The Uncertain Futures Of Propositions 13 And 30

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

(Editor’s Note: The Hoover Institutions’ EUREKA newsletter this month examines California’s Revenue Conundrum. The following article was one of a series of articles published discussing California’s tax system.)

Two of California’s historical ballot initiatives – one brought by government outsiders to limit government revenue, the other brought by government insiders to expand government revenue – face an uncertain future if changes to these laws appear on the 2016 ballot.

The legendary Proposition 13, passed overwhelmingly by the voters in 1978, was a tax revolt heard round the world. While limiting property taxes in California – to 1 percent of the acquisition price of property with annual tax increases of up to 2 percent depending on inflation – and setting strict vote requirements before other taxes could be raised, Proposition 13 also served as a springboard for centering the tax issue in national politics.  The late Martin Anderson, a Hoover Institution Senior Fellow and top advisor to Ronald Reagan, told me that following the passage of Proposition 13, “The idea of Reagan cutting taxes was now politically viable and rolling. Proposition 13 was a clear political signal that the public was fed up with taxes.”

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Only Voters Can Solve California’s Pension Crisis

Chuck Reed and Carl DeMaio
Chuck Reed, a former Mayor of San Jose, is a Democrat. Carl DeMaio, a former Councilmember of San Diego, is a Republican

Despite its growing economy and higher tax revenue, California still faces fiscal ruin from unsustainable government pension programs.

In these good times, the state, local governments, public schools and our universities are raising taxes, boosting tuition and cutting services to pay rising employee retirement costs.  Between 2003 and 2013, combined annual pension costs have nearly tripled, from $6.43 billion to $17.5 billion.

The State Controller also reports nearly $200 billion in unfunded liabilities for state and local pension obligations.  California Common Sense calculates another $150 billion of unfunded liabilities for state and local retiree healthcare obligations.  That’s $350 billion in unfunded legacy liabilities that are driving massive cost increases, again:

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Planned Parenthood Controversy Deserves More Than a Reprimand

Hector Barajas
Director of Strategic Communications at Revolvis Consulting, Political Analyst for Univision and Telemundo, and Communications Consultant for GROW Elect

You couldn’t pick up a newspaper, channel surf television, or visit social media sites without tripping over the latest Planned Parenthood scandal this past week.

In clandestine videos, you saw Planned Parenthood officials haggling over fetal organs and suggesting to ask their surgeons to use procedures that were “less crunchy” in order to keep the child’s body “intact.” They are procedures, they admit, that violate their patient agreements, but at the right price their organization’s objections could be dropped.

From the sidelines, crisis communication specialists observed how this multimillion-dollar, 100-year-old organization with millions of supporters and tremendous political clout would handle its publicity crisis.

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The CTA Empire Strikes Back

Ed Ring
Executive Director, California Public Policy Center

Emperor Palpatine: There is a great disturbance in the Force.
Darth Vader: I have felt it.
Emperor Palpatine: We have a new enemy, the young Rebel…
Darth Vader: How is that possible?
Emperor Palpatine: Search your feelings, Lord Vader. You know it to be true. He could destroy us. The Force is strong with him.
– Quote (edited for brevity) from Star Wars Episode V: The Empire Strikes Back, 1980

There are indeed great disturbances in the force. There are indeed challenges to the imperial monopoly that, for nearly 40 years, has eroded the quality and escalated the costs for California’s system of public K-12 education. And the imperial stormtroopers who enforce their educational edicts on California’s state legislature, its thousands of public school boards, and by extension, millions of parents and children, are all part of an evil empire called the California Teachers Association, or CTA. In plain English, the teachers union.

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State Moonlights as Slumlord

George Runner
Member of the California State Board of Equalization, District 1

If a recent study to determine the safety of 29 state-owned buildings tells us anything, it’s that the state is a terrible landlord. In fact, it may be time for government to get out of the building- owning business.

