As U.S. Moves Right, Will California’s Outlier Status Accelerate Exodus?

californiaAfter recovering from the shock of the presidential race, California pundits began absorbing what all this actually means. There is broad agreement that the rightward movement by the rest of America has only increased the political divide between the nation as a whole and California.

This divide has widened so significantly that Governor Brown joked about building a wall around the state to protect it from nasty conservatives. And a handful of ultra-progressives, distressed at the thought of a Trump presidency, are planning an initiative they hope will lead to California seceding from the United States. (Newsflash for backers of this “Calexit” effort: That a state can’t secede from the Union was resolved in 1865 when General Lee surrendered to General Grant at Appomattox).

Putting the jokes and unrealistic fantasies aside, there are real world implications for the increasing chasm. First, if it were evident prior to the election that California has “go it alone” policies on climate change, it is even clearer now. Sure, Washington will continue to pay lip service to greenhouse gas reductions, but broad, draconian laws and regulations perceived to be damaging to the economy will be shelved.

Second, the High Speed Rail project might have just graduated from being a mere pipedream to a true fantasy. Already Congress had shut the spigot of federal money and the project has been on life support using cap and trade revenue which doesn’t generate a fraction of what it needs for the train to become viable.

Third, perhaps the biggest hit to California will come in the area of health care. While other states have resisted full implementation, California has been held up as Obamacare’s shining example of “success.” But a Republican Congress is likely to repeal major parts of the law, including the funding for Medicaid expansion and elimination of the federal tax credits that lower premiums for most California enrollees.

This enormous gap between right America and left California will result in the state no longer being able to rely on the federal government to finance its left-of-center policies. And that’s bad news for taxpayers.

Without federal support and California’s majority party wanting no slowdown in their agenda, the pressure to raise taxes will grow even stronger. So even though California will have the highest income tax rates in the nation until 2030 – thanks to Prop. 55 – and the highest state sales tax, expect the alligators of the left to be searching for their next meal. No doubt, they will put Prop. 13 on the menu.

The non-stop pursuit of an even higher tax burden has already resulted in millions leaving California. The growing fissure between the rest of nation and the state’s pursuit of destructive progressive policies is giving millions more Californians an excuse to bail out.

It’s not just the hard data from the IRS and the Census Bureau that confirms this. We all know people who have made the choice to escape California’s hostile tax and regulatory environment. A neighbor of mine just left to visit the multi-acre parcel he bought in Texas. When he retires in four years, he will build a home on the property. He is currently an attorney with the state.

A close family relative and her husband left the Bay Area for Oregon in large part for tax reasons. This is especially ironic given that they are both liberals who, as California residents, voted for every tax increase on the state and local ballot.

Another close relative who was visiting her mother on the Gulf Coast of Florida tells of miles and miles of white sand beaches with homes on the ocean that can be purchased for what a 1,200 square-foot condo would cost in San Francisco. Derided as the “Redneck Riviera,” the Gulf Coast is now a favorite of former Californians in large part because there is no income tax.

Can California change course? As long as those interests which rely on government largess own the Legislature, the prognosis is not good. With trillions in public debt of all kinds, an unresponsive and arrogant administrative state and high cost of living, California is bound to see the exodus that has already started to accelerate quickly.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This piece was originally published by HJTA.org

Debt Addicts Spend Big Opposing Prop. 53

vote-ballot-electionThe usual suspects are digging deep into their pockets to make sure that California’s borrowing binge remains unchecked. Contractors, unions and bond houses that benefit from state debt are contributing millions to defeat Proposition 53, the Stop Blank Checks initiative. This straightforward proposal simply requires voter approval of state issued construction bonds larger than $2 billion.

These insiders are being joined by the ultimate insider, Gov. Jerry Brown, who has contributed $4.1 million left over from his 2014 reelection campaign. So far, over $15 million in campaign cash is being used for a massive television buy featuring the governor calling for Prop. 53’s defeat because, he says, it will increase the cost of “roads, bridges and hospitals.” This claim is ludicrous on its face. Prop. 53 creates no new costs, but allows taxpayers to approve new debt.

