Issues of the week: Porn tax and gay marriage. This is not your father’s and mother’s California. What happened to infrastructure and water? I guess we solved those problems.

The Recall of Senator Denham has been recalled by the measure’s sponsor, Senator Don Perata. At least he says he called it off. However, it is still on the ballot. Voters can still vote Denham out and a replacement in. Doesn’t this remind you of any number of government programs? The reason behind it is over; the author has abandoned it; but it goes on and on like the Energizer bunny.

Speaking of the Energizer bunny and also thinking about the AFLAC duck, the animal kingdom seems to have a positive branding effect on certain products. So what happened to the GOP elephant? Stories about branding and re-branding the GOP are popping up everywhere, including on the pages of Fox and Hounds Daily

The question is, does the GOP elephant need a personality re-do or does he have to get back being his old self. Maybe a session on the couch will help. Calling Dr. Doolittle.  Or is that the problem for the GOP in a nutshell: Do little?

When legislatures and governors make big mistakes, it’s often because they are focused on the wrong thing. The state’s budget shortfall of $15 billion is at the center of attention these days. But that problem would pale in size to the hidden troubles of unfunded pension liabilities in the state.

That brings me to CalPERS. I can barely balance my checkbook, so look for financial expertise elsewhere. But each day seems to bring unsettling news about the pension fund. A month ago, there were a string of resignations of top executives.  This week, we’re hearing more about a $1 billion land investment gone bad. The Wall Street Journal recently has turned up examples of conflicts of interest among actuaries in other states (though not California). In the face of all this news, CalPERS hums along, its officials saying that there’s nothing for taxpayers to worry about.

But we should worry. And so should the governor and state legislature. If CalPERS fails to perform, this state faces a fiscal disaster that would make us forget the current budget predicament. But the legislature is not being persistent enough in holding hearings and asking questions. When the pension fund gets attention, it’s usually during political debates over legislation requiring divestment from this country or that. One reason for the lack of scrutiny, unfortunately, is that CalPERS is an important source of power for the state’s labor movement, which dominates the politics of the state’s Democratic party.

In a piece of news that has not been widely reported, the AFSCME union that represents workers on all University of California campuses has approved a strike in an effort to seek a 20% wage increase. The union last held a UC-wide strike in April of 2005.

The kicker — unlike their previous strikes, this one would coincide with final exams at the vast majority of UC schools. They have already demanded that both Students and Teachers not cross their picket line, without regard for what effect this might have on those individuals’ academic standing. Even without such a demand, the strike would nonetheless prove extremely detrimental to student life during final exams by shutting down on-campus services like dining halls and shuttles, as well as severely limiting public transit access to and from campuses.

Whether or not the union’s demands are justified, I can’t help but lose respect for anyone who feels that causing such a disruption would work to their benefit. Academia is the lifeblood of a college campus — the University, and the jobs it creates, would be all but nonexistant without the students. An action as distasteful as this attempt to disrupt their exams is a clear example of strongarm bargaining tactics being taken too far.

As Governor Schwarzenegger’s analysis notes, California ranks "dead last" in terms of per capita lottery sales.  Several east coast states, including Massachusetts, New York and Pennsylvania do far better.  Interestingly, the independent Legislative Analyst’s analysis reports that the average revenue of lotteries in states west of the Mississippi are significantly lower than those east of the Mississippi.

While a thorough analysis of the states’ games, demographics, and marketing could help explain this difference, a simple explanation occurred to me:  lotteries have just been around longer in many eastern states.

Maybe playing the lottery, like many other behaviors, is passed on from parents to their children, and there just aren’t as many age groups, and therefore as many people, playing the lottery in California – too many of today’s lottery players don’t have children old enough to play, never mind grandchildren.

I looked at brief histories of the states that the LAO highlighted…indeed, Massachusetts, with one of the most successful lotteries in the country (successful for the lottery itself, not its players) began in 1971, as did Pennsylvania’s very profitable one.  New York’s began in 1966.

Then the lottery spread west – to Arizona in 1981, California and Oregon in 1984, Colorado in 1989 and Texas in 1992.

If this longevity/heredity theory has any truth to it, and the age of the lottery is in fact a contributing factor, this is important because it means that promoting the lottery or changing its games won’t increase revenue to the degree that the Governor hopes.  Time and good breeding will do that.  Teach your children well…And feed them on their dreams….

As our leaders look to revive the flat-lined 2007 "Year of Healthcare", it is important to remember that small business owners, employees, and family members make up 60 percent of the uninsured, so until healthcare is fixed for small business it is not "fixed".  But what does truly "fixed" health care look like for California’s job creators?

NFIB has put forth ten principles for small business healthcare reform which include:

• Universal: All Americans should have access to quality care and protection against catastrophic costs.  A government safety net should enable the neediest to obtain coverage.
• Private: To the greatest extent possible, Americans should receive their health insurance and healthcare through the private sector.  Care must be taken to minimize the extent to which government safety nets crowd out private insurance and care.
• Affordable: Healthcare costs to individuals, providers, governments, and businesses must be reasonable, predictable and controllable.

