How push polls pervert politics

Voting booth“There are lies, damn lies and statistics,” goes the old saying. It has always been true that statistics can be presented in ways that are highly deceptive and intentionally misleading.

A Midwestern city might truthfully claim that its average temperature is a perfect 74 degrees — just like the Hawaiian Islands.  It could be technically true, except that the deviation from that temperature in the sub-tropical climate isn’t very great, while the Midwestern city might swing from below freezing in the winter to triple-digit heat in the summer. That comfortable-sounding “average” is sure not the full story.

Still, for susceptibility to manipulation, statistics don’t hold a candle to polling — especially political polling.  During this primary season in California, the various candidates are releasing reams of polling to show how far ahead they are of their competitors.  Two different polls can show diametrically opposite results, with one candidate showing he or she is leading 80 percent to 20 percent over an opponent while the opponent might claim to be ahead by a margin of 90 to 10.

The credibility of political polling took a huge hit in the last presidential election. Virtually all the polling showed Hillary Clinton coasting to a relatively easy victory over Donald Trump.  In fact, his path to victory in the Electoral College was so narrow that he would have to “run the table” in every swing state — something all the pundits said was next to impossible.

What’s particularly odd about that election is that even the good polls were wrong. And by good polls we mean those administered by pollsters who don’t have a political agenda.  Good pollsters will admit that their reputations depend on being accurate in their predictions.

The lesson here is that voters need to take any polling with a grain of salt. That is especially true when the polling is paid for by an interest group.

One recent example makes this clear. There has been a recent push by supporters of higher taxes to impose a statewide “fee” on the monthly water bills of all water users — homeowners and businesses — to pay for programs to deal with contaminated water supplies.  Interestingly, the opposition to the proposal includes both the Association of California Water Agencies (ACWA) and the Howard Jarvis Taxpayers Association, two groups frequently at odds over water-rate practices.  But here, both groups have deep concerns about the state intruding in an area best left to local government interests. …

Click here to read the full article from the OC Register

Proposals to ban internal combustion engines in California are a bad idea

carpool-laneThe latest battle in Sacramento’s war on California’s middle class is the push to ban the internal combustion engine.

Luckily, the effort has stalled.

The legislation that would have imposed the ban, Assembly Bill 1745, died last month, but bad ideas in California have a way of recurring like nightmares. We will see this proposal again, either as legislation next year or perhaps even as a ballot initiative. A number of so-called progressive candidates on the ballot this year have publicly stated they embrace this foolish idea.

The bill that was stopped, AB1745, would have prohibited the Department of Motor Vehicles from registering a new vehicle unless it was a zero emissions vehicle, beginning on January 1, 2040. Under the proposed law, a new car with an internal combustion engine could not legally be driven in California after that date.

A ban on internal combustion engines would certainly limit mobility and transportation options for millions of California families and businesses. And it would arbitrarily limit the development and use of advanced and efficient vehicle technologies, the kind that have already achieved great success in squeezing extra miles out of a gallon of gas.

Today, despite the availability of ZEVs, a substantial publicly funded rebate program and access to HOV lanes, ZEVs accounted for only 1.9 percent of the over 2,000,000 new passenger vehicles sold in California in 2016. And many of these sales are repeat sales to the same households, according to the UC Davis Institute of Transportation, raising the question of whether plug-in vehicles are experiencing widespread consumer rejection, outside of a limited group of true believers.

A ban on internal combustion engines is an attempt to force consumers into buying vehicles that they have decided are not best suited to their needs.

The better alternative is leveraging all available vehicle technologies, including efficient internal combustion engines, so that California can reach its environmental goals without banning or discouraging any technological innovations. …

Click here to read the full article from the OC Register

There is no loophole in Proposition 13

property taxFor decades, California progressives have complained about a “loophole” in Proposition 13 that unfairly benefits the owners of commercial real estate to the detriment of homeowners. This characterization has been widely accepted by the mainstream media with little critical analysis.

There is no loophole in Prop. 13.

There is, however, an ambiguity in the statute implementing the measure that relates to the “change of ownership” rules. That ambiguity can be easily addressed by a statutory amendment without doing violence to Prop. 13. Both the business community and the state’s preeminent taxpayer organization, Howard Jarvis Taxpayers Association, agree that this change is necessary.

Senate Bill 1237, by state Sen. Patricia Bates, would address this technical tax issue involving fictitious entities such as limited liability corporations and complex partnerships in a way that is wholly consistent with Prop. 13.