Even if he believes his own words, Brown may have a less obvious motivation for wanting to defeat Prop. 53. He is concerned about his legacy and fears that allowing voters to decide important spending issues might make it more difficult to build that upon which he has seized as his ticket to immortality, California’s high-speed rail project.

When first elected governor in 1974, Edmund G. (Jerry) Brown, Jr. was the nation’s youngest. Now, in what are probably his final two years in elective office, he is the oldest. Considering his senior status, it would not be surprising if his thoughts have turned to how he will be regarded by future generations. Brown is well aware that his father, Edmund G. Brown, Sr., who served as governor from 1959 to 1967, established a reputation as a builder of freeways and universities. Ironically, this was back in the days when the state relied more on a “pay-as-you-go” approach, rather than on massive borrowing to fund projects.

Brown continues to promote high-speed rail even though it’s now clear it can meet none of the promises made to voters back in 2008 in terms of costs, travel time and no public subsidies. Recent polls show that Californians would overwhelmingly reject what is now seen at best as a sop to political insiders and, at worst, the biggest public works boondoggle in America.

California voters of all stripes support infrastructure improvements. There is no question we need better roads, water storage and bridges. But citizens are tired of being lied to. Both the high-speed rail project and the infamous Bay Bridge (rusty bolts and all) blew through their original cost estimates by many factors.

Proposition 53 guarantees voter approval for megaprojects which are far more susceptible to questionable financing than small projects. Such voter approval is already required for general obligation bonds repaid from the state’s general fund. Proposition 53 imposes transparency with new debt by preventing the state from issuing “revenue bonds” and other vague instruments of debt, like “certificates of participation,” over $2 billion without voter approval.

So, in looking at the opponents of Proposition 53, we see the “greedy,” those who depend on the continuation of unrestricted government debt to maintain their high life, and the “needy,” in this case a governor desperately seeking a legacy.

With the political insiders arrayed against them, taxpayers will have to fend for themselves and by passing Prop. 53 they can guarantee that those who pay will have the final say.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Proposition 53 and Voter Power

One California ballot initiative getting far less attention than it deserves is Proposition 53. It would require statewide voter approval for revenue bonds (not now subject to voter approval) in excess of $2 billion.

The anti-Proposition 53 theme is that rather than giving citizens more power, it would reduce their power over local government. Their voter guide statement claims it “erodes your voice and the voice of your community,” allowing “voters in faraway regions the power to deny local projects your community needs.” Unfortunately, those claims, focus-grouped to trigger knee-jerk “no” votes, are deliberate distortions.

Opponents’ claims that Proposition 53 would lead local voters to lose control over local government ignore that it “does not apply to bonds sold by cities, counties, schools, community colleges, and special districts,” which involve the local issues voters care about most. And state general obligation bonds already require voter approval. What Proposition 53 focuses on are joint power agencies (JPAs) which combine different government bodies, because JPA revenue bonds do not require voter approval in California (though they do in some states).

Local voters already have very little power over JPAs, however, making the hobgoblin of lost local voter control imaginary. JPA boards include elected officials from government bodies involved (not all local) and sometimes, those in appointed government positions. Voters have no power over any appointed members. While they can vote for representatives to their local governments, those representatives will always be a minority on the board, so voters have no control over who will be selected as JPA board members. If voters are unhappy with those selected, even throwing them from office (for a generally low voter-visibility role) gives them no power over who will replace them. And while voters have very limited legal power to override JPA decisions (via an initiative within 30 days), its difficulty seldom makes it an actual option. With so little local voter power over JPAs, Proposition 53 cannot eliminate an appreciable amount of it.

High Speed RailThe Legislative Analyst’s conclusion that few projects would likely be subject to Proposition 53 similarly undercuts the lost voter power narrative. The two projects that will clearly be affected — the extraordinarily expensive bullet train and Sacramento delta water tunnel — are also instructive. Neither are really local projects, but ones that would substantially reshape California’s economic landscape, illustrating that JPAs allow policy making for state level issues, while evading the requirement of putting such bonds to a citizen vote.

If citizen control was the real issue motivating Proposition 53’s opponents, local good government and taxpayer groups would offer widespread support. But they do not. State and local taxpayer groups, in particular, favor Proposition 53, reflecting widespread belief that the projects in question can’t be justified and that citizens would be better served by Proposition 53’s securing of more voter power.

