Progressives in California, more than elsewhere, forget the history and inspiration behind the founding of the United States. Our very system of government – with divided powers among the three branches of government – reflects an effort to ensure that political power never becomes consolidated in one person or institution.

The same is true with respect to the federal government’s relationship to the states. Again, the national government is (or was intended to be) a government of limited constitutional powers, and powers not specifically enumerated in the Constitution were reserved to the respective states. And capping it all off was a Bill of Rights, the first ten amendments to the Constitution.

If it isn’t obvious by now, it should be. The primary function of government in America, either at the national level or by the states, is to preserve liberty. But to progressives, this simple statement sounds as foreign as ancient Greek. To them, the primary function of government is to redistribute wealth and expand government into all aspects of our lives. They possess the false belief that decisions by elites who control our public institutions are superior to the decisions made by ordinary citizens.

This “government is better” thinking is reflected in several of the new laws that take effect on January 1st. For example, the controversial Assembly Bill 5, which severely restricts the use of “independent contractors,” has the potential of inflicting real damage to California’s gig economy as companies will no longer be able to contract with individuals who seek part-time or seasonal work in a way that provides people with flexibility over where and when they work.

Two more new laws which restrict freedom include a mandated increase in California’s minimum wage, which forces employers to pay more to their employees than the market would otherwise require, and a new rent control law prohibiting owners of rental housing from raising rents more than a certain amount annually.

To read the entire column, please click here.

The U.S. Supreme Court’s decision not to hear an appeal of a 9th U.S. Circuit Court of Appeal ruling limiting when homeless people can be arrested in California and eight other Western states has left lawmakers who want a crackdown over the homeless’ negative effects on quality of life not even sure what that might look like.

In 2018, the San Francisco-based appellate court threw out a broadly written Boise, Idaho, law allowing arrests for sleeping in public, holding that if there were no shelter beds available, this was a cruel and unusual punishment. But dozens of local governments submitted or co-signed amicus briefs to the Supreme Court arguing that the decision was murky at best. One oft-cited example: If a city has fewer shelter beds than its homeless population, is the city automatically blocked from arresting those sleeping in public? 

Some Los Angeles officials fear that’s a likely interpretation.

“The [Boise case] language, rather than citing clear principles where constitutional questions are at stake, makes local jurisdictions vulnerable to lawsuits as they struggle to achieve a balance between the legitimate rights and interests of homeless people and the legitimate rights and interests of other residents and businesses,” City Attorney Mike Feuer told The New York Times.

Los Angeles County Supervisor Mark Ridley-Thomas called the ruling “ambiguous and confusing” and said in a statement released by his office that the Supreme Court’s refusal to hear the appeal “handicaps cities and counties from acting nimbly to aid those perishing on the streets, exacerbating unsafe and unhealthy conditions that negatively affect our most vulnerable residents.”

Large homeless camps called ‘untenable’

It was Ridley-Thomas in September who signaled the arrival of a backlash on homelessness by breaking dramatically with Los Angeles Mayor Eric Garcetti, who has called for a compassion-first approach to what he calls “the moral and humanitarian crisis of our time.”

After persuading L.A. County supervisors to vote 3-2 to support filing an amicus brief backing Boise’s appeal, Ridley-Thomas issued a statement saying the status quo in which the city and county accept massive homeless encampments is “untenable. … We need to call this what it is — a state of emergency — and refuse to resign ourselves to a reality where people are allowed to live in places not fit for human habitation.”

Until then, Ridley-Thomas had been seen as a supporter of the view touted by Democrats like Garcetti and Gov. Gavin Newsom, who argue that homelessness can be sharply reduced with the patient, smart use of public resources. Earlier this year, Newsom had named Ridley-Thomas to be part of his state commission on homelessness.

The fear that the Boise ruling would destroy the quality of life in cities with substantial homeless populations was a focus of Boise’s appeal, which was prepared by the Los Angeles-based Gibson Dunn law firm. “Nothing in the Constitution … requires cities to surrender their streets, sidewalks, parks, riverbeds and other public areas to vast encampments,” the appeal asserted.