Specifically, under Prop. 13, when you sell your home, it is reassessed to the full market value for the new purchaser. Of course, the new buyer still enjoys the 1 percent rate cap and the certainty that the taxable value of the property will not increase more than 2 percent per year.  But for properties that have been under the same ownership for decades, the “taxable” value of the property can be just a fraction of the market value. That is why Howard Jarvis and Paul Gann provided in Prop. 13 that upon change of ownership, property would, at least initially, be taxed at market value. After purchase, it receives the same 2 percent limitation on annual increases in taxable value as all other properties.

But some clever tax attorneys have advised clients that they can avoid Prop. 13’s intent to treat commercial transactions the same as homeowners by creating fictitious entities that themselves are transferred in an inappropriate attempt to avoid reassessment. This violates the spirit of Prop. 13 and actually gives the enemies of Prop. 13 a justification for arguing that all of Prop. 13’s protections should be stripped away for commercial property. It also explains why public employee unions continue to oppose bills such as SB1237, because it would deprive them of their best argument in the ongoing fight to remove Prop. 13’s protections for commercial property. Indeed, the enemies of Prop. 13 are already working to qualify this very initiative for the 2020 statewide ballot. …

To read the entire column, please click here.

Enemies of Prop. 13 Delay Attack on Iconic Initiative

property taxA reporter for the Bay Area News Group stopped by the government office in Santa Clara County and concluded that while people standing in line to pay their property taxes were upset with the heavy burden, they had scant knowledge of California’s iconic Proposition 13. What most were probably unaware of is that their taxes would be at least twice as high without Prop. 13.

Many people who live in California today were not here in 1978 when Proposition 13 was passed overwhelmingly by voters. Today’s younger homeowners have little idea how frightened and angry citizens were in the mid-1970s when their property taxes doubled or even tripled from the previous year.  Homeowners were literally being taxed out of their homes.

But despite having no personal memory of the pre-Prop. 13 era, most Californians have at least heard of Proposition 13 and, when prodded, recall it somehow helps to keep escalating property taxes in check.

In June, Proposition 13 will hit its 40th birthday. While long-time homeowners will surely celebrate, those in government with an insatiable appetite for taxpayer dollars are hoping that voters will be ready to weaken it.  But previous attacks on Proposition 13 have come up short. At most, Prop. 13 was weakened by court decisions involving fees and charges as well as attacks on the two-thirds vote requirements.  But those attacks were quickly countered by subsequent ballot initiatives such as Proposition 218 in 1996, the Right to Vote on Taxes Act, which reinforced Prop. 13’s original intent.

Knowing that a direct attack on Proposition 13’s protections for homeowners is a fool’s errand, the tax-and-spend interests have focused on raising property taxes on business property. This so-called “split roll” effort has gone on for about 30 years and has never really gained any serious traction. According to these interests, 2018 was going to be the year where they would finally be able to take a big chunk out of Prop. 13 by hitting commercial real estate with several billion dollars in higher taxes.

The optimism displayed by Proposition 13’s detractors has been based in large part on the expected “blue wave” of voters coming out in support of progressive candidates. Liberal Democrats believe, rightly or wrongly, that voter disgust with the Trump administration might at least allow them to regain control of the U.S. House of Representatives. The thinking, at least until recently, has been that November of 2018 would be the right moment to fracture the pro-Proposition 13 alliance because of an energized progressive base, low voter turnout and fading memories of 1978.

But a funny thing happened on the way to the ballot box. After beginning a serious effort to collect signatures for their “split roll” initiative, the proponents have taken their foot off the gas and announced that, instead, they will attempt to qualify the measure for the 2020 ballot. The ostensible reason for the delay is that it would give them more time to expand their coalition (of course, the same can be said for Prop. 13 defenders) and that the voter turnout model in 2020 would be better for them – a dubious claim indeed.

Split-roll proponents might be having second thoughts about what they thought was a weakening of support for Prop. 13 or the political strength of their own coalition. Perhaps they’ve seen polling – both private and public – revealing Proposition 13’s continued popularity. Whatever the reason, this November’s election will not present a direct threat to Proposition 13. …

Click here to read the full article from the Orange County Register

California On Verge of Second Massive Boondoggle

Gov. Jerry Brown, Anne Gust“I’ll gladly pay you Tuesday for a hamburger today.” That was the catchphrase of J. Wellington Wimpy, simply known as just “Wimpy” on the “Popeye” cartoon show. For good reason, the proprietor of the diner rejected Wimpy’s request because of his reputation for not paying on Tuesday.

The inability to repay one’s debts can come with severe consequences, as anyone who has borrowed money from a loan shark can attest. California, despite record revenue coming into the state treasury, has a real problem with debt. High on that list, of course, is the state’s multi-billion-dollar unfunded liabilities for its pension obligations. But we have a problem with bond debt as well.

