New Legal Action Possible Over Minimum Wage Dispute

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

The Howard Jarvis Taxpayers Association is considering jumping into the legal fray over the question of whether Controller John Chiang can resist Governor Arnold Schwarzenegger’s proposed order to pay public employees the minimum wage if no budget is in place.

Lawyers at the Jarvis Association feel the group has a good understanding of what can and cannot be paid under state law. The law was interpreted in a case handled by Jarvis attorneys, White v. Davis, which took five years to run through the courts with a final decision by the California Supreme Court in 2003.

Controller Chiang said his constitutional powers allow him to ignore the order from the governor. Schwarzenegger has yet to sign the order, but his office said he plans to do so on Thursday if no budget agreement is reached, meaning there is no legal basis for making appropriations. The governor is trying to force the legislature to make a budget deal.

The legislature’s legal counsel, Diane Boyer-Vine, backed Chiang with an opinion that argued court decisions indicate the controller can wield power independent of the governor.

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NewsFlash: The Market Works

Loren Kaye
President of the California Foundation for Commerce and Education

Spread the news, especially to the Air Resources Board. California drivers respond to price signals. Judging from its skepticism of market solutions – embodied by the draft blueprint for greenhouse gas controls, which minimized the role of markets in achieving emission reductions – the Board doesn’t buy this. But recently-released gasoline sales data for California demonstrate that drivers do respond to higher gasoline prices.

The State Board of Equalization recently released its March, 2008, gasoline consumption report, which shows taxable gasoline sales falling by more than three percent from a year ago, and by 5.5% per capita from two years ago.

More recent figures over a longer time horizon from the Energy Information Administration show a similar trend. May per capita gasoline sales were down nine percent per capita from a year ago. Obviously, neither of these agencies has yet published sales results from the steepest run-up of gasoline prices deeper into the summer. But common sense shouts that consumption will be even lower.

Once again, consumers have demonstrated that they will respond to market signals. One hopes the Air Resources Board will rethink the direction of their Scoping Plan, and show as much confidence in California market participants.

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New Taxes Are Not The Answer to Budget Woes

Jon Coupal
President of the Howard Jarvis Taxpayers Association

It has been over a month since the constitutional deadline passed to approve a new budget and members of the Legislature have gone on vacation. Apparently, not many Californians believe lawmakers have earned this time off – a recent Field Poll shows only 27% regard their performance positively, while 57% have a negative view.

While state representatives have decided they would rather go to the beach than wrestle with the state budget crisis, California families are not having nearly as much fun. They are being slammed by increased costs for everything from food to gasoline. Many are struggling to hold onto their homes. There can be little doubt why three out of four Californians say we are headed in the wrong direction.

But things can get a lot worse if the majority in the Legislature get their way. These politicians want to increase the burden on California taxpayers by $9 billion, which averages out to $1,000 in new taxes for a family of four.

Californians are already extremely generous to government. Our state ranks 8th highest in the nation in tax burden according the Washington, D.C-based Tax Foundation

Although taxpayers are sending record amounts of tax dollars to Sacramento, this is not enough to keep up with spending. State outlays are up 44% over the past 5 years. Now that the economy is not generating enough revenue so that politicians can spend as much as they like, what is their response? Instead of tightening their belts the way California families are forced to do when they run short on funds, these politicians want to raise income taxes, taxes on businesses and they even want to do away with the tax exemption for children.

Sacramento politicians do not have a revenue problem, they have a spending problem. Now is not the time to raise taxes on families and small businesses. The State Department of Finance reports that the state has been suffering an ongoing net loss of citizens over the past four years. The proposed tax increases are a recipe for disaster for our economy and those taxpayers who have not already fled the state.

Politicians are feeling the heat. Unfortunately the heat is coming from special interests — providers of government services and those who contract with government — who clearly benefit from more spending. Those who profit from public spending do not what to see their gravy train derailed by having reasonable limitations placed on Sacramento’s ability to tax and spend. Some of these special interests are now engaged in expensive media advertising campaigns in an effort to whip up support for their retaining and expanding their piece of the public spending pie.

