California attorney general failing to create fair and objective initiative titles and summaries

xavier-becerraThe attorney general of California has the responsibility of preparing the “title and summary” for ballot measures to be submitted to the voters. Pursuant to that authority, California Attorney General Xavier Becerra issued the title and summary for one of the most anticipated ballot initiatives for the 2018 election. Here is his description: “Eliminates recently enacted road repair and transportation funding by repealing revenues dedicated for those purposes.”

Confused? Try this excerpt from the ballot summary: “Eliminates Independent Office of Audits and Investigations, which is responsible for ensuring accountability in the use of revenue for transportation projects.”

If you have no clue that this is actually the initiative to repeal the gas tax you wouldn’t be alone. As drafted, the title and summary make every effort to hide the fact that the measure is targeting one of the most unpopular laws in recent California history. Though the words “gas” and “tax” are not in the ballot title, they do at least appear in the ballot summary. But they are followed by the suggestion that the initiative also acts to eliminate the Independent Office of Audits and Investigations — an office that does not yet exist.

This obvious effort at obfuscation, and ultimately voter confusion, flies in the face of a promise Becerra made during his confirmation hearing. Asked last January what he would do to ensure the objectivity of ballot titles and summaries, which is the constitutional responsibility of the attorney general to produce, Becerra testified that “the words I get to issue on behalf of the people of this state, will be the words that are operative to everyone.”

Becerra’s readiness, just months later, to depart from this approach in order to protect the gas tax — which was championed by his own party — is just the latest example of how attorneys general use their influence over the ballot to manipulate voters and advance the interests of their allies. To put an end to this damaging practice, Assembly Constitutional Amendment 3, by Assemblyman Kevin Kiley, was introduced earlier this year, a measure that would strip the attorney general of the power to write ballot titles and summaries, and transfer that authority over to the nonpartisan Legislative Analyst’s Office.

Unlike the attorney general, the Legislative Analyst is not a politician. A trusted source of impartial information since its creation in 1941, the LAO’s primary mission is to provide the state Legislature with reports on fiscal and policy issues. The office is also tasked with preparing the fiscal analysis for ballot initiatives, making it well suited for the responsibility of writing titles and summaries, too.

Since the introduction of ACA3, the Sacramento Bee, Los Angeles Times and Orange County Register have all endorsed the measure, arguing that, no matter the party in power, the temptation to manipulate a ballot initiative’s language is too great for an attorney general to resist.

Their concerns are supported by a long history of abuse that stretches back to at least 1966, when Attorney General Tom Lynch, tasked with describing the initiative to create a full-time Legislature, at first misleadingly framed it as a measure to raise legislative salaries. More recently, in 2013, Attorney General Kamala Harris drew criticism for describing public pension reform as the “elimination” of state constitutional protections for pensioners, using language that had been poll-tested by opponents of the initiative. Other examples abound, from both sides of the aisle.

The high stakes of the initiative process make any attempt at reform difficult, particularly when the party controlling the Legislature also holds the Attorney General’s Office. When ACA3 was brought before the Assembly Elections Committee earlier this year, the bill had the support of every major good government group in the state, including the Howard Jarvis Taxpayers Association, California Common Cause and the League of Women Voters of California. The only opposition was a representative from the Attorney General’s Office. Nevertheless, the bill failed 2-4 on a party-line vote, with one Democrat abstaining.

Initiatives are powerful tools of direct democracy, allowing the people of California to take direct control over the state’s political destiny when the Legislature has failed. But this is only possible when voters have an accurate description of what they are voting for. ACA3 would assure just that, and when it returns for consideration next year, we urge legislators on both sides to support this measure to redeem direct democracy in California.

Jon Coupal is the president of Howard Jarvis Taxpayers Association. Kevin Kiley represents California’s 6th Assembly District, which includes parts of El Dorado, Placer and Sacramento counties. You can follow both on Twitter @joncoupal and @KevinKileyCA.

This article was originally published by the Orange County Register. 

This Supreme Court ruling imperils every California taxpayer

TaxesEarlier this week the California Supreme Court issued a stunning decision which imperils every California taxpayer. At issue is whether taxes proposed by special interests using the local initiative process have to comply with taxpayer protections set forth in Proposition 218, the Right to Vote on Taxes Act, a Howard Jarvis Taxpayers Association sponsored statewide measure approved by California voters in 1996.

