Author: Joel Fox

The Iowa Debate

For Californians who watched the Republican presidential
debate in Iowa yesterday, they probably had a sense that former House Speaker
Newt Gingrich’s reality check on Congress’s super committee on debt reduction
struck a note of truth. 

Gingrich argued the Select Committee on Debt Reduction
should not substitute for an open, legislative process and said members of
Congress should not sit around while the committee does its work and then
presents a terrible choice such as, "We can either cut off your right leg or we
can shoot you, which one do you prefer?"

The reason Gingrich’s rant may feel right to Californians is
because he described the super committee in terms familiar to the Big 5 process
that produced a state budget for so many years here. The discussions occurred
behind closed doors then the final surprise package was presented to the
legislature for a pretty much up and down vote.

The Memorandum of Understanding approved by the Los Angeles
City Council with the Anschutz Entertainment Group moves professional football a
step closer to Los Angeles after a 16-year absence. But it might mean
another California city could lose their NFL franchise.

The negotiated deal still has some yards to gain before it
scores the big touchdown of returning an NFL team to the City of the Angels. The
$1.2 billion deal for a stadium and remodeling of the convention center seems
to be sensitive to taxpayer concerns. The stadium and team would bring both
construction jobs as well as permanent jobs related to the stadium.

However, if the team that occupies Farmer’s Field comes from
another California city, jobs will be lost there.

After the MOU was approved by the City Council, sports talk
pundits started speculating which team might move to L.A., since it is assumed
by all that the NFL will not add a new franchise at this time. The stadium will
not be built without a team confirmed for the new stadium.

A new study on the California High Speed Rail (HSR) project
released this week says the cost estimates for the first segment of the rail
are much higher than previously calculated. Everyone who is surprised by this
fact please raise your hands. I thought so. The High Speed Rail project has
received one credibility cut after another. Like the tree subject to continuous
hacks from lumberjacks, HSR is about to topple over.

As reported by the AP’s Adam Weintraub, supporters of the
rail are now having second
thoughts. He quoted rail supporter Senator Alan Lowenthal, "We really
need to re-examine what we’re spending and what we’re going to get for
it."

The first leg was tagged at a cost of $7.1 billion in 2009.
The new study reports the cost at anywhere from $10 billion to $13.9 billion,
an increase of anywhere from 40 to 95 percent. And that’s the cost overrun of
just the first leg – a Central Valley leg that doesn’t run through the coastal
metropolises. What will the cost overrun be in trying to build the rail through
those high population corridors?

Who gets to tax the rich first – the federal government or
the California state government? Politicians and tax increase advocates on both
the federal and state level say the rich must pay more. In the end, neither may
pass a tax on high-end income taxpayers and there is no advocacy to raise taxes here. However, how successful the federal
government tax-the-rich supporters are on this issue will clearly affect the
fortunes of the state.

President Barack Obama says the United States must attack
its deficit problem in a "balanced" way, which includes both cuts and revenue
increases. He talks about taxing millionaires and billionaires but sets that
bar rather low, often citing the figure of $250,000 in income as a target for
tax increases.

California tax increase advocates think the rich start at a
higher point, if not quite millionaire territory. Assembly Member Nancy
Skinner’s income tax increase proposal, AB 1130, would levy an additional 1%
tax on taxable income of $500,000 and more.

Remember way back five weeks ago when the California budget
was declared balanced because $4 billion in higher revenues was expected in the
treasury? If the $4 billion didn’t appear, an automatic trigger would add additional
budget cuts of $2.5 billion.

Five weeks ago was before the federal debt-ceiling bill
passed with its promise of hundreds of billions of dollars in federal spending cuts.
Those cuts could mean a loss of billions of dollars for California. George
Skelton has a rundown of the federal money earmarked for California in his L.A.
Times column yesterday.

Five weeks ago there was no referendum circulating against
the Amazon tax measure. If the referendum achieves enough signatures, collection
of the estimated $300 million expected from the tax could be temporarily stopped
or even eliminated if the measure makes the ballot and the voters overturn the
law.

Five weeks ago there was no referendum against the bill to
end redevelopment that added over  $1
billion to state government’s depository.  

An interesting email arrived yesterday from Parent Revolution, the group that
has pushed the Parent Trigger concept in California. Since Parent Trigger has
gained a foothold here, a teachers’ union, using "lessons learned from
California" devised a scheme to stop it elsewhere.

Parent Trigger is a new California law that allows parents
to transform their children’s failing school if 51% of the parents sign a
petition to force the school district to make changes.

The American Federation of Teachers plan came to light when
a 19 page powerpoint
presentation from the Connecticut branch of the AFT found itself onto the
website Drop
Out Nation.

Three times in the presentation California’s success in
implementing the Parent Trigger is mentioned. An additional reference is made
to former California state senator Gloria Romero, an advocate for Parent
Trigger. The theme related to California: We
learned from the mistakes made in California that resulted in Parent Trigger
becoming a reality. Here’s how to stop it spreading further.

Governor Jerry Brown did the right thing yesterday when he vetoed SB 168 by Sen. Ellen Corbett. The bill would have changed payment for helping to gather signature petitions from a per signature basis to a flat hourly rate. The change in the process would have made it more expensive to pay for signature gatherers, something Brown recognized would favor the wealthiest interests.
 
More importantly, Brown noted that the bill offered “a dramatic change” in California’s long established democratic process of direct democracy, which the governor knows the people respect and defend.
 
Some have conjectured that Brown, himself, is looking to the initiative process to raise taxes that the legislative process denied him and if SB 168 became law it would be more expensive for him to succeed. Perhaps. However, Brown’s time serving as California Secretary of State long ago also may have helped create the foundation for this veto.

By now you probably have heard the deceitful radio
ad funded by a group called Californians Against Identity Theft that is
attempting to discourage people from signing initiative and referendum
petitions by scaring them into believing their signatures on the petitions
could lead to identity theft. The dishonesty of the pitch has brought
rebuke from across the political spectrum and by groups that battle
identity theft.

The goal of the Californians Against Identity
Theft is to limit the use of direct democracy. That can clearly be detected on
the group’s
website which highlights not problems with identity theft but accusations
against the initiative process.

At least one California public employee union
has admitted being behind the ad. The public unions are opposed to some
initiatives and referendums that are currently in circulation.

The Texas versus California job creation comparison continues
to make noise during these tough economic times, and while Texas takes its
lumps over state issues on occasion (see Greg Lucas’ recent piece
in Capitol Weekly) there seems little doubt that purely on a jobs creation
front Texas is doing much better.

Adding to that view were numbers on very small, non-employee
businesses released by the U.S. Census Bureau as described by Dan Walters in
the Sacramento Bee Capitol
Alert yesterday:

"The number of California’s non-employee businesses hit a
high mark of 2.76 million in 2007 but by 2009 had dropped by 82,878, the Census
Bureau report, based on Internal Revenue Service data, found. Business receipts
declined from $145 billion to $121 billion during the two-year period."

Meanwhile, the report noted Texas added
8,260 small firms between 2008 and 2009.