While the Howard Jarvis Taxpayers Association is not able to match the media campaign of the special interests, whose pockets are fat with taxpayer dollars, it is very important that all taxpayer interests – both the grassroots homeowners and the business community – do what they can to educate Californians about the enormous burden we are carrying. For that reason, HJTA is funding a statewide radio campaign to get out the facts about the state budget, and how much average taxpayers have at stake in the final outcome. You can listen to the ad by Clicking Here.

Our media campaign will also provide support to those brave lawmakers in the minority party who are truly the last bastion against cruel and unwarranted tax hikes.

Public pressure is the only way that the cowardly lawmakers in the majority can be compelled to solve the budget problem without increasing the tax burden, especially the burden on California families.

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iTunes and Text Messaging? That’s just the tip of the iceberg.

Chandra Sharma
Political Communications, Redistricting and New Media Strategist

In retrospect, it seems absolutely deplorable – as new technologies continue to popularize and grow, improving the way we communicate, live and interact, the government has been deprived of its fair share. High-Speed Internet Service, Text Messages, iTunes Music and Video Downloads – yes, they all may seem like cutting-edge innovations that are helping bolster California’s economy by creating jobs and encouraging investment, but truly, all they’re doing is cheating the government out of valuable tax revenue.

For shame! Thank god that Progressive cities like Los Angeles and Sacramento, along with equally progressive legislators like Charles Calderon are there to put a stop to such an injustice and help the government get its fair share – after all, all those environmental impact reports aren’t going to pay for themselves.

But let’s be honest – taxing Music Downloads and Text Messages is a nice start, but if California is ever going to live up to its true tax potential, we’ll have to start getting more serious about taxing early and often. How long have iTunes and Text Messaging been around? We can’t afford to waste future tax revenue by sitting around waiting for the next big thing – it’s time to get proactive!

Here are some ideas for current and future innovations that we can tax immediately to make sure the government gets its fair share:

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Democrats and Drilling, Part Two

Patrick Dorinson
Host of The Cowboy Libertarian Radio Talk Show in Sacramento

The ban on offshore drilling must be renewed by September 30th. Speaker of the House Nancy Pelosi has categorically stated that she will not permit a straight up or down vote on whether or not to keep the ban in place. Instead, she has said that she will place the measure in an Omnibus Spending bill which will be needed to continue to fund the government.

For weeks, there have been no Appropriations hearings because that would allow Republicans to offer amendments on overturning the ban. Her partner, Senate Majority Leader Harry Reid, is also trying to stall any vote. So the Democratically controlled Congress ceases to do the people’s business on the orders of two people.

Why won’t they allow this vote? In a word—fear.

Fear that the ban might be lifted with full Republican support and the support of Blue Dog Democrats and many members from swing districts in the heartland that they recently wrested from the Republicans in 2006. Their constituents don’t own beachfront property in California or Florida. Heck, with gas prices being what they are, they can’t even afford to drive to the beach.

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Shoring Up America’s Oil

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

Famed oilman T. Boone Pickens lately has been calling it the greatest wealth transfer ever – the $700 billion or so the United States now will send overseas each year to buy expensive oil. Much of that money is enriching regimes that want to undermine the West and kill Americans.

More people are motivated to take serious action and make sacrifices to trim our appetite for foreign oil. And California – which burns more gasoline than any other state and most other countries – is in position to make an important contribution. California should reopen offshore drilling.

I know there is a barrel of opposition to it. But most arguments against offshore drilling are old and no longer valid.

For example, those who say drilling inevitably leads to devastating oil spills apparently have missed the revolution in safety improvements. Sure, there’s risk in oil exploration and production, but in recent years the amount of oil spilled in the oceans from human activity has dropped so far it is now far less than from natural seepage. Think about this: Hurricanes routinely twist up dozens of rigs in the western Gulf of Mexico, yet you don’t hear much about oil spills there, thanks to safety improvements.

