Because the two veteran Democratic congressmen were placed in the same district with overwhelming Democratic registration, some experts believe the contest will last all the way to November under the new top-two primary rule.

The debate hosted by the Jewish Journal saw the temple’s main sanctuary filled to capacity with a couple of overflow rooms set up with monitors for those who couldn’t squeeze into the main event.

Like a prize fight of old, the audience was studded with notable personalities who came to watch the action, including LA County Supervisor Zev Yaroslavsky, LA City Council members Dennis Zine and Jan Perry, Assembly member Bob Blumenfield, and city attorney Carmen Trutanich.

The combatants wasted no time trying to bloody their opponents.

Berman said he often accomplished success by working with others but not always taking the credit. However, he declared early on he was at the debate to “blow the trumpet more loudly.”

They battled over who offered the toughest sanctions against Iran to stop that country from developing nuclear weapons. Sherman said the US was too slow in supplying severe sanctions. Berman offered that he was the author of the most severe sanctions.

The sanction issue brought a series of jabs back and forth with Berman angrily denouncing Sherman for, he said, knowingly distorting his record. “For him to invert the truth is … Brad!”

Reed fired off a couple of roundhouse hooks that seemed to light up many in the audience when he charged that the policies of both Sherman and Berman had failed for thirty years and that his candidacy represented the voters against the status quo.

Sherman and Berman locked up in clinches pounding away on who best supported Israel, the positions they took on military intervention in Libya and their stand on the Stop Online Piracy Act.

Berman was a key supporter of the SOPA measure, a position recognized by the entertainment industry. Sherman said he was a co-sponsor, a position mocked by Berman.

The two traded punches on Sherman’s call for Berman to sign a pledge not to accept money from Super PACs. Berman called the pledge request “a gimmick.”

Pointing out that Berman opposed the pledge not to accept Super PAC money, but at the same time called for a constitutional amendment that would outlaw Super PACs, Sherman counterpunched, “You can’t have your Super PAC and eat it, too.”

The Super PAC issue was involved with Senator Barbara Boxer’s decision earlier in the day to jump off the fence and endorse Berman. She reacted negatively to a mailer sent by the Sherman campaign that tied Berman to the PG&E utility company and the deadly 2010 San Bruno pipeline explosion because PG&E gave money to Berman through a Super PAC.

Maybe the most telling punch was delivered inadvertently when questioner Bill Boyarsky, former Los Angeles Times editor and now a writer for the Jewish Journal, said it was time to “get down to the street level.” He was attempting to segue into a discussion on roads.

Berman took it another way. “Let’s get up to the street level,” he said.

Here’s my take.

* The Effort Behind the Measure Was Partisan — Instead of building bipartisan consensus for a ballot measure, the backers decided to try to make it an anti-union political play for Republicans. The chief fundraiser was a former GOP party chairman. The main proponent was a former Republican legislative and Schwarzenegger Administration aide. The architect/author of the plan, Mike Genest, was a long-time Republican legislative staffer and Schwarzenegger Department of Finance head. It boasted former Nixon cabinet secretary George Shultz as its big-name supporter. And the spokesperson was Schwarzenegger’s press secretary. That’s no way to make a measure appeal to Democrats and the growing number of independent voters in California. A smarter move would have been to involve Democrats on the ground floor of the campaign to make it bipartisan from the get-go.

* The Non-Partisan LAO, not the AG, Did It In — Opponents of the measure got an unexpected Christmas present when the nonpartisan Legislative Analysts Office gave the measures unexpected blistering assessments in late December. The LAO, which had cheered the Little Hoover Commission’s findings on pensions as well as the Governors proposal, put a pricetag on the measure of more than $1 billion per year for the next 30 years. It also said it had numerous legal and constitutional problems. While the initiative backers blasted the Attorney General for her Title and Summary, the real problem was the LAO’s scathing analysis. The AG simply drew her assessment from the LAO’s.

