Author: Joel Fox

The Los Angeles City Council voted yesterday to end the
red-light camera program, which apparently came with "voluntary" fines for traffic
violations. That’s right, "voluntary
fines."

It was revealed this week that violators do not have to pay
the tickets that arrived in the mail if a camera caught them making a traffic
light infraction. As the Los
Angeles Times put it:

"For a variety of reasons, including the way the law was
written, Los Angeles officials said the fines were essentially
"voluntary" and that there are virtually no tangible consequences for
those who refuse to pay."

Heck, you didn’t even need the services of the notorious
"Gold Card Desk," recently
revealed where politicians and others with connections at city hall could
get parking tickets dismissed quietly and cleanly.

California’s high speed rail program was in danger before
the debt ceiling debate in Washington. Given the desire to cut trillions of
dollars from federal spending that both sides of the debate advocate, seeing a
$20 billion payment to California’s questionable high speed rail system is
doubtful.

If the federal money fails to appear, private investors are
unlikely to kick in with their expected share of the project. That leaves
Californians on the hook. Voters authorized $10-billion dollars in bond revenue
for the project when they passed Proposition1A in 2008 (Disclosure: I was a
member of the No campaign.)

Since that time, reviews and studies on the proposed rail
system have criticized the project. 
Projected ridership numbers that were attacked during the campaign have
been continually challenged many times since the measure passed. The lack of a
business plan has been cited.  Costs
estimates have grown — no surprise there.

Proponents of the plan say, "Don’t worry," money is not
always lined up immediately for big infrastructure projects that have become a
reality. The plan is needed, they say, because California’s projected
population growth will demand alternative transportation systems.

The USC Dornsife/Los Angeles Times poll asked how voters
felt about giving more taxing authority to local governments. Curiously,
however, the question asked in the poll did not reflect the proposal being discussed
in Sacramento.

The question dealt with a
number of areas that local governments currently do not have the power to tax
that the state does: alcoholic beverages, sweetened beverages, tobacco products and oil
extraction.

The bill authored by Senate President Pro Tem Darrell Steinberg granting
new taxing authority to local governments casts a much wider net. The bill
would extend taxing authority over some very big items: transaction and use
tax, vehicle license tax, and personal income tax.

Do you suppose if the poll question included these items – especially
giving local government power to establish a personal income tax – the results
would be the same? Highly unlikely.

The result of
the USC Dornsife/Los Angeles Times poll on the Amazon tax issue
reminds me of the famous headline when Harvard’s undefeated football team made
an incredible comeback from a huge deficit in the final minute of a game to tie
arch rival and undefeated Yale. The Harvard
Crimson newspaper ran a headline: Harvard Beats Yale
29-29.

The poll has the pubic split at this point on the question whether online
retailers should collect sales tax as in-state retailers do. 46% support the
bill signed by the governor requiring the tax collection while 49% oppose it.

Like the two undefeated Ivy League teams of 1968, powerful opponents will
square off against each other over the referendum if it makes the ballot.
Deep-pocketed online retailers like Amazon will be battling big chain stores
like WalMart.

You have to wonder at the attention the American Lung
Association sponsored study
on tobacco company contributions to California politics got in the press. There
was no surprise that tobacco companies donate to protect their interests just
as unions do, just as Indian tribes do and just as other interests do. However,
only in rare cases in the stories was the tobacco spending put in perspective.

Tobacco is not the largest donor to California politics – not
by a long shot.

Senator Loni Hancock has proposed an amendment to Proposition 13, SCA 15, that would allow an alternative method to raise state taxes. In a press release, the Senator calls the measure a "Double Majority" tax vote because it allows the legislature to put a tax on the ballot with a simple majority vote and then the people must pass the tax in a statewide election with a majority vote.

The press release states: "It does not make it easier to raise taxes by removing the two-thirds vote requirement. It simply creates a viable alternative to legislative gridlock."

Who remembers the WIN Button from the Ford
Administration? The WIN button campaign came to mind in reading the new effort
devised by the California State Employees Association Retirees to place
stickers on checks that read: "Paid by State Retiree."

WIN stood for Whip Inflation Now. In attempting
to bring inflation under control, President Gerald Ford and his advisors came
up with a campaign of both mandatory and voluntary measures to encourage the
public to engage in disciplined spending habits and personal savings. A public
relations campaign featuring WIN buttons was created to accompany the effort.

The buttons did little to change economic
habits. They quickly became the object of ridicule and some people wore the
button upside down saying the acronym "NIM" stood for: "No Immediate Miracles."

The state retirees want you to know the value
their spending power has on California’s economy.  The effort is built on the back of a CalPERS
sponsored study recently released that claims public employee pension payments
have a $26 billion effect on statewide economic activity.

Yesterday, Joe Mathews challenged me on this site to accept
a bargain that would eliminate the two-thirds vote on taxes and fees for a
guaranteed referendum by the people on all tax measures. He asked the question:
"Should a majority of voters in one election be able to overturn the votes of
2/3 of their elected representatives?"

My answer is: Yes, voters should have the power to make the
final decision on taxes if they choose.

As I made clear in the piece
that prompted this debate, just because voters choose legislators who lean
toward supporting taxes does not mean the voters themselves support such an
action. I offered numerous examples when this was so: Proposition 13’s property
tax reform (1978), Proposition 218’s right to vote on taxes (1996); and
Proposition 26’s two-thirds vote on fees (2010).

A potential
split within the business community over Amazon.com’s referendum on a new sales
tax law could have larger repercussions for business entering an unpredictable
election year. The referendum, should it qualify, would likely be on the June
primary ballot, which will be the first, full-blown test for the top two
primary system. The tax issue and the primary candidates make an unstable
mixture.

Amazon.com filed a referendum to overturn the newly signed law requiring that
online sellers collect sales tax on products sold to Californians. Should the
referendum qualify for the ballot, it will set up a business versus business
campaign battle, with state retailers who must collect sales taxes versus out
of state online sellers who do not collect sales taxes and their California
affiliates. The split in the business community could affect candidate races
during the 2012 primary election.

The California Retailers Association supported the law requiring that taxes be
paid on online sales, as they put it, to level the playing field. Sales taxes are
added to the cost of their products making similar products purchased online
that much less expensive. The sales tax could increase the total cost of an
item up to 10% in some jurisdictions.