Prop 50: The weirdest measure on the ballot this year

As reported by CalMatters:

It’s been two years since criminal accusations against three lawmakers rocked the California Capitol. Charged with corruption and perjury in separate cases, three Democratic state senators were suspended from the Legislature in 2014 but kept earning their $95,000 annual salary for many months.

Now, California voters will get their say on a question prompted by that spate of scandal. Proposition 50 on the June 7 ballot asks whether legislators who are suspended from duty should also have their paychecks taken away.

In a year of weird ballot measures – should porn actors be required to wear condoms? – Proposition 50 may be the most unusual one California voters face. Here are three reasons why:

1.  It stems from a bizarre year in the Legislature – not a widespread problem in the state.

Most measures that make the ballot ask voters to weigh in on a question that impacts the masses: raising taxes, for example, or making marijuana legal. Proposition 50, if approved, would apply …

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Ballot Measure: Docking Pay of Suspended CA Lawmakers

As reported by the San Jose Mercury News:

SACRAMENTO — California voters will decide in June whether to allow state lawmakers to revoke their colleagues’ pay following the Legislature’s 2014 ethics crisis that saw three senators put on leave as they faced felony allegations.

Proposition 50 is the only statewide measure on California’s June 7 ballot, but has drawn little attention and reaped no cash in support or opposition — in stark contrast to high-profile primary races this election cycle.

The proposal asks voters to amend the state constitution to give two-thirds of a chamber’s members the power to suspend their peers with or without pay. Its passage would signify voters approve of recent suspensions made under rules lawmakers wrote for themselves. …

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3 Bills in Legislature That Will Actually Benefit Californians

CA-legislatureThose who value liberty, good government and a reasonable level of taxation have a lot to complain about if they are citizens of California. Not only do we have one of the highest tax burdens in America, we rate very poorly in term of efficient and effective governance as well as transparency. Those of us who point out the state’s shortcomings are labeled as contrarian, “declinists” or pessimists by state politicians, including our governor.

And let’s not forget about corruption. Just a couple of years ago, the California Senate actually had a higher arrest rate than the general population of California. Because of all the negative press, it is no wonder that that the public believes that most of what the California Legislature does is self-serving.

Although there is more than sufficient justification to criticize California’s political system (and especially its Legislature), for the sake of fairness, we should take special notice when our politicians do the right thing. For example, every so often bills are introduced that cut against the stereotype by providing genuine benefit to average folks.

Interestingly, although the California Legislature is fairly left-leaning, sometimes opportunities present themselves for a taxpayer group like Howard Jarvis Taxpayers Association to work with legislators from both sides of the aisle to do good for average citizens. This year, HJTA has sponsored three separate legislative proposals in 2016 that have been well received in the Capitol.

The first, Assembly Bill 1891, would provide property tax relief for seniors. Currently, seniors over the age of 65 in most school districts can file for an exemption from education parcel taxes. However, many school districts require an application for exemption to be filed every year. AB1891 simply states that seniors only need to fill out the opt-out paperwork one time to be permanently exempt from paying a parcel tax.

HJTA is also the co-sponsor of Assembly Constitutional Amendment 6, by Assemblywoman Cheryl Brown. Among its numerous positive provisions, ACA 6 will provide property tax savings for seniors in their retirement years. The law today allows married seniors over the age of 55 to transfer the Proposition 13 base value of their home to a property of equal or lesser value in the same county once in retirement. As good as this law is, it needs to be expanded. For instance, if a spouse were to divorce and remarry, that property owner would not be able to use their base value transfer exemption. Property owners are also out of luck if they do a base value transfer, then decide to move again a few years later. They would be forced to pay the full market value property taxes on a new home. ACA 6 allows for married couples to transfer their base value twice. This will provide couples increased flexibility to sell their home to move closer to children or grandchildren. If approved out of the Legislature, ACA 6 will go to the statewide ballot for voters to approve in November.

Assemblyman James Gallagher has introduced the third HJTA sponsored bill, AB2801. This bill increases transparency for purposes of Proposition 218 protests. Approved by voters in 1996, Proposition 218 allows for water, sewer and refuse rate increases to be approved or rejected via a written protest process. Protests can either be mailed in, or announced at the public hearing. AB2801 simply requires that protests will be retained for two years so taxpayers can review them after the hearing.