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New Players, but Still the Same Old Play

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

Taking a long weekend, I didn’t have time to prepare a blog for today, so I figured why not use something I wrote years ago about the state budget debate. You see, very little has changed when it comes to the budget deliberations. A few cross-outs here, a new word there, a changed name and, presto, I have an up-to-date article.

The original, slightly longer opinion piece is from 2002 and the sad truth is we’ve all seen this play before—only some of the actors are different.


For suspense and thrills this summer, forget the Spiderman BATMAN movie or the latest Grisham JAMES PATTERSON novel. Follow the attempt to solve this year’s state budget crisis. The hole in the state budget is getting deeper. And with it, suspense builds like any good political thriller – how are the governor and legislators going to get out of this one?

Who the good guys and bad guys are in this drama will depend on your political point of view – but it will be exciting. Really!

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Minimum Wage could be a dangerous game for the Governor

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)

My first reaction to the leak that Schwarzenegger might sign an executive order cutting state workers’ pay: this wakes folks up around the state, puts much-needed attention on the budget problem, and prepares the public for the difficult changes — a tax hike that Republicans will hate and a rainy day fund or spending restraint that is not the Democrats’ cup of tea — that may be part of the final budget agreement.

My day 2 reaction: This is a dangerous game the governor is playing. Here’s one potential problem. Schwarzenegger had received some support from the big state workers’ union, SEIU Local 1000, for his suggestion to borrow against the future revenues of a modernized lottery. But now he’s scared those members. He could be risking that support. And more broadly, SEIU has been helpful to the governor.

SEIU’s international president backed his health care proposal, and the California board has been debating whether to back the governor’s redistricting initiative. I wouldn’t expect the union to reverse its position on either issue out of anger about this possible executive order. But it clearly strains a relationship between SEIU and Schwarzenegger that was helpful to the governor.

It’s a decent bet that Schwarzenegger retreats and doesn’t sign this executive order at all.

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CNN uses fake CA “College Republican” in Anti-McCain story

Guest Author and Chairman of California Students for McCain

The idea that much of our nation’s media in their coverage of the Presidential election has exhibited a bias in favor of Senator Obama has been a hot topic of discussion as of late, even recently prompting the McCain campaign to release a video of quotes to illustrate their point.

In an exchange with CNN yesterday that began with the news network apparently fabricating a quote and attributing it to a supposed member of the USC College Republicans, California Students for McCain may have gotten the chance to witness this phenomenon first hand.

Yesterday morning, I awoke to concerning news – someone claiming to be linked to Students for McCain and the USC College Republicans had been quoted by CNN as stating that McCain does not appeal to youth, Republicans included, and will struggle to carry the youth vote on both sides of the aisle. The CNN story was one of the top headlines on their website, and even made the front page of Yahoo.

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Cost Overruns from Coast to Coast

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

I grew up in Massachusetts, and recently I’ve been reading stories about government projects in my home state that would be familiar to anyone who follows government in California. They deal with cost overruns of major public programs. Let’s be fair and say there are cost overruns in private as well as public efforts, as anyone who has remodeled a house knows.

However, what made me take notice of these cost overrun stories is that one had to do with a big infrastructure project and the other had to do with the Bay State’s effort to implement a universal healthcare system.

California is involved in many infrastructure projects, but may get behind a massive proposal if the voters approve Proposition 1 on the November ballot to support a $10-billion high-speed rail. And, anyone following California politics knows that last year was supposed to be the Year of Health Care Reform. The governor’s pet project was derailed, but perhaps only temporarily. Rumor has it he wants to resuscitate the program as soon as the budget is resolved—whenever that occurs.

Thinking about these California proposals I read these recent reports about Massachusetts with trepidation. That big infrastructure project in Boston — the most expensive highway project in United States history is facing – you guessed it, a cost overrun. And, the Massachusetts health-insurance-for- everyone plan is up and running and one of the first things state officials noticed was – it cost more than expected.

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