Show Your Anger by Voting Yes on May 19

Gary Toebben
President & CEO of the Los Angeles Area Chamber of Commerce

California’s dysfunctional state government and our chronic budget crisis are beyond inexcusable. The majority of voters are justifiably angry about taxes and elected officials seem to be unable to effectively plan for the state’s fiscal future. That sentiment is reflected in the latest polls showing Propositions 1A-1E headed for defeat. But taking out our frustrations on these initiatives is the kind of self-flagellation that will deepen the crisis and prevent the reform we dramatically need.

As I wrote last month, the Los Angeles Area Chamber of Commerce — together with nearly every business organization in the state — is urging support for the package of state budget initiatives on the May 19 special election ballot. There are no perfect short-term fixes for the disastrous financial condition that California is in, but these ballot propositions go a long way toward avoiding a fiscal catastrophe and putting in place the kind of reforms that will avert a similar crisis in the future. Most notably, Proposition 1A will significantly reduce spending by establishing a long-sought spending cap and requiring the stockpiling of revenues from good years in a substantial “rainy day” fund to mitigate future economic downturns.

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Five Stages of CEQA

John R. McLaurin
President of the Pacific Merchant Shipping Association

With apologies to my Psych 1 professor at UC Davis.

The California Environmental Quality Act (CEQA) is well known to those pursuing projects in California. At our commercial ports, the CEQA process for a marine terminal project is taking up to ten years to complete – not including the subsequent litigation. With term limits at the local level, the environmental impact review (EIR) process currently outlasts the political lives of mayors, city council members and harbor commissioners. Combined, the last two EIR’s at the Ports of Los Angeles and Long Beach were approximately 6,000 pages in length. Both projects were appealed before their respective City Councils – and both still face years of litigation, a reflection of the "can do" spirit of California.

While listening to a local public official lamenting the fact that EIR’s have become a multigenerational process in which people are married, have children, divorce, wars declared and ended, pandemic’s (or at least pandemic panic) come and go – it struck me. For those pursuing a construction project in California, the CEQA process has become something similar to the five stages of grief. Tell me if you agree.

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Stop Lying About Prop 1A: It’s Not Long

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)

Criticize Prop 1A if you like, but opponents of the measures (and heck, even some supporters) should stop saying that it’s long. It’s not.

By comparison to other California ballot measures, 1A is short and compact. And the legislative and gubernatorial staffers (not to mention the interest group folks) who drafted 1A have done a much better job of being concise than sponsors of ballot initiatives.

Prop 1A is a little less than 3,000 words. If that seems like a lot, consider this: between 2000 and 2006, 15 of the 46 voter-sponsored initiatives on the ballot were over 5,000 words long, according to a 2008 report from the Center for Governmental Studies. Eight of those 46 initiatives were longer than 10,000 words.

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Green Shoots, or Wishful Thinking?

David S. White
Principal of the Law Firm of David S. White & Associates, West Los Angeles, specializing in litigation, arbitration and mediation of real-estate-related disputes and litigation since 1977;

The latest job loss figures have been greeted by many in the Media as a good sign – only 540,000 (almost) jobs lost! It could have been worse, say the pundits. And look at those bank profits, and the Dow is back up to the mid- 8000’s – why, this thing is blowing over and pretty soon all will be right with America’s and the world’s economies again! Whew, that was pretty dreadful, no?

Not so fast. The Newspeak term for we are seeing is “Green Shoots,” everywhere, signs of Spring, or plants growing back after a devastating fire, like the one ravaging Santa Barbara last week and over this past weekend – their third major firestorm in some 9 months. But, in an economy that needs to add hundreds of thousands of jobs every month just to stay even with population growth, should we really be popping champagne corks over only 540,000 jobs lost in April? 5.7 million Americans without jobs likely did not go shopping last weekend.

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CALA Celebrates Jury Appreciation Week

Tom Scott
CA Executive Director, National Federation of Independent Business

Every year, during the second full week of May, the Administrative Office of the Courts (AOC) and the Superior Courts in California team up to recognize the millions of Californians who answer the call and the serve on juries in our great state. California Citizens Against Lawsuit Abuse (CALA) would like to also applaud these great Californians who take the time to serve their state.

This is not sometimes a perfect system, but it does work and it is truly a system of the people, by the people and for the people. As Chief Justice Ronald George has stated, "trial by a jury of one’s peers is among the fundamental democratic ideals of our nation. Serving as jurors reminds us that these ideals exist only as long as individual citizens are willing to uphold them."

Our jury system has come a long way. Some statistics compiled by the AOC show directly what an impressive system we have in California.

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Chula Vista Election Great News

Richard Rider
Chairman of the San Diego Tax Fighters

On May 5th, a clear message was sent that voters will no longer obediently approve the politicians’ tax increases. And that’s great news!

Chula Vista city politicians held a special mail ballot election to raise the city sales tax an additional full 1% to 9.75%. In a dramatic turnaround from similar previous sales tax elections around San Diego County, the city politicos and public employee labor unions got their collective keisters kicked, losing the vote by a lopsided two-to-one margin.

This defeat in the county’s second largest city is all the more impressive because the other side had the public employee manpower and money to win easily – in normal times. But these are no longer normal times.

