, at least yet.

For my money, the two best politicians in California work at the same company: Facebook. Sheryl Sandberg has made herself a major public figure who, for all her flaws, speaks coherently to full political spectrum on many major issues, and specifically to the experiences of women and families with an authenticity that Hillary Clinton achieved only in her wildest dreams. One wonders how much her boss Mark Zuckerberg’s emergence as a political and cultural figure owes to her counsel.

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Californians Rely on Our Judiciary to Ensure and Protect Access to Justice 

Sosan Madanat
Executive Director, Foundation for Democracy and Justice

“Separation of powers,” “judicial independence” and “rule of law” are abstract concepts with important implications. At an abstract level, most Americans cannot identify with these concepts. Nearly two-thirds cannot name the three branches of government; a third cannot name a single First Amendment right; three out of four don’t know the role of the judicial branch.

But these concepts do not just live in abstractions. As California Chief Justice Tani Cantil-Sakauye has said, “

People have to know that government belongs to them, it runs on their participation and their leadership. But if they don’t ever get an understanding that government exists for them – three branches are there for them – then they’ll never feel they’re a part of it. And decisions will be made without them, and they’ll feel helpless – or they will mistrust the system.”

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The Real Reason Behind The CA Single Payer Proposal

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

Hint: It’s not about health

This past weekend the California Democratic Party of which I am a member held a state convention riven by the election of a new chairman. Behind that was a battle over a proposal to enact “Single Payer” (SP) health care financing in California. Behind that is a power play about money.

SP is a method by which health care expenditures are financed by public agencies. For example, Medicare and Medicaid are SP systems. Now, a powerful commercial and political interest (the California Nurses Association) is pushing legislation to establish a consolidated state-run SP agency. They want Medicare and Medicaid to run through the new agency and to eliminate private insurance so that all healthcare payments in California (~$400 billion per year) would run through that agency.

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