Further, virtually all the opponents of Proposition 53, supposedly on behalf of voter groups who favor it, come from groups who benefit from more government projects. Unions and their members who construct the projects (supported by other unionized government employees), those whose sales of goods and services will increase, as well as a host of consultants and lobbyists, all want more construction, regardless of whether those projects advance Californians’ well-being. Similarly, JPA board members, officials who select them, and Sacramento legislators gain power from evading voter approval requirements.

Anti-Proposition 53 attacks add other distortions, as well. Most notable is the complaint it doesn’t precisely define “project,” knowing that highlighting ambiguity will generate more “no” votes. Unfortunately, the greatest problem with such ambiguity is government’s ongoing efforts to weasel out of every constraint those it supposedly represents try to impose on it, amply illustrated by the bullet train saga. That is a problem of abusive government, which needs to be contained, not a reason to keep voters from having any effective power to defend themselves from its abuse.

Proposition 53 is an effort to improve Californians’ self-defense capabilities against government’s ability to impose harm on them. Those who will be better protected, and have seen through the subterfuges, back it by large margins, while opponents, who benefit even from projects that harm Californians, rely on focus-grouped, misleading claims to fool low-information voters. We can only hope that Proposition 53’s opponents have underestimated the gullibility of those they claim to serve.

Gary M. Galles is a professor of economics at Pepperdine University, a research fellow at the Independent Institute, adjunct scholar at the Ludwig von Mises Institute, and member of the FEE faculty network. His books include Apostle of Peace (2013), Faulty Premises, Faulty Policies (2014) and Lines of Liberty (2016).

Controversial Climate Change Legislation Signed by Gov. Jerry Brown

Photo courtesy Steve Rhodes, flickr

Photo courtesy Steve Rhodes, flickr

Over staunch opposition on his right, Gov. Jerry Brown signed several new climate bills into law, aiming to keep California on the regulatory trajectory first set during former Gov. Arnold Schwarzenegger’s administration.

That suite of laws, “in which polluters pay to offset emissions under a declining cap, is on tenuous footing amid litigation and uncertainty in the Legislature,” the Sacramento Bee noted. The idea of a new set of rules, “negotiated by Brown and legislative leaders last month, was significant to many moderate Democrats who viewed spending in their districts as critical to buttress a state climate program that has faced heavy resistance from industry,” the paper added.

Complex divisions

Some Democrats with that stance have worried that national and statewide populist sentiment could pose an especially sharp threat to their political fortunes this election year. Complicating the ideological picture still further, “many lawmakers representing low-income communities of color made themselves a force in the state’s climate change debate after complaints that existing policies weren’t doing enough to benefit the districts they represent,” as the Los Angeles Times noted.

But Democrats further to the left did not want to back down, or be seen as backing down, to industry interests. At the same time, however, their own interests have not shifted measurably closer to Gov. Brown’s, which have wound up at loggerheads with party members to his left over allocations to projects such as the state’s bullet train. With talks moving slowly, “Brown negotiated the spending plan with top Democratic legislative leaders Assembly Speaker Anthony Rendon of Paramount and Senate President Pro Tem Kevin de Leon of Los Angeles,” according to KPBS. “It was approved on the last day of the legislative session, Aug. 31.”

Big ticket

Environmental activists and policymakers embracing their cause had to scramble to craft the fresh scheme in a way that seemed to ensure it could survive a spirited fight during the legislative process. “The new plan, outlined in SB32, involves increasing renewable energy use, putting more electric cars on the road, improving energy efficiency, and curbing emissions from key industries,” NPR reported. “Brown signed another bill, AB197, that gives lawmakers more oversight of regulators and provides aid to low-income or minority communities located near polluting facilities such as oil refineries and factories.” All told, the package amounted to some $900 million in outlays sourced from the state’s cap-and-trade revenues. “The money represents two-thirds of the available funding from California’s carbon-emission fee,” noted KPBS.

On hand for Brown’s signing ceremony in Fresno, Republican Mayor Ashley Swearengin touted the prospect of statewide infrastructure construction associated with Brown’s environmental agenda, which would include the long-simmering high-speed rail effort. With success, “Swearengin added, the Valley will see a 40 percent reduction in greenhouse gas emissions over the next 20 years,” the Business Journal noted.