* The Campaign Overreached with Its Measures — Instead of a modest measure that would have addressed the headline-grabbing voter concerns about pension spiking, pensions awarded to felons, and the practice of buying additional years of state service known as “airtime,” the ballot measure authors bit off more than they could chew with an all encompassing attempt to pare back pensions for the long haul. The vast scope of the initiative left it vulnerable to the multiple weaknesses identified by the LAO.

* No Sugar Daddy — No matter how flawed, ballot measures often have backers willing to write fat checks to ensure they get on the ballot. This one was an orphan. The backers say that the Title & Summary chilled fundraising, but big bucks should have been banked long before that.

So now what?

There’s lots of sour grapes among the measures backers these days. They say the Governor and the Legislature won’t produce any real savings now that the initiatives are off the table.

But I wouldn’t be so sure. The Governor has put forward an ambitious 12-point reform plan. No one expects the Legislature to rubber stamp it, but I’d be surprised if lawmakers don’t move forward with enough changes in the state’s pension system to put this issue to rest for years to come.

Once again the Sacramento politicians and powerful special interests are attempting to subvert the will of the people and sabotage the public’s support for strong term limits for state legislators.

They tried it before with the slimy Proposition 93 in 2008, which would have kept the ethically-flawed Senate President Pro Tem Don Perata and Assembly Speaker Fabian Nunez in their powerful positions as well as carve out a special loophole to allow incumbents to stay in office.

Nunez and Perata had then-Attorney Jerry Brown write a dishonest description of their self-serving measure to try and trick voters into supporting it. They then spent over $18 million in special interest money to try and pass it.

Then-California Insurance Commissioner Steve Poizner and U.S. Term Limits, the nation’s leading term limits advocacy group, courageously fought back and won that underdog effort despite being outspent by two-and-a-half to one.

Now Jerry Brown and his special interest cronies are at it again.

They have maneuvered the cynical and misleading Proposition 28 on to the June ballot and it would dramatically increase the time that politicians can hold legislative office.  The current term limits law allows a politician to serve a maximum of six years, or three terms, in the State Assembly and eight years, or two terms, in the State Senate.

Proposition 28 allows a politician to serve 12 years in the State Assembly or 12 years in the State Senate. That means Proposition 28 doubles the amount of time a politician can be in the State Assembly and increases by 50% the amount of time a politician can serve in the State Senate.

Given Californians’ strong, and ever increasing support, for term limits and their utter disdain for our state’s arrogant, ineffective and ethically-challenged Legislature, one would naturally think that Proposition 28 would have zero chance of passage.

But that is based on the belief that the voters will receive an honest and complete description of the initiative. That is not the case. Thanks to the ultimate career-politician himself, Jerry Brown, who was first elected to office in 1969, the voters will once again be reading an intentionally slanted and dishonest description of an initiative to weaken term limits when they go to the polls.

The first line of Proposition 28’s description states that it, “Reduces the total amount of time a person may serve in the State Legislature from 14 years to 12 years.” The key word is reduces!

The initiative’s description does not mention what current term limits are or that Proposition 28 modifies existing term limits for legislators.

An independent study by U.S. Term Limits showed that 80% of state legislators would have their time in office increased, not reduced, if term limits is weakened to allow a legislator to stay in office in one legislative chamber for 12 years straight. Only 8% would have their time in office actually cut.

That’s because very few legislators actually serve the full 14 years in both chambers. It’s too difficult to arrange to be elected to three terms in the Assembly and then have an open Senate seat be available in which a politician could be elected to two full terms.

Then-Attorney General Jerry Brown used his position to again compromise the integrity of California’s elections process. He wrote a description of Proposition 28 that intentionally tries to trick the voters of California into casting a ballot to do the exact opposite of what they intend and think they will be voting for. Voters will understandably believe they are voting to strengthen and toughen term limits for legislators when in fact they will be greatly increasing terms for politicians.

The most recent Field Poll, taken in December, shows that 62% of California voters disapprove, and only 22% approve, of the job the State Legislature is doing.  A Survey USA poll conducted in April of 2011 reported that 75% of voters ranked the Legislature unfavorably and only 12% gave it passing marks.