San Francisco official downplays impact of ruling

While they were outnumbered by lawmakers who feared the worst, some local officials in San Francisco and Oakland were less alarmed with the implications of the U.S. Supreme Court’s decision to pass on the Boise case.

In interpreting the appellate court’s 2018 ruling, these officials concluded they had the open-ended right to clear encampments that posed clear health and safety risks — so long as they notified those in encampments ahead of time that the camps are going to be cleared and offered the homeless storage for their belongings.

Jeff Kositsky, chief of San Francisco’s Department of Homelessness and Supportive Housing, told the San Francisco Chronicle that he considered the Supreme Court’s action to be a “nonissue.”

Seventy-five miles to the east, Sacramento officials were far more concerned. They fear the upholding of the Boise ruling will interfere with local governments’ efforts to remove the homeless camps that have frequently sprung up in flood-prone areas, especially by the American River in Sacramento.

This article was originally published by CalWatchdog.com

Two years after state-licensed marijuana merchants began serving recreational consumers in California, those retailers account for just a quarter of the estimated market, according to a new draft report from the state’s Cannabis Advisory Committee (CAC). The CAC says the lackluster progress in displacing the black market is due to a combination of high taxes, local bans on pot shops, licensing bottlenecks, and heavy regulation.

The CAC report, which was obtained by the Los Angeles Times, projects that licensed marijuana sales will total $3.1 billion this year, compared to $8.7 billion in unlicensed sales. That means the black market still accounts for nearly three-quarters of marijuana sales. Tax revenue from legal sales for the fiscal year that ended last June was just $288 million, less than a third of the $1 billion that was expected.

California legislators do not seem to have learned much from the experience of states that legalized marijuana earlier. If they had been paying attention, they would have figured out that maximizing tax rates is not a smart way to maximize tax revenue, since legal sellers have to compete with black-market dealers who do not collect any tax at all. The combination of state and local taxes currently adds as much as 45 percent to the retail price, and both the cultivation tax and the excise tax are scheduled to increase on January 1.

Three-quarters of California cities have prohibited marijuana stores, a policy allowed by Proposition 64, the 2016 ballot initiative that legalized cannabis for recreational use. Partly because of those bans, California has just 568 licensed marijuana retailers, less than a tenth of the expected number. That amounts to about 14 stores for every 1 million residents. By comparison, Colorado, where marijuana was legalized in 2012 and licensed sales began in 2014, had 572 recreational retailers as of December 2, or 100 per 1 million residents.

Even in places where pot shops are allowed, the state and local licensing process is a “nightmare,” William Panzer, who co-authored California’s 1996 medical marijuana initiative, told the Times. As of September, Scott Shackford noted, Los Angeles had received more than 1,600 applications from would-be retailers. So far it has granted only 188 licenses. …

Click here to read the full article from Reason.com

The June 30, 2020, deadline for Pacific Gas & Electric to emerge from bankruptcy if the giant utility wants to be eligible for a $21 billion wildfire relief fund set up by Gov. Gavin Newsom and the Legislature earlier this year may end up an unofficial deadline of another sort: for the parties interested in taking over all or part of PG&E to put forward their best plans to win over Newsom, the Legislature, Wall Street and the public.

That’s because Newsom’s announcement of his opposition to PG&E’s plan to come out of bankruptcy contains such fundamental objections that it is hard to see a possible compromise. While the governor cannot single-handedly prevent the plan from being approved by regulators and a U.S. bankruptcy judge, his opinion is sure to carry weight. Without his support, PG&E’s path out of bankruptcy is sharply complicated.

Newsom described PG&E’s proposal as being “woefully short” of the commitments needs to ensure the scandal-plagued utility is able “to provide safe, reliable and affordable service to its customers.” His critique included what seemed akin to one of the “poison pills” that the corporate world uses to make sure deals are rejected: a demand that the utility replace every member of its board of directors.