There’s an old saying about the weather. Everybody talks about it but nobody ever seems to do anything about it. The same can be said about the price of gasoline. And while the pain at the pump continues, everyone is looking for scapegoats to blame for high gasoline prices.

Number one on the list are the "greedy" oil companies and their "windfall profits", followed by the Saudis and their fellow travelers at OPEC, China and India for daring to prosper and thus increasing demand, and a whole host of other things. All convenient, but something is missing.

The one thing we always leave out is ourselves.

Now before you start heating up the tar, gathering the feathers and looking for a rail to run me out of town on, hear me out.

In 1990, the United States imported 42% of its oil needs. Today we import 60%. Congress has placed huge potential areas of development off-limits to exploration-and while we are speaking about energy we have also restricted the exploration of natural gas as well. Don’t take my word for it — read what Business writer and author Robert Samuelson wrote recently about our energy situation by clicking here.

Environmentalists have succeeded beyond their wildest dreams in cutting off oil and gas exploration in the United States. And as long as gasoline was at a low price, the public and the voters went right along with it. Whenever exploration was proposed anywhere, they ginned up their PR machine and their lawyers and quickly ended the discussion.

And that’s not just oil. That includes coal, natural gas, new refineries, power plants, nuclear energy, LNG facilities and new pipelines.

Likewise, we continue to elect politicians who give us pie-in-the-sky solutions that are years away but tell us nothing about what they will do today. And we gullibly go along with it, never asking the hard questions.

Liberal economic commentators like Paul Krugman see high oil prices as the perfect time to further their social engineering goals, so that we all start leaving the suburbs and start living more like Europeans, abandoning our cars and using public transit. I don’t think that would sit too well with most Americans and try telling Californians to leave their cars at home.

Don’t get me wrong — I am 1000% behind alternative fuels, good public transit, high speed rail, and making sure California becomes the leader in developing green technologies. It makes sense economically and will create a new generation of high paying jobs.

And someday we will live in a world where we have moved beyond fossil fuels. But that day is realistically 30 to 50 years away. Changing what and how we consume energy and having the infrastructure in place to do so is a monumental undertaking. Right now we can’t even build roads, freeways, bridges, water systems and levees.

We have both actively and passively agreed to not doing the kinds of things necessary in order to provide gasoline and other forms of energy during this "Era of Energy Transition" as I call it.

So when you wake up to start out on your Memorial Day weekend, take a few moments to think about how we got into this mess.

And when gasoline gets to $5 a gallon we’ll see if the rest of the country who don’t have beachfront property in California or Florida, and even Californians, still all say no to new energy exploration.

If they do, then they need to take a good hard look in the mirror before they start looking for scapegoats.

Before, it was easy to be "green" as long as there was no associated cost. Now there is.

Environmental activism, may I present economic reality.

If you are trying to defeat an initiative measure destined
for the ballot, lesson one in the initiative game playbook is to cause
confusion and uncertainty with the voters. One of the chief weapons to
accomplish this goal is to file a rival measure of your own on the same
subject. If both measures qualify for the ballot, the voters will have the extra
task of not only trying to decide if a reform is needed, but also which reform is the
best one to solve the problem the measures are intended to address.

Once the campaign attacks start flying on the supposed
hidden agendas or flaws in the rival measures, the voters often throw up their
hands in disgust and vote NO on both entries. That is often an acceptable
result for the supporters of the second measure. They don’t want Measure A to
pass. If Measure B, their own initiative, goes down in the process, they will
accept that collateral damage because their first priority is to defeat Measure
A. 

Californians have seen that scenario play out time and
again. In 2005, the pharmaceutical companies filed Proposition 78 as an
alternative to what became Proposition 79, a measure its proponents had intended to
reduce the cost of drugs. Without getting into the pros and cons of each
measure, the defeat of both initiatives meant that Prop 79 did not become law,
which was a satisfactory result for the companies.

It’s happening again in this coming June primary. The League of
California Cities is determined to defeat Proposition 98, an eminent domain
reform put forth by the Howard Jarvis Taxpayers Association and the California
Farm Bureau Federation. The League qualified Proposition 99, a much softer
version of eminent domain reform. 

Frankly, the League would be just as happy to see both
measures go away. League spokespeople will argue they really want their measure
to pass because they can then claim eminent domain reform has been
accomplished. Their hope is the issue will not come back on a future ballot.
But, they also tell you there really is not an eminent domain problem in California, which is an
argument that the status quo is just fine.

This strategy doesn’t always work. In 1978, with the people
in revolt over out-of-control property taxes and Proposition 13 on the ballot,
the Legislature hurried a weaker measure onto the ballot that promised property
tax relief for homeowners. This measure, Proposition 8, was considered too
little, too late by the voters in the high profile debate over soaring property
tax bills. Proposition 13 passed with about 65% of the vote. Proposition 8 was
defeated, 47%-53%.

