Gov. Brown Bows Out in Last State of the State Address

Jerry Brown state of the stateIn his 16th and final State of the State address, California governor Jerry Brown made a case that his policies have charted a glorious future for the Golden State. Californians may not be convinced, but for longtime observers, Brown succeeded in summarizing and encapsulating his political career.

“Learning takes place in the classroom,” Brown said, “and that’s why our first job is to support teachers and give them the training and freedom to teach as they know best.” Brown did not cite the state’s stagnating, subpar test scores in math and English proficiency, but he did note that “spending has dramatically recovered.” In 1975, Brown signed the Rodda Act, which authorized collective bargaining by teachers’ unions such as the powerful California Teachers Association. Brown stumps for tax increases on behalf of poor minority students, then looks the other way as educrats spend the money on salary increases, a process he calls “subsidiarity.” Teachers’ unions can deliver miserable results and still get whatever they want. Indeed, the state’s government-employee unions are so powerful that they gather outside the capitol and proclaim, “this is our house.” Brown rewards them with bonuses; the state payroll is up $1 billion.

Brown beat the drum on climate change and called for incentives to produce 5 million zero-emission vehicles by 2030. In that cause, he said, the new $5.2 billion tax on gasoline and diesel fuel—and a new annual fee on all vehicles—was “essential,” adding, “I will do everything in my power to defeat any repeal effort.” Brown thus rehearsed his well-established fondness for punitive taxation. When the tax-limiting Proposition 13 appeared in the late 1970s, Brown attacked it as a “fraud” and a “rip-off.” After it passed, Brown declared himself, unpersuasively, a “born-again tax cutter.” He leaves behind a state with the highest marginal income-tax rate, at 13.3 percent, and the highest base sales tax, at 7.5 percent. And he blasts those who protest high taxes as “freeloaders.”

“I like trains,” Brown said, “and I like high-speed trains even better,” referring to the state’s beleaguered high-speed rail project. “Yes, it costs a lot of money,” Brown said—and he provided no overall cost estimates—but in the long run, it would prove “cheaper and more convenient than expanding airports and building new freeways.” The bullet train would be “fast, quiet, and powered by renewable electricity and last 100 years,” and it was already employing 1,500 construction workers. (By the logic of using infrastructure projects as jobs programs, California could equip the workers with spoons instead of tractors and thereby eliminate unemployment.) Brown neglected to add that the rail project also has a Sacramento headquarters and three regional offices, or that its board serves as a sinecure for washed-up politicians such as former congresswoman Lynn Schenk, once chief of staff to California governor Gray Davis. By some accounts, the bullet train will be more expensive than air travel, but Brown has always made things work for bureaucrats.

Brown conceded that crime remains a problem, and he outlined reforms in the state’s prison system and promoted “more mental health and drug treatment programs.” Even before he signed sanctuary-state legislation, Brown’s outlook on crime has tended to veer out of the mainstream, even for California. During his first governorship, in the 1970s, Brown refused to extradite American Indian militant Dennis Banks, who had fled to the Golden State after his conviction on riot and assault charges. Brown’s pick for California Supreme Court chief justice, Rose Bird, overturned every death sentence that came before her, including the one given to Ted Frank, who tortured and murdered two-year-old Amy Sue Sykes. Voters booted Bird off the court in 1986, along with Brown appointees Cruz Reynoso and Joseph Grodin.

Brown talked up his $17 billion WaterFix tunnel project, but he leaves behind a state with crumbling infrastructure. Last year, spillway failures on the Oroville Dam forced the evacuation of more than 180,000 people. Brown teamed with state water bosses to block access to the dam’s design specifications, federal inspection reports, technical documents, and other crucial information. In similar style, when asked about safety issues on the new $6.4 billion span of the Bay Bridge, Brown responded: “I mean, look, shit happens.”

Still, Brown’s audience in the legislative chamber was chanting “Jerry! Jerry!” yesterday. “As my father used to say, I accept the nomination,” Brown responded, reminding any who don’t already know that his father, Edmund G. “Pat” Brown, was governor before him. That paternal legacy was the key to the son’s first gubernatorial election victory, in 1974. For some Californians, the career of Brown fils may recall Edward Gibbon’s observation: “Of the various forms of government which have prevailed in the world, an hereditary monarchy seems to present the fairest scope for ridicule.”

California: Time for a Major Change in Course

Governor Jerry Brown, California Attorney General Xavier Becerra, legislative and other government officials are fixated on battling the new administration in Washington with almost total disregard for California’s major problems and unmet needs. Failure to address these pressing problems threatens the viability of a state whose status is rapidly being transformed from “golden” to “tarnished.”