The case, California Cannabis Coalition v. City of Upland, at first glance seems limited to a narrow technical question: When a local initiative seeks to impose a new tax, does the issue need to be put to the voters at the next general election or can the proponents, relying on other laws, force a special election? The lower court had ruled that taxes proposed by initiative are exempt from the taxpayer protections contained in the state constitution, such as the provision dictating the timing of the election.

When the lower court in San Diego issued its decision, the Howard Jarvis Taxpayers Association was alarmed because the constitution’s taxpayer protections include the right to vote on taxes. For that reason HJTA provided legal representation to the city of Upland. Of major concern was that, if local initiatives are exempt from taxpayer protections, then public agencies could easily deny taxpayers their right to vote on taxes by colluding with outside interests to propose taxes in the form of an initiative, then submitting a tax under a lower vote threshold than that currently required. The worst case scenario would be if a local government were to rely on this case as legal authority to impose a tax without any election at all.

The import of the case was not lost on those who dislike Proposition 218’s requirement that local special taxes — those imposed for specific purposes — receive a two-thirds vote of the local electorate. For example, backers of a tax to subsidize a new sports arena in San Diego were hoping that the lower court ruling would allow them to impose a special tax with only a simple majority vote. Now that the lower court decision has received the imprimatur from the state’s highest court, these kinds of schemes are already being hatched.

The court in Upland based its decision on the view that local voters were different from the governing body when it comes to enacting legislation. But for decades courts have said that, when voters use the initiative power they are simply “stepping into the shoes” of the governing body and have the same powers and same limitations. For example, a local city council cannot seize someone’s real property without paying “just compensation,” but if local housing advocates propose an initiative to seize someone’s property, the reasoning of the court suggests that there’s no requirement to pay for it. That is surely an absurd result.

While there’s little dispute that the logic behind the majority opinion could substantially weaken the two-thirds vote requirement in Proposition 218, taxpayers are not wholly without hope.

First, the court barely mentioned the parallel two-thirds vote requirement in Proposition 13. Its vitality will surely be the subject of more litigation.

Second, while taxpayers are concerned about collusion between local governments and special interests, not all local governments are applauding the decision. In fact, some local governments filed a “friend of the court” brief in support of HJTA’s position. That’s because many local governments are concerned that special interests could usurp the governing body’s ability to tax.

Finally, the actual ruling dealt with the timing of local elections for tax increases proposed by initiative. While the dicta in the decision (verbiage in a decision not necessary for disposition of the case) is a huge threat to Propositions 13 and 218, the scope of the ruling will require years of additional litigation.

In the meantime, the decision has provided tax-and-spend interests with a roadmap of how to avoid taxpayer protections set forth in the California Constitution. When taxpayers see how they are being burned by collusion between those seeking additional tax revenue, like government employee unions and complicit local officials, it may be necessary to go back to the initiative process to close yet another court created loophole.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register

Raising property taxes for public pensions

PensionsSome California citizens who voted for Proposition 13 almost four decades ago may have forgotten that the drafters were in fact concerned about government spending as well as tax relief. A few still contend that taxpayer groups such as Howard Jarvis Taxpayers Association should focus only on protecting homeowners against rising property taxes and avoid issues like the costs of regulation, environmental policies or the cost of public employee pensions. But fortunately, most astute taxpayers understand that their tax burden is inextricably related to government spending and that there are tremendous risks in failing to engage on government policies that drive up public costs.

One Illinois town has learned that the hard way. The city of Harvey has been ordered by a state appellate court to approve a property tax levy specifically for its firefighters’ pension. That court order, however, may be difficult to enforce given that Harvey already has effective tax rates of 5.7 percent for residential and 14.3 percent for commercial properties. (Under Proposition 13, the maximum tax rate for all real property is 1 percent).

As stunning as this decision may be, residents of Illinois better prepare themselves because Harvey won’t be the last. Many of Illinois’ 600-plus local police and firefighter pensions are similarly underfunded which may explain massive flight out of the state by its taxpaying citizens.

