Positive Movement on the Jobs/Business Front or Window Dressing?
The powers that be in Sacramento are focusing on the job
dilemma in California with pronouncements this week from both Governor Jerry
Brown and Senate President Pro Tem Darrell Steinberg. This follows the focus
put on economic policy by Lt. Gov. Gavin Newsom a couple of weeks ago.
Attention is being put where it belongs to help California
reduce its staggering unemployment rate and stifling business climate.
The question is: Will there be follow through to make
positive changes?
While some wonder if there is anything state government can
do while the country is in the grips of a national recession, other states have
managed to keep unemployment away from the sky-high figures with which California
suffers. Positive steps can be taken at the state level.
The governor appointed former Bank of America executive
Michael Rossi as a jobs czar. His mission is to advise the governor on ways to
make job creation less difficult through regulatory reform or legislative
actions. He will also try to create a cooperative atmosphere between business
and labor working toward the goal of increased business and job creation.
Concerns over Proposed New Health Insurance Regulations
This article was first published in
today’s Los Angeles
Daily News
Despite
alarm raised in many corners over costly new regulations, the California
Legislature is pursuing AB 52 to clamp new regulations on health insurance
premiums.
The
purpose of the bill, according to the author, Assemblyman Mike Feuer, is to
control dramatically rising health care costs by giving state regulators the
authority to deny or moderate proposed insurance premium increases.
Once
again a measure that purportedly is designed to protect consumers ignores the
cost of doing business. Ironically, the increased cost of regulation will find
its way to the consumers either through increased costs or reduced services.
Villaraigosa Dismembers Prop 13 in his “Grand Bargain”
Los Angeles Mayor Antonio Villaraigosa addressed the
Sacramento Press Club yesterday offering a "grand bargain" of revenue increases
and tax cuts to fix the fiscal condition of the state but the core of the plan
dealt with significant dismantling of Proposition 13.
The 1978 property tax reform measure set a firm property tax
rate, and limited yearly property tax increases while requiring a two-thirds
vote of the legislature to raise taxes and a two-thirds vote of the people for
some local tax increases.
Villaraigosa proposed undoing many parts of the proposition removing
business property from property tax protection, lowering the two-thirds vote to
simple majority votes for legislative tax increases and lowering the two-thirds
vote for local property parcel taxes dedicated to education. Parcel tax
increases would be new taxes on both business and residential property.
He also called for a tax on services that could raise $28
billion.
Amazon Tax Referendum Drive Going Gangbusters
Despite radio commercials that try to scare voters not to
sign ballot petitions, signatures calling for a referendum on the so-called
Amazon tax law requiring out-of-state Internet companies to collect sales taxes
from California buyers are piling up. The necessary signatures to put the
referendum on the ballot will likely be in hand well before the 90-day
deadline.
The eager response on an opportunity to stop a tax comes at
a time when tax talk may come back to the state capitol. Hoping for new
revenue, the state budget included a failsafe — a trigger to be pulled
mandating further cuts if billions in expected revenue does not show up.
Given the condition of the economy and the recent gyrations
of the stock market concern is that the hoped-for money will not materialize. A
rumor circulated around the Capitol yesterday that to avoid the "trigger" cuts,
the governor might call a special legislative session focused on taxation.
About Presidents: Those Who Want to Be; One Who Wanted to Be; One Who Was
The Iowa Debate
For Californians who watched the Republican presidential
debate in Iowa yesterday, they probably had a sense that former House Speaker
Newt Gingrich’s reality check on Congress’s super committee on debt reduction
struck a note of truth.
Gingrich argued the Select Committee on Debt Reduction
should not substitute for an open, legislative process and said members of
Congress should not sit around while the committee does its work and then
presents a terrible choice such as, "We can either cut off your right leg or we
can shoot you, which one do you prefer?"
The reason Gingrich’s rant may feel right to Californians is
because he described the super committee in terms familiar to the Big 5 process
that produced a state budget for so many years here. The discussions occurred
behind closed doors then the final surprise package was presented to the
legislature for a pretty much up and down vote.
Football Deal for LA Could Hit Other CA Cities
The Memorandum of Understanding approved by the Los Angeles
City Council with the Anschutz Entertainment Group moves professional football a
step closer to Los Angeles after a 16-year absence. But it might mean
another California city could lose their NFL franchise.
