Cuts Are Coming
The governor issues two budget proposals today, one suggesting how he plans to fill the budget hole if the special election ballot measures pass, the other showing how he’ll fill the bigger hole if they fail.
Either way, whether the budget is 15 billion dollars out-of-whack or 21 billion, cuts will happen.
Arguing that many of the suggested cuts are scare tactics, some have referred to similar tactics employed in the past, especially during the famous California tax revolt of 1978. Few of the threatened cuts at that time came to pass. One big difference from then to now is that in 1978 the state was sitting on a 40% state budget surplus. Now there is a about a 40% state budget deficit.
So there will be cuts. The focus now is how they will be employed. Many cuts should be made and have been needed for a long time. Agency consolidation, unnecessary commissions and sale of excess property have been argued over for years and will be the first on the agenda. But that will not be enough, and cuts will come to local governments and schools and other mainline services.
Main Street Menace of the Week: Proposition 1A – Small Businesses Say No Way
While the legislature is in session, the National Federation of Independent Business/California will be profiling anti-small business bills and the adverse effect they would have on California’s job creators. This is the fifth column of that series.
In a less than a week, California voters will go to the polls once again. This time, they are being asked to consider several propositions that were put on the ballot as part of the budget deal that was struck earlier this year. Late last month, NFIB/CA formally opposed Proposition 1A after balloting our more than 21,000 members. Once again, the voice of small business was loud and clear – no more new taxes!
There is no doubt that the state is facing unprecedented troubling times. That is why it is especially concerning that the budget deal included new and unanticipated costs that struggling small businesses simply can’t afford to absorb, including an increase in income taxes, sales taxes and a near doubling of the car tax. During tough economic times such as these, heaping new costs upon California’s leading job creators should not be even a remote option when trying to balance the state’s budget.
Show Your Anger by Voting Yes on May 19
California’s dysfunctional state government and our chronic budget crisis are beyond inexcusable. The majority of voters are justifiably angry about taxes and elected officials seem to be unable to effectively plan for the state’s fiscal future. That sentiment is reflected in the latest polls showing Propositions 1A-1E headed for defeat. But taking out our frustrations on these initiatives is the kind of self-flagellation that will deepen the crisis and prevent the reform we dramatically need.
As I wrote last month, the Los Angeles Area Chamber of Commerce — together with nearly every business organization in the state — is urging support for the package of state budget initiatives on the May 19 special election ballot. There are no perfect short-term fixes for the disastrous financial condition that California is in, but these ballot propositions go a long way toward avoiding a fiscal catastrophe and putting in place the kind of reforms that will avert a similar crisis in the future. Most notably, Proposition 1A will significantly reduce spending by establishing a long-sought spending cap and requiring the stockpiling of revenues from good years in a substantial “rainy day” fund to mitigate future economic downturns.
Five Stages of CEQA
With apologies to my Psych 1 professor at UC Davis.
The California Environmental Quality Act (CEQA) is well known to those pursuing projects in California. At our commercial ports, the CEQA process for a marine terminal project is taking up to ten years to complete – not including the subsequent litigation. With term limits at the local level, the environmental impact review (EIR) process currently outlasts the political lives of mayors, city council members and harbor commissioners. Combined, the last two EIR’s at the Ports of Los Angeles and Long Beach were approximately 6,000 pages in length. Both projects were appealed before their respective City Councils – and both still face years of litigation, a reflection of the "can do" spirit of California.
While listening to a local public official lamenting the fact that EIR’s have become a multigenerational process in which people are married, have children, divorce, wars declared and ended, pandemic’s (or at least pandemic panic) come and go – it struck me. For those pursuing a construction project in California, the CEQA process has become something similar to the five stages of grief. Tell me if you agree.