Author: Joel Fox

The Los Angeles Times completed an exhaustive six-part
series yesterday on the Los Angeles Community College system, which charged
that out of billions in bond money "tens of millions of dollars have gone to
waste because of poor planning, frivolous spending and shoddy workmanship." Ironically,
some members of the community college board of trustees are running for
re-election in Tuesday’s election.

While little attention is spent on races such as the
community college board, the Times articles should open the eyes of the
property taxpayers who back the bonds and pay for the waste mentioned in the
article.

Board of trustee candidates for re-election are filling
mailboxes with campaign literature, one even boldly claiming that he "fights to
protect taxpayers."

Business has become the focus of Governor Jerry Brown’s efforts to line up support for his budget plan. But business is far from unified and does not speak with a single voice.

Yesterday, Allan Zaremberg, president of the California Chamber of Commerce, gave Brown hope that the largest, most influential business organization in the state may support his plan to deal with the budget. Zaremberg was careful with his words and did not give an outright endorsement to any budget plan saying that would have to wait until all details are in place and the Chamber board has an opportunity to meet on March 11.

What may accompany the five-year tax extensions on a special election ballot that Brown is pushing could have a lot to do with his securing support from different segments of the business community.

When the Los Angeles Chamber of Commerce recently endorsed Brown’s effort they did so with caution and recommendations advising the governor that the business leaders wanted to see regulation reform and a shorter period for the tax extensions.

A study released today by Capitol Matrix Consulting headed by former State Finance Director Mike Genest and former Democratic and Republican legislative fiscal consultants, Brad Williams and Peter Schaafsma, claims if the City of Vernon is dissolved there will be a potential of 11,620 jobs lost with a loss in state and local revenue of more than $42 million.

Another study released by the United States Chamber of Commerce yesterday placed California in the lowest tier of states for business friendly environments.

The state takes a one-two punch from these studies on California’s business environment.

VERNON STUDY

How do you insure the protection of 50,000 jobs? That is the task Assembly Speaker John Perez has set out for himself as he pushes his bill (AB 46) to see the disincorporation of the City of Vernon in Los Angeles County.

Vernon is an industrial city with only 91 residents but a work force of 50,000. City officials have been caught up in corruption focusing on huge salaries and pensions that rival those in the near-by City of Bell. Additional scandals are centered on the city’s governance. No elections were held in Vernon from 1984 to 2006 and when one did occur, the city clerk refused to count the ballots for six months. Los Angeles County Sheriff Lee Baca called Vernon a "rogue city" supported by voters who are picked by elected officials.

Former state senate president pro-tem Don Perata, bicycle racing champion Lance Armstrong and Los Angeles Mayor Antonio Villaraigosa kicked off their campaign for a new cigarette tax initiative in Los Angeles yesterday. Unfortunately, it is another example of ballot box budgeting in which revenues are limited for specific purposes with little oversight from outside agencies.

Multiple ballot measures directing how tax dollars can be spent have taken away the ability of the legislature to respond to changing fiscal problems. In fact, one item Governor Jerry Brown wants to see on a special election ballot this summer is a measure to ask voters to take a billion dollars from a segregated tobacco tax fund for childhood development that the voters created by initiative in 1998 and place it in the general fund to deal with the budget deficit.

The new tobacco tax initiative has qualified for the next ballot, whether that is Brown’s special election or a later scheduled election if the special election does not come off. The initiative proponents want to get an early jump on the campaign in case there is a special election.

The Oscars are over. I actually went to the movies instead of watching the award show. I like movies but I’m not a fan of the celebrity-fest. But then I know I’m out of touch with this celebrity stuff. I’m still surprised that a short court hearing for actress Lindsay Lohan gets two or three times the number of TV cameras than come out to cover Governor Jerry Brown’s first visit to Southern California to discuss the budget mess, as happened a couple of weeks ago.

Movies can and do play a role in political debates.

The Los Angeles Times reported over the weekend that Secretary General of the United Nations Ban Ki-moon visited with Hollywood bigwigs asking them to take up the fight against global warming. Specifically, the Secretary General wants movie and television writers and producers to educate the public on the issue by putting messages in their work or dramatizing the issue.

The Republicans have lighted a path for the governor to put
the tax extensions on the ballot if the governor is willing to take a
calculated risk – put tax cuts on the ballot as well.

The governor insists the people should vote on his tax
extension plan. Many Republicans say they will only put those tax extensions on
the ballot if equivalent tax cuts are also placed on the ballot.

It’s a risk to the governor and Democrats agenda, but how
big a risk? There really hasn’t been much call for a tax cut recently and there
doesn’t seem to be a demand for new tax cuts from the voters.

The tax extensions are a different matter. Defeating the tax
extensions might be considered the same as approving a tax cut because it would
affirm the current temporary tax levels expire. Governor Brown said he is willing
to take on that fight.

Can Col. Gaddafi and/or the oil-rich countries of the Middle East sway a California special election? Okay, let’s agree that the scenario I am about to examine is way down the road and things will change in a few months. But it is possible that the revolutionary actions in the countries along the rim of Africa and the Middle East could play a role if California holds a special election in June.

How so? You already know the answer: the price of gasoline. The price is already affected by the uncertainty in the region and if the unrest ever hits Saudi Arabia the price would blow through the roof like a gusher on an old-fashioned oil derrick.

Increased prices for crude oil translate to increased prices for gasoline at the pump. CNBC Executive Editor, Patti Domm, said clues to whether the United States hits $4-a-gallon gasoline would first show right here in the Golden State. “Let’s watch California. California is the first state that will see prices go up to the point that will really impact consumers.”

Pension reform was already on the table here in California
before the Wisconsin public employee union protests, but now in the glare of
the national spotlight pension reform could become a major focus of the budget
debate. Governor Jerry Brown said he wants to look at public pension reform, but
he does not want to tie it to the tax extensions and weigh down the ballot. He
may no longer have a choice.

The Wisconsin standoff – with minority Democratic
legislators refusing to step inside state borders and create a quorum so that
the majority Republicans can pass the reform bill – represents a budget battle over
public employee benefits that will occur in many states across the country.
State budgets are being squeezed, unemployment is steady, services provided by
government are being slashed, and reductions in government employee benefits
will have to be part of the solution.