It’s safe to assume that with those low approval numbers Californians have no interest in giving Sacramento legislators more time in office. Jerry Brown and his special interest cronies know this and they also know that many voters will gladly support an initiative that claims to toughen term limits.

Once again, the will of the voters and the integrity of our state’s election process, is under attack by the arrogant and dishonest political establishment

Much attention, in both policy research and broader political circles, has been paid to California’s statewide pensions systems.  In contrast, virtually no systematic analysis of the state’s independent pension plans had previously been performed, though they collectively hold more than $150 billion in assets. A detailed look reveals that the June 2011 funded ratio for the aggregated 24 systems is 53.6 percent, based on an assumed rate of return, or discount rate, of 5 percent.

There are notable outliers on both sides. The City of Fresno’s two systems have an aggregate funded ratio of 78.5 percent, while the Kern County system is only 41.5 percent funded. However, none of the systems is at or above 80 percent funded, which is the conventional benchmark for the minimum funded ratio.

The report also reveals that benefit levels vary significantly.  The average annual pension benefit in 2009-2010 for miscellaneous members was $34,461; for safety members, it was $67,718.  This includes all beneficiaries, regardless of the number of years of service. Those numbers would be much higher if the systems were willing to provide data for retirees who worked a full career.

It is also important to note that a majority of independent systems base final average salary on the last one year of work, while a minority based this on three years.  This encourages spiking of the final year salary to increase retirement benefits. All systems contain some form of cost of living adjustment, further inflating average payouts to retirees and costing taxpayers more.

Why all this really matters is that pension costs were 4.1 percent of aggregate municipal spending in 1999; by 2011, that figure had more than doubled.  The highest share is 17.7 percent in San Mateo County and the lowest is 6.0 percent in Los Angeles County. Between 1999 and 2010, pension spending grew at 11.4 percent per year, more than the rate of growth for any other expenditure category. And this is still with the unrealistic assumption of 7.75 percent for annual portfolio returns.

This practice is at odds with standard practice in economics, which holds that pension liabilities are full-recourse obligations that must be paid without regard to the performance of pension fund investments. Thus, each system substantially understates liabilities and overstates funded ratios.

If pension systems assumed a more realistic 6.2 percent average annual rate of growth (what Warren Buffet argues for), which is a typical rate of return for private systems, pension costs would total 17.4 percent of all municipal expenditures. This unfortunately means we can expect to see less local parks, roads, libraries, firefighters, and police, while we keep paying more for government employees’ pensions.

That’s the way it was in late November when the aging computer system running the state’s CAL-ACCESS database of political contributions clanked, wheezed, sent up a final gasp of steam and then shuddered to a halt for the best part of a month.

Suddenly political junkies, consultant types, broken-down reporters and ordinary citizens were wondering how they could live without being able to find out who was giving what to whom.

State Sen. Alex Padilla of Sylmar even sent a letter to Jerry Brown, demanding that the governor take over the reporting system and make sure it’s working perfectly for the upcoming elections.

Brown was actually the right person to call, since it was his Political Reform Act of 1974 that forced California politicians to file those regular finance reports to the state. Before that, the typical answer to questions about political contributions was something along the lines of “What’s it to you?”

But even after 1974, it was a statewide game of hide-and-seek to actually find those finance reports. While every campaign filed a copy in Sacramento, reporters and other interested citizens in the hinterlands of, say, Southern California had to figure out which county courthouse held the local copy of that finance report. And if it was an Assembly or state Senate district that included several counties, good luck.

It wasn’t until 1999 that the secretary of state fired up the CAL-ACCESS system, putting that financial information on the Internet and, for the first time, making it easily available to anyone who wanted to see where the political money was coming from.

Nicole Winger, a spokeswoman for Secretary of State Debra Bowen, described that original state system as “something like your first cell phone,” with the difference being that most of us have upgraded our phones since 1999, while the state is still using the same Version1.0 system.