State-issued bonds can be a legitimate method to finance public projects that have a long useful life. But key to bond financing is a clear and predictable plan to repay those bonds.

California is now on the verge of adopting a second massive boondoggle plagued with financing issues. We are all familiar with the notorious high-speed rail project that was sold to voters as a safe and economical alternative to air travel between Northern and Southern California. A third of the money was to come from the private sector, a third from the feds and the rest from the sale of Proposition 1A bonds. All three of those revenue sources have disappeared in a puff of smoke and, instead, the HSR project is kept on life support through “cap-and-trade” revenue that didn’t even exist when voters approved the original bond.

The second mega-project destined to adopt the boondoggle label is Gov. Jerry Brown’s “twin tunnels” project, intended to transport water from the Sacramento River to the pumping stations at the south end of the delta. Bear in mind that the project will not provide a new water source but would be built ostensibly for environmental reasons.

However, like the high-speed rail project, the financing for the twin tunnels is illusory. Virtually all the potential major wholesale customers of water from the twin tunnels are highly skeptical of its viability and balk at paying for it. The one exception is the Metropolitan Water District in the greater L.A. area, which is considering the adoption of a plan to finance a scaled-down version of the project — meaning one tunnel instead of two.

To read the entire column, please click here.

This article was originally published by the Orange County Register

What would make legislation in California truly ‘family friendly?’

CapitolEvery year California politicians push bills advertised as “family friendly.” This label is certainly useful to gain sympathy for a proposal. It’s akin to labeling a bill “The Protect Puppies Act.” Who could possibly object to that except heartless cretins?

Last year a number of bills were advanced as “family friendly” including Senate Bill 63 by Sen. Hannah-Beth Jackson, D-Santa Barbara. Known as the “baby bonding” bill, it is now illegal for an employer of 20 or more employees to refuse to allow an eligible employee to take up to 12 weeks of job-protected parental leave to bond with a new child within one year of the child’s birth, adoption or foster-care placement. It also mandates that an employer maintain and pay for the employee’s continued group health coverage during the duration of the leave. Prior to the passage of this bill, parental leave was mandated only for companies with 50 or more employees.

Another “family friendly” bill that became law last year was Assembly Bill 1127, from Assemblyman Ian Calderon, D-Whittier. It requires that diaper-changing stations be available to dads as well as moms at sporting arenas, auditoriums, libraries, passenger terminals, shopping malls, large restaurants and other places.

It is difficult not to be sympathetic to legislation which, at least on the surface, appears to make life easier for parents. But does the family-friendliness of such proposals cloud the judgment of our policy leaders as to the potential downside? California already has a horrible reputation as being anti-business. Indeed, for more than a decade CEO Magazine has ranked California dead last among states as a place to do business.

It’s no secret that, even with a resurgent economy, California continues to bleed jobs. Its share of the growth in the national labor force is a fraction of what it should be, given our population. The trend line of citizens moving out of California — known as “net domestic outmigration” — is well documented. …

Click here to read the full article from the Orange County Register

Gas Tax Repeal Has 3/4 of Signatures Needed — with 30 Days to Go

An effort to repeal California’s new gas tax repeal has collected three quarters of the required signatures, and has 30 days to gather the last 200,000 to place an initiative on the November ballot.

The Reject The Gas Tax referendum, sponsored by the Howard Jarvis Taxpayers Association, has received substantial bipartisan voter support towards gathering the 587,407 California signatures from valid registered voters that are legally required to place an initiative on the ballot.

California’s Democrat-controlled legislature claimed that “The Road Repair and Accountability Act” of 2017 (SB-1), which they passed almost a year ago, would provide $5 billion per year to address significant funding shortfalls to maintain the state’s multimodal transportation network as the “backbone of the economy and critical to quality of life.”

But advocates of the gas tax were silent on how the regressive measure would hammer middle-income and lower-income families. The average California family of four is now paying about $300 more per year in gas taxes and fees and will pay about $400 more in 2019, along with an additional $50 in gas taxes for each year thereafter.

Progressives understand that after California Gov. Grey Davis increased car registration fees in 2003 by a similar $263 per year, voters retaliated by recalling the Democrat governor and sweeping Republican Arnold Schwarzenegger into office. …

Click here to read the full article from Breitbart.com/California 

The Board of Equalization got the last laugh on a gas tax increase

Gas-Pump-blue-generic+flippedIn a normal universe, the rejection of a gas tax increase by a state agency would be based primarily on policy grounds. But in a strange mix of wonkish tax policy, political turf fighting and revenge, California drivers will be spared — temporarily — from a 4 cent per gallon tax increase on gasoline.