The governor’s position appears encouraging to the coalition of Northern California cities that announced in early November that they were working together to craft a plan take over PG&E operations. Those cities: San Jose, Oakland, Berkeley, Sacramento, Hayward, Sunnyvale, Richmond, Redwood City, Petaluma, Sonoma, Windsor, Cotati, Elk Grove, Clovis, Chico, Redding, Davis, Santa Cruz, Scotts Valley and San Luis Obispo. Supervisors from San Mateo, Santa Cruz, Marin, Yolo and San Benito counties also endorsed the effort. The coalition includes local governments with about one-third of PG&E’s 16 million customers in the utility’s 70,000-square-mile service area.

Cities push for power provider run like credit union

San Jose Mayor Sam Liccardo – de facto leader of the coalition – told the San Francisco Chronicle that he envisioned a electricity supplier run more like a nonprofit credit union than a government-run utility. Backers cited the Georgia Electric Membership Corp., a 501(c)(6) nonprofit that distributes energy from three power providers to 41 not-for-profit local utilities with a total of 4.4 million customers.

But another approach has the strong backing of one of the richest cities in America: San Francisco. Mayor London Breed has long been on record as saying local power infrastructure should be under local control and in September joined with City Attorney Dennis Herrera to offer PG&E $2.5 billion to buy local power lines. 

The measure was quickly rejected by PG&E and appears to have little support beyond city limits. In October, the editorial page of the San Francisco Chronicle called the plan unlikely to be approved by state regulators for a basic reason: Utilities use big-city profits to keep power affordable in rural communities, and any break-up of PG&E means “the state would almost certainly have to help provide power to rural areas — likely at taxpayer expense.”

Newsom has not explained his view of what a PG&E takeover might look like, but he appears to agree with the Chronicle about the need to keep intact the basic framework of a large utility. 

Gov. Newsom wants Warren Buffett to buy utility

In October, he made headlines when he said he hoped that Warren Buffett’s Berkshire Hathaway holding group considered buying the utility.

“We would love to see that interest materialize, in a more proactive, public effort,” Newsom told Bloomberg News.

While Buffett has shown no public interest in the idea of acquiring a controlling interest in California’s largest power utility, several hedge funds have been plain with their interest in taking over PG&E for nearly a year. They have drawn little support from lawmakers because of the perception they would be as indifferent to safety as the owners they hope to replace.

PG&E entered into bankruptcy in January, citing potential liabilities of $30 billion because of massive recent wildfires in recent years that have often been blamed on the utility’s poorly maintained infrastructure. 

The utility believed it had crossed a huge hurdle to emerging from bankruptcy on Dec. 6 when it announced a $13.5 billion settlement of damage claims from four of the largest blazes, sending its stock price higher. Seven days later, Newsom announced his opposition to the utility’s overall plan to emerge from bankruptcy, sending the stock price down to near 52-week lows.

This article was originally published by CalWatchdog.com

On December 10, the SJ City Council approved a directional plan which aims to allocate to affordable housing monies raised from a proposed new property transfer tax.  The plan has no guarantees that the monies will actually be spent on housing and has no guardrails to make sure the money isn’t misspent on overpriced new dwellings. Pierluigi Oliverio of the Silicon Valley Taxpayers’ Association explains.

Opportunity Now (ON): In 2016, Los Angeles residents passed a similar, $1.2bn tax for affordable housing. They are now concerned that the money appears to have been misspent, with tax funds being allocated to “affordable” units that cost more than $500k to build (https://reason.com/video/los-angeles-is-spending-over-1-billion-to-house-the-homeless-its-failing/).  Are there are any constraints or metrics in this plan that would provide some type of cost limit or targets to stop something like that from happening in San Jose?

Pierluigi Oliverio (PLO): No. The spending plan passed at City Council is focused on income levels they want to target and administrative costs. Remember, the city doesn’t build the housing. They give the monies to affordable housing developers, who have to patch together funding from government subsidies, tax credits, etc.

And the reality of new construction, land, labor (these projects are 100% union),  and entitlement costs make these projects very expensive. The way the monies are currently spent acts as a subsidy not just for low income renters, but also for the current housing construction industry. The city’s plan will do nothing to incent cheaper building costs and will not influence the current marketplace to bring real prices down.

ON: So if the per unit cost of “affordable” housing these tax monies end up going to are north of $500k, there’s nothing in the plan to stop that?

