Vote Sends Mixed Message on Growth

Timothy L. Coyle
Consultant specializing in housing issues

Measure A, the initiative that would have limited development in San Diego County, was narrowly defeated by local voters – handing homebuilders, local REALTORS® and other supporters a victory on the issue of regional growth.  But, voters ultimately sent a mixed signal by also defeating Measure B, which was on the same ballot to allow a specific housing project in San Diego’s backcountry.

Measure A, which appeared before County voters as part of the newly established March presidential primary election, would have subjected to a referendum each new housing project that involved a change to the County’s general plan.  Had it become law, homebuilders developing six homes or more would need the blessing of County voters before moving forward with their project.

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Pension Math

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

Lately we are often asked about the impact on pension costs from a stock market decline. Our answer might surprise you.

On December 31, 1999, the Dow Jones Industrial Average closed at 11,497. That fiscal year, the state spent $1.3 billion on pensions.

20 years later, the DJIA closed at 28,462. That fiscal year, the state spent $10.3 billion on pensions.

You read that right. As the stock market rose nearly 150 percent, state pension spending increased nearly 700 percent.

Too many people incorrectly believe that pension costs increase only when stock markets decline, but pension costs would rise even if the stock market never declined. That’s because pension liabilities accrete (grow) at the discount rate employed by pension funds for reporting obligations. The higher the discount rate, the greater the accretion. Because California’s pension funds discount pension liabilities at the same high rate at which they hope pension assets will earn, the state’s pension liabilities grow very fast:

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Pressure Mounts for Property Tax Relief

Jon Coupal
President of the Howard Jarvis Taxpayers Association

From many corners, California politicians and tax officials are under increasing pressure to extend the current April 10 deadline for paying property tax bills.

The request is not unreasonable and there are many ways that government can assist homeowners who are under threat of hefty penalties or tax foreclosures.

To date, our political leaders have been responsive to those suffering from the economic shock due to the COVID-19 virus. Many California localities have passed emergency laws against evictions and the state, via Gov. Gavin Newsom’s executive authority, has ramped up special protections for small businesses and extended the tax filing deadlines for income taxes. These actions are justified.

But homeowners are hurting, too, because of the pending due date for the second installment of property taxes.

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This Is Not the Time for An Austerity Budget in California

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)

The budget should not “shelter in place.”

Unfortunately, word went out from the governor’s office that the budget is likely to stand pat, without any new investments or programs. 

That’s an enormous mistake. And indefensible, given that it’s a mistake that California has seen made twice in recent memory.

Indeed, if Gov. Newsom uses this moment to stand pat or retreat, with lots of devastating budget cuts, he’d be following the same failed path of his two predecessors.

Both Arnold Schwarzenegger and Jerry Brown responded to the recession and economic setbacks with frugality. Both made big cuts to the budget. Both reduced revenues.  Both pulled back on infrastructure and other needed building projects. 

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April: The Cruelest Month

Tony Quinn
Political Analyst

April is the cruelest month, and April 2020 will be the cruelest April in decades.  Sometime this April the Covid 19 pandemic will possibly explode; with luck it will crest and the “curve flatten”, but no one knows for sure when.  

Americans have been through terrible Aprils before, but this will be one of the worst.     

April 1865 was the most important month for Americans in the 19th Century.  On April 6 that year, retreating Confederate forces under Gen. Robert E. Lee reach a small stream in central Virginia known as Saylor’s Creek.  

Here they engaged the mighty Union army under Gen. Ulysses Grant.  

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Look Out Californians: We Could Be Next!

Richard Rubin
Attorney Richard Rubin has taught at the University of San Francisco, Berkeley and Golden Gate University, is a regular columnist for the Marin Independent Journal and was Chair of the California Commonwealth Club Board of Governors, 2017-2019.

The rolling surge of new COVID-19 infections will soon hit Californians as surely as the tides washing up daily on our shores. You can take it to the bank! There is no escape from its deadly onslaught which observes no boundaries. 

The belated arrival at Los Angeles harbor of the 1,000-bed naval hospital ship “Mercy” is a welcome sight which will alleviate some of the overload on local hospitals by taking non-virus patients. 

