Did Tax Rise Help CA, Tax Cuts Hurt KS?

John Seiler
John Seiler, an editorial writer with The Orange County Register for 19 years, is a reporter and analyst for CalWatchDog.com.

Toto, I have a feeling we’re not in Kansas anymore. We’re in California, where the winter weather is in the 70s and the high taxes are imposed by the Great and Powerful Oz.

Writing in Al Jazerra, David Cay Johnston said Kansas’ tax cuts hurt it, while California was helped by its $7 billion in tax increases, which voters approved with Proposition 30 in 2012. He is an investigative reporter, Pulitzer Prize winner and professor of business, tax and property law of the ancient world at the Syracuse University College of Law.

His headline: “Real world contradicts right-wing tax theories.” Subheadline: “California raised taxes, Kansas cut them. California did better.”

He wrote:

“Ever since economist Arthur Laffer drew his namesake curve on a napkin for two officials in President Richard Nixon’s administration four decades ago, we have been told that cutting tax rates spurs jobs and higher pay, while hiking taxes does the opposite.

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Jerry Brown As The Nation’s Leading Democrat

Tony Quinn
Political Analyst

The big story of 2015 may be the emergence of Gov. Jerry Brown as the new national leader of the Democratic Party.  That’s not due to anything Brown has done, but rather the thrashing the Democrats suffered in 2014 that has left them a leaderless party with both a weakened President and an uncertain President-in-Waiting.

After November, California is practically the only bright spot left of the Democrats.  Go beyond this state’s borders and the Democratic wreckage is nothing short of astounding.  Just look at Nevada, a state carried twice by President Obama.  This year Republicans swept every statewide office, ousted one of the state’s two Democratic congressmen, and won overwhelming majorities in both houses of the Nevada legislature.

Republicans now control 69 of the 99 state legislatures; Democratic legislative control is at its lowest point since the end of Reconstruction – and that was 1876.  Republicans now have more members of Congress than at any time since Herbert Hoover was President.  

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If You Want to Make Sense of Obamacare, Go to San Diego

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)

Will San Diego have America’s finest Obamacare?

Yes, it’s way too early for any verdicts about the Affordable Care Act and its implementation, even in California, which has embraced this messy mash-up of a law more rapidly and firmly than almost any other state. It may be that we’ll never be able to evaluate Obamacare coherently—it’s simply too complex and contradictory, a wave slowly remaking one-fifth of the economy via regulatory jargon and codes that test the limits of human understanding.

But if Obamacare is ever to fulfill its core promises—of bringing health coverage to those without, of driving health innovation, and of improving community health—I’d bet those promises will get fulfilled in San Diego first.

While some parts of Southern California—sections of the Inland Empire and Los Angeles—have lagged in health coverage enrollment, San Diego nearly tripled projections.

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Bipartisan Bills to Reduce ADA Lawsuit Abuse Introduced in California Legislature

Tom Scott
Executive Director, California Citizens Against Lawsuit Abuse

Will 2015 be the year we see substantial reforms to stop lawsuit abuse associated with the Americans with Disabilities Act (ADA)? We are off to a good start with the introduction of AB 54 by Republican Assemblywoman Kristen Olsen and AB 52 by Democrat Assemblyman Adam Gray.

Both bills already have bipartisan co-authors, and both bills would establish incentives for fixing alleged violations without lawsuits. AB 54 would give businesses 60 days to update facilities once a violation is spotted before a lawsuit could proceed, and AB 52 would significantly reduce damages awarded in a lawsuit if alleged violations are corrected within 180 days.

While we have seen variations of these bills in the past, I am hopeful that the California Legislature and Governor Brown can see that well-intentioned laws are being blatantly abused by self-serving trial lawyers. We all want to promote disability access in California. The bottom line is that the ADA is a very complicated law and it is absurd to assume that all of California’s 3.5 million small businesses can understand its provisions.

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Google Announcement Signals Surge in High Tech Jobs

Gary Toebben
President & CEO of the Los Angeles Area Chamber of Commerce

When Google announced a week ago that it was making a $120 million purchase of 12 acres of land in Playa Vista, the tech world took notice. The land is zoned for nearly one million square feet of commercial space and sits adjacent to the historic hangar in which Howard Hughes built his famous “Spruce Goose” airplane. This new development, plus the renovated space in the hangar, could create 6,000 new technology jobs in Los Angeles.

Google’s big announcement is symbolic of the tremendous momentum that L.A.’s tech scene is experiencing.  A recent article on TechCrunch.Com was titled, “There’s Something Going On in L.A.”  The article noted that Southern California has the largest number of new tech company start-ups in the United States and is No. 3 in tech ecosystems, behind Silicon Valley and New York.

One of the foundations of this recent surge in tech and entrepreneurial activity is the concentration of high quality universities in Los Angeles County. These universities attract the brightest students, faculty and researchers to L.A. and Southern California. The TechCrunch authors noted that L.A. universities graduate more engineers than any metro area in the United States.  