PLO: Nothing.

ON: Could they have put those types of cost controls in the plan?

PLO: Yes.  It’s possible to put language into the plan and the initiative itself  to say units can only cost this much, square footage should be limited to a certain metric, a certain percent have to be shared facilities or a certain type of less expensive construction. This is the sort of activity that would influence the marketplace, as well as controlling costs. Although if you put a cost limit, say, of $450k/unit into the ballot initiative, you might shock the populace into voting “no” because many people would consider that per unit cost extravagant.

ON: Does last night’s vote do anything to actually require that the property transfer tax money will go to housing? Our previous interview with Pat Wait of Citizens for Fiscal Responsibility (https://www.opportunitynowsv.org/blog/problem-wit-unrestricted-taxes) suggests that because it’s a General Fund tax, the council can spend it on anything they want.

PLO: Nothing has changed.  It remains a General Fund tax, which means there’s a lower bar for passing it—it only requires 50% approval—and future councils can spend the tax receipts on anything they like. Last night’s plan is directional and aspirational, but it’s just a statement of goals at this particular moment in time. There is no legal requirement for them to spend the monies the way they say they want to. It may require an extra public hearing or two to make the change, but that happens all the time.  The Oversight Committee is a misnomer: it has no teeth, they can’t veto a change or require the council to abide by its stated intentions.

And even if they do end up spending some, or even all, of this money on affordable housing, it’s a losing battle. They will never be able to raise enough money to put a dent in the problem.  The solution has to be to dramatically lower the cost of building new housing, which means changing land use regulations,  labor costs, CEQA, and the factors that drive up the price of new housing.

ON: So this money that’s supposed to go to housing could actually be spent on employee pensions?

PLO: Usually, money spent on affordable housing come from restricted funds, not general funds.  So here’s the problem they are likely to face: As pension costs rise, the ability to maintain this verbal promise of how the money will be spent will come under pressure. The City is legally required to fulfill its pension obligations, it’s not legally required to spend this money on housing.  So they will be in a bind:  Are they going to tell the people of San Jose that, because pension costs have increased, we have to lay off police officers to fund expensive low income housing? I bet most people won’t think that is acceptable. The last general tax increase in 2016 was a sales tax increase and in that first fiscal year it raised $30 million. However in the same fiscal year pension costs went up $38 million, surpassing the general tax new revenue.

ON: Back in 2018, didn’t the voters reject a tax proposal to raise money for affordable housing? It was a targeted tax proposal.

PLO: That proposal was for a targeted tax, which means it needed 2/3 approval to pass. It didn’t get 2/3ds.

ON: So this time, they are offering a General Tax focused on the same thing. What’s the difference?

PLO: A General Tax only requires 50% approval.

ON: But they are saying this is targeted for affordable housing.

PLO: There is nothing in this ballot proposal that would ensure the monies will go for affordable housing. The proposal is for a General Fund tax.

ON:  Wait, so they are promoting this tax that’s targeted on housing (which requires 2/3ds approval), but in reality it’s a General Fund tax (which only requires 50% approval), which they can spend on anything.  Did someone just move the goalpoasts? This seems kind of cynical and deceptive.

PLO: Governments want to raise revenue.

 *   *   *

This article was originally published on Opportunity Now’s website here.

And she brought forth her firstborn son, and wrapped him in swaddling clothes, and laid him in a manger; because there was no room for them in the inn.
– Luke 2:7

Advocates for the homeless frequently invoke biblical passages in order to appeal to the Christian compassion that still guides the hearts of most Americans, whether they are religious or secular. “No room at the inn,” is a phrase the American Left relies upon for to justify everything from open borders and immigration amnesty to affordable housing and homeless shelters. But what sort of inn? An inexpensive manger that is warm, dry, and safe? Or an overbuilt monstrosity? Both options are warm, dry, and safe, but the monster is so grossly expensive that only a few find shelter.

California’s policies currently favor these overbuilt monstrosities, with the biggest losers the homeless. The average cost for “permanent supportive housing” in California is now easily in excess of a half million per unit.

