All other things are not equal in California

Tom Del Beccaro
Former Chairman of the California Republican Party and current candidate for U.S. Senate

California’s ongoing budget problem brings with it an endless supply of commentary and proposed fixes. Not long ago, I wrote that California now has a revenue problem. Long before that, I wrote The New Conservative Paradigm that suggested that we need a true part-time legislature, 2 year budget cycles, a true budget cap, pension reform, sun setting of programs, zero based funding and cost/benefit analyses for all spending programs – to name just a few necessary reforms.

The tax issue, as readers of my columns well know, is of particular concern to me. Simply stated, the California tax burden is too high – which, when combined with the national tax burden, the 2nd highest in our history – ensures that the California economy will be slow for years to come.

In light of that, I took great interest in Dan Walters’ column in yesterday’s Sacramento Bee entitled: Are California taxes too high or too low? Walters cites a study which says that California had the 6th highest state tax burden in 2008. Of course, that means California is not the worst. But Walters’ column does not tell the whole story that we need to know. Here is why:

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Can California Make a Comeback?

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Urban scholar Joel Kotkin gives his take on woeful California and how things might turn around in Forbes. Kotkin argues jobs and support for the middle class is the solution to California’s difficulties. And he also takes a shot at the current political leadership, recalling that political leaders in the 1990s were part of the solution in overcoming similar dire circumstances. It’s an interesting read. Take a look here.

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The Special Election was Act One

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The Special Election was Act One of a three-act drama that will play out over the next year and a half. When the curtain falls on the final act — the 2010 general election — California will set a new course for its fiscal future.

In Act One, the voters rejected the budget proposals put up by the governor and legislature. Act Two will consist of how the governor and legislature respond.

Those who see this as a chance to finally get California’s fiscal house in order with a more conservative fiscal plan are right. But they must act fast.

Reforms must be presented, implemented, and show some results before the voters make decisions on the November 2010 ballot. That ballot will likely contain a myriad of opportunities to alter direction, or to cement changes that could come out of the newly reinstituted budget negotiations. Of course, new leadership will be offered in the governor’s race. A new group of legislators will be elected. And, undoubtedly, voters will be presented with a number of options to change the way we conduct business in California.

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So If We Take Your Terrorists…

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

President Obama has a problem. He’s promised to close the detainee facility at Guantanamo, Cuba, but is finding it hard to find a place to put them. States all over the union are saying not in my backyard.

California has a problem. It needs federal loan guarantees for its short-term cash flow borrowing. But President Obama and members of Congress are saying – at least right now – that such assistance isn’t forthcoming. The other 49 states, after all, don’t want to bail out California.

Are these two completely unrelated problems?

Or a match made in heaven?

Here’s the deal, modestly proposed: President Obama, we’ll solve your problem if you’ll solve ours.

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Trashing Chevron in Amazon Court

Judy Lloyd
President of Altamont Strategies

Chevron’s global headquarters is just a couple of miles down the road from where my family and I live. I pass it several times a week when driving through San Ramon.

Chevron is an important part of San Ramon, the 680 corridor, and the Bay Area community. From their refinery in Richmond to their headquarters in San Ramon, they employ many of my neighbors and give millions of dollars through corporate philanthropy to the needy and underprivileged each year. They are a well-respected corporate citizen and a good neighbor.

Not surprisingly, because they are a successful company, they are also a target for trial lawyers seeking to line their pockets through endless litigation.

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Golden State Bailout?

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

A piece I penned in today’s New York Times, entitled Golden State Bailout, grew out of some reporting I did for a post at Fox&Hounds a few weeks ago. Despite all of today’s back and forth, the case for the state to receive federal loan guarantees for its short-term borrowing is a very easy one. Such borrowing would keep the state from falling off the cliff, and there’s virtually no risk — and absolutely no cost — to the treasury. In fact, California will have to pay a fee.

That said, for political and policy reasons (namely, that California appears unable to govern itself), the feds should attach major conditions to guarantees. Essentially, the feds should use its leverage on the short-term cash flow problem to force the state to adopt a real budget plan that fixes the long-term, structural deficit.

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How can CA win the Lottery? Become a powerful magnet for the next wave of innovative products!

Gino DiCaro
Vice President of Communications for the California Manufacturers & Technology Association

This week the Assembly
Revenue and Taxation Committee passed — with 6 voting yes and 3 not
voting — a bill that brings California in line with 47 other states by
exempting the sales tax on manufacturing equipment and giving working
families a fighting chance for higher paying careers.  The
bill is AB 829 by Assemblymember Anna Caballero. 
Unfortunately, the bill was amended to include offsetting revenue
sources, a difficult circumstance during tough budget times. 
But the vote on the bill shows that legislators want to put out the
welcome mat for high wage employers.

Many in both
the capitol and media circles have argued that companies aren’t leaving
the state and they often use that as carte blanche to oppose the
removal of any barriers to conducting business in California —
including reinstatement of the sales tax exemption that our employers
lost back in 2003.

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A Wealth of Movement

Charles Crumpley
Editor and Publisher of the San Fernando Valley Business Journal

How often have you heard the bromide about how the rich get richer and the poor get poorer?

Well, it’s difficult to look over this year’s list of the wealthiest Angelenos, which is in the May 18 issue of the Los Angeles Business Journal, and declare that that’s true. By our count, 41 of the 50 wealthiest Angelenos lost money over the last year, and eight of them lost more than $1 billion each. Only three on the Business Journal’s wealthiest list actually gained money. On the whole, the rich certainly did not get richer.

Now, I know some could argue that this is only one year and an aberrant one at that, so it doesn’t really count. Over time, the rich do get richer and the poor, poorer.

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Governor Obama

President of Ringe Media

When I voted for Barack Obama for President. I certainly never expected him to wind up as the de facto Governor of California.

Now it looks like the only way out of this money mess is to just give up and toss it all onto the good faith and credit of the federal government. If effect, President Obama will soon be wearing at least one more hat as the CEO of the now rather tarnished Golden State. Not fun, but a better bet than his General Motors hat any day.

Fine with me. This may be just what California needs, a political Supreme Being who can order up salvation with the stroke of a pen, a Hercules who can clean out the stables in Sacramento by simply letting the American River overflow the capitol, a smart guy who can add and subtract and, by the way, inspire.

But, can anyone really save us from ourselves?

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New Jobs Will Balance Budget

Public Affairs Consultant specializing in Issue Advocacy and Strategic Communications

On Monday night, several lawmakers could be overheard in the Southwest Terminal in Sacramento saying that layoffs are eminent as are tax hikes and more spending cuts. (They were assuming that the budget reform initiatives were going to fail the next day—and they were proven right!).

Sadly, we don’t hear more about improving our business climate to generate new tax revenues and to reverse unemployment trends. So, here is a quick list of ideas for more than a handful of legislators to consider:

· Give manufacturers more incentives to operate in California, particularly in areas where large employers have gone out of business (i.e. auto dealerships).

· Provide employers some help in creating jobs instead of downsizing their workforces.

· Take another big step in protecting employers from lawsuits that are unheard of in almost every other state.

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