To help the political class refocus on the important, here is a list of the most exigent problems accompanied by modest solutions, as compiled by a couple of veteran taxpayer advocates who speak with, and hear from, thousands of California taxpayers.

  • car highway roadRoads & Highways – Just about any road trip one drives on in California confirms that we have gone from a world leader in highway capacity and quality to barely a third world contender. Major changes are in order. Our gasoline tax must be dedicated to roads and highways alone, not to other general fund uses like paying off state general obligation bonds, as is now the practice. Also, Senator John Moorlach’s demands to reform Caltrans should be a top priority. California spends 4.7 times as much per mile of state highway than the national average, according to the Competitive Enterprise Institute, and a 2014 government report concluded the transportation agency was over-staffed by 3,500 positions. Additionally, we should end the practice of requiring “prevailing wages” on public works projects, which are estimated to add up to 20 percent on every road and other public improvement.
  • Energy Costs – Gasoline formulation requirements, “cap and trade” and other responses to climate change must be revisited with demonstrable science and hard-headed realism to help low and middle income Californians who struggle with the costs of transportation and household energy. This is not climate change denial, but rather a recognition that it is patently unfair to burden the citizens of one state with the entirety of a global problem.
  • Business Regulations and Lawsuit Abuse – Manufacturing restrictions, wage and salary rules, workers’ compensation standards, frivolous lawsuits and “sue and settle” standards have driven the aerospace and most other manufacturing industries out of California. Time for tort and regulatory reform to establish a business-friendly climate that will encourage refugees to return and lure others to relocate here. Note: The Nestle Corporation has just announced it is moving its U.S. headquarters from Glendale to Rosslyn, Virginia taking hundreds of high paying jobs with them.
  • Land Development and Housing Costs – The mid ‘70s pioneering California Environmental Quality Act has created a nightmare for those seeking affordable, conveniently located housing, workplaces and shopping centers. It has been used as a weapon by environmentalists, competitors, “NIMBYs” and labor organizations to limit – and dramatically drive up the cost of homes, apartments and other needed facilities. Fortunately, despite the best efforts of some in Sacramento, Proposition 13 remains on the job protecting homeowners from runaway property taxes that could force them from their homes.
  • Public Transit – Gov. Brown’s “Bullet Train to Nowhere” is in a death spiral due to lack of public support, refusal of the federal government and the private sector to provide additional funds, and out of control costs due to mismanagement, malfeasance and insurmountable engineering hurdles. But fixed route/fixed rail transit remains part of the liberal social planners’ mantra. Other than in highly congested urban areas, public transit is unjustifiable in terms of both capital and operating costs. With the advent of Lyft, Uber, self-driving cars and even Elon Musk’s Hyperloop — that, within a few years, could move passengers at a faction of the cost of rail — private companies and entrepreneurs are offering answers to the mobility problem. This justifies placing renewed emphasis on fixing and expanding our highway system.
  • Education Improvements and Cost Control – “School choice” is the answer to improving K-12 student learning results. The political clout of the California Teachers Association and other teacher unions has blocked progress. Properly framed ballot initiatives may be the only realistic avenue to reform as we must stop the automatic and mindless Proposition 98 commitment of nearly half of general fund revenues – regardless of need – to K-12 and community colleges.
  • Public Employee Wages, Benefits and Pension Reforms – Public sector compensation costs for California, at both the state and local levels, are now clearly unsustainable. According to the Department of Labor, California state and local employees are the highest compensated in all 50 states. Pay, benefits and pensions of public employees have become disproportionate to their private sector counterparts who foot the bill. Adding to the approaching calamity is mismanagement – which has included criminal bribery – at CalPERS, the state’s largest public employee pension fund. Politically motivated investment strategies and fanciful predictions of return on those investments have left taxpayers on the hook for hundreds of billions of dollars in unfunded liability for current and future retirees. Consideration must be given to shuttering CalPERS and fairly allocating to each current employee their share of the retirement funds, arranging for the public employer to make up the difference for what has been promised to date, and move from “defined benefit” to “defined contribution” plans for all existing and future employees. Otherwise, this pension burden has the potential to grow so large that California will not be able to fund the most basic services and as residents flee to other states, the last one out will be asked to turn out the lights.

We call on our representatives to stop pursuing discretionary causes and pet projects and come to grips with these real problems facing all Californians.

Lewis K. Uhler is Founder and Chairman of the National Tax Limitation Committee and National Tax Limitation Foundation. He was a contemporary and collaborator with both Ronald Reagan and Milton Friedman in California and across the country.

