From Hummers to Hybrids
Nothing symbolizes the change in Arnold Schwarzenegger’s image over the course of his governorship than his attitude toward cars. Let’s call that transition: From Hummers to Hybrids.
I watched the governor praise alternative fuel vehicles at the opening of the Los Angeles Auto Show last Friday. Standing before 14 alternative fuel vehicles under banners that separated the vehicles into four categories: plug-in hybrid; hybrid electric; hydrogen fuel cell and battery electric, Schwarzenegger said that he loved cars and loved the environment. The array of cars behind him, he noted, proved car manufacturers could build fast, powerful, gorgeous cars and still protect the environment.
Remember this was the man who brought the military Humvee onto the streets as a commercial vehicle – the Hummer that environmentalists detested. Schwarzenegger’s relationship with the beginning of the Hummer is well told by fellow Fox and Hounds Daily blogger Joe Mathews in a Washington Post article from earlier this year.
Call for Split Roll Property Tax Ignores Consequences
Former State Board of Equalization chairman Conway Collis’s article arguing for higher taxes on commercial property in the San Jose Mercury News last week didn’t tell the full story. He did not cover the negative consequences of such a move.
Collis was trying to sell splitting the property tax roll between business and residential property as the panacea to dig California out of its deficit problem. He claimed increasing taxes on business property would raise $6 to $ 8 billion in new revenue for government.
In reality, raising business property taxes will prolong our fiscal mess because it will act as a disincentive to job creation and business growth, which is the only way to pull California out of the deficit hole. If billions were raised in taxes they would not be available for job creation. In fact, former Legislative Analyst Bill Hamm noted in a study last year that for every one percent increase in business property taxes, 43,000 jobs would be lost.
A Nation at Risk; A State at Risk
Yesterday in Washington, D.C., United States Chamber of Commerce president Thomas J. Donahue laid out a framework for the chamber to work with the administration and the new congress to improve the business environment. In reading the speech, one might think Donahue was speaking about the problems of California and offering solutions to our troubles here.
The key to improve California as well as the key for the American economy is to create jobs. Clearing the path to job creation takes changes in the regulation-at-all-costs mindset. Donahue called the onset of too many rules a “regulation tsunami.” That charge echoes for the business community in California.
Donahue also pointed to dealing with the debt (in California we need to tame the deficit), improve our infrastructure, and encourage small business. All issues for improving California’s economic future.
Donahue titled his speech, “ A Nation at Risk.” Few would argue California is a state at risk. Scholar and historian Kevin Starr suggested a year ago California could be the first “failed state.”
LA County Plastic Bags Fee will Test Newly Passed Prop 26
Now that Los Angeles County has banned plastic grocery bags, I have a clear choice—pay ten-cents per paper bag for groceries purchased in the unincorporated areas of the county or risk the possibility of lead used in reusable bags contaminating my food.
No less a consumer advocate that New York Senator Charles Schumer is demanding an examination into reusable bags after a newspaper investigation found lead in many reusable bags sold by grocery stores.
I wonder what the voters think about this Morton’s Fork presented them by the Los Angeles Board of Supervisors?
“Parent’s Trigger” Goes National
This site has highlighted Ben Austin’s and the Parent Revolution’s fight to install a “parent’s trigger” – the ability for the parents of California school children to demand improvement in their local schools. Now the movement, just taking root in Los Angeles and California, is about to go national.
Under the parent’s trigger law, if 51% of the parents of a failing school sign a petition they can redirect the operation of the school by turning to charter school operators or forcing administrative and staff changes at the school. As Austin wrote here last year, “The concept recognized a truth that school officials often discount: Parents are in the best position to make decisions about what’s right for their kids.”
With the parent trigger now California law, the Wall Street Journal’s David Feith reported recently that state legislatures in five states are considering following California’s example. In fact, Feith reported that, “incoming House Education Committee Chair John Kline (R., Minn.) says that he supports parent trigger, and that Congress "can make sure federal policy does not stand in their way."”