More important, though, every year more and more people call up that site, expecting to find just who is putting up the money to back California’s politicians.

“Thirteen years ago, who could have anticipated how much this system would be used?” Winger said in an interview. “We try to promote it to voters and the usage grows every year.”

That’s actually the point of this stroll down the political memory lane. People nowadays not only want to see campaign spending records, they also expect to see them. They want those records complete and they want them now.

The demand for full disclosure can go beyond the current legal minimums, but politicians can’t afford to ignore those increasing nosy voters. Just ask Mitt Romney about his tax returns.

Not everyone in the politics biz has recognized the growing demand for financial disclosure. The U.S. Senate, for example, is still content to ignore the fact that the entire world has moved online and insists that it’s perfectly OK for senators to file their financial reports by hand and then sloooowly put them in a form people outside the Beltway can access.

Then there are the ever-increasing numbers of 501( c ) (4) non-profits, which can raise money for candidates without having to reveal who is writing the checks.

That promise of anonymity is a selling point used by folks raising cash for Republicans and Democrats who are convinced that voters either won’t notice or don’t care.

They’re playing with dynamite. As it gets closer to election day, voters are going to want to know who’s paying for those expensive hit pieces or mud-slinging political spots. And “None of your damn business” isn’t the answer they’ll be looking for.

John Wildermuth is a longtime writer on California politics.

California’s elected leaders continue to heap new taxes upon our leading job creators – and without one solitary reform to fix our broken system or assurance that they will spend our dollars responsibly.

So why should we trust the Governor, labor or any other tax-hike advocates when they tell us their various measures will solve our economic woes and help the local butcher, baker or candlestick maker sleep better at night. They won’t.

That’s why the National Federation of Independent Business/California and Howard Jarvis Taxpayers Association, representing the voice of small business and taxpayers in our state, together released an Open Letter to California’s Business Community calling upon everyone with an interest in business, jobs and the economy to join us in opposing these terrible, destructive tax proposals.

Some politicians, pundits and number crunchers may want you to believe that California is on the mend, but make no mistake: the Golden State is still a long way away from restoring its shine, and small business owners and taxpayers are a long way away from feeling confident once again.

Look at the grim numbers as they stand today:

• California still has the 3^rd highest income tax in the nation.
• Our state sales tax rate (7.25%) is still the highest in the nation.
• California’s corporate income tax rate (8.84%) is still the highest west of the Mississippi.
• California’s 2011 Business Tax Climate ranks 2^nd worst in the nation.
• We have the fourth highest capital gains tax at 9.3%.
• California has the second highest gasoline tax (averaging 65 cents/gallon) in the nation.
• California is ranked 14^th highest in per capita property taxes (including commercial) – the only major tax where we are not in the worst ten states.

With these startling figures alone, how is it that we can rest assured “the ice is thawing” in some way?

And, lest we forget, our state leaders have promised us time and again meaningful, sustainable reforms to help business and jobs recovery – and with no tangible results:

• Nothing to fix our $500 billion unfunded pension liability.
• No meaningful, comprehensive reform to the regulatory morass that is strangling job creators.
• Nothing to stop egregious and frivolous “shakedown” lawsuits that have nothing to do with justice and everything to do with making a quick buck for the plaintiffs’ bar.

Simply stated, it is difficult to understand why, given California’s heavy tax burden and harsh regulatory and legal climate, any private sector entity doing business in California would support higher taxes.

Governor Brown, we understand, is working tirelessly to cajole and persuade business organizations and leaders to support his proposal to raise sales and income taxes on business, and yet by his own projections, the state deficit will shrink to $1.9 billion by 2015 without a single tax increase.

The Governor, labor and other tax proponents want you to believe that $35 billion in new and higher taxes will pave the way to solving California’s ills.

But we must ask: without one reform to control the cost of government or make it more efficient, without any history of politicians making good on their promises for reform, and with a projected shrinking deficit without any new taxes, why should small businesses or any taxpayer pay one cent more? No track record, no science, no logic – no good.