As may be apparent, these three bills do not reflect huge policy shifts, such as a large tax cut or a complete reorganization of state government. However, they do make California a better place for homeowners and taxpayers. And for that we can be grateful.

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.

Originally published by the Howard Jarvis Taxpayers Association

Gov. Brown’s Greenhouse-Gas Cuts Scrutinized

As reported by the Associated Press:

SACRAMENTO, Calif. (AP) — The top lawyer for the California Legislature says Gov. Jerry Brown exceeded his authority when he issued an executive order imposing what he called the most aggressive carbon-emission reductions in North America, aligning California with the European Union’s aggressive climate change standards.

The opinion by Legislative Counsel Diane Boyer-Vine does not curtail Brown’s authority to continue implementing the greenhouse gas reduction plan, but it suggests a lawsuit challenging them could be successful.

The Democratic governor issued the executive order last year setting a new target for cutting carbon emissions to 40 percent below 1990 levels by 2030. …

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California’s Economically Illiterate Legislature

Minimum Wage chartCalifornia’s minimum wage is set to rise to $15/hour over the next six years. While this topic has been beat to death, it is seldom pointed out that the inflation-adjusted minimum wage, based on 78 years of precedent, at most should only be around $10 per hour. A recent UnionWatch post “Raise the Minimum Wage, or Lower the Cost of Living?” proved this using CPI data. As can be seen, only once, in 1968, did the minimum wage in 2015 dollars exceed $10/hour.

A lot of things have happened since 1968, of course. To name just two, the earned income tax credit didn’t arrive until 1975, and the Affordable Care Act, offering health insurance to low-income participants at give-away rates, didn’t arrive until 2010. Needless to say these programs make it easier to survive on minimum wage.

The point of this isn’t to suggest workers shouldn’t earn more money, or to argue about whether or not we should have a minimum wage. The point is that the minimum wage, at $15 an hour, has no historical justification. And because of this, the unintended consequences are more severe. Like never before, this minimum wage increase will kill small businesses and it will kill entry level jobs.

There’s another point missing from the debate over the minimum wage. It is an indictment of the members of California’s state Legislature, because collectively, they have a simplistic, ideologically driven view of economics that is divorced from reality. Their naive enthusiasm is harming the working families they claim they want to protect. California’s legislators, nearly all of them coerced and controlled by government unions and seduced by extreme environmentalists, have enacted policies that deny upward mobility to working people.

These policies only begin with an excessive minimum wage hike that is going to reward large corporate franchises and drive small emerging companies out of business. They extend to the unaffordable cost of housing, caused by misguided “urban containment” policies in what is one of the most spacious developed regions on earth. They extend to the high cost of electricity and natural gas, elevated by policies inspired by a futile wish to set an example to the rest of the world – regardless of their regressive impact. They extend to a pension system built by an alliance of government unions and powerful financial interests that guarantees retirement benefits to government employees that are literally five to ten times more generous than Social Security, paid for by taxpayers, teetering on the abyss of insolvency. The list goes on.

Legislator business experienceHere’s part of the reason why: California’s legislators do not have experience running a business. Most of them have never worked in the private sector. A 2014 UnionWatch post “How Labor Money Undermines the Financial Literacy of California’s Legislators” documents, based on biographical analysis, the level of business experience in California’s 2014 state legislature. In all, 56 percent of them have NO experience in business – having spent their entire careers in government or nonprofits. Of the majority democrats, 76 percent of them have NO experience in business. The 2016 class of legislators is unlikely to be any different.

Understanding that you can’t raise the minimum wage without killing entry level jobs is a basic economic concept. So is the fact that if you make it nearly impossible to develop land or energy, prices will rise for those commodities. And it isn’t much of a leap to realize that when you do this, you are hurting the most vulnerable members of society.

More sinister, and perhaps harder to grasp, upper division stuff, is the fact that every time you add a regulation, you further empower the monopolistic corporate special interests who are supposedly the bad guys you’re fighting. Every time you lower interest rates to stimulate spending, you invite people of limited means to go further into debt, and you decimate the savings accounts of people unwilling or unable to gamble their modest fortunes in a volatile stock market. And every time you raise pay and pension benefits for government workers, you create deficits, pouring additional billions into the pockets of bond underwriters, and you redirect the money into the hands of the pension funds and their investment bankers.