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Looking for Solutions – “A Revolution in American Policing”

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

With continued protests in California cities sparked by the high profile deaths of black people at the hands of white police officers and a search for solutions to the raw situation, I want to transcribe comments from Connie Rice, well-known Los Angeles civil rights attorney who went from suing the Los Angeles Police Department to seeking solutions by working with the police to change the culture within the department. Rice appeared in a town hall forum taped in Missouri and moderated by Gwen Ifill on PBS after the Ferguson protests began.

“This is going to be repeated again and again, Gwen. We’re not going to get beyond this for, I would say, another hundred years or so because it’s a process. It’s learning to dance with one another, post slavery.

We’re still stuck on stupid in many regards. And I’m not being derogatory to anybody. What I mean by that is, collectively, we can’t quite face what we have in front of us, number one. Number two, we’re not willing to learn from the folks who have danced these dances and come out on the other side okay.

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Big Plastic’s Gambit on Referendum is Doomed from the Start

Steven Maviglio
Principal of Forza Communications, a Sacramento-based public affairs/campaign firm

The plastic bag industry, under the guise of the disingenuously-named “American Progressive Bag Alliance,” is likely to submit 750,000 or so signatures next week to the California Secretary of State. Although the rain has dampened signature gathering efforts, forcing the industry to spend upwards of $3.50 signature, the bag makers should collect more than enough voter signatures to qualify a referendum on Senate Bill 270, the legislation signed by Governor Brown in late September that would have banned single-use plastic bags as of July 1, 2015.

Last week, veteran Sacramento Bee columnist Dan Walters said it was a “no lose” situation for the out-of-state bag industry to force the referendum. But Walters apparently discounts the $3.1 million they’ve already spent to qualify it (98 percent of which is from out-of-state) — not to mention the $30 million or so it will cost them to mount a challenge to the law.

In addition, if and when the referendum qualifies, it also will mean dozens of communities will unleash bans of their own to add to the 131 jurisdictions that already have them. Sacramento Mayor Kevin Johnson announced his intention to do just that on Monday.

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Plastic Bag Ban Opponents and Supporters Bringing the Fight To You

Katy Grimes
FlashReport Senior Correspondent

Staring at a gigantic German Shepherd poop on my bedroom rug last weekend, I reached for one of those single-use grocery bags outlawed by California, for the clean up.

Thankfully, I have a small stash of extra “single-use” plastic bags… but not for long.

After eight years of failed legislative attempts to ban plastic grocery bags, Gov. Jerry Brown signed a bill in September to ban and tax plastic and paper grocery bags, despite the fact that all types of plastic shopping bags can be reused and recycled into new bags. The new statewide plastic bag ban is scheduled to go into effect July 15, 2015.

Immediately after the bill signing, the American Progressive Bag Alliance announced it would gather signatures for a November 2016 ballot initiative to repeal the bill to block implementation of the statewide ban. They are collecting signatures right now, or you can sign up to receive the petition at Bag the Ban.

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New Pension Numbers: A Banner Year, but LA Still Billions in the Hole

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 the City’s two pension funds experienced excellent returns on their investment portfolios for the fiscal year ending June 30, 2014, it still has a huge unfunded pension liability that will continue to devour a disproportionate share of the City’s budget, crowding out basic services such as the repair of our streets and sidewalks.

Last year, the Los Angeles City Employee Retirement System (“LACERS”) and the Fire and Police Pension Plans (“LAFPP”) had a blended rate of return of slightly less than 18%.  Since this return exceeded the investment rate assumption of 7.75%, the unfunded pension liability – based on the market value of the assets – decreased 23%, from $10 billion (74% funded) to $7.6 billion (81% funded).

This improvement would have been more that been over $1 billion more if the two plans had not followed the excellent recommendations of their actuary and lowered their investment rate assumptions to 7.5% and made adjustments to selected assumptions based on past experience.  This would have improved funded ratio to almost 83%. 

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Will the Supreme Court Deliver Relief for Central Valley Farmers and Ranchers?

John Kabateck
California Executive Director, National Federation of Independent Business

In California, water issues are of top concern. So, all eyes should be on Washington now as the U.S. Supreme Court is poised to potentially take-up two major cases that may affect water policies in the Central Valley for years to come. The cases, Stewart Jasper Orchards v. Jewell and State Water Contractors v. Jewell, are about water rights for Californians and they tell a story of environmental regulation gone wild.

As we know too well, ranchers and farmers are hurting under severe drought conditions throughout California. These troubles are only exacerbated by the federal government’s Endangered Species Act (ESA) regulations, which are forcing additional water restrictions, in the Central Valley, for the benefit of the Delta Smelt, a pinky sized fish that has no commercial value. These restrictions prevent farmers and ranchers from receiving their full water allocations—meaning precious rain water and snow-melt is passing into the San Francisco Bay while agricultural communities are running dry. In fact early this summer farmers in the Central Valley were forecast to get “zero allocation” in order to protect the Delta Smelt. That projection was revised upward only after we received a little more rain than was originally expected. But the farmers still received far less water than they really needed.

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