Pay Cut Decision is a No-Brainer

I’m no legal scholar, but Attorney General Jerry Brown’s decision yesterday to allow for an 18 percent salary cut for the state’s lawmakers and constitutional officers was a political no-brainer. The budget is in woeful deficit, unemployment is at record levels, public employees are on furlough – of course, the state lawmakers must share the pain.

The fact that legislators tried to avoid the pay cut during these difficult times separates them even further from average citizens. Legislators claim their fingerprints are not on the request seeking the opinion on the legality of the cuts. The administrators of the Senate and Assembly made the request to Brown. Right. And, I’m prepared to buy that bridge in Brooklyn.

The state’s independent pay commission authorized the cut in May. Commission chairman Charles Murray, in agreeing with the attorney general’s opinion, said on this issue, “We represent the average Californian.”

He’s right. The proof is the result of the only ballot measure that passed at the May special election.

So Now What?

Legislative Analyst Mac Taylor officially let all Californians know what a lot of insiders were whispering about for months. The budget is already in the hole for this fiscal year and combined with the projected deficit for the next budget the state treasury is short a cool $21 billion.

Elsewhere on this site, Greg Lucas runs the state’s tab on a woeful future. And, John Wildermuth explores the difficulty in finding a solution.

The question at hand is who’s picking up the tab and how do we get to a solution?

Maybe Governor Schwarzenegger and his buddy, movie director James Cameron, can team up to make the equivalent of 21 blockbusters like Titanic, all in one year, each grossing $1 billion—and donate it all to the state.

We are talking 21 disaster movies here.

Club California Spends Our Dues Poorly

Before Californians rush off and try to fix what’s wrong with the state’s governance by calling for a new constitution, they ought to consider the simple solution of getting a bigger bang for the taxpayers’ dollar.

William Voegeli, a contributing editor to The Claremont Review of Books and a visiting scholar at Claremont McKenna College’s Salvatori Center, argues that California government has shortchanged its citizens by not providing good services for the amount of tax dollars the citizens provide.

In a lengthy comparison of government efficiency between the states of California and Texas in a City Journal article, Voegeli shows California’s government model fails to deliver for its citizens and overcharges dearly for that failure. Quoting the New Geography’s (and occasional Fox and Hounds contributor) Joel Kotkin, to make the point: “Twenty years ago, you could go to Texas, where they had very low taxes, and you would see the difference between there and California. Today, you go to Texas, the roads are no worse, the public schools are not great but are better than or equal to ours, and their universities are good.”

Jerry Brown is Paddling on the Right Side of the Canoe

When he was governor three decades ago, Jerry Brown explained his political philosophy this way: “You paddle a little bit on the left, then you paddle a little bit on the right and you keep going straight down the middle.” As John Wildermuth pointed out here on Fox and Hounds,
Brown is not the first politician to try this system. Bill Clinton and friends called it triangulation. But, Brown’s description is more appealing and it makes it easier to examine what he has been up to lately.

Brown has been paddling hard on the right side of the canoe.

On Wednesday, Brown told LegalNewsline.com that over-regulation and too many laws were hurting California business.

"The whole framework of law is crucial for the operations of business enterprises," Brown said in the interview. "But when over prescriptive, it creates a huge and growing amount of overhead and it does seem that we’re reaching the point of counter-productivity." Brown indicated too many laws make it too easy to sue in California.

Split Roll Tax Proposals: A Little Sweetener with the Poison

Curious items appear in the two initiatives filed by the California Teachers Association to split the property tax roll taxing commercial property more than residential property. Both measures contain a pair of tax cuts as part of the packages that, overall, would result in massive tax increases.

One item would double the homeowner’s exemption and increase the renter’s credit. The second would create an exemption for business personal property tax.

When the $7,000 homeowner exemption was created, the exemption was equivalent to about one-quarter of the average California home’s value. However, after years of housing inflation the $7,000 exemption has little impact. It saves $70 off the homeowners’ property tax bill. Increasing the homeowner exemption to offset inflation driven value is a good idea.

