Maybe it’s the Legislature that’s becoming Irrelevant
Following the end of the budget talks, numerous commentators argued that the Republicans have become irrelevant to the governmental process because they could not cut a budget deal with Governor Jerry Brown and the majority Democrats. However, there may be another way to read the long-term results of the collapse of the talks – that the legislature, itself, is becoming irrelevant.
Senate president pro tem Darrell Steinberg said, Republicans "appear to want to be irrelevant and seem intent on achieving that objective."
A Los Angeles Times news analysis by Evan Halper and Michael J. Mishak titled, “Budget Talks Fold and California GOP’s Influence Fades Further” ran as the lead story on the front page of the print edition. A news analysis, mind you, not a news story, as the top headline of the day signifying that the Times’ editors believe this to be true.
The Angry Voice of Small Business
The small business community is frustrated and angry about the business and political climate in California, if my experience yesterday is a guide.
At the request of California National Federation of Independent Business executive director, John Kabateck, I had the privilege of moderating a panel on Employer and Labor relations in the current political environment at NFIB’s yearly conference.
However, it was before that panel began that I saw the concern of small business in the questions from the attendees directed at Assembly Republican leader Connie Conway, state senator Anthony Cannella, assembly members Shannon Grove and Henry Perea, and especially senate pro tem, Darrell Steinberg.
Questioner after questioner blasted the state for undercutting business. Many of the business owners complained of laid-off workers, lost profits, and even watching other companies leave the state.
What Now? The Economy Might Hold the Key
With Governor Jerry Brown declaring the end of budget
negotiations there is plenty of uncertainty of how the budget gap of over
$15-billion will be resolved. Two main avenues get all the buzz: A majority
vote scheme to put tax measures on the ballot or seeking a November ballot
initiative. I believe the second approach is most likely.
Elsewhere on this site, Loren Kaye discusses the possibility
of seeking a majority vote to place taxes on the ballot and the hurdles in the
path of that approach. Perhaps the governor or Democrats in the legislature
might try to test the legal obstacles along that path by filing a lawsuit
themselves and search for a friendly judge to get a ruling on the majority vote
approach. Possible–but unlikely.
The November ballot approach is much more likely, especially
if the state’s economy improves. If the state brings in more dollars than
projected, the budget can be massaged past the end of the fiscal year and
initiatives would be filed for November in an attempt to secure even more
revenue. Look for the new state revenue figures as a portent of this approach.
Some cuts will have to be made and schools are the likely
target. However, cuts to schools could well play into the hands of those promoting
a November tax initiative. With the school year starting a short two months
before the election, news of the cuts will be fresh in the minds of
voters.
Plot Thickens on Spending Limit
No sooner had word leaked out that the governor and Republican legislators were working on a five year spending cap as a compliment to the five year tax extension plan than Jon Coupal of the Howard Jarvis Taxpayers Association filed a proposed initiative with the Attorney General’s office for a hard spending limit. Spending is limited under the HJTA plan, but the term of the law is not.
The effectiveness of a five year spending limit is suspect. Projections are that the state will not have a lot of excess revenue over the next five years. The goal of a spending limit, beyond the obvious effort to control spending, is to reassure Wall Street and the bonding agencies that California is taking concrete steps to deal with it’s budget problems in the long term.
The HJTA approach does that.
Comments on the Counterpunch; Prop 13 Still Favored 2-1
The Public Policy Institute poll released Wednesday showed the
anti-tax attitude is still strong in this state. The poll indicates that Gov. Brown’s tax
extension proposal is in for a dogfight. Support for the measure is dropping
with only 46 percent approval, a terrible place to start if you’re seeking a
Yes vote in an election.
While the poll indicates a positive attitude toward local
governments, voters are not about to ease the requirement of a two-thirds vote
to raise certain local taxes. By a 59-percent to 37-percent margin, likely
voters in the PPIC poll say they favor this two -thirds vote provision.
The two-thirds vote requirement for local special taxes was, of
course, part of Proposition 13, the 1978 tax reform initiative.
Stop me if you’ve heard this before, but according to the poll,
Proposition 13 is supported 2 to 1, the same margin it passed by nearly 33
years ago. That two to one edge has been fairly consistent with the voters over
the years.