The real question for California taxpayers is whether what is going on in Illinois could happen here in California. More specifically, could a California court order a city, county or special district to raise property taxes to cover unfunded public employee pension obligations? It’s possible, but it would be more difficult for those who seek such a move. First, Proposition 13’s one percent rate limit is in the constitution, so a state court would have to find — which it could — that the pension obligations were guaranteed under the United States Constitution. That is not an inconceivable outcome. Indeed, it is possible that a federal court might reach that conclusion more easily.

That a federal court might order a local property tax increase is not without precedence. In 1990, the U.S. Supreme Court ruled that federal judges may order local governments to increase taxes to remedy constitutional violations such as school segregation. The court took an expansive view of judicial power to actively manage institutions and activities usually within the power of states and localities.

If property owners need a reason to watch the entire controversy over public employee compensation, especially pension benefits, this is it. Don’t assume what happened in Harvey, Illinois couldn’t happen here.

Jon Coupal is the president of Howard Jarvis Taxpayers Association.

This article was originally published by the OC Register

Taxpayers pay for lobbying in Sacramento

Pension moneyThe latest lobbying reports are out in Sacramento, showing how much special interests are spending to influence lawmakers. After reading the reports, you can’t blame taxpayers for feeling like the man who has been unjustly condemned to the gallows and is compelled to pay for the rope that will hang him.

When asked who spends the most currying favor with members of the Legislature, many folks will say “Big Oil” or maybe drug or insurance companies. Not even close. Those who name government employee unions as the big spenders would be wrong, too, but at least they would be getting warmer. (Unions, which thrive on involuntary “contributions,” have a huge influence on the activities of the biggest spender of all).

Far and away, the lobbying champs are California’s myriad of local governments. Through the first six months of this year, cities, counties, schools and other special districts have spent $24.3 million on influencing Sacramento lawmakers. And it is a safe bet that these governments are not spending this taxpayer money to promote tax cuts for average citizens. In fact, in many cases, they are spending tax dollars to advance their objective of wringing even more out of already beleaguered taxpayers.

Local government officials use high-sounding rhetoric to justify not spending these millions of dollars on fixing potholes, hiring first responders or addressing other pressing needs of the local community. To best serve their constituents, they will argue, it is important that they have a voice in lawmaking that may impact local jurisdictions.

Closer to the truth would be that local governments want to make sure they get a share of the “spoils” in our very high-tax state. And sometimes they seek more than a share of state revenue, they want special exemptions to allow them to increase local taxes beyond what state law allows.

A number of jurisdictions have sought and received exemptions from laws limiting the local sales tax, and in one case, nine Bay Area counties asked for, and received, an OK to create a huge taxing district to impose a parcel property tax on all residents, even though some lived many miles from the improvements for which they are being charged.

However, one of the motivators that keeps local government officials constantly scrounging for more revenue is, just like their brethren in Sacramento, so many are beholden to the most powerful political force in California, the government employee unions. Just like many state legislators, they owe their election to union support. These unions provide campaign cash and boots on the ground in election season. So, when it is time to sit down and discuss pay, the unions are represented on both sides of the table and taxpayers, if they are considered at all, are an afterthought.

With this constant pressure to raise funds for pay, benefits and pensions for local government workers, it should come as no surprise that local officials are willing to spend millions in the hope that state government will funnel more money back into local coffers and smooth the way for increasing the already exorbitant taxes locals are paying. Of course, savvy taxpayers understand that debates about where tax money comes from — be it state, local or even federal dollars — are a ruse. Every penny comes from the same location, our pockets.

The question local taxpayers must decide is whether or not money that could be used to solve local problems should continue to be spent “wining and dining” the Sacramento politicians. Certainly, the government employee unions think that this investment in Sacramento by local officials is a good deal for them.

Jon Coupal is the president of Howard Jarvis Taxpayers Association.

This article was originally published by CalWatchdog.com

Increase the homeowners exemption to improve housing affordability

http://www.dreamstime.com/-image14115451California is in a housing crisis. The cost of housing — both for purchase and rental housing — is too expensive. Ineffective public housing policies and anti-growth policies that impede even reasonable development projects have choked supply in a high-demand market. California needs to start building homes and apartments as soon as possible. Recent estimates show that California must build 180,000 units of housing a year over the next 10 years simply to keep pace with demand. Currently, only about half of that amount is being constructed.