Lingering resistance

But business, energy and conservative groups, which had struggled to turn the tide against the bills, quickly vented their frustration. “Taken together, SB32 and AB197 impose severe caps on the emission of greenhouse gases in California, without requiring the regulatory agencies to give any consideration to the impacts on our economy, disruptions in everyone’s daily lives or the fact that California’s population will grow almost 50 percent between 1990 and 2030,” said Allan Zaremberg, California Chamber of Commerce president and CEO, in a statement.

Under Zaremberg’s leadership, the organization has spearheaded litigation targeting the current cap-and-trade regime. “A state appellate court is considering a challenge by the California Chamber of Commerce, which argues the fee is a tax that needed support from two-thirds of the Assembly and Senate in order to be valid,” KPBS recalled. “Republicans have in the past said it’s irresponsible to spend money generated from a fee being challenged in court.”

Originally published by CalWatchdog.com

Taxpayers to Pay Even More as Usual Legislative Allies Vote for Tax Hikes

tax signAs the final day of the legislative session dawned last week, taxpayers were cautiously optimistic. After all, we had already stopped the most direct threats to Proposition 13. Those included Senate Constitutional Amendment 5, which would have weakened the rules regarding how some properties are valued for tax purposes and Assembly Constitutional Amendment 8, lowering the two thirds vote at the local level for taxes and bonds. Another success was notched by derailing an eleventh hour effort to make it much easier to raise property fees by broadly redefining sewer service to include storm water runoff programs. While seemingly arcane, this would have exposed California homeowners to billions of dollars in new property levies without direct approval.

As for more debt, taxpayers should be pleased that two multi-billion dollar bond packages, on parks and affordable housing, failed to clear the Legislature.

Now for the bad news. On the last day of session, our tax-and-spend legislature hit California consumers with a new tax on car batteries by passing AB 2153. This $1 tax on consumers will be paid at the point of sale, as will a $1 tax on manufacturers to be passed onto consumers. After 2022, the $1 tax on manufacturers is added to the consumer total increasing it to $2, and the tax is made permanent. While the revenue generated purports to deal with legitimate environmental issues regarding battery recycling facilities, thanks to AB 2153 receiving a two-thirds vote, the money can simply go into the General Fund and be used for any purpose.

Under the category of illegal as well as foolish, the Legislature authorized local municipalities to spend public money for political campaigns. Beyond the obvious argument that taxpayers should not be forced to finance campaigns with which they might disagree, Senate Bill 1107 is also in direct violation of the Political Reform Act which expressly prohibits such financing. To avoid costly litigation over the validity of SB 1107, Governor Brown could do taxpayers a favor by vetoing this bill.

Speaking of illegal, Assembly Bill 1889 seeks to spend hundreds of millions of taxpayer dollars on California’s showcase boondoggle, the High Speed Rail project. The legal problem is that access to the bond proceeds is conditioned on several requirements, including partial funding from federal and private sources, speed requirements and no public subsidies for operating expenses, none of which the High Speed Rail Authority can possibly meet. Again, in the absence of Governor Brown’s veto, litigation over sale of the bonds is a certainty.

From the perspective of fiscal sanity, it is a shame that every two year legislative session in California is an exercise in trying to prevent damage to taxpayers and the economy. Rarely is there anything remotely worthwhile in the hundreds of bills passed by our esteemed political leadership: No pension reform, no education reform, no civil justice reform or tax reform. While other states run clean, effective and efficient governments, the California Legislature resembles a three ring circus more times than not.

Unfortunately, it is not getting better. In the session that just ended, even some of our allies (or so we thought) cast horrible votes in favor of tax increases. As bad as things are, this November’s election could spell disaster for California’s beleaguered taxpayers. Tax hikes at the state level require a two-thirds vote of each house and we now know that a legislator’s proclivity to raise taxes does not necessarily depend on party affiliation. For taxpayer advocates, this is going to make our job of defending ordinary citizens in the Capitol much, much harder.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This piece was originally published by the Howard Jarvis Taxpayers Association.

