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Campaign 2014: Weekly Update, What’s Hot

Allan Hoffenblum
Publisher of the California Target Book and owner of Allan Hoffenblum & Associates

Entering the last week of Campaign 2014, I am posting my last weekly piece updating readers on the week’s latest campaign news. This is an abbreviated version of the Hot Sheet, which is regularly emailed to subscribers of the California Target Book.

Clinton to campaign in key House races: Some of the hottest House races in the nation are here in California and former President Bill Clinton is in California today to headline a rally for Rep. Ami Bera (CD7) and John Garamendi (CD3) at UC Davis and for Reps. Julia Brownley  (CD26) and Raul Ruiz (CD36) and Redlands Mayor Pete Aguilar (CD31 Open Seat) at Oxnard College.

CD21 (R-Valadao) Polls Shows Valadao Leads by 5 points: This is a highly competitive district in the southwestern portion of the San Joaquin Valley. A poll taken for a local Fresno TV station by SurveyUSA from Oct. 15 through Oct. 20, show GOP Rep. David Valadao leading her Democratic opponent Amanda Renteria 47% to 42%, with 11% undecided. Compared to a SurveyUSA tracking poll released six weeks ago, Renteria has surged among women. Back then, she trailed Valadao among women by 14 points. Today, she leads among women by 12, and 26-point turn-around. Valadao had lead by 25 points among men, now leads by 22. Latino voters, who are the largest ethnic group in the district with 54 percent of registered voters, back Renteria 51% to 35%.

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Politics Present and Past

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

On Tuesday, I had an opportunity to listen to someone running for statewide office in California today and a short time later spend time with someone who helped many candidates run for office decades ago, including one who won the highest office in the land. Ashley Swearengin is running for controller; Stu Spencer was the campaign manager who helped put Ronald Reagan in the White House.

Ashley Swearengin, mayor of Fresno and Republican candidate for state controller, told a Town Hall of Los Angeles meeting that her run for office was to challenge the status quo. She praised recent budgets in Sacramento to right the ship but said the current fiscal fix will not be sustainable.

The budget’s long-term problems, she said, are because of the state’s indebtedness and unfunded liabilities. As controller, Swearengin promised to create a comprehensive list of those debts and liabilities and make them transparent for all to see.

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The California Conundrum

Carson Bruno
Research Fellow, The Hoover Institution

The original unabridged version of this analysis can be found on the Hoover Institution’s online journal, Defining Ideas. To view the survey, please see Hoover’s California blog, Eureka.

Jerry Brown is going to win on November 4. Based on the Hoover Institution’s recently released October 2014 Golden State Poll, Brown has a 17 point advantage over his Republican challenger, Businessman Neel Kashkari, among self-reported registered voters. But Brown can’t credit a so-called “California comeback” for his pending victory. Indeed, any sort of true economic comeback remains elusive.

As of September 2014, California’s unemployment rate is 1.4 points above the national rate and has the distinction of being the fourth worse rate in the nation. Even more troubling, California’s average four-year real GDP growth of 1.8% is about half the rate the state experienced coming out of the dot-com-bust recession. This has led to California’s job market underperforming by about 1 million jobs and the state still burdened with roughly 311,000 more people unemployed than at the start of recession. California requires more aggressive growth rates than was previously acceptable to boost its labor market adequately. Any one of these statistics alone should be troubling for an incumbent Governor heading into Election Day.

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CA Business Climate Improves in One Ranking; Business Taxes Rank Near the Top in Another Listing

Fox and Hounds Daily Editors
 

California business climate improved 15 places from 47th to 32nd place according to a ranking produced by CNBC business channel. The Governor’s Office of Business and Economic Development (GO-Biz) circulated the ranking which shows California is still 50th in the cost of doing business and 48th in business friendliness but leads the nation in Technology & Innovation and is tied for first in access to capital. The state’s economy ranked ninth among the states.

The California profile from CNBC is appears below.

Meanwhile, the Tax Foundation came out with it’s annual ranking of state tax climates and California ranks 48th. Only New York and New Jersey rank behind California.

California is 50th with the highest individual income tax, 34th in corporate tax and 42nd in sales tax. What probably keeps California from dropping to last place on the Tax Foundation’s Business Tax Climate Index is Proposition 13’s check on property taxes. California’s property taxes are ranked 14th among the states.

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See Tax Increases, Think Pensions

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

Despite the ridicule heaped on bonuses offered public workers for simply doing their jobs – just one prime example: a librarian earning a bonus for helping members of the public find books – the California Retirement System (CalPERS) board last week made sure the bonuses added to salaries will be part of pension calculations.

While the exact cost to taxpayers is uncertain, the price tag for pensions because of this move is certain to go up. State and local governments have contributed four times to CalPERS what they contributed just a decade ago.