But in the meantime, a quick and effective way to provide financial relief to everyone in California with a roof over their head is to increase the homeowners exemption which has been stuck at $7,000 since 1972. A lot has changed since then. Mark Spitz won a then-record seven gold medals in the 1972 Munich Olympics. Atari released the PONG computer game and a gallon of gas sold for 36 cents. California’s population has nearly doubled from 21 million residents to 39 million residents today. And according to the California Association of Realtors, the median price of homes in California is well over $500,000 compared to $28,000 in 1972.

Because the average Californian earns $61,000, according to the U.S. Census Bureau, most are knocked out of the market before they even start. Only one-third of California residents can afford a median priced home.

In February, Assembly members Phil Chen and Matthew Harper introduced Assembly Bill 1100, the “American Dream Act,” which would increase the existing homeowners’ exemption on their property tax from $7,000 to $25,000, as well as raising the renter’s credit by using the mandated California Franchise Tax Board inflation adjustment. This will not only help current homeowners but this will help those aspiring to own a home. One-third of renters in the state spend at least half their take-home pay in rent, a statistic driving California’s record high 20 percent poverty rate.

Californians are paying some of the highest taxes in the nation, exacerbating the ability of ordinary citizens to afford a home. Even with Proposition 13, which has proven effective in limiting the growth of homeowners’ property tax bills, California still ranks in the top third of all states in per capita property tax revenue.

Moreover, high taxes and unaffordable housing are taking their toll on the California economy. In the last decade, California has lost more than 1 million people in net domestic out migration to other states. We all know at least a few people who have moved to Nevada, Texas, Oregon, Florida or Arizona to find a less expensive place to live.

In some welcome good news, in May, AB1100 passed a major hurdle by passing the Assembly Revenue and Taxation Committee with notable bipartisan support. This was the first time legislation of this nature got out of a legislative policy committee. Many had been attempted in years past but had failed.

When the Legislature returns from its summer recess later this month, affordable housing will be the leading topic of discussion. While there are many ideas being considered, including more bonds and taxes, ideas that provide direct relief for middle-class property owners have yet to rise to the forefront. They need to. Beyond the homeowners exemption, liberalizing the rules about taking one’s Proposition 13 base-year value to a new residence, the so-called “portability” issue, should also be part of a legislative proposal.

Any reform package must articulate that government can’t tax and bond its way out of a problem where it costs over $300,000 to build one unit of affordable housing. Addressing these regulatory burdens as well as providing tax relief for homeowners and renters will not only lead to future economic prosperity for California. It is also the right thing to do.

Jon Coupal is the president of Howard Jarvis Taxpayers Association and Phillip Chen is a member of the California Assembly from the 55th Assembly District.

This article was originally published by the Orange County Register

Republicans didn’t have to vote for cap and trade

Chad Mayes2Last month, eight Republicans in the California Legislature made the unfortunate decision to vote for an extension of cap and trade that will increase the cost of fuel by as much as 71 cents a gallon by 2031. The primary justification was that the market-based cap-and-trade solution was preferable to any option controlled solely by the powerful and hostile California Air Resources Board. While that argument can’t be discounted, it is nonetheless useful to speculate what would have happened if no Republicans supported the deal.

Historically, Republicans have been the primary defenders of California’s middle-class taxpayers. They almost always vote against any proposal to weaken Proposition 13 and for that they deserve our thanks. But there is no debate that the cap-and-trade legislation will increase gas prices. The only debate is over how much.

Republicans in the Legislature should also be thanked for providing the lion’s share of votes against the cap-and-trade bill. But now they are in a situation where they have to explain why eight of them voted for the bill which has created a significant messaging problem. Voters don’t understand cap and trade and they don’t understand what “saving them” from a $2 fuel price increase looks like because they’ve never experienced it. Compounding the messaging problem is the inevitable political fallout. Republican support gave Democrats and Gov. Jerry Brown acres of political cover. Democratic legislators in at least two marginal seats were protected against having to cast a vote for higher energy costs and Gov. Brown secured a relatively stable source of funding for high-speed rail.