High-speed rail’s first route segment will end in an almond orchard

As reported by the Los Angeles Times:

The state’s plan to build an initial stretch of high-speed rail line, from San Jose to a map point in the midst of Central Valley farmland, came under renewed attack at an oversight hearing Monday.

Republicans on the House rail subcommittee had sought to hold the hearing in the Silicon Valley but ran into Democratic opposition, according to sources familiar with the matter. So the group convened around folding metal tables in a nondescript basement room in a San Francisco federal building.

Rep. Jeff Denham (R-Turlock), chairman of the panel, chided the state for lacking a plan to complete the Los Angeles-to-San Francisco bullet train system.

“You could be stuck in a field somewhere between Shafter and Wasco … and … out of money,” Denham said.

The apparent absurdity of the abbreviated route was not lost on supporters. …

Click here to read the full story

High Speed Rail On Track to Incur Billions in Cost Overruns

high speed rail trainHigh-speed rail continues to be an expensive, sick joke for California. Under the current plan, it is no longer “high-speed” and projected costs, which seem to change almost daily, appear to be doubling.

In the latest news, the nascent California high-speed rail system is running $50 million over budget for a two-mile stretch in Fresno.

Let that sink in for a moment.

$50 million, over budget, for just a two mile stretch.

Let’s see, HSR has a $50,000,000 cost over run on 2 miles of a 32 mile job. Does that mean we can expect total cost overrun of $25 million per mile times 32 miles or $800,000,000?

Better yet, let’s extrapolate that to the entire project. You know, the one sold to voters. According to High Speed Rail Authority itself, over 800 miles of track are needed. So, at $25 million of cost overruns per mile, that works out to $20,000,000,000. That’s $20 billion in cost overruns!

In just 3 years, from the original passage of Proposition 1A authorizing about $10 billion in High Speed Rail bonds, the estimated cost for high-speed rail had gone from $40 billion to $98 billion, the amount that independent expert analysis had predicted prior to the bond’s being approved.

Responding to public outrage, the High-Speed Rail Authority came up with a plan costing “only” $68 billion. The new “blended” system would combine high and low speed rail, doubling the travel times as well as ticket prices.

Fearing a voter revolt, the High-Speed Rail Authority rushed to break ground, hoping that once they dug a hole, the pet project of Gov. Brown and the majority of Sacramento lawmakers, who receive backing from construction contractors and labor unions that expect to be the primary beneficiaries of billions of dollars of public spending, would be safe from outside interference.

By beginning a first segment between Merced and Fresno, the rail authority engaged in the classic Willie Brown strategy. The former Assembly Speaker, in a moment of candor, once told the San Francisco Chronicle, “In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.”

Constant cost overruns and a lack of accountability plague California’s infrastructure projects. Perhaps, as a public service, it should be required that Brown’s words be reprinted in every ballot summary for every construction bond placed before the voters.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Cap-and-Trade Revenue Drastically Lower Than Expected

carbon-tax-1In yet another blow to California’s besieged bullet train, revenues from this year’s cap-and-trade carbon credit auction fell drastically below the state’s goals, triggering a selloff that left analysts unsure of the system’s long-term viability.

“The results of last week’s quarterly auction were posted and revealed that instead of the $500-plus million expected from the sale of state-owned allowances, the state will get only about $10 million, less than 2 percent,” the Sacramento Bee reported.

“The poor results confirmed reports circulating in financial circles that the cap-and-trade program has begun to stumble. February’s auction resulted in some allowances being left unsold — the first time that had happened. Afterward, there was a brisk trade in the secondary market as speculators began dumping their holdings due to uncertainty about the future of the program, which may expire in 2020.”

Officials and activists swiftly sought to downplay the damage. “Over the long-term allowances will be needed, and so the allowances that will be offered through the auction will need to be purchased,” said Ross Brown of the Legislative Analyst’s Office. “But in the short-term it’s hard to know and it depends on the underlying supply and demand.” From an environmentalist standpoint, meanwhile, “it’s important to remember that […] it’s the declining cap — not the price or number of allowances sold at auction — that drives emissions reductions,” wrote Alex Jackson at the National Resources Defense Council. “That is the purpose of the program, not raising revenue.” But with 2020 looming, Jackson allowed, the one-two punch against high-speed rail and cap-and-trade have cast doubt on California’s strategy of fusing infrastructure and environmentalism into a single economic policy.