The negotiated deal still has some yards to gain before it
scores the big touchdown of returning an NFL team to the City of the Angels. The
$1.2 billion deal for a stadium and remodeling of the convention center seems
to be sensitive to taxpayer concerns. The stadium and team would bring both
construction jobs as well as permanent jobs related to the stadium.
However, if the team that occupies Farmer’s Field comes from
another California city, jobs will be lost there.
After the MOU was approved by the City Council, sports talk
pundits started speculating which team might move to L.A., since it is assumed
by all that the NFL will not add a new franchise at this time. The stadium will
not be built without a team confirmed for the new stadium.
Another Nail in the High Speed Rail Coffin
A new study on the California High Speed Rail (HSR) project
released this week says the cost estimates for the first segment of the rail
are much higher than previously calculated. Everyone who is surprised by this
fact please raise your hands. I thought so. The High Speed Rail project has
received one credibility cut after another. Like the tree subject to continuous
hacks from lumberjacks, HSR is about to topple over.
As reported by the AP’s Adam Weintraub, supporters of the
rail are now having second
thoughts. He quoted rail supporter Senator Alan Lowenthal, "We really
need to re-examine what we’re spending and what we’re going to get for
it."
The first leg was tagged at a cost of $7.1 billion in 2009.
The new study reports the cost at anywhere from $10 billion to $13.9 billion,
an increase of anywhere from 40 to 95 percent. And that’s the cost overrun of
just the first leg – a Central Valley leg that doesn’t run through the coastal
metropolises. What will the cost overrun be in trying to build the rail through
those high population corridors?
Racing to Tax the Rich
Who gets to tax the rich first – the federal government or
the California state government? Politicians and tax increase advocates on both
the federal and state level say the rich must pay more. In the end, neither may
pass a tax on high-end income taxpayers and there is no advocacy to raise taxes here. However, how successful the federal
government tax-the-rich supporters are on this issue will clearly affect the
fortunes of the state.
President Barack Obama says the United States must attack
its deficit problem in a "balanced" way, which includes both cuts and revenue
increases. He talks about taxing millionaires and billionaires but sets that
bar rather low, often citing the figure of $250,000 in income as a target for
tax increases.
California tax increase advocates think the rich start at a
higher point, if not quite millionaire territory. Assembly Member Nancy
Skinner’s income tax increase proposal, AB 1130, would levy an additional 1%
tax on taxable income of $500,000 and more.
Nervous “Trigger” Finger On State Budget
Remember way back five weeks ago when the California budget
was declared balanced because $4 billion in higher revenues was expected in the
treasury? If the $4 billion didn’t appear, an automatic trigger would add additional
budget cuts of $2.5 billion.
Five weeks ago was before the federal debt-ceiling bill
passed with its promise of hundreds of billions of dollars in federal spending cuts.
Those cuts could mean a loss of billions of dollars for California. George
Skelton has a rundown of the federal money earmarked for California in his L.A.
Times column yesterday.
Five weeks ago there was no referendum circulating against
the Amazon tax measure. If the referendum achieves enough signatures, collection
of the estimated $300 million expected from the tax could be temporarily stopped
or even eliminated if the measure makes the ballot and the voters overturn the
law.
Five weeks ago there was no referendum against the bill to
end redevelopment that added over $1
billion to state government’s depository.
Lessons Learned from California: An Effort to Scuttle Parent Trigger
An interesting email arrived yesterday from Parent Revolution, the group that
has pushed the Parent Trigger concept in California. Since Parent Trigger has
gained a foothold here, a teachers’ union, using "lessons learned from
California" devised a scheme to stop it elsewhere.
Parent Trigger is a new California law that allows parents
to transform their children’s failing school if 51% of the parents sign a
petition to force the school district to make changes.
The American Federation of Teachers plan came to light when
a 19 page powerpoint
presentation from the Connecticut branch of the AFT found itself onto the
website Drop
Out Nation.
Three times in the presentation California’s success in
implementing the Parent Trigger is mentioned. An additional reference is made
to former California state senator Gloria Romero, an advocate for Parent
Trigger. The theme related to California: We
learned from the mistakes made in California that resulted in Parent Trigger
becoming a reality. Here’s how to stop it spreading further.