On Feb. 27, the Board of Equalization was expected to approve a routine request by the governor’s Department of Finance to raise the tax. But it did not. As a result, the state treasury will miss out on a little more than $600 million (much to the relief of California drivers, however).

Because California already has one of the highest gas taxes in the nation, citizens may not care one bit about why the Board of Equalization rejected the tax increase. But understanding how this happened is an object lesson in the strangeness that is California.

It begins with the “gas tax swap.”

In 2010, Gov. Arnold Schwarzenegger signed into law two fuel tax measures commonly referred to as the gas tax swap, which adjusted the rates of the sales and excise tax on gasoline. (The excise tax is a “gallonage” tax based on the amount of gas purchased). The fuel tax swap legislation was designed to be “revenue neutral,” meaning the total taxes paid at the pump would not increase because of the change in the law.

But ensuring that the gas tax swap was actually revenue neutral required some backward-looking calculations, because the price of gasoline can greatly fluctuate. In short, the state had to determine how much sales taxes would have been collected had the law not been changed and then adjust the excise tax in an attempt to even things out. Yes, it’s weird, and the reason they did this is beyond the scope of this column.

For the last several years, the Board of Equalization was tasked with making that annual adjustment after receiving a recommendation from the California Department of Finance. That annual adjustment has always been viewed as routine and non-controversial.

All that changed last year because of two notable events: First, a massive increase in the gas tax and, second, a turf battle between the legislature and the Board of Equalization.

When the legislature enacted the infamous Senate Bill 1 raising the gas tax to a stratospheric level, which taxpayers are now trying to undo with an initiative measure, it also took away the Board of Equalization’s authority to make the annual adjustment. The adjustment that was to occur last month was to be the last exercise of that authority by the board.

In the meantime, progressives in the legislature were increasing their criticism of the Board of Equalization which they viewed as being a bit too sympathetic to taxpayers. (The Board of Equalization is the only popularly elected tax board in the nation and would actually give taxpayers a fair hearing when there are disputes over tax liability of individuals and businesses.)

In recent years, the Board of Equalization has endured a few minor (by Sacramento standards) scandals involving office space and political activity. The Legislature then saw these issues as an opportunity to pounce and deprive the Board of Equalization of the bulk of its authority, shifting much of its responsibilities to a new bureaucracy-driven California Department of Tax and Fee Administration that has no direct political accountability.

It is with that background that members of the Board of Equalization, including one Democrat, refused to adjust upward the gas excise tax, an otherwise ministerial act. And although the members who spoke against the increase cast their positions as looking out for California taxpayers, no one who has observed the Board of Equalization over several years missed the real message being delivered to the Legislature. The board’s decision leaves the fuel excise tax at 29 cents per gallon, instead of 33 cents, for another year unless the legislature finds a clever way to bypass the process.

When one considers all the machinations of politics and the manner in which legislation is enacted, it’s no wonder people refer to the California Legislature as a sausage factory. Actually, that’s an insult to sausage factories.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register

Once again, California sees the unintended consequences of bad legislation

property taxLast July, we wrote a column regarding the foolishness of Senate Bill 2, a new $75 tax on real estate recordings, ostensibly for the purpose of funding housing programs. We pointed out that imposing a tax on real estate transactions to pay for programs to make housing more affordable is like treating someone with a low blood count with leeches.

While the fundamental irrationality of SB2 is water under the bridge, a host of implementation problems have now arisen that need corrective action, and quickly.

For example, SB2’s language makes it difficult for California’s 58 County Recorders to determine if they should charge the additional $75 for tax liens and lien releases presented by government agencies.

These tax liens can originate from small local business activities like selling Avon, from failure to pay your annual income taxes, from a missed tax payment on your jet ski, for child-support collection and more. You don’t even need to own a house to have one of these liens recorded against you, and worse yet, you may not even know that the lien exists until it shows up on your credit report.

State agencies and the IRS have refused to pay the $75, arguing that these documents are exempt from the new tax. The attorney general agrees (see AG 18-101), but California’s Office of Legislative Counsel issued an opinion that contradicts the attorney general — making it even more confusing for taxpayers and county recorders.

At this point, most recorders interpret the statute as mandatory, because the legislative counsel has told them this was the original intent of the bill. Therefore, they are mailing back lien releases as unrecorded to state agencies and to the IRS for lack of the $75. For property owners, this is a real problem because their debt has been paid but their credit is not cleared because the lien hasn’t been released.