Jon Coupal is the President of the Howard Jarvis Taxpayers Association. He is a recognized expert in California fiscal affairs and has argued numerous tax cases before the courts. 

This piece was originally published by HJTA.org

It’s Time For a State-Wide Tax Convention

Perhaps the moment has come to convene a Tax Convention in Sacramento to address the chronic dysfunction of a system in California which is largely attuned to the vagaries of ballot measure tax gimmicks and emergency responses as a basis for administering government.

The one constant for running government at any level regardless of size, population mix, political coloration, current leadership or future goals is sound financial machinery and a set of tax rules that can help ensure highest quality performance during good times and bad.

When these rules can be changed at the whim of a sufficient number of petition signers backed by a few powerful funders and their special interest allies, or by a legislative majority bowing to the prevailing political winds, we are inviting dissension and instability.

Sorting out the needs and priorities that matter most to the state’s citizenry gets expression on Election Day. Entrusting that California has the wherewithal to get all the things it wants or forsaking those we cannot afford is the province of the governor and the legislature.

It begins with the need to raise money and lots of it, which every state is empowered to do through its taxing powers. The challenge lies in how those powers are carried out and to what ends.

Most importantly it means taking a hard look at the mechanisms California has at its disposal, if and how well they are performing, and whether our tax policies are adequate to meet the demands of a growing and diverse population even during a period of economic recovery.

These are complicated questions with no easy answers that require more than dubious ballot box solutions and weather vane budget projections.

Without enough revenue little gets down and when spending exceeds it which is often the case, economic disparities are inevitable and factionalism replaces solutions.

At the moment California is enjoying a bit of prosperity after years of retrenchment when the deficits reached $20 billion prior to Jerry Brown’s re-assumption of the governorship.

But as any sensible politician or economist knows, the good times will not last forever and if long-term structural reforms are not made, we can return quickly to the same trough.

California is a vulnerable boom or bust state which puts excessive reliance on personal income taxes that result in massive pendulum swings that can go downward fast when stock portfolios take a big dip. Although high net worth earners are only tiny percentage of the overall population, their impacts are out-sized.

Of course balancing their losses by raising taxes on the middle and lower classes carries risks few lawmakers want. This invites discussion about taxable alternatives (internet sales, legal services, corporate bonuses, gas and energy) to name just a few, which is already inspiring intense debate.

This economic roller coaster encourages overly rosy pictures during times of prosperity or doomsday scenarios when conditions turn sour.

Much like climate changes, these cycles are frequently unpredictable and involve forces that are frequently uncontrollable. However unlike the weather, rules can be devised which would make such wild gyrations less likely or at least minimize their effects—providing there are basic agreements as to when and how they can be employed.

Under current practices we wait for emergencies such as a major drought, an earthquake or some other catastrophic event to trigger public response before we take decisive actions.

Or in times of surplus as we are now experiencing, the fight is over whether to spend or save with doctrinaire anti-tax advocates on one side and free-wheeling spenders on the other.

Without any hard rules to go by, actions generally come in the form of ballot measures either to curb taxes (Proposition 13) or increase them (Proposition 30) which draw support or opposition depending upon their political expediency.

Prop 13 which helped both residential and commercial property owners and depleted community coffers for funding vital services has been under attack from practically the first day it was adopted.  Today, it is so wildly popular as to make it politically untouchable.

Prop 30, designed to help the state out of the recession through a quarter cent sales tax due to expire in 2016 and higher taxes on incomes exceeding $500,000 until 2019 will almost certainly face trouble whether efforts are made either to renew or end them as Brown has pledged.

To his credit, State Sen. Bob Hertzberg, D-Van Nuys, has introduced a bill (SB8) calling for an overhaul of California’s tax system. How far it will get is unknown, but it is not enough.

These and many other tax-related issues deserve serious inquiry and resolution.

Governor Brown should bring together a thoroughly bi-partisan group of the best minds in the state across a multi-disciplinary spectrum to examine an antiquated tax system and make recommendations that both the legislature and voters would support.

Other bi-partisan tax study groups precede it, but none had the necessary steerage and clout to finish the job. If Brown is interested in legacy-building, this would rank high.

Richard Rubin writes about political issues and is President of a Public Affairs Management Firm. He also teaches courses on the Presidential & Congressional Elections at the University of San Francisco and is Vice Chair of the California Commonwealth Club.

Originally published on Fox and Hounds Daily

Brown fuels incentives for alternative-energy cars

Convinced carbon emissions pose an “existential threat” to the human race, Gov. Jerry Brown just signed a set of bills designed to push ahead an environmental agenda dependent on automobiles that don’t run on gas. Among other new rules, regulations and programs, the new legislation set three changes in motion.