While helpful, it does not nearly begin to answer the urgent pleas for help for the tsunami yet to come. 

Speeding up the manufacture and delivery of thousands of ventilators and PPEs desperately needed which cannot occur unless the president exercises his full powers under the Defense Production Act would be a much more telling gesture. The failure to do so after repeated requests is incomprehensible. 

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Restaurants Rely On Consumers, But What About The Suppliers Who Rely On Restaurants?

Mary McAuley
Founder & Owner of Craft Winery Spotlights the Livelihood of Small Agricultural-Based Culinary Suppliers, and Their Survival Rate, Post-Pandemic .

People drink wine in times of joy and in times of stress (hello, quarantine) and although we’ve seen a lot of coverage online and social media highlighting the libations people are stocking up on, the smaller, craft, high-quality wineries, distilleries and breweries you don’t find in massive retail chains, are screwed.  Really screwed.  Boutique wine brands are what the alcoholic beverage industry calls “on-premise brands,” meaning the majority of what we produce is consumed on the premises it is purchased (i.e. a restaurant).  

I am the owner and founder of Ripe Life Wines, AKA one of those wineries.  So while the sales of alcohol through retail has been quite bountiful this week (Shanken News Daily reported some retailers were up as much as 400% last week), we small guys who don’t have the brand recognition or the merchandising dollars to be in the type of retailers that are being flooded right now, are feeling the total opposite.  And while I do have a number of small wine shops and gourmet markets that carry our wine (whom I love dearly) they are far and few on a national basis and that sort of retail doesn’t do the volume that restaurants do.  

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Here’s What Small Business Owners and Government Must Do Now to Survive the COVID-19 Crisis and Rebound

Kevin Klowden
Kevin Klowden is executive director of the Milken Institute Center for Regional Economics and California Center

The COVID-19 outbreak is decimating the global economy with company shutdowns and soaring unemployment. But in its aftermath, the world must be ready to rebound quickly. Small business and government can jumpstart this recovery by taking strong measures now to limit the damage and establish a strong foundation for regrowth.

The recommendations below can ensure companies and their surrounding communities avoid mass layoffs, have ready access to capital, and take advantage of new opportunities. Putting them into practice requires steady leadership and operational discipline. Small businesses should:

  • Reduce hours for non-essential personal rather than engaging in widespread layoffs. This more moderate approach will minimize employees’ loss of income and the strain on unemployment insurance systems, and allow firms to ramp up quickly once the virus is contained.
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School Grades in the Time of Crisis

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The front page story in the Los Angeles Times Sunday dealt with problems of issuing fair school grades in the time of the COVID-19 emergency. For those of us who were in college during the Vietnam War, the question of appropriate grading policy at a time of closed classrooms due to an external crisis is a situation we lived through before.

The Times article reported on how to fairly grade students with some students saying under the pressures and uncertainties of the times only pass/fail grades would be appropriate. Others wanted letter grades, which they believe would help them in seeking jobs, scholarships or graduate school acceptance. The story listed other possibilities being mulled over by school administrators such as pass/no record, credit/no credit, satisfactory/unsatisfactory.

A look into school logs from 1970 might help administrators in the decision-making process to see how their predecessors from 50 years ago dealt with a similar situation.

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Digital Petitions Now

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)

Here is one democratic advance that COVID-19 should demand. The introduction of digital processes for collecting signatures on ballot measure petitions, effective immediately.

The coronavirus crisis has hit as petition circulators work towards an unofficial mid-April deadline to gather enough signatures to get various measures on this November’s ballot.

But as Politico has shown, the effort has been made more expensive—and medically risky—by COVID-19. A circulator can have hand sanitizer and wipes at the ready, and even purchase tens of thousands of pens so each voter who signs has his or her own. But it’s impractical to collect a signature at a social distance of 6 feet.

The obvious workaround involves allowing technology into the process—something that should have been done long ago. Online signature gathering has been kept illegal by powerful interests that detest the initiative process, and the politicians and judges those interests support.

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