A recent audit in the City of Los Angeles estimated the average cost at $550,000 per unit. According to a program overview released by the Santa Clara County’s Office of Supportive Housing, their average cost is in excess of $500,000 per unit. In San Francisco, according to a report released by the Bay Area Council Economic Institute, over $700,000 per unit. Across the Bay in Alameda County, a 2018 report released by the City of Oakland discloses average costs of over $600,000 per unit. On Federal property in Los Angeles County, remodeling an existing building to provide permanent supportive housing is estimated to cost over 900,000 per unit. But the champion of all monstrosities is in Venice Beach, California, where developers propose to construct housing for the homeless at a cost of approximately $1.4 million per unit.

Dubbed by its opponents as “The Monster on the Median,” this building is set to occupy three acres of city owned property located in the heart of Venice Beach. The land is currently used for public beach parking, as well as periodically hosting farmers markets and craft fairs. If these three acres were zoned for mixed use commercial development, they would sell for around $100 million. Any rational policymaker would either leave this property alone, allowing it to remain one of the last scraps of publicly accessible open spaces in Venice Beach, or sell it to a commercial developer.

Instead what is being proposed is a 140 unit “community project,” a concrete blockhouse with a three acre footprint that will rise over the residential neighborhoods of Venice Beach like the fortress of an occupying army, which is not an entirely inaccurate metaphor. At an estimated construction cost of around $700,000 per unit, and including the value of the land, the total project cost of this monstrosity will exceed $200 million. This is an astonishing, criminal waste of public money. To house every one of the City of Los Angeles’s estimated 60,000 homeless in structures like this monster would cost taxpayers around $100 billion. That will never happen. What’s going on?

It doesn’t require a cynic to recognize that something’s rotten: The incentive to build monsters instead of mangers is because with these monsters, project developers and financiers have a larger monetary denominator to work with. Much larger. That’s more budget to accommodate overhead, fat consultancy contracts, huge payoffs to litigators, hefty payments to the public sector for permits and fees, lucrative deals with subcontractors, and the promise of endless additional work since at this rate, and at this cost, the problem will never get solved. But how is this ever justified morally?

Here’s where one of the more insidious manifestations of socialist ideology comes into play. Like all socialist principles, it reeks with compassion but is utterly impractical if not nihilistic in the real world. Building homeless housing and low income housing on some of the most expensive real estate on earth is to fulfill the ideals of “inclusionary zoning.” Relying on “scientific studies” that defy common sense, the role of inclusionary zoning is to “encourage the development of affordable housing in low poverty neighborhoods, thereby helping foster greater social and economic mobility and integration.”

“Greater social and economic mobility and integration.”

In practice, this means if you work hard your entire life to live in a neighborhood where your children can go to decent schools and feel safe walking the streets, if you skip vacations and take on a 2nd job to pay off an astronomical mortgage, it does not matter. If you lose the inclusionary zoning lottery, prepare to have an apartment house dumped onto the lot where your neighbor’s single family home just got demolished. Then, while investors pad their profits with property tax exemptions for creating “inclusionary” housing, prepare to have this property occupied by tenants who pay little or no rent out of their own earnings – if they work at all – because your taxes will be paying their rent for them. Prepare for them to openly consume drugs and watch your belongings since petty theft and heroin use is now decriminalized in California.

That is what happened to Venice Beach. And it’s coming to your neighborhood.

There is nothing compassionate about this. In the real world, people congregate in low income neighborhoods because they have low incomes. This is where developers build, at no cost to taxpayers, defacto low income, market housing. This is where charities build and operate shelters, because they are affordable. And when people are fortunate enough to be able to afford to move from low income neighborhoods to middle income neighborhoods or beyond, they expect to be rewarded for their efforts, not have to wonder if the Homeless Industrial Complex will destroy their new neighborhood.

The obligations of compassion don’t end when the Homeless Industrial Complex is finally forced to build inexpensive mangers instead of overwrought monsters. What if baby Jesus was born in a barn filled with addicts injecting heroin and smoking methamphetamine? What if the three wise men didn’t have to bring gifts, because gangs of thieves had set up lucrative criminal enterprises to pay for their drugs, and instead of the hospitality of the innkeeper providing food, King Herod dispensed free government meals?