So what would have happened if no Republican legislators voted for cap and trade? Conceivably, Gov. Brown could have demanded Democratic allegiance and, using both carrots and sticks, may have secured it. But that would put Democrats in marginal districts at tremendous risk. At a minimum, Republicans could have leveraged their opposition for policies that actually are friendly to citizen taxpayers including, but not limited to, a rebate or broad based sales tax reduction for consumers to offset the added cost of gas over the next decade.

Republican refusal to give in to the type of extortion reflected in the cap-and-trade bill may very well have forced the Democrats into approving a CARB-style bureaucracy with a simple majority vote — which, by the way, might still happen. The far-left of the Democratic Party may have cheered but, for Republicans, it would open up vast new demographics — working Hispanics, other ethnic groups and recent immigrants — for whom just a few more cents in a gallon of gas is a big deal.

Unfailing opposition to the deal by Republicans would have provided something else almost always absent from California politics — clarity and accountability. When gas prices go through the roof — which they surely will — there would be no doubt which party to blame.

But we’ll never know as it will be difficult, if not impossible, to repair the damage and restore the Republican brand. Thus the odds of Republicans gaining seats in any of the next four election cycles (thanks to redistricting in 2022) are now in doubt. And for what? So Republicans can now adopt the losing argument that they voted for increased fuel costs to save taxpayers from even higher prices? What ordinary voting taxpayer is going to buy that argument?

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register.

New tax on real estate docs adds hardships to most vulnerable

http://www.dreamstime.com/-image14115451Last week, the California Senate voted to pass Senate Bill 2 which would impose a new $75 tax on real estate documents filed with each county’s clerk recorder. If the bill becomes law, the projected revenue — over $250 million annually — would be dedicated to low income housing programs.

Like a recurring nightmare, this proposal to tax real estate transactions seems to come up every legislative session. Up to now, this regressive tax has failed to gain traction because of bipartisan opposition. Taxpayer and business interests hope that, once again, the bill fails to complete its journey through the legislative process.

Currently, certain real estate documents must be filed with the county in which the property is located.Recording fees are relatively modest, costing between $14 and $18 varying slightly among counties. The fees help defer the costs of administering the clerk/recorder’s office and, as long as the fees are low, they encourage people to record essential documents.

SB2 would increase that fee to anywhere between $89 and $93 per document; amounting to a tax increase of up to 1,250 percent. Anyone recording a property-related document would be required to pay the fee although sales transactions would be exempt. There is also cap of $225 on each transaction.

A flat rate tax on real estate recordings is highly regressive. For example, because actual sales are exempt, a person purchasing a multi-million dollar home wouldn’t pay the higher tax. But a widow recording an affidavit of their spouse’s death would. So would a contractor filing a mechanics lien for unpaid work or a senior citizen on a fixed income recording estate planning documents, including transfer upon death deeds. Moreover, the bill would make refinancing a home and loan modifications more expensive as those transactions would trigger the tax.

The biggest irony of SB2 is that it ignores basic economics. Think about it. A tax imposed on real estate transactions — obviously imposed only on those who own property — to pay for programs to make housing more affordable. This is like treating someone with a low blood count with leaches.

No one disputes that California has a housing crisis. It ranks 49th out of 50 states in housing units per capita. But SB2 only creates a different hardship as it attempts to alleviate another.

In a 2015 report by the California Legislative Analyst’s Office titled, “California’s High Housing Costs: Causes and Consequences,” the nonpartisan LAO said “the key remedy to California’s housing challenges is a substantial increase in private home building in the state’s coastal urban communities.” Furthermore, “considerable evidence suggests that construction of market-rate housing reduces housing costs for low-income households,” while government programs for affordable housing help only a fraction of low-income Californians. And expanding those programs would be “extremely challenging and prohibitively expensive.” In other words, a new tax or bond is not the way to solve this problem. Government programs cannot be the solution to fix problems created solely by government.

SB2 puts an excessive tax burden on families who have already achieved homeownership and is unnecessarily regressive. Lawmakers should reject SB2, as they have in the past, and work to remove regulations, lower building permit and impact fee costs and push for CEQA reform. Only then can we ensure that the American Dream of homeownership remains viable in California. Taxpayers should call their representative in the State Assembly and urge them to oppose SB2.

Jon Coupal is the president of the Howard Jarvis Taxpayers Association and Kammi Foote is the clerk-recorder of Inyo County.