It shouldn’t take an act of the Legislature to get the state agency in charge of building maintenance to do its job. Without last year’s successful legislative push by former Assemblyman Roger Dickinson, it’s highly unlikely the Department of General Services would have commissioned the study by Hellmuth, Obata & Kassabaum.

A key reason for Dickinson’s legislation was the troubled state Board of Equalization’s headquarters at 450 N St., located a few blocks away from the site of the new Sacramento Kings arena.

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California, Don’t Get Suckered by the 2024 Olympics

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)

After Boston dropped its bid for the 2024 Summer Olympics on Monday, Los Angeles Mayor Eric Garcetti quickly put out a statement expressing interest in the Games. Boston needs to be replaced as the American bid city for the games, and early speculation is that L.A. would be the replacement.

San Francisco could be in play too. The two big California cities competed for the U.S. Olympic Committee’s nod against Boston earlier this year and were finalists, along with Washington D.C., before Boston was the winner.

As readers here know, I’m a huge sports fan, but I’m decidedly not a fan of spending billions of dollars on pro sports teams and big sports events. But I have a soft spot for the Olympics – it has a meaning for the world that goes beyond dollars and cents. And the Olympics has been incredibly good to California and specifically Los Angeles. The 1932 and 1984 Games both continue to shape the city, mostly in positive ways. (I often drive home from work along Olympic Boulevard).

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HHS Spending and the Quest for More Money

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

Fox_Exp by ProgramThe Hoover Institutions’ EUREKA newsletter this month examines California’s Revenue Conundrum. Given the recent clamor for more social spending one chart in the report catches the reader’s eye.

The chart shows expenditure by program type from 1976-77 to 2015-16. While most programs have remained steady or had a modest increase, Health and Human Services towers over the other items on the chart. It even bests the second largest expenditure gain, K-12 education, by a considerable amount.

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LAO Deals a Blow to Pension Measure’s Chances

Steven Maviglio
Principal of Forza Communications, a Sacramento-based public affairs/campaign firm

The Legislative Analysts Office may have dealt the death knell to an effort to slash the retirement security of California’s teachers, firefighters, peace officers, bus drivers and other public employees this week with a candid assessment of its impact.

In its analysis of the measure, being advanced by former San Jose Mayor Chuck Reed and former San Diego City Council member Carl DeMaio, the no-nonsense LAO concluded “There is significant uncertainty as to the magnitude, timing, and direction of the fiscal effects of this measure and its effects on current and future governmental employees’ compensation.”

It said the measure would likely be the subject of legal battles because of the massive uncertainty about its impact.

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Putting Climate Change Ahead Of Constituents

Joel Kotkin
Editor of NewGeography.com and Presidential fellow in urban futures at Chapman University

Racial and economic inequality may be key issues facing America today, but the steps often pushed by progressives, including minority politicians, seem more likely to exacerbate these divisions than repair them. In a broad arc of policies affecting everything from housing to employment, the agenda being adopted serves to stunt upward mobility, self-sufficiency and property ownership.

This great betrayal has many causes, but perhaps the largest one has been the abandonment of broad-based economic growth traditionally embraced by Democrats. Instead, they have opted for a policy agenda that stresses environmental puritanism and notions of racial redress, financed in large part by the windfall profits of Silicon Valley and California’s highly taxed upper-middle class.

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Wealth and Poverty in California and Tennessee

Bill Watkins
Executive Director of the Center for Economic Research and Forecasting at California Lutheran University

Over the past 18 months, I’ve spent a lot of time in East Tennessee, Appalachia if you will. You can’t avoid poverty in East Tennessee. It’s pretty much everywhere. A large, and obviously expensive, home may have a trailer next door, a trailer so dilapidated that you are sure no one lives there. But, someone does live there. You may see a light at the porch, or a car, or a satellite antenna. Sometimes, you run into a pocket of such homes. They call them Hollows.

If you go to an event with a large crowd, you hear language that sounds almost foreign –, things like “Where was you?” or “Them cows ain’t mine.”

A Californian can easily conclude that poverty in East Tennessee is a far worse problem than it is in California. But that’s not true.

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