Assembly Bill 2013, by Assemblyman Al Muratsuchi, D-Torrance, expanded the sticker program that authorizes drivers of low-emissions vehicles to use High Occupancy Vehicle lanes regardless of whether they carry any passengers. The bill raised the total number of stickers authorized for DMV issuance from 55,000 to 75,000.440px-Electric_car_charging_Amsterdam

Aware of the symbolic political value of statistics, Gov. Brown has sought to use memorable numbers to capture the environmental imagination of elites and the public alike. That approach was evident in an additional bill signed by Brown, Senate Bill 1275, by state Sen. Kevin de Leon, D-Los Angeles; on Oct. 15 he will become the Senate’s president pro tempore.

It officially set a goal of one million zero- or near-zero emissions vehicles on California roads by 2023. In addition to ordering the California Air Resources Board to create a plan to meet the objective, SB1275 required the board to create new incentives for lower-income residents, who are less likely to purchase or lease alternative energy cars or trucks.

To do that, CARB was tasked to expand California’s electric and hybrid car rebate program. First used in 2010, over 75,000 rebates have gone out to Golden State motorists. As the Los Angeles Times reported, CARB will beef up that program by offering extra credit to qualifying “low-income drivers” who choose an electric vehicle.

Moreover, CARB will oversee the installation of new charging stations in selected low-income residential buildings and bolster car-sharing programs in targeted neighborhoods. “Low-income residents who agree to scrap older, more polluting cars will also get clean-vehicle rebates on top of existing payments for junking smog-producing vehicles,” according to the Times.

Beyond cars

Finally, Brown signed off on legislation using CARB to push alternate fuel use for heavier vehicles. That bill, SB1204, was introduced by state Sen. Ricardo Lara, D-Bell Gardens. Its aim is to subsidize the development, purchase and leasing of zero- and near-zero emission buses and trucks, dramatizing Brown’s vision of an overhauled transportation infrastructure for California.

To do that, however, SB1204 authorized $200 million in cap-and-trade fee revenue to be allocated to various incentives for alternate-fuel buses and trucks. In the recent past, Brown came under fire, even from environmentalists, for diverting cap-and-trade funds to his prized but costly high-speed rail project. Although critics have not rallied against the new allocation of funds, Brown’s rival in this year’s gubernatorial race did not hesitate to jump on the move.

“If he was serious about climate change,” Neel Kashkari told the Sacramento Bee, “he would be taking the cap-and-trade revenue and funding basic research at Stanford, at Berkeley, at Caltech, so we develop cleaner technologies that are also cheaper, and we export them around the world.”

A final mission

With Brown’s tenure in Sacramento coming to an end either this year or in four years, his idiosyncratic but dogged approach to environmental issues has taken on the air of a capstone personal project. At this week’s United Nations summit on climate issues, Brown told world leaders that within six months he planned to set new, lower carbon emissions goals for 2030.

AB32, the Global Warming Solutions Act of 2006, mandated reducing carbon emissions by 25 percent by 2020, just six years away.

Realizing his ambitions, Brown said, will take more ambition and more technology, “and will also require heightened political will.”

James Polous is a contributor to Calwatchdog. This piece was originally posted on Calwatchdog.com

California Card Check Aims to Abolish Secret Ballots

IRVINE, Calif., May 16, 2011 /PRNewswire-USNewswire/ — Western Growers President and CEO Tom Nassif released the following statement on today’s passage by the California State Assembly of the United Farm Workers-sponsored Senate Bill 104.

“If Governor Jerry Brown signs the card check bill, SB 104, he will effectively abolish a farm worker’s exclusive right to vote by secret ballot in a state-supervised election process. We doubt the governor has forgotten what he and Cesar Chavez fought for in the Agricultural Labor Relations Act of 1975—the secret ballot as the exclusive means of determining the true wishes of the workers. With a card check system, every worker’s vote is made public to the employer, the union organizers and co-workers. Union organizers trying to get signatures would be able to shove the cards in front of a worker with no one else around. This clearly exposes workers to unwanted pressure and possible intimidation by the union. This legislation is not about advancing the cause of farm workers; SB 104 is only about advancing the cause of a union that cannot persuade workers to vote for it without having a union organizer looking over the worker’s shoulder.”

About Western Growers:
Western Growers (www.wga.com) is an agricultural trade association whose members from Arizona and California grow, pack and ship 90 percent of the fresh fruits, nuts and vegetables grown in California and 75 percent of those commodities in Arizona. This totals about half of the nation’s fresh produce. Western Growers is headquartered in Irvine, Calif.

Read More at the Sacremento Bee by Western Growers Association, the Sacramento Bee