Tax Measures Everywhere—For What Purposes?

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

The coming March 3 California primary election is not simply about the presidential contest and legislative races, it’s also about taxes—big time. Voters will decide on a record 231 local tax and bond measures (backed by taxes) across the state.

The California Taxpayers Association amassed a listing of the 231 measures, which cover the gambit from general obligation bonds funded by property taxes to parcel taxes to cannabis taxes to document transfer taxes to sales taxes to hotel taxes. According to brief summaries of the multiple tax measures the money will go for schools, parks, law enforcement, road paving, open spaces and all kinds of government services – or will it?

Never mentioned in any of the descriptions is the hidden cost driver for many local governments and schools– pension liabilities.

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A Suggestion for the Governor: The Best Way to Raise Revenue Is to Allow Businesses to Create New Jobs, Not to Support the Largest Tax Increase in State History

Rob Lapsley
President, California Business Roundtable

Dear Governor Newsom,

In early January, you released your proposed state budget for the next fiscal year. Thanks to a sustained economic recovery within the business community, the state has near-full employment and $78 billion more in total budget tax revenue since 2010–11. In fact, state and local tax and fee revenue has increased by more than $140.2 billion—state taxes and fees alone at a 73 percent increase—in just ten years. Local property taxes are expected to rise to $79 billion this fiscal year, of which $33 billion will go to schools, resulting in a record-high funding level of $17,964 per K–12 student in the current budget. And thanks to this increase in economic activity and tax revenue, the state is sitting on a growing balance of $38 billion in combined general and special fund reserves.

Yet in most parts of the state, working Californians aren’t feeling the same budget security.

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The PAGA Gold Rush

Tom Manzo
President, Timely Prefinished Steel Door Frames and President and Chairman of the Board at California Business and Industrial Alliance

The labor union-backed authors of a new report scoff at potential abuses of the state’s Private Attorneys General Act (PAGA), but hundreds of trial lawyers have pursued this modern-day gold rush. One of the state’s top PAGA lawyers even drives a Rolls Royce with the license plate MR. PAGA.

PAGA empowers them to use the power of the state to threaten massive penalties over arcane violations of the state’s 1,100-page labor code. More often than not, employers settle rather than risk financial ruin–netting a quick buck for all the Mr. and Mrs. PAGAs who make up California’s trial bar.  

The report’s authors picked a series of unusual metrics to measure PAGA’s success, such as the state’s cut of PAGA financial penalties nearly tripling between 2018 and 2019.  Let’s be clear: Employer law-breaking did not triple between 2018 and 2019; rather, these increased penalties are a function of the flood of new PAGA notices being filed by trial lawyers. The growing dollar figure attached to PAGA is proof-positive that the law needs closer scrutiny by the state legislature. 

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CA Voters are Casting Ballots–What Does That Mean?

Paul Mitchell
Vice-president at Political Data, Inc.

The Tracker is Back!

In it’s 7th iteration, and always improving, we are excited to launch the PDI absentee ballot return tracker for California. Check it out at this link.

A few things we’ve updated for this cycle:

:: The graphics are cleaner and should load faster.  We hope the tracker will work better under the heavy loads we have experienced in the past.

:: The geographic and other filters are hidden under the “find my data” button in the upper right hand corner. This “hamburger button” is where you can hone into a district or type of voter to filter the whole database.

:: We have added a new feature where you can subscribe to a district, county, city, or other geography and get an emailed PDF report every night. If you know what district or city you want, please go to this link and select it!  You should get your first update overnight, fresh for you to look at tomorrow morning.

:: The shading now shows precinct-level percentage of the vote returned, and you can hover over any precinct with your mouse to get more detail.

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Attacking the California Travel Ban

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

It was inevitable that other states would push back against California’s moralizing by legislation. California passed legislation to ban official travel to states that, in the view of legislators and the attorney general in one way or another discriminate against the LGBTQ community. In retaliation, Tennessee and Oklahoma issued travel bans to California and now Texas has filed a lawsuit to have the California law overturned. 

Since the lawsuit pits one state against another, the U.S. Constitution demands that the lawsuit is filed directly to the United States Supreme Court, which has original and exclusive jurisdiction over such a case. 

Last year, I wrote about possible consequences of the travel ban, including asking, “What if states on the California banned list decide to strike back and ban official travel to California? Are we seeing the beginning of an economic war between the states if that occurs? Are we treading closer to the courts intervening on the basis of the US Constitution’s Commerce Clause?” 

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Proportional Representation Is Showing Results in California’s Democratic Presidential Race

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)

Bernie Sanders campaigned in Chico and opened an office in Bakersfield.