Plan B Starting to Come Together
News reports that Gov. Jerry Brown is considering a ballot initiative on taxes if he cannot secure Republican votes to put taxes on a June special election confirm whispers that have been circulating for a couple of weeks. Plan B for Brown’s budget would go directly to the people to raise taxes.
While there is still talk of Brown using a suspect alternative of seeking a majority vote in the legislature to amend older ballot measures to get his tax plan on the June ballot, a November special election would not face legal hurdles.
Taxes appearing on a November ballot would be classified as a tax increase rather than a tax extension for the taxes under consideration expire the end of June.
Of course, the income, sales and vehicle taxes that Brown wants to extend may or may not be the subject of an initiative effort.
Republicans Can Change the Narrative
Republicans in the legislature have been tagged as the “Party of No” for not agreeing to put tax extensions on the ballot. However, they are not the only party that is practicing the art of saying no. Democrats are saying no to putting reforms on the ballot such as a spending cap, pension reform or regulation reform.
Read news accounts, editorials or listen to Democratic politicians and you will hear that the Republicans are the obstacle to a budget solution. Democratic consultant Darry Sragow questioned in the Sacramento Bee this weekend whether the Republicans were even committed to democracy because they have not allowed the people to vote on tax extensions.
The Republicans can change this narrative if they come together behind a move to put reforms on the ballot. Five GOP senators have been negotiating with the governor for reforms. They must take the next step and tell the world exactly what they want to see on the ballot.
Once that is done, the governor, the Democrats and their allies will be put on the spot. Do they want these important, long-term reforms to structurally fix the budget problem? Or will they say: No!
Friday Issues: The 11th Commandment; Property Taxes; SF Pensions
When Ronald Reagan first ran for governor of California, he faced a hailstorm of sniping and attacks from the moderate wing of the Republican Party supporting the candidacy of San Francisco mayor George Christopher. To tone down the attacks, the California Republican Party Chairman created what he called the Eleventh Commandment. As Reagan described it in his autobiography, An American Life, “The personal attacks against me during the primary finally became so heavy that the state Republican chairman, Gaylord Parkinson, postulated what he called the Eleventh Commandment: Thou shalt not speak ill of any fellow Republican.”
Ironically, the conservatives are firing the verbal attacks nowadays offering a resolution to declare any legislator who votes to put taxes on the ballot a traitor. As introduced, the resolution gives no leeway for voting to put taxes on the ballot even if they are accompanied by major reforms such as a spending limit or pension reform.
There has been no talk about the 11th Commandment as the Republican Convention comes to Sacramento this weekend, and seemingly no talk of Reagan’s Big Tent idea, either.
Voting on the Budget Bill – Ready or Not
With budget votes called in both the Senate and Assembly today, one wonders how well legislators know the details of the proposed budget. While debate raged over the potential for a special election and the tax extension part of the budget plan, the California Taxpayers Association took a look at what is actually in the budget bill and came up with some interesting insights.
CalTax reports that the proceeds from the sales and car tax increases would be state revenue, and would be put into a special fund and earmarked for local governments to pay for the public safety programs that would be transferred from state to local governments.
This “public safety” money would be on top of what is now spent on public safety because another provision prevents local governments from using this transferred revenue to replace other funding for public safety. CalTax asks an interesting question: “With local governments facing massive deficits, would this provision make them unable to reduce police and fire budgets?”
Looking for Clues in the Los Angeles Election
Did last week’s Los Angeles election results give any clues on where voters stand if a special statewide election is called?
On the tax front, LA City voters passed a tax on medical marijuana and apparently defeated a tax on oil production. Along with the defeat of another oil production tax increase in neighboring Beverly Hills, it should give pause to those who have clamored for a statewide oil severance tax. Voters understand that the tax will work its way on to them at the gas pump.
Whether approval of the marijuana tax provides any tell-tale sign is difficult to determine. The marijuana tax faces legal hurdles and uncertainties best described by City Council President, Eric Garcetti: “If marijuana is supposed to be medicine, you can’t tax medicine. And if it is a gross receipts tax on a business, these (dispensaries) are not supposed to be businesses.”
It may be too much of a leap to guess results from a special election on taxes from what happened in Los Angeles. The concern for those supporting a tax on the special election is that the tax that voters felt would eventually affect them directly (the oil tax) was turned down. Continuation of the car tax, sales tax, and, for many, the income tax, directly affects the voters. A PPIC poll found overwhelming opposition to these taxes marked for extension.