NFIB/CA and the Howard Jarvis Taxpayers Association could not sit on the sidelines and allow our leaders to shake the remaining coins out of the pockets of already struggling Californians. But we cannot do this alone.

We call upon all citizen taxpayers and the small business community to do what is right for all of California and urge you to join us in opposing any and all proposed tax increases by signing and submitting this attached form.

As Benjamin Franklin once noted, we must hang together in order to avoid hanging separately.

Mission accomplished for the state’s job-creating solar industry? Not quite. The utility is back at the CPUC proposing to change the way it charges schools, water districts, cities and commercial properties that have solar. It also is expected to file statewide legislation to accomplish the same goal.

As a result, the local schools that produce their own power could see costs increase by more than $1 million annually. Equally drastic are the impacts to   government agencies (read: taxpayers) that have invested millions upon millions of dollars in solar projects.

At the heart of this fight is a policy called “net energy metering.” Also known as the program that lets a customer’s electric meter “spin backward,” net metering is a simple billing arrangement that ensures solar customers receive fair credit for the electricity their systems generate during daytime hours. It operates like rollover minutes on a cellphone; when a facility doesn’t use all the power its solar panels are producing at a given time, the extra energy goes to the property’s neighbors and the owner gets a credit on his or her electric bill.

In place since 1995, net-metering is one of the most effective state-level policy tools to avail solar energy to thousands California residents and independently owned businesses. Forty-three other states have adopted the policy.

Largely due to this policy, California’s solar market continues to grow exponentially – at a pace of up to 40 percent per year, far faster than the general economy. According to the Solar Foundation’s job census our state’s solar industry employs more than 25,000 Californians. Equally important, the majority of people working in the solar industry are from working- class communities. These are jobs that reduce our dependence on imported fossil fuels and cannot be outsourced to China and other nations.

Who is driving the growth of Californians rooftop solar sector? Families in median income zip codes looking to save money now comprise the majority of the  Golden State’s new residential solar customers, thanks to the growing popularity of solar finance models where customers can lease the panels rather than making a big-ticket purchase.

Despite the setback SDG&E just received from regulators, we know that the utilities are continuing to make a concerted effort to change the rules of net metering and accelerate limitations on the program. Such efforts – call it a “solar tax” – threaten one of the few growing sectors in our state’s economy and could also penalize existing solar generators by increasing their bills. That creates uncertainty in the market and will stall job growth.

While our elected government can set the nation’s leading energy policies, it does no good if the utilities are able to undermine our state’s energy goals by changing billing structures on solar producers. Our lawmakers must step up to protect net metering, expand the jobs of our fastest growing industry and defend the interests of the thousands of homeowners, schools, water districts, and cities who have invested in a sustainable future.

Read more here:

We stand at once the wonder and admiration of the whole world, and we must enquire what it is that has given us much prosperity, and we shall understand that to give up that one thing, would be to give up all future prosperity.  This cause is that every man can make himself.

Over the past forty years we have tolerated the steady encroachment of the regulatory state into every corner of our lives, so none of us can any long “make ourselves.”  And even though for the most part these rules and restrictions have had plausible rationales, no one paid any attention to either the accumulative impact they would have on our society and economy, nor to the corrosion they would bring to our commitment to our foundational principles.

Like the frog in the pot with the heat slowly but steadily turned up over time, we find ourselves in a tight spot.  Our state economy is stagnant, our infrastructure is fraying, our debts are rising, our global economy is transforming at an increasingly rapid pace, and comity is but a distant memory.  Our political leadership can only offer more of the same expensive, ineffective, and industrial-era government tarted up with the exaggerated and expensive chimeras of high-speed trains and “green” energy.

Small business owners know from first-hand experience that things are not going to return to the “good old days.”  Unlike government, they have had to scramble and reinvent themselves by the hundreds of thousands over the past four years of economic downturn.