This article was originally published by the Orange County Register

How to increase transparency for local bond measures

Voting BoothsPicture yourself on Election Day at your local polling place and looking over a lengthy ballot. Or, try to recall when you were at home reviewing your mail-in ballot. In choosing your elected officials on the ballots, it is pretty straight-forward: You vote for the candidate that best matches your interests and values.

But what about tax levies and bond measures proposed by local governments and school districts? There are so many factors to consider. How will the new funds help your community or school? How long will it take for bonds to be paid off? Most importantly, what will be the actual financial impact on you and your family?

Current law requires that a “tax rate statement” be mailed out to all voters, which includes the best estimate of the highest tax rate for voters, as well as the best estimate of total debt service. While this information can be helpful, it is often insufficient in aiding voters to estimate how much their property taxes might increase.

This is why Assembly Bill 1194 (by this column’s co-author, Matt Dababneh, D-Woodland Hills) is necessary to alleviate this uncertainty and increase transparency for voters regarding the effects that local bond measures may have on property taxes. By providing information upfront, such as the best estimate of the average annual tax rate and the last year when the bond is expected to be paid, voters will have the ability to better understand the bond measures’ impact on their own personal finances.

AB1194 was approved by the state Assembly with strong, bipartisan support. It is supported by taxpayer advocacy organizations and by the very people in local government who are most affected if this bill should pass: the California Association of County Treasurers and Tax Collectors.

However, AB1194 faces more hurdles in the state Senate and has attracted some opposition. One organization fears the additional information provided to voters through the legislation “could have a chilling effect on the passage of local bond measures.”

This opposition should concern all taxpayers, as well as transparency advocates. How can providing more information about the average annual tax rates be misleading or even “chilling”? Are opponents afraid that more transparency might give voters pause and cause them to take a closer look at the consequences of the bond measure’s passage rather than blindly voting “yes” down the ballot?

Taxpayers should ask themselves if they could benefit from more clarity on these bond measures. If the answer is yes, then we need your support to ensure AB1194 wins approval in the state Senate and moves to the governor’s desk. You can help by contacting your state senator over the course of this summer to urge their support on AB1194 for better voter transparency.

Jon Coupal is the president of Howard Jarvis Taxpayers Association. Matt Dababneh is the California Assemblymember for the 45th Assembly District.

This piece was originally published by the Orange County Register.

What taxpayers should know about the California budget

BudgetCalifornia voters are pretty good at figuring out what is going in the state capital when it hits them directly. For example, recent polling shows that citizen awareness of the $5.2 billion annual gas and car tax is very high and, incidentally, very negative.

But the same can’t be said when it comes to the more complicated and arcane actions of our state politicians such as the annual California state budget process. While Californians are painfully aware that taxes are very high (they’ve been watching their friends and neighbors moving out of state at record pace) they typically have little comprehension of where their tax dollars go. That’s not surprising since California ranks dead last in budget transparency according to a recent study by U.S. News & World Report.

Nonetheless, here are the main takeaways that every California taxpayer should know.

First, the budget is huge – over $125 billion in general fund spending – by far the largest budget in California history. Since the recovery began after the great recession, taxpayers have infused California’s General Fund with $41 billion and special funds by $28 billion. That translates into a 63 percent increase since 2010. And property owners have done their part as well. With real estate values fully recovered (and then some) property tax revenues are up 72 percent. This is where our schools get the lion’s share of their money.

Second, the budget is only balanced if you ignore debt. The majority party is practically breaking their arms trying to pat themselves on the back for a “balanced budget.” This is like a family celebrating the fact that they paid all their bills this month but ignoring the fact that they have a mortgage that is way beyond their means over the long term. California’s pension debt is, by some measurements, close to a trillion dollars.

Third, the budget is, as usual, full of tricks and questionable accounting. One of the more dubious ploys involves borrowing from special funds. This year, there’s a proposal to borrow $6 billion (with a “b”) from the state’s Surplus Money Investment Fund to reduce the unfunded liability of the state’s pension fund, PERS. While there is agreement that appropriating more money to PERS now helps to reduce unfunded liability in the future, that payment should come from current revenue, not a special account designed to cover ongoing operating expenses.  Let’s call this for what it is: Paying your Visa bill with your MasterCard.