Local budgets are being eaten away by the pension and health care obligations. In the City of Los Angeles, for example, pensions costs took 3% of the city budget in 2002-3, it was eating 18% of the budget in 2012-13.

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Will Prop 2 Produce More Debt?

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)

Prop 2, while being advertised as a rainy day fund on TV, is actually a complicated formula that prioritizes debt payback. Gov. Brown and the measure’s other backers have said that by speeding up debt payback, it will reduce debt service and free up money in the long-term for investments.

If only that were true.

If the last few decades of California history are any guide, Prop 2 will be just another budget measure that created incentives for more debt.

How is that possible? Because of the following dynamic: as the California budget has been strangled and chained increasingly under various budget restrictions and formulas like Prop 2, local governments and interest groups, searching for ways to fund starved priorities, have turned more and more to bonds. Put it another way: the more you clamp down on spending, and take money that could be used to restore fundamental programs for reserves and debt payoffs, the more you force people to look at borrowing.

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Forgetting the Latino Vote in 2014?

John Nienstedt
President of Competitive Edge Research & Communication, Inc., recently co-founded Latino Edge Research to focus on issues within the Latino community.

It’s only a week before Election Day and Governor Jerry Brown must be smiling. The Public Policy Institute of California (PPIC) Statewide Survey completed October 19 has Brown at 52 percent and Kashkari at 36 percent. The lackluster gubernatorial snoozefest has led to what will be an unprecedented shunning of the ballot box this November 4th.

However, who will occupy the Governor’s mansion for the next four years is not the only important thing to be settled next week.

First there are Propositions 1 and 2. If passed, they will at long last address California’s chronic water supply deficiencies and create a “rainy day” fund so that when the inevitable economic downturn comes there will be money available to protect vital services and education.

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Californians’ News and Information Sources

Mark Baldassare is President of the Public Policy Institute of California (PPIC). Dean Bonner is Associate Survey Director at PPIC. Lunna Lopes is Research and Administrative Associate at PPIC. Jui Shrestha is a Research Associate at PPIC.

Television loses ground as the top source of political news.
A plurality of Californians (38%) get most of their political news from television. Our findings were similar in 2010 (37%), but in 2007 this number was 9 points higher, at 47 percent. Over the same time period, reliance on the Internet for political news has increased 15 points (17% 2007, 24% 2010, 32% today). There has been a slight drop in reliance on newspapers (15% 2007 and 2010, 10% today) and radio news (12% 2007, 10% 2010, 9% today).

More than half of those who rely on TV watch cable news.
Among those who watch television news, a little less than half (48%) report watching mostly cable stations (53% 2010, 43% 2007). Across all parties, regions, and demographic groups, pluralities report watching mostly cable news. By contrast, viewership of network television has remained steady (25% 2007, 23% 2010, 21% today). Twenty-seven percent of Californians report watching local television news (29% 2007, 22% 2010, 27% today).

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Beyond the Propaganda: How I’m Voting on California Propositions

Jon Fleischman
Publisher of the FlashReport

California’s general election turnout is predicted to be dismal this year, with less than half of eligible voters likely to turn out. Two factors include a lack of competitive statewide races, and ballot measures that don’t inspire activism. Speaking of statewide ballot measures, voters will see six of them, and here’s my take, and how I’m voting on them.

PROPOSITION 1: THE WATER BOND – OPPOSE

Californians pay so much in taxes that the state’s budget annually is well over a hundred billion dollars. The state has more than enough revenues to just pay for above-ground water storage, which is desperately needed. Unfortunately, year after year, governors and legislatures have prioritized other spending.  This massive bond package (which will cost nearly $15 billion to repay) does have some funds for water storage–but it is only a fraction of the spending.  Most of the spending has nothing to do with dealing with our water-shortage crisis. A vote against Prop. 1 is a vote for telling our state’s political leaders to use existing tax dollars to solve the problem.

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Who’s Winning, Who’s Losing A Week From The Election?

Tony Quinn
Political Analyst

Voting by mail is now the rage in California; in the June primary more than 69 percent of the ballots were cast before Election Day.  It is very possible that a majority of votes this November will be by mail.  And thanks to Paul Mitchell and Political Data Inc, for the first time we can watch the return of absentee ballots on a daily basis.

Political Data, which maintains a complete file of every voter in the state, has put together a series of on-line charts that gives the daily return of absentee ballots, and provides their party breakdown as well as age and race.  Not surprisingly, the early electorate shows a Republican bias; that is always the case; Republican absentee voters get their ballots in early.

But the Political Data charts go a step farther; they show the final vote in California and by district, so it is possible to project out the likely make up of the final electorate in a district by comparing the current absentee turnout with the final vote.  And for the first time, this allows analysis a week before Election Day of the likely results when all the votes are counted.  As of this weekend, more than 1.3 million ballots had been returned to the counties and processed into the Political Data database.

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