Case and controversy

Adding to the upheaval, the carbon credit regime itself has wound up in court, as the state Chamber of Commerce pushes to prove that the legislation authorizing its creation — AB32 — has run afoul of the state constitution. “Propositions 13 and 26 require a two-thirds majority for the Legislature to approve new or higher taxes and fees,” as Hoover Institution fellow Carson Bruno wrote at the Bee. “Whether or not AB32, which barely passed in 2006, is unconstitutional depends on whether the cap-and-trade revenues constitute either a tax or a fee. These auction revenues fit the definition of both a tax and fee. They are imposed by a government entity, spent on government activities and are collected in exchange for a transaction — in this case a permit to emit greenhouse gases.”

Officials have countered that argument in court. “The state contends the fees are not taxes, but a consequence of regulations,” as the Times noted. But a judge hearing arguments “recently asked a series of questions that perhaps fueled speculation that he might rule in favor of the suit,” according to the paper.

The governor’s gambit

Flexing his considerable political skill and discipline to balance competing interests to his ideological left, Gov. Jerry Brown had labored to ensure that cap-and-trade funds could be leveraged to make the train a viable public and private sector investment. That presumed a degree of stability in revenues that now can’t be relied on. “The rail authority had been expecting about $150 million,” the Los Angeles Times observed; now, it will receive just $2.5 million. “Whatever prompted the lack of buyers, the auction is a stark example of the uncertainty and risk of relying on actively-traded carbon credits to build the bullet train, a problem highlighted in recent legislative testimony by the Legislative Analyst’s Office and a peer-review panel for the $64-billion high-speed rail.”

Brown had hedged against just such an eventuality, however. State finance spokesman H.D. Palmer “noted that there is a $500-million reserve set up in anticipation of volatility that could help close the gap,” the Times added. But Brown will have to clear the emergency expenditure in Sacramento, where some liberal lawmakers, hoping to channel more money to environmental policy, could try to nix the scheme by aligning with Republicans long bent on scrapping the train.

This piece was originally published by CalWatchdog.com

Government Waste Negates Justification for Transportation Tax Hike

LA-Freeway-Xchange-110-105A personal digression: My father was head of the Iowa Department of Transportation (then called the Iowa Highway Commission) in the late ’60s and early ’70s before he was appointed by President Ford to serve as Deputy Federal Highway Administrator. (Of course, he lost that job when Jimmy Carter became president, but he continued to work in the private sector for a transportation think tank.) When I was in high school, I remember him coming home from an ASHTO conference. That organization, the Association of State Highway and Transportation Officials, was a pretty well respected group and still is. He was complaining bitterly about what was going on in California. I don’t recall his exact words, but the gist of it was that the new head of California’s transportation agency, called CalTrans, had been taken over by a certifiably crazy person (with no background in transportation policy) by the name of Adriana Gianturco. According to my father, in the 1950s and ’60s, California had the best transportation agency in the entire world. But all that changed with the election of a new, anti-growth, small-is-beautiful governor by the name of Jerry Brown.

Now, fast forward 40 years. Gov. Brown, version 2.0, proposes a budget that assumes a big increase in transportation taxes and fees. The California Legislature shouldn’t just say no, it should say hell no.

Where to start? First, let’s take judicial notice of the fact that California is already a high tax state with the highest income tax rate and the highest state sales tax in America. But more relevant for the issue at hand, we also have the highest fuel costs in the nation. This is because of both the 4th highest excise tax on fuel and the fact that refineries are burdened with additional costs to comply with California’s environmental regulations.

The high cost to drive in California might be understandable if we were getting value for our tax dollars. But we aren’t. A big problem is that Caltrans is dysfunctional, plain and simple. It has never fully recovered from the days when the agency was effectively destroyed by Gianturco. A report by the California State Auditor just a couple of months ago concluded that a primary responsibility of Caltrans – maintenance of our highways – is not being executed in a manner that is even close to being efficient or competent. Senator John Moorlach, the only CPA currently serving in the California legislature, reacted saying that “This audit reinforces the fact that our bad roads are not a result of a lack of funding. They’re a result of a lack of competence at Caltrans.” Moreover, a report by the Legislative Analyst concluded that Caltrans is overstaffed by 3,500 employees costing California taxpayers over a half billion dollars a year. All this compels the obvious question: Why, for goodness sake, do we want to give these people even more money?