The budget is being praised for adding a couple billion more to the state’s rainy day fund (technically called the Budget Stabilization Account) bringing it to over $8.4 billion. But recall during the last recession, the budget shortfall was many times that amount. Thus, while it seems like a lot of money, the state’s reserve funds remain woefully inadequate. You can’t save a penny a day for a couple of years and think it will be enough to fix the roof when it collapses.

Other trickery includes several dozen so-called “trailer bills.” These are supposed to be budget related bills – many are not – that can pass with a simple majority vote and are not subject to citizen referendum. Because they can be jammed through on short notice without citizen recourse, they are a favorite tool of the majority party to effectuate big policy changes. Two examples of this are the gutting of the California Board of Equalization – one of the few state tax agencies in America actually accountable to voters – and a blatantly political power grab by changing the law as it relates to recall elections designed solely to throw a lifeline to a tax-and-spend democrat who cast the deciding vote on the gas and car tax hike.

Bottom line? The majority party has adopted laws and policies which will unquestionably push state spending permanently higher by expanding programs, increasing welfare costs and giving their political funders – labor unions – higher compensation via costly collective bargaining agreements. Our elected leadership is driving California right off the cliff.  Thelma & Louise would be proud.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This piece was originally published by the Orange County Register 

The California caste system

Caste system IndiaAfter the Legislature imposed billions of dollars in new car and gas taxes on Californians last month, a friend emailed me to register his disappointment and disgust: “It’s like we live in an apartheid society where the politically powerful live in luxury and laugh at the working people of our state.”

Sadly, his point is accurate. The separation between the ruling class and the rest of Californians is becoming more extreme by the day. So much so, in fact, that California is beginning to resemble a society based on a caste system, meaning a formal structure of social stratification (usually associated with India) deriving from the hereditary division of the population into the highest caste (Brahmins) and various castes below.

California’s high cast Brahmins reside primarily in coastal enclaves including the San Francisco Bay Area, Santa Barbara, Malibu and the west side of Los Angeles but they are also numerous in the Silicon Valley and Hollywood. These elites tend to be high income or wealthy and can afford to separate themselves from the trials and tribulations suffered by average citizens. This immunity from “real world” problems allows them to obsess about issues like bathroom access, climate change or the president’s hair. They lack respect or compassion for less fortunate citizens and, if truth be known, they find those outside their caste to be annoying.

And a gas tax? This tax to them is nothing when they can avoid paying it by plugging in their $120,000, taxpayer subsidized Teslas. And if their cars do run on gas, they never even bother to check the price. These are folks who wouldn’t be caught dead in a Walmart.

Next in the caste hierarchy are the politicians and members of government employee unions. While the Brahmans may help to elect the politicians, as do the unions, this second tier caste is much less secure because they still have to scrounge for financial advantage. The unions — representing the highest compensated state and local workers in all 50 states — are constantly seeking more pay and benefits. And because the politicians are constantly trying to consolidate and expand their influence, they establish a symbiotic relationship with the unions to keep campaign contributions rolling in that guarantee reelection. (Some electeds, who have spent years living off the taxpayers’ dime, genuinely fear they may not be qualified for work in the private sector and so will do almost anything to keep a grip on power.)

These politicians will parrot the concerns of the Brahmins about matters like the environment, but they do not have a committed belief system. They trip all over themselves in their rush to make environmental law exceptions for projects like stadiums that are backed by wealthy interests or unions in a position to secure or advance the politicians’ careers.

The next rank on the scale of who’s who in California are the non-working poor. While the upper classes do not want to rub elbows with them, they are regarded as useful because their votes can be purchased through extensive entitlement programs that are paid for by the very lowest class.

On the very bottom rung of the stature ladder, the equivalent of the Indian’s “Untouchables,” are working Californians, and the lowest of these workers is anyone who labors at a job that requires perspiration — these are regarded as little more than beasts of burden.

When the elites bother to consider members of the working class, they regard them as a source of tax revenue and little more. Ideally, to their way of thinking, they exist to pay taxes and not make waves.

A massive new gas tax adding to the burden of working Californians? Why it is just the price of being able to share a beautiful state and great weather with their social betters.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This piece was originally published by the Orange County Register