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One Year….and Counting

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

Today marks the first anniversary of Fox and Hounds Daily.

Our goal in creating this site was to bring together varying voices to debate and illuminate the issues affecting business and politics in California.

Our best-read pieces didn’t hone to a specific political ideology or theme. Jon Coupal’s argument for shared sacrifice from the public sector and supporting furloughs for public employees proved extremely popular, as did Allan Hoffenblum’s view of the falling fortunes of the California Republican Party and Chandra Sharma’s business take on building a football stadium in Los Angeles.

Our readers clearly have multiple interests.

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May 19th Winners and Losers

Tony Quinn
Editor, California Target Book

Bring on the autopsy. If the polling is any indication, California voters will defeat the five budget balancing measures, Propositions 1A through 1E, on May 19. Not only do both the Field and PPIC polls show the measures losing, but opinion seems to be hardening against them. According PPIC, those voters following the measures closest are the most vigorously opposed. Fifty two percent of likely voters oppose Proposition 1A, the spending cap/tax measure. But among those following the measure most closely, 65 percent are opposed and only 29 percent are in favor.

If the measures go down, two factors will be at play. The voters do not seem to believe the legislature is capable of reforming itself, thus they are unimpressed with the “rainy day” spending cap Gov. Schwarzenegger and proponents have pushed so hard for.

And they are opposed to the additional burden of higher sales taxes, a higher car tax and increased income taxes, all of which fall on the state’s voters. As part of the budget compromise, the legislature declined to impose any industry specific taxes (no doubt to not arouse industry opposition) and instead raised broad based taxes. But the voters have already turned down higher taxes on rich people, oil companies and tobacco companies – so why did the legislature think voters would support higher taxes on themselves.

So who are the winners and losers if the measures fail? That’s easy. Everyone is a loser. Republicans said they were for a spending cap, but they are not supporting Proposition 1A, that has a spending cap. GOP anti-tax activists say it won’t hold down spending, but how do they know if it is not tried.

Legislative Republicans ousted their leadership over the tax increases and are recalling members who voted for the tax package. But in the process, they alienated themselves from business, which wants the ballot measures, and the governor, who is the only one who can raise any money for the state GOP (not that he cares about that anymore.) Will the new GOP legislative leaders be players in what happens next? Probably not.

Democrats are losers in the short run; they must still govern and make the draconian cuts that will be necessary if the measures fail. But they can be winners in the long run. The tax increases will now expire in 2011, but if Democrats under new party boss John Burton put their minds to it they can win two thirds control in both houses, and in 2011 they can make the tax cuts permanent, and do so without worrying about a spending cap. That’s having your cake and eating it too.

Given plummeting GOP registration throughout the state, all the Democrats need to do is spend $5 to $10 million in a half dozen Assembly and Senate seats in 2010 – dollars they can easily raise — and they will take full control of both houses of the legislature. In 1975, when Jerry Brown first became governor, Democrats had effective two thirds margins in both houses; funny if Jerry Brown becomes governor in 2010 and this is all repeated 36 years later.

Finally, Gov. Schwarzenegger is certainly a loser too, but he also has a window of opportunity. His numbers have plummeted largely because the public no longer believes him. He said he would not raise taxes and he did so. There is no chance of passing another tax bill, but liberal Democrats will concoct 41-vote fee bills that do the same thing. They passed one in January to impose an oil severance tax and a gas tax fee that Schwarzenegger vetoed.

Once the people have spoken, Schwarzenegger should say no to any new taxes, especially those disguised as fees. If the voters on May 19 vote for draconian budget cuts, the governor should see that they get them.

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Now the Governor knows how the Bank and Auto CEOs feel

Loren Kaye
President of the California Foundation for Commerce and Education

This probably isn’t what Mac Taylor had in mind.

When giving advice on solving the state’s desperate cash flow crisis, the state’s Legislative Analyst acknowledged that federal loan guarantees could be helpful, but cautioned about accepting federal help with strings attached:

“We recommend that the Legislature agree to no substantial dimin­ishment in the role of California’s elected state leaders. In our opinion, the difficult decisions to balance the state’s budget now are preferable to Californians losing some control over the state’s finances and priorities to federal officials for years to come.”

Well guess what, the puppet master has already appeared , and it’s not cash flow that’s on the line, but nearly $7 billion in federal stimulus funds. Turns out that one of the budget cuts hammered out by the Governor and legislative leadership, saving $74 million by reducing the pay of home care workers, has run afoul of the powerful union that represents these workers.

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Governor: Two “May Revise” Budgets Coming Thursday

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)

Governor Schwarzenegger said Monday morning that he will release two revised budget proposals on Thursday to show voters the budget options, depending on whether the May 19 Special Election measures pass or fail.

The governor said one revised budget proposal would show the state spending plan in the event that all six measures pass; the other would show precisely what cuts he will propose if all the measures fail.

He said he was doing this “so that people have a clear understanding” of the situation. Schwarzenegger made this announcement after a meeting with local government officials from around Southern California at the Culver City Senior Center.

UPDATE — Governor’s office clarifies: The official May revise release is May 28. But they are going to release two "summaries" — one if the measures pass, one if they fail — on Thursday.

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