Some taxpayers are so eager to clear their credit that they are intercepting the lien releases at their county recorder’s office and offering to pay the $75, legal or not. The Department of Child Support Services intends to record all lien releases itself instead of giving them to the redeemed payer to record more quickly on their own, but it is still being held up. Some child-support payers might be offering to take the release to the recorder themselves and paying the $75 to have their credit cleared. As the situation continues, however, others might be discouraged from paying up their child support arrears or tax debts in the first place. The extra hurdle is not helping the government, the taxpayer, or the children.

It is also true that the state of California cannot tax the federal government. Although this has been settled law for hundreds of years, many county recorders are attempting to collect the tax from the IRS. And although this is legal doctrine, it makes common sense as well. Would there be any sense or justice if the states had the power to tax the federal government out of existence?

Because the language of SB2 is so confusing, and it relies on many assumptions that the county recorder has no ability to independently verify, payment of the tax on most documents relies on self-certification. Most people do not have law degrees, so many people are paying the tax when they are not legally required to pay it, and others are receiving exemptions when they are not entitled to them.

SB2 gives a long but non-exclusive list of “real estate instruments” to which the fee applies. This includes a “release” and a “mechanic’s lien,” but not just a “lien” nor a “tax lien,” and certainly not a “child support lien.” SB2 also uses the words “transaction,” “in connection with” and “relating to real property,” none of which are defined in statute. Is enforcing a government debt a “transaction”? Are IRS tax liens and releases “relating to real property”? Tax liens use specific real property to enforce a debt, but they are not like a mechanic’s lien where the contractor performed work on that specific property.

There are many other types of liens where intent could vary as to whether to charge the $75: liens for postponement of property taxes for senior citizens, government liens recorded in error, government liens released due to discretionary re-prioritizing, and, less sympathetically, liens for graffiti nuisance abatements or violations of various safety codes. It is unclear whether the legislature intended to extend the tax to these recordings, although they were aware that this was a potential issue and chose not to address it.

Clean-up legislation is needed promptly. SB2, as substantive legislation, was bad enough. Its implementation is almost worse.

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

High-speed rail is the best reason to repeal the gas and car tax hike

High speed rail constructionWould you trust a surgeon who has a history of amputating the wrong limb? Of course not. For the same reason, California taxpayers should not trust our state politicians with more transportation dollars. Let’s get one thing clear from the outset. Any spending on the California high-speed rail project is, by definition, transportation spending. Therefore, any discussion about the wisdom of repealing the gas tax cannot ignore what the state of California has done with its “showcase” transportation project.

The complete dysfunction of HSR is no longer in dispute.

The latest development is the failure of the HSR authority to issue its revised business plan to the California Legislature as required by law. Its excuse? The authority is in the midst of hiring staff so it can’t issue a timely report. Besides being a complete non sequitur, one would think that the hiring of additional staff would be a reason to issue a report as soon as possible.

Moreover, this latest shortcoming is consistent with the authority’s continued aversion to transparency. Just last month, Republican legislators called for an emergency audit when it became evident that just the Central Valley segment of the project was $1.7 billion over budget. While that request was denied, this week Democratic legislator Jim Beall joined with Republicans seeking a comprehensive audit when it was revealed that the Central Valley segment was actually a stunning $2.8 billion over budget.

Many who originally supported the high-speed rail project have had a dramatic change of heart. Quentin Kopp, a former state senator and High Speed Rail Authority chairman, is now vigorously opposed, noting that “this is not what the voters approved.” Likewise, the San Jose Mercury News this week ran an editorial entitled, “Stop the California Bullet Train in its Tracks.”

The foolishness of the project is especially evident when considering that one of its main purposes was the reduction of greenhouse gas emissions. Indeed, that justification is why the project is currently being funded almost exclusively by “cap-and-trade” funds that are generated by the sale of “carbon credits,” a hidden tax on energy.

But ironically, even the respected, nonpartisan Legislative Analyst’s Office notes that the project is a net greenhouse gas producer. If the state of California were more serious about GHG emissions, it would direct those funds into more traditional transportation projects including road improvements and lane capacity. Stopped traffic produces more pollution than traffic that moves.

Despite the higher gas and car taxes that drivers have been paying since November, a new report by the State Auditor says transportation infrastructure remains one of the “high risk” issues facing California. Why? Because of uncertainty about the “effective and efficient use” of the money collected from the tax hikes.

In short, our current political leadership, which jammed the massive car and gas tax increase down our throats without a vote of the people, has no credibility whatsoever as acceptable stewards of transportation dollars. And as long the high-speed rail project continues, they never will.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register