Division and Disagreement Face CA Democrats in 2016

Democrat DonkeyConflicts over the spoils of Democratic leadership in California have come to define the party’s prospects and future in 2016 and beyond.

Division and disagreement

Falling victim to their extreme dominance in statewide politics, an increasing number of Democrats have sharpened their blades against one another this election season — driving uncomfortable wedges between minority groups that have long formed the bedrock of the Democrats’ broad coalition. “The racial and ethnic overtones of politics in California, the country’s most diverse state, surfaced again last week,” the Sacramento Bee observed. “Two Democratic Assembly incumbents, Mike Gipson and Cheryl Brown, both of whom are black, are facing challenges from Latina opponents within their own party.”

“The challenges to Brown and Gipson are motivated by their stances on environmental legislation, not race. But the prospect of unseating two black incumbents, with African Americans’ share of the state’s population dwindling, stirred concern.”

Elsewhere, some Democrats have found themselves in hot water for departing too far or too often from party orthodoxy — a dangerous move in increasingly partisan and populist times. In California’s 7th District, for instance, Rep. Ami Bera has begun to lose key support within his own party, thanks to votes roiling labor and other elements of California Democrats’ liberal base. “Bera’s votes on issues such as Syria refugees and trade are coming under intense examination as local Democrats debate withholding endorsement from him in his re-election race against Sacramento County Sheriff Scott Jones, a Republican,” McClatchy reported. “Last week, the Elk Grove-South County Democratic Club, Bera’s home club, voted against endorsing him.”

Brown’s balancing act

In his State of the State speech this month, Gov. Jerry Brown sought to ameliorate some intraparty divides while holding fast to others. “Legislative Democrats say they can spend some of California’s budget surplus on expanded government services without disrupting Gov. Jerry Brown’s push for fiscal restraint,” as the Sacramento Bee also reported, while Brown urged them “instead to focus on paying down debts and liabilities incurred in the past.” But Brown didn’t mention the multibillion-dollar high-speed rail project that has been one of his marquee projects, despite arousing the frustration of environmentalists to his left who believed cap-and-trade money should not be spent on the system.

A recent Field poll revealed that a modest but sharply critical segment of Democrats appear to have turned their backs on Brown. Fully 17 percent said a description of Brown as having “the right experience to deal with the problems facing California” applied “not at all,” while 18 percent took the same dim view of the claim that Brown “has the vision to lead California into the future.” At the same time, over 40 percent of Democrat respondents agreed at least somewhat with the idea that Brown favors too many unaffordable projects and isn’t doing enough to help average Californians.

But Brown has consolidated support, despite sometimes unorthodox policies, to an unprecedented degree in California politics. At a time when Democrats nationwide have become increasingly split over whether to embrace Hillary Clinton as their nominee, Brown’s name has perennially appeared in conversations about where they might look for an alternative to both Clinton and Sanders. Despite Brown’s refusal to play along, he has been floated once again — by New York City liberals, according to Hoover Institution fellow Bill Whalen. “Their pet conspiracy theory is that President Barack Obama so detests Hillary Clinton — and worries about her ability to win in November and preserve his agenda — that his Justice Department will indict her this spring on charges of breaching national security in the email scandal,” he wrote at the Sacramento Bee. “Exit a wounded Hillary, enter a prominent Democrat to rescue the party — none other than California’s governor.”

Originally published by CalWatchdog.com

California lawmakers send Brown bill to fix marijuana mistake

As reported by the San Francisco Chronicle:

SACRAMENTO — The California Legislature moved quickly this week to pass a bill that corrects a mistake in the state’s historic medical marijuana laws passed last year.

AB21 deletes a provision that lawmakers inadvertently left in the legislation that said cities and counties had to create their own medical marijuana regulations by March 1 or the state would assume the responsibility. Lawmakers did not mean to set a deadline.

The deadline, however, caused local governments to panic at the prospect that they would lose local control of medical marijuana regulation — and many cities simply banned cultivation.

On Thursday, the Assembly passed AB21 in a 65-0 vote after the Senate passed …

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CA Budget About HOW We Spend … Not Just How Much

Jerry Brown Legislature BudgetGov. Brown’s opening general fund budget gambit of $122.6 billion – total spending including bond and special funds is $170.7 billion – sets a new record for state government spending.  That the big increases are coming from the man many regard as one of the more sane of Sacramento’s top politicians does not bode well for taxpayers. After all, this is just a starting point.  Now the real