Redevelopment
Redevelopment agencies have been bleeding public schools, counties and special districts for years. Now the governor has taken a long-overdue stand to recapture this lost revenue. This year’s budget calls for the state to take $2 billion in RDA funds over the next 2 years to augment public education. These are not really “takings” at all but a restoration of property tax revenues to serve public needs, rather than enrich private developers.
RDA tax increment diversions now consume over $5 billion annually, or 10% of all state property taxes. This comes at a direct expense to school districts and counties. Education has some Prop. 98 protections, but cutbacks this year have been deep. Counties have been hit hard, too. Since 1990, Los Angeles County alone has lost $2.7 billion in revenues to redevelopment diversions.
Whitman’s Long War
Steve Poizner and Tom Campbell each ramped up their gubernatorial campaigns before Meg Whitman. Their calculation seemed to be that getting in early, they could gain an important edge.
Last week’s financial reports cast doubt on that strategy. By starting early, the Republican contenders turned the nomination contest into a long war. Such fights often are won by the army with more resources, and that army belongs to Whitman. The former eBay chief raised $6.7 million between Feb. 9 and June 30 – on top of millions of her own contributions.
Poizner and Campbell still should be able to compete. But the length of the campaign may work against them. They may have to devote more time to fundraising just to remain in the game, while Whitman, with a huge financial advantage, is free to focus on rounding up endorsements and rolling out policy proposals. One potential opportunity for Poizner and Campbell is high-volume, small-donor fundraising via Internet and social networks. Whitman hasn’t done much of this yet – her average contribution was about $5,900.
Tax Commission Still Requires Vigilance
The California Commission for the 21st Century Economy was created
by the Governor and Legislature in October of 2008. Its main
purpose, at least that which was represented to the public, was to
deal with the real issue of California’s revenue volatility. By now,
almost everyone knows that California is overly reliant on the
income tax to run the state and, because of its steep progressivity,
we are even more reliant on a handful of the “evil rich” to pay the
lion’s share of that tax. (Of course, notwithstanding this reliance,
our elected leadership still goes out of its way to drive these rich
folks out of California to places where profit and success aren’t
dirty words.)
Days after the Commission was created, this columnist wrote a piece
ringing the alarm bells. At the time, none of the commission members
had been selected but the real concern was that all twelve of the
Commission members were to be selected by individuals — the
Governor and Legislative leaders — who had just actively pushed for
massive tax increases. Without quality taxpayer representation, the
commission would have zero credibility.
Growing Tourism a Blessing in a Struggling Economy
In the June 25th Los Angeles Times story “Tourism industry is L.A. County’s No. 1 job generator” the reporter asserted that this development is “not necessarily a good thing: Tourism and hospitality do not pay out as much in wages and salaries.”
While tourism may not pay as much as some other industries on average, there are many opportunities on the higher end of the pay scale as with any industry. For example, in the U.S., the average wage for managers in the “Arts, Entertainment and Recreation” sector was $86,960, and for CEOs, $160,090. In the hotel sector, the average wage for managers is $67,120 and for CEOs it’s $144,780. In the “Food Services and Drinking Places” sector, the average wage in the U.S. is $56,410 for managers and $132,030 for CEOs. Although comparative figures are not available for individual states and cities, we know that California salaries tend to skew higher than most areas of the U.S.
More importantly, during this recession we should be looking how tourism can help keep our state economy afloat while other industries are floundering. The bottom line is, tourism creates jobs across a broad spectrum of skill sets and educational levels – a resource sorely needed during these tough times. Additionally, tourism offers employment across a huge variety of economic sectors – from hospitality to retail, restaurants and attractions, to rental cars and other transportation businesses.