"Cut Welfare, public housing and job programs. I’m tired of paying for worthless lazy scum bags who spread theirs legs and make us pay for their kids."

That’s "Sandwich8’s" thoughts on the budget. Not something regrettably leaked from a private email, but a comment purposely posted to a public website.

Whether it’s an article on the budget crisis, the lottery, health care, retirement income, or an increase in California’s teen birth rate, we need all Californians to think about real ideas and embrace genuine solutions to the state’s problems.  Here are some alternatives to the prevailing themes that most readers of California’s newspapers and blogs embrace in their online comments:

Theme: Most elected officials take bribes ("are crooked").
Alternative suggestion: Elected officials just want to be popular and get re-elected to political office.  Taking bribes is usually not an efficient way to accomplish this; most legislators in California probably aren’t even offered bribes.

Theme: Public policy doesn’t really matter; we’ll get screwed either way.
Alternative suggestion:  You can at least support the lesser of two (or three or four) evils.

Prevailing Theme: EVERY problem is related to illegal immigration.
Alternative suggestion: Immigration brings benefits and costs to California, and we can discuss it with an adult vocabulary.  (And immigrants are people, too.)

Prevailing Theme: Using CAPS increases the validity of my opinion.
Alternative suggestion:  If you have to use CAPS, you probably shouldn’t say it.

Commenting on a San Francisco Chronicle article on the increase in California’s teen birthrate, "Chronic08" and "Crustyoldseaman" succinctly combine these themes:

"Illegals drop babies; Stupid Gringo pays for it, wonders why there is a budget deficit. SFGate, you suck."

"Lovely. More ignorant trash (of ALL colors and creeds) spitting out more morons they can’t raise."

One reader plans his/her suicide:

"My plan is to take my life voluntarily if I get cancer or some other condition that would create disability. I have no family to take care of me. My suicide note will be a letter to the insurance company, saying that my death will save them money so I am doing them a favor…."

The comments sections are rife with public policy solutions in the form of (what I hope are) modest proposals to deal with the issues of the day:

"The state has property it can sell. It can sell oil leases off the coast. It can offer inmate labor to farmers and others in need of strong backs and weak minds. Log state forests. Trees grow back."

"Instead of increasing taxes on liquor, cigs, cars, boats, millionaires, etc. We should raise the sales tax on diapers, formula, cribs, baby clothes, etc.

"UNTIL WASTE AND CORRUPTION IS CLEANED OUT, THERE IS NO,NO,NO reason for a tax increase. That will only enable the crooks more."

Since some people would be fired from their jobs or chastised by their children for saying such things, these opinions almost certainly come to us courtesy of the relative anonymity of the Internet.  They are also the real thoughts of real people, and I didn’t just choose the most shocking, most offensive ones for exhibit.  

There is so much energy online, and the Internet gives us all a genuine opportunity to engage in honest, well informed and much needed debate. Let’s use it.

Comments, anyone?

Forget the new Indiana Jones thriller, for real action-packed excitement just tune into the State Senate Revenue and Taxation Committee. Last week’s hearing had it all: a tax temper tantrum, rowdy debate over parliamentary procedure and even controversial remarks about the tax agency’s conscience.

Check out the video:

Youtube: Tax Collector’s Conscience

Last week I was meeting with Tony Plana, the actor that plays Ugly Betty’s father at their Hollywood studio set, and while the show is a huge success with ABC having ordered 26 episodes for their upcoming season, it felt like a funeral on the set that day. The reason for this — Ugly Betty is just the latest production lured away by New York’s lucrative tax incentives, one of 40 states now offering such incentives.

Those who think tax breaks for TV and movie productions are a giveaway to rich actors, directors and producers are very wrong. The actors and other "above the line" people go with the production to whatever state they move to. It is the "below the line" people who lose their jobs-the drivers, carpenters, set designers, make up artists, craft services and production assistants.

The entertainment industry is iconic to California, contributing 38 billion dollars to our economy and employing over 250,000 people. During the recent writers strike the LAEDC estimated the cost to California was 2.5 billion dollars. Yet, while 40 states see the merit of offering financial incentives to "steal" these jobs from California, some in our legislature are too shortsighted to take smart aggressive action.  In 2006 the Governor, speaker Nunez and minority leader Kevin McCarthy joined together to push such a bill, but the Senate refused to consider it. The legislation would not have even cost the taxpayers or state budget anything, as it used a "revolving fund" which was more than made up for by the productions themselves.

Perhaps next year when the Chamber lists their "job killing bills" they can suggest a list of "job creating bills", and perhaps with the new Senate President Steinberg having served as Assembly budget chair, the Governor will have more success in supporting an industry that the whole world associates with California, and keep these "below the line" jobs from leaving our state.