Special Session Doesn’t Cut It
Governor Arnold Schwarzenegger’s call for a special legislative session to deal with a portion of the budget deficit will probably produce nothing more than rhetoric. Finding six billion dollars to cut out of the budget won’t be easy given that the legislature passed the unbalanced budget 100 days late packed with gimmicks that quickly fell apart.
Will this brand new legislature suddenly find solutions that evaded the previous legislature — over the holiday season no less?
Certainly, the majority Democrats would like to smooth the way for Governor-elect Jerry Brown and at least put this current year’s budget in balance before the new governor has to challenge the monstrous debt he inherits. But, that almost certainly means cutting to the bone programs that the Democrats do not want to cut and, in fact, found ways to fund after Governor Schwarzenegger chopped spending with his line item veto.
LAO Budget Estimate: a Few Days Late and 25 Billion Short
Amid the shock over the Legislative Analyst’s Office announcement yesterday that California is staring down the barrel of a 25 billion dollar deficit, hangs the question: Wouldn’t it have been good for the voters to have had this information before the election?
Certainly, part of the deficit calculation made by the LAO was created by the voters with their decisions on ballot initiatives. The LAO reported, for instance, that passing Proposition 22 to protect local revenue opened an $800-million hole in the state budget.
However, there is plenty of budget analysis that was certain before the election and could have been reported before Election Day.
Like many in California, I hold the Legislative Analyst’s Office in the highest regard. And I understand that even if this report were made before the election it might have been lost in campaign rhetoric. But, the legislature is only one of the governing bodies at work in California. The voters making decisions on ballot measures are also policy makers.
Jerry Brown and a Return to Tax Commissions
Governor-elect Jerry Brown’s goal of reforming and restructuring California will surely follow the well-worn path of tax reform. Brown’s two immediate predecessors, Gray Davis and Arnold Schwarzenegger, both called together state commissions to study restructuring the state tax system.
California’s roller-coaster budget ride is created by its current mix of taxes, particularly the state’s heavy reliance on the steeply progressive income tax. Brown’s effort to smooth the ups and downs of California’s budget problems will bring him around to the tax system.
Davis’s commission, known formally as the California Commission on Tax Policy in the New Economy, was headed by current Los Angeles City Councilman Bill Rosendahl. Among other recommendations, the commission suggested that sales tax rates be lowered but extended to services, that the vote requirement to raise special taxes on the local level be reduced, and that a long look be taken at periodically reassessing non-residential property to market value.
Election Afterthoughts
A couple of follow up thoughts post election – then maybe I can put it behind me and move forward.
The well-to-do Governor Stanford
On election night I was talking to KNBC-TV political reporter Conan Nolan about rich candidates who were elected governor of California. I don’t know the history of all of California’s governors, but one that Conan immediately identified was Leland Stanford, eighth governor of California elected to a two-year term in 1861.
Stanford, of course, was a founder of Stanford University named after his son and became wealthy in the railroad business as a member of the Big Four who ran the Central Pacific Railroad.
While Stanford was a well off businessman when he won the governorship, his big dollars would come later. Some have argued he used the governorship in ways that benefited his business and increased his wealth.
What now for Meg and her Money?
Another wealthy candidate has failed to gain political office in California and you have to wonder what Meg Whitman will do now when it comes to politics and public affairs. Will she pull an Al Checchi, one time Democratic candidate for governor, and chalk up her run for the state’s top spot as an interesting experience and move on, making an occasional newsworthy comment now and again, or will she stay in the political game one-way or another?
I don’t know Meg Whitman well and don’t presume to know what she is thinking about her future in politics, but given who she is and what she recently endured during the campaign, there are certainly many ways she could stay involved in California politics if she so chooses.
If Whitman is considering a future run for office she might establish a record of working on public issues and coming up with solutions for California’s many problems. This suggests perhaps funding a think tank or financially supporting on-going efforts on reform, such as those being conducted by California Forward or the newly announced Think Long Committee funded by fellow billionaire Nicolas Berggruen.