And they did it applying the fundamentals of business success to their moral fiber and passion for success.  Now we demand that government transform itself to be a partner in the new economy.  We will reinvent the California dream yet again only by returning to our founding principles and applying them to the enormous and unprecedented political economic transformation underway.

To keep faith with small business owners and the founders of our country, Small Business Revolution offers these as our founding principles.  We will support candidates that embrace them and oppose those that will not.

1. Freedom Wins.
2. Limited Government Secures and Perpetuates Freedom.
3. Free Markets Require Impartial Refereeing.
4. Everybody Must Adapt to Accelerating Change—including Government.
5. Time Is of the Essence.
6. What Gets Measured Gets Done.
7. The Only Way Out Is Forward.
8. A Growing Economy Requires More Energy.
9. There Is Only One Market in the New Economy.
10. We Are Responsible for the Government We Get.

Detailed explanation of how we see these principles applying to today’s economy and political geometry are posted on our website, www.smallbusinessrev.com.

We aim to unite the voice of the state’s 3.5 million small business owners around these maxims, to change government from a relentless and careless constrictor of our liberties to what we promise ourselves in the preamble to our state constitution:

We the people of California, grateful to Almighty God for our freedom, in order to secure and perpetuate its blessings, do ordain this constitution.

Originally published at Zocalo Public Square

Election night 1876 arrived full of uncertainty. The presidential race was something of a referendum on Reconstruction, and the results were so tight that the winner was unknown. It would be months before a special commission awarded 20 disputed electoral votes, and the presidency, to Rutherford B. Hayes.

With all the attention on the election, it was the perfect night to pull off a crime. In the town of Springfield, Illinois, several thieves went to work on stealing a body from the local cemetery.

And not just any body.

It was the body of Abraham Lincoln.

The robbers might have gotten away with it. But among their number was an undercover agent who was relaying their activities to the Secret Service.

The Secret Service had not been assigned to protect the body of the dead president. Nor for that matter was the Secret Service in the business of protecting the bodies of live presidents. The agency would not assume that role until after the assassination of President William McKinley in 1901.

But, then as now, the Secret Service was attached to the Department of the Treasury and was in charge of foiling counterfeiters. The grave robbers’ plan was to trade Lincoln’s remains for the release of an imprisoned, notorious counterfeiter—Ben Boyd—and $200,000 in (non-counterfeit) cash.

The Secret Service prevented this particular grave robbery, but we’ve been trying to steal the 16th president ever since.

One of the most hated presidents while in office, Lincoln has become the most beloved, and sought-after, president in our history. President Obama, who announced his presidential campaign from Springfield in 2007, often tries to seize Lincoln’s mantle.

Hollywood is among the most persistent grave robbers. Steven Spielberg is directing a new film, Lincoln, based on Doris Kearns Goodwin’s bestselling book Team of Rivals. Just last year, Robert Redford directed The Conspirator, an account of the trial of those accused of plotting to kill Lincoln, with a particular emphasis on the lone female, Mary Surratt. And in a campier spirit, there’s the forthcoming Abraham Lincoln, Vampire Hunter, based on historical fiction by Seth Grahame-Smith. It posits that the president worked nights as well as days to protect the Union, and his enemies didn’t all report to Jefferson Davis.

I don’t blame these filmmakers, because I know how tempting it can be to dip into the Lincoln vault—literally. In my own mystery novel published last year, Lincoln’s Hand, the catalyst of the story is that 1876 grave robbery.

After that failed attempt in 1876, Lincoln’s body was frequently moved to protect against more grave robbing efforts. The coffin was even opened twice to see if the body was still there. It was—and still is.

But you don’t need a shovel to grab a piece of Lincoln. An estimated 16,000 volumes have been written about Lincoln, far and away more than any other American. According to one survey, of the 600 public statues or sculptures of American presidents, more than one-third of them depict Lincoln.

What explains the endless exploitation of Lincoln? The easy answer is that Lincoln is being honored for helping guide the country through its greatest crisis.