And at the graduate level, in that rarefied space where sound-bites (that perform so well in Sacramento) just echo meaninglessly in the vast alpine air, consider this:  The impact of artificially elevating the cost of living creates an asset economy, so pension funds and rich people alike can ride the bubble for one more year, while ordinary folks endure servitude to their $700,000 mortgages. It doesn’t take an economist, however, to know this can’t last. It just takes horse sense. That too, appears to be in short supply in Sacramento.

Could it be that if California’s Legislature were committed to lowering the cost-of-living via policies that encouraged competitive development of natural resources including land and energy, maybe they wouldn’t have to bestow such lavish benefits on government workers, nor the crumbs of minimum wage increases to private workers?

*   *   *

Ed Ring is the president of the California Policy Center.

Democrats win 31st Assembly District showdown

As reported by the Fresno Bee:

In the days leading up to the 31st Assembly District’s 2004 election, then-Assembly Republican Leader Kevin McCarthy of Bakersfield made a prediction: “Someday, this will be our seat.”

That day may never come.

There was a special election Tuesday to fill the unexpired term of Fresno Democrat Henry T. Perea, who resigned a year early to take a job with the pharmaceutical industry, and it appears all but certain that Kingsburg Democrat Joaquin Arambula will win the race. Just before midnight, his main opponent, Fresno Republican Clint Olivier, conceded.

Republicans always like their chances in special elections, which historically have …

California’s New $15 Minimum Wage Will Accelerate Automation

Minimum wage1California’s Legislature last week voted overwhelmingly to automate most of the Golden State’s fast-food restaurants, supermarkets, and mid-sized retail chains by 2022. No, that wasn’t the stated intent of Senate Bill 3, which sailed through the Assembly and Senate on mostly party-line votes and after little debate. But that will be the likely effect of the law, which is supposed to phase in a $15 hourly minimum wage starting in January.

Governor Jerry Brown signed the bill in Los Angeles on Monday, one week to the day after unveiling the wage proposal at a Sacramento press event where he was surrounded by the Democratic elected leaders and labor union bosses who helped put it together. “I’m hoping that what happens in California will not stay in California, but spread all across the country,” Brown said. “It’s a matter of economic justice. It makes sense.” Assemblyman Sebastian Ridley-Thomas, a Los Angeles Democrat, echoed Brown during Thursday’s floor debate. “This is an argument about economic justice,” he said. “Justice is not something that can be negotiated or compromised.”

As it happens, the bill was the product of several months of extensive negotiation and compromise, almost all behind the scenes and without a word of input from California’s many industry lobbying groups, or from the leadership of the state’s largely irrelevant Republican Party. The law’s most immediate practical effect will be to end a pair of union-backed initiative drives that appeared headed for November’s general election ballot. The Service Employees International Union had been agitating for a measure that not only would have imposed the $15 minimum wage sooner, but would have done so without regard to the state’s fiscal outlook or economic circumstances. Brown, ever the cautious progressive, thought the union’s proposal went too far, too fast.

Under Brown’s plan, California’s hourly minimum wage would increase to $10.50 in 2017 for businesses with 26 or more employees, followed by $11 in 2018, and another dollar each year, arriving at the magic $15 in 2022. After that, the law would let the wage continue to rise with inflation. Smaller businesses would have an extra year to implement the annual raises. Brown insisted on a provision allowing the governor temporarily to suspend the wage hikes in the event of an economic downturn or a large state budget deficit. But the legislation provides a limited window for action: the governor must make his decision in September; the wage hike takes effect the following January. And, the truth is, these emergency provisions are almost always for show. AB32 — California’s ill-named Global Warming Solutions Act of 2006 — included a similar escape hatch, which neither then-governor Arnold Schwarzenegger nor Brown ever considered using during the recession, or during any one of the state’s multibillion-dollar budget crises. They opted instead for budget gimmickry and tax increases. One result? California’s high-skill, high-wage manufacturing sector has never recovered. In February, it experienced its worst contraction since 2009.

Advocates, including the labor-backed Fight for $15 Coalition and Senate president pro tem Kevin de León, say the raise will benefit as many as 6.5 million workers, or upward of 43 percent of the state’s workforce. Mainly, though, the $15 minimum wage will be a boon for California’s public-sector unions. The state Department of Finance estimates that the wage hike will cost taxpayers at least $3.6 billion a year by 2023, owing to a raise (and new benefits) for in-home health-care workers. But the cost likely will be even higher than that, as many public employees—teachers, most notably—must contractually be paid at least double the minimum wage or receive overtime pay.