However, the CTA measures merely increases the savings to $140. Such a small amount does little to offset inflation built into home costs.

Politics as Usual — A Veterans Day Tribute

My grandmother answered a knock on the front door and was asked by the stranger at the door if she was the mother of Harry Fox. She fainted.

It was early 1945. The Second World War raged and my grandmother thought the man at the door was the one she had dreamed about too many times. In her dreams, a man came to the door to inform her that her son, who has served in the United States Army since 1941, had been killed in action. The dream was so real that when the stranger said her son’s name she believed her premonition had come to pass.

Had she known her son’s whereabouts she would have been right to be afraid. Tech/4 Harry Fox was serving with General George Patton’s Third Army at the Battle of the Bulge.

In December 1944, Adolph Hitler attempted his last, desperate offensive thrust, sweeping tanks and infantry into the frozen, hilly, dense Ardennes woods. Hitler’s armies and Panzers massed in total secrecy and surprised the Americans in an attempt to disrupt the allied front, capture Antwerp, and break apart the Anglo-American alliance.

Deeper Cuts Could Light the Fuse on Tax Measures

Governor Arnold Schwarzenegger’s announcement that the current fiscal year budget is already $5 to $7 billion dollars in the red may have repercussions beyond the expected legislative budget battle.

With the budget heading toward another large deficit (including the projected structural deficit of an additional $7 billion-plus), the governor is suggesting across the board spending cuts again.

That will not sit well with the spending lobby, which has been mulling over tax raising initiatives in light of the polling numbers that indicate little interest in more taxes from the voting public. The cost of a full on initiative drive has made a number of the big money players have second thoughts about launching campaigns given the sour mood of the public and the down economy. Money is even in short supply for political wars.

However, the governor’s pronouncement will surely become part of the calculus when public employee unions and other pro-tax organizations decide whether to go ahead with tax increase measures. They’re thinking a roll of the expensive campaign dice might be worth the gamble when facing more deep cuts.

The Fourth Kind … of Government

The movie The Fourth Kind, now in theaters, refers to the fourth level of interaction with extraterrestrials. We are told by the movie promotions the first kind is sightings, the second kind is evidence, and the third kind is contact. The fourth kind is abduction.

There appears to be a Fourth Kind of government entity that the people of California are dealing with themselves. The familiar first three kinds of government are federal, state and local. The fourth kind is the people through the initiative process.

A few might even say the initiative process is an abduction of government.

The people of California have not felt that way — at least not yet. Polls in the past have revealed that about 75% of those polled support the initiative process. Ironically, that number 75 is nearly the total of initiatives that have been filed with the Attorney General for title and summary during this election cycle.

Split Roll Initiatives Filed

The California Teachers Association has filed two split roll initiatives according to reliable sources. A split roll would change Proposition 13 to tax business property differently than residential property.

Moving ahead with either measure will trigger a costly battle — public employee unions versus the business community and taxpayer groups.

In response to the filings, oppnents of a split roll will take steps to set up an oppostion campaign.

More to come.

Local Tax Measures Fare Better Than Recent State Tax Proposals

What do we make of many local tax measures passing in these tough economic times? According to the preliminary review by the League of Cities’ Local Government Finances Almanac, two-thirds of fifty-seven local taxes and bonds passed Tuesday.

Local voters said “yes” to a number of tax measures less than six months after statewide voters rejected continuing a number of temporary tax increases that were part of the February state budget deal. The “yes” on taxes also comes in the shadow of polls that indicate voters are not interested in raising taxes or making it easier to raise taxes.

It is telling that the “yes” votes occurred for local tax measures, while the “no” votes carried the day against continuing state taxes. With the legislature suffering a 13% approval rating, not too many people trust legislators with their tax money. On the local level, voters have a better sense of how their money is spent.