But that’s only part of the story. Also central to our attraction is Lincoln’s demise

“It was the manner of his death that elevated him above all others in the American Valhalla,” argued historian James M. McPherson in the New York Times. “Coming five days after General Robert E. Lee surrendered at Appomattox, John Wilkes Booth’s shot heard round the world changed triumph into a tragedy of Shakespearean proportions.”

This tragedy—death at the moment of triumph—is intensely cinematic, and the story is enhanced by Lincoln’s complex character. Lincoln exemplifies “the right to rise” through hard work and learning, no matter how humble one’s beginning. He is the embodiment of the American dream.

Lincoln also left future authors and screenwriters plenty of material in his own writing. When modern life confuses us, Lincoln’s message remains relevant. To a country obsessed with reinvention, he offers the hope of “a new birth of freedom.” His dictates of “malice toward none, charity for all” still remain the markers for any American who wants to be revered. His explanation of political gravity—“you can’t fool all of the people all of the time”—remains sage advice 150 years later. And what better phrase has anyone designed to describe the internal American struggle against darkness—and for a brighter future—than his counsel to reach for the “better angels of our nature?”

No wonder, then, that everyone wants to dig up Lincoln, whether the goal is to refresh the American spirit, remind us of the American character, or get a book ranked high on Amazon. Bringing Lincoln back to life reminds us what our country strives to be. That comes through whether it’s Lincoln in a straightforward biography or Lincoln in a fistfight with vampires.

The report authored by Stephen Levy, Director and Senior Economist of the Center for Continuing Study of the California Economy, a long time Proposition 13 critic, argued that a “new normal” of a weak California housing market means that property taxes would not keep pace with the historical gains made under Prop 13, which for three decades outstripped increases in California’s cost of living.

Under Proposition 13, California’s property tax was the most stable revenue source and produced revenue at a faster rate than cost of living increases. Levy reports that, “The average annual increase in assessed value for all counties combined was 7.8 percent between 1980 and 2008, while the average increase in consumer prices was 3.6 percent.”

Because of the recession, things have changed according to the report. Property values will not grow as fast as in the past. As he has done for years, Levy argues California governments need increased revenue.

Is there a “new normal” or are we fighting through a cyclical economic downturn? The report itself envisions an uptick in revenue although it does not anticipate a full economic rebound for some time.

The report makes the argument that there has been a shift of total property tax burden between residential property and commercial property, acknowledging that some of that is because there has been a boom in housing construction over the last thirty years. The so-called property tax shift is a favorite talking point of Prop 13 critics who want to raise property taxes on business regardless of how that would affect the economy or stifle job creation.

The real question: Is this talking point political gamesmanship or a real problem? Homeowners are satisfied with the Proposition 13 protections as poll after poll reveals. The report rightly notes that Proposition 13 gave certainty to taxpayers. That certainty enjoyed by individual property owners is more important to the taxpayers than some nebulous notion of what share of the tax burden homeowners’ pay.

The report bemoans the fact that Proposition 13 prohibits raising property taxes while other states are looking at that option. There is no mention, however, about taxpayer protests that often accompanied the call for higher property taxes in other states.

The report offers no recommendations on changing the tax system except that Prop 13 should be part of the tax reform discussion. There is no conversation about the possible increase in income taxes that currently are headed for the ballot and presumably would nick Silicon Valley executives.

Further, the report noted that sales tax revenue has dropped because consumers are spending more on services instead of goods, and services are not taxed. No mention that a service tax should also be on the table. Such a suggestion is sure to garner interesting conversations in the Silicon Valley’s service oriented economy.

The Proposition 13 analysis is part of the Joint Venture Silicon Valley’s annual Index of the Silicon Valley report. Here is a link to the Index. The Prop 13 analysis starts on page 10.

One correction should be noted. The report twice states that Proposition 13 brought about a two-thirds vote requirement to pass bonds. That requirement originally was included in the 1879 California constitution and was reinstated by a separate ballot measure after Proposition13 passed.