Businesses have the most to lose. “I think very few business people will lobby against this bill, because then they will just be cutting their own throat,” Brown said at his press conference the other day. And he was right—the business lobby didn’t put up much of a fight, and its reasonable objections were scoffed at. California is a diverse state. What might appear economically feasible along the wealthier coast may not be such a good idea in some of the poorer inland areas, which have never quite come back from the recession.

Will a $15 per-hour wage really help workers in San Francisco? As the city began phasing in its own $15 minimum wage law last year, locals were shocked to discover the law of unintended consequences. Business owners who supported the city’s ordinance have found themselves raising prices, cutting hours, or in a few notable cases, shutting down altogether. “If you can only raise prices so much,” one political consultant with the Los Angeles Area Chamber of Commerce told the L.A. Times this week, “you’re going to be forced to cut hours, cut employees, change your business model and frankly, automate.”

That — and maybe relocate your corporate headquarters to Tennessee while you’re at it. Last month, Andy Puzder, chief executive officer of CKE Restaurants (owners of the Carl’s Jr. and Hardee’s fast-food chains), announced that the company would leave Santa Barbara for the more accommodating tax and regulatory climes of Nashville. But Puzder’s greater sin, at least judging from the scorn and ridicule he garnered online, was his unapologetic view of how best to boost his company’s bottom line in the years ahead: robots all the way down. “They’re always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case,” he told Business Insider. If labor is the biggest expense on the ledger, then that’s the likeliest target for cuts. “With government driving up the cost of labor, it’s driving down the number of jobs,” Puzder said. “You’re going to see automation not just in airports and grocery stores, but in restaurants.”

In fact, Puzder wasn’t saying anything particularly new or novel. Automation is coming, no matter what. Fast-food kiosks are commonplace in Europe, where labor costs are even more prohibitively expensive than here, with McDonald’s leading the way. But it isn’t just the corporate monoliths that are embracing automation. Smart start-ups are making automation hip. Puzder was overjoyed with Eatsa, a new restaurant chain with locations in Los Angeles and San Francisco that is almost completely automated. Customers order from a screen in the front of the restaurant. A small crew in the kitchen assembles the meals in the back. “The entire process requires zero human interaction between customers and workers.”

Brown may be right that California will lead the way for the rest of the nation. But progress isn’t a $15 per-hour minimum wage. It’s an automat in San Francisco.

Bill Would Ban Legislators From Accepting Lavish Trips From Lobbyists

For average Californians, the news out of Sacramento is seldom good.

Finding ways to increase the tax burden, eliminate the taxpayer protections in Proposition 13 and increasing the cost of living seem to be the preoccupation of most members of the Legislature. The majority of bills that are introduced are designed to give special interests an advantage over their competitors and/or taxpayers.

To illustrate how this can work, let’s look at an issue state regulators faced some years ago. The burning public policy question was whether or not dog groomers should be allowed to clean dogs’ teeth. No, seriously. Veterinarians argued that this should be their exclusive purview because they can perform this procedure more “safely.” Dog groomers claimed this was just an attempt by animal doctors to eliminate competition so they could increase the cost to consumers, who, because of higher prices, might be less attentive to their pets’ needs.

Perhaps only the dogs know who was right, but the point is that much of what passes for activity in our state capitol is in the picking between winners and losers, whether it’s insurance companies versus trial lawyers, school choice advocates versus unions, doctors versus chiropractic providers, etc., ad nauseam. More often than not, the winners are not those with the best argument but, instead, are those with the most political clout. And of course having clout includes the ability to provide generous campaign contributions, turn out voters and hire the most persuasive lobbyists.  This helps explain why the losers are usually average folks.

ShakingHandsWithMoneyStill, there are some regulations over lobbying activity that are designed to give the illusion of fairness. For example, there are limitations on gifts that lawmakers can accept from lobbyists. However, there remains a huge loophole that allows special interests to dominate individual lawmaker’s attention for days at a time. This loophole is free luxury vacations provided to legislators, that are disguised as seminars or conferences.