Another unneeded and costly practice consists of project labor agreements for transportation construction projects. These pro-union policies shut out otherwise competent companies from bidding on projects resulting in California taxpayers shelling out as high as 25% more than they should for building highways and bridges.

Finally, California’s environmental requirements are legendary for their inefficiency while also doing little for the environment. Exhibit A in this foolishness is Gov. Brown’s incomprehensible pursuit of the ill-fated high speed rail project. Not only has the project failed to live up to any of the promises made to voters, it is currently being kept alive only by virtue of the state’s diversion of “cap and trade” funds which are supposed to be expended on projects that reduce greenhouse gas emissions. But in the Kafkaesque world of California transportation policies, the LAO has concluded that the construction of the HSR project actually produces a net increase in emissions, at least for the foreseeable future.

No one disputes the dire need for improvements in California’s transportation infrastructure. But imposing draconian taxes and higher registration fees that serve only to punish the middle class while wasting billions on projects that don’t help getting Californians get to work or school cannot and should not be tolerated. Legislators who present themselves to voters as fiscally responsible need to understand that a vote for higher transportation taxes will engender a very angry response from their constituents.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This piecd was originally published by the Howard Jarvis Taxpayers Association

Hyperloop vs. High-Speed Rail

HyperloopWhen Elon Musk first proposed the hyperloop as a transportation alternative, he projected sealed tubes would hurl a pod between San Francisco and Los Angeles in 35 minutes. At the time, Musk’s vision was compared to the newly minted high-speed rail project that was projected to cover the same ground in 2.5 hours and be outmoded before it was finished.

Yesterday, in the Nevada desert the hyperloop had its first test. A sled rocketed from 0 to 60 miles per hour in 1.1 seconds propelled along a track by magnets for 300-plus yards. The company behind the test, Hyperloop One, was satisfied with the results. The Los Angeles based company is aiming to run a full-scale, full-speed hyperloop prototype through what is often described like a vacuum tube by the end of the year.

While the hyperloop system was projected by some as an alternative to high-speed rail, former California secretary of business, transportation and housing, Dale Bonner, told a Milken Institute Global Conference forum at the beginning of the month that both forms of transportation would be necessary for a burgeoning population. Saying that he heard that in 10-20 years an entire population the size of Chicago would be dropped on Los Angeles, Bonner argued all innovate transportation systems would be needed, from hyperloop to high speed rail to the sharing economy transportation systems.

Brogan BamBrogan, co-founder and chief technical officer of Hyperloop One (formerly Hyperloop Technologies), which is running with Musk’s idea, told the conference that while most people have been talking about hyperloop pods as people movers, one great advantage of hyperloop would be carrying freight.

BamBrogan noted that California had two of the busiest ports in the country. He envisions the system as energy efficient, weather proof, and non-polluting. Anyone stuck behind the slow-moving line of trucks coming from the San Pedro ports up the Long Beach Freeway spewing exhaust will appreciate BamBrogan’s vision.

But the people mover aspect also could have profound impact on other social issues, if the predictions made at the conference play out.

California’s steep cost of housing is driven, in part, by the lack of places to build. BamBrogan suggested the hyperloop could reset land values and grow suburbs 30 or more miles from the city when it only takes six minutes to commute to downtown Los Angeles’s Union Station.

Hyperloop is counting on investors to help fund the project, something that has been lacking with high-speed rail.

However, Bonner warned that re-thinking might be necessary with dramatic changes in transportation. If fewer people use cars in a shared economy, there will be fewer fees and taxes paid associated with car ownership. There would also be fewer citations issued with accompanying fines.

The Milken Global Conference panel was called Harnessing Technology for the Future of Cities. BamBrogan’s hyperloop discussion starts around minute 18.

This piece was originally published by Fox and Hounds Daily