 Pete Buttigieg toured the Central Valley.

Mike Bloomberg hit Stockton and Fresno.

Proportional representation election systems, a reform I’ve long championed, have been dismissed as unrealistic in California. But in this presidential primary season, PR is being quietly tried out, and there are signs that, unlike so many political reforms in the state, it’s actually working.

Proportional representation systems try to allow representation—in this case delegates—based on the percentage of the vote. Under the Democratic rules, delegates are awarded in each Congressional district based on a proportional system. 

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Another School Bond? Why It’s Easy to Say No!

Jack Humphreville
LA Watchdog writer for CityWatch, President of the DWP Advocacy Committee, Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and Publisher of the Recycler

While it is not easy to say no to State’s nine million public school and higher education students, it is easy to say no to the educational-industrial complex that is expected to spend over $10 million to buy our approval of a ballot measure authorizing the issuance of $15 billion of general obligation bonds.  

This is in addition to the $54 billion of bonds* that have been authorized since 1998 and $17 billion of local bond measures that are on upcoming ballots.  

The proceeds from this Proposition 13* (not to be confused with the real Proposition 13 that protects our homes and businesses from massive tax increases) offers something for everybody, including $9 billion for K-12 facilities and $6 billion for facilities of community colleges, Cal State, and University of California. 

There are many reasons to reject this proposition. 

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Selling PG&E Reduces Property Taxes by Millions $

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

A government takeover of Pacific Gas & Electric Company could cost  billions of dollars for the buyout and a big loss in property taxes for the governments that want to become the new utility proprietors. As a government owned utility, a state or local government run operation would no longer be required to pay property taxes. 

According to the State Board of Equalization, the assessed value of PG&E is nearly $30.9 billion. At a one percent tax rate, the PG&E property tax liability is about $309 million. That would be gone with a state take over. 

Assuming that the property tax roll is reduced by $309 million then the state will have to make up about 37% of the loss to K-12 districts or about $115 million, since each dollar of property tax that goes to the schools saves General Fund payouts to the schools. Community colleges are affected as well. 

Not that government will allow for the utility to escape all taxes. In Los Angeles, the city operated Los Angeles Department of Water and Power sought an in-lieu fee in place of property taxes, but lawsuits were filed against that effort.

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Super Bowl LIV Socio-Economic Studies

Lloyd Billingsley
Policy Fellow with the Independent Institute (Independent.org) based in Oakland, CA

The Kansas City Chiefs came from behind to defeat the San Francisco 49ers 31-20 in Super Bowl LIV. The game has been endlessly analyzed but some related economic and social issues could use similar attention. For example, nothing like the college admissions scandal was going on. 

Celebrity status might help stars such as Beyoncé and Sir Paul McCartney get into Hard Rock Stadium in Miami, a very tough ticket. On the other hand, no such thing was happening on the field of play. 

Nobody starts at quarterback for the Kansas City Chiefs or San Francisco 49ers because their daddy or mommy has a lot of money, owns the team, or holds an executive position in the National Football League. That never happens with any NFL team, and nobody gets on the team due to family connections. 

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All Eyes on March

Darry Sragow
Publisher of the California Target Book and USC professor

The California Target Book’s latest California political update, “All Eyes on March”, will be this Thursday, the 13th, from 1:30 until 5:00 in the CalChamber Conference Room, 1215 K Street, 14th floor.

Secretary of State Alex Padilla headlines the event that features panel discussions on Ground Campaigns, Independent Expenditures and Ballot Measures, as well as an overview of the hot legislative races in the March 3 primary.

Panels include: GROUND CAMPAIGNS AND THE MEDIA with Pat Dennis, Street Level Strategy; Tina McKinnor, LA Voice; and Roger Salazar, ALZA Strategies; moderated by Cesar Diaz, Target Book Editor and Legislative & Political Director for the State Building & Construction Trades Council. INDEPENDENT EXPENDITURES with Lisa Gasperoni, LG Camaigns, Richard Temple,  McNally Temple Associates; Marty Wilson, Jobs PAC; moderated by Target Book Senior Editor and veteran political analyst Tony Quinn. BALLOT MEASURES with Gale Kaufman, Kaufman Campaign Consultants; Rob Lapsley, California Business Roundtable; Ned Wigglesworth, Spectrum Campaigns; moderated by Target Book editor and public affairs and government relations specialist Marva Diaz 

Tickets are $60 each and available on the California Target Book website. https://californiatargetbook.com/

 

 

 

 

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