Every year members of the Legislature are whisked off to exotic locales – Hawaii is a favorite — where they enjoy complimentary luxury lodging and dining, often overlaid by activities like golfing, tennis and snorkeling. In return, the lawmakers are expected to attend brief meetings. Sponsors assure the public that these trips are opportunities for lawmakers to learn more about important issues.

Others call these junkets a form of legalized bribery. They are designed to allow special interest lobbyists to have exclusive call on lawmakers’ attention, against which the officials’ small fry constituents cannot afford to compete.

Enter Assemblywoman Patty Lopez who would ban legislative junkets funded by interest groups. Her Assembly Bill 2840 would prohibit non-profit organizations (set up by lobbying interests) from providing lawmakers with free transportation, lodging and food.

Assemblywoman Lopez summarized the issue by saying “They’re not going to learn anything by golfing with lobbyists in Maui.”

Will Lopez’s colleagues approve her reform legislation intended to reduce the influence of special interest lobbyists by forcing lawmakers to give up junkets? You’d be better off betting on the snowball.

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

California Chamber releases list of ‘job killer’ bills

As reported by the Sacramento Bee:

The California Chamber of Commerce on Tuesday released a list of 18 bills it says will reduce jobs and hurt the state economy.

The chamber introduces it’s so-called “job killers” every spring and boasts a high success rate of blocking bills on the list from becoming law. Critics question the organization’s methodology to determine the list.

All of the bills labeled job killers this year were introduced by Democratic lawmakers and four carried over from 2015.

“As everyone knows, California has areas that are booming economically and other areas that are stagnating,” said Allan Zaremberg, president and chief executive officer of the California Chamber, in a statement. “Each part of California has unique problems and these job killers will negatively impact future economic …

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Labor Unions, Legislature, Governor Reach Deal to Raise Minimum Wage

Minimum wage1Labor unions, legislative leaders and the governor came together on a minimum wage deal to presumably keep a minimum wage initiative off the ballot – presumably because there is more than one way to get on the ballot. More on that later.

The governor got what he wanted from the reported deal. Labor got pretty much what it wanted, albeit, with a slight delay. Details of the deal as reported in the Los Angeles Times include a 50-cent minimum wage increase for the next two years, hitting $1 a year after that, reaching the $15 mark by 2022, a year after the initiative planned. Businesses with 25 employees and less will have an extra year to adjust.

The hit on the General Fund will not be as great if the minimum wage increase to state workers is half what is proposed in the initiative. To some extent, that satisfies the governor’s office, which warned that a larger, faster increase in the minimum wage would put a heavy burden on the General Fund. State minimum wage workers would cost the state an additional $4 billion at $15 an hour according to the governor’s office.

Significantly for the governor, the immediate effect of the increase on the state budget is lessened and the full force of the deal comes into play once Governor Brown and his administration will be well into the history books.

Apparently, the business community and small business were not a part of the final negotiation and they don’t like the result. The business community raised concerns that the speedy wage climb to $15 and additional increases would hurt employment and threaten small businesses that survive on the margins.

Two issues the business community sought in minimum wage negotiations were a pre-emption for local government seeking their own $15 or higher minimum wage and preventing an automatic cost-of-living provision that would increase future minimum wage amounts to inflation. Reportedly, neither of those provisions made it into the negotiated settlement. The only reported provision to deal with economic uncertainties is power given to the governor for freezing minimum wage increases in economic downturns. The details are unclear.

If the deal is passed by the legislature and signed by the governor and the union is satisfied with all aspects of the plan, the already qualified initiative can be pulled from the ballot by proponents.

However, the minimum wage question could still find its way to the ballot by referendum.

If the business community objects to the final deal, a referendum gathering the necessary signatures would freeze the law passed by the legislature until the next scheduled election. Depending when the bill passes and is signed and when a referendum qualifies that referendum vote could be in 2016 or possibly 2018.

Is a referendum possible? Cost of signatures brought in by professional signature gatherers is prohibitive right now with many initiatives circulating. However, while labor said that a pre-emption of local minimum wage laws was a non-starter for any negotiated settlements, business made the same argument about the automatic cost-of-living issue.

If the negotiated settlement becomes law with no adjustments for business concerns, the business community will have to decide if it will take its argument to the voters.

The piece was originally published by Fox and Hounds Daily