Compassionate Christians who reelect these corrupt politicians should imagine that scene defining their next Christmas pageant. And while this all sounds horribly cruel during the holiday season of giving, true cruelty is to accept the solutions currently being pursued. They are wasting billions while suffering only increases.

These are the tragic consequences of a perfect storm of flawed legislation and court rulings. In California, the practical effect of Prop. 47, sold to voters in 2014 as criminal justice reform, has been to decriminalize possession of hard drugs and petty theft. At the same time, court rulings such as Jones vs. City of Los Angeles prohibit law enforcement from relocating or detaining anyone camping in a public space unless they can offer them “permanent supportive housing.” The final straw is the “housing first” regulations originating at HUD during the Obama administration that require virtually all federal grant money get spent on housing, rather than also on parallel treatment for substance abuse and mental health.

Tolerate vagrancy, drug use and petty crime. Permit an alliance of developers, service nonprofits, and government bureaucrats to hijack and waste every dollar taken from taxpayers to help the homeless, abetted by useful idiots who believe this impossible, toxic intersection of futile, corrupt strategies somehow constitutes “compassion.” The result? Billions have been spent, additional billions will be spent, and the population of homeless in California, already numbering over 130,000, will only get bigger and more unmanageable.

This is the fraud presided over by supposedly compassionate politicians such as California governor Gavin Newsom and Los Angeles Mayor Eric Garcetti. Hiding behind supposedly compassionate principles such as “inclusionary zoning” they are spending billions of dollars to construct monstrous housing boondoggles where homeless people will be given “permanent supportive housing” in order to “integrate with the community.” At the same time, California’s unsheltered homeless, the majority of whom are either mentally ill, substance abusers, criminal predators, or all three, shall be subject to minimal expectations.

Perhaps it’s time for the Homeless Industrial Complex bureaucrats to construct one of these housing monsters on the park property immediately adjacent to Gavin Newsom’s gubernatorial mansion. Isn’t that sort of “integration” the logical endpoint of “inclusionary zoning?” Perhaps these monstrosities should follow Gavin Newsom, and every other wealthy liberal who pushes these scams – and they are scams, designed to enrich the Homeless Industrial Complex, not to help the less fortunate – to the streets where they live and the schools where their children learn.

Instead of into the neighborhoods of hard working families, let California’s completely unaccountable homeless come en masse to the exclusive, “low poverty” enclaves of the liberal elites who engineered this crisis. Let them come, with all the lawless behaviors that California’s liberal laws enable. Let them urinate in your hedges, defecate on your lawn, shoot heroin and smoke methamphetamine in plain sight, beg, bellow, fight, rape, mug, murder, and, of course, steal everything that isn’t nailed down or under armed guard.

This is exactly what happened to Venice Beach. Fact. Where’s the difference?

And yes, we know, some of the homeless just need a helping hand. So how does it help the virtuous homeless when we fail to police the predators among them?

Isn’t it funny how politicians like Gavin Newsom are willing to impoverish the taxpayers with tens of billions in housing bonds that have not even begun to solve the problem, and leave unchallenged laws and court rulings that turn their state into a magnet for lunatics, addicts, predators, perverts and bums, and destroy neighborhoods across the state with “inclusionary zoning,” but make sure to leave their own streets and schools untouched by this growing nightmare.

Nothing about California’s homeless policies today qualifies as genuine compassion, because compassion has to be rational. Compassion has to have a winning strategy, not become an endless, losing war. California’s housing for the homeless policy is corruption masquerading as compassion.

If Gavin Newsom, Eric Garcetti and all the rest of them cared about the homeless, they’d build the modern day equivalent of mangers, warm, dry and safe, located in more affordable neighborhoods. They’d defy HUD’s preposterous “Housing First” mandate, rallying compassionate reformers in every Continuum of Care agency in the U.S. to back them up. They would use the money they saved to actually help the homeless in every way – managing their mental illness, treating their addictions, training them for jobs. That would be compassion worth its name, and worthy of the season.

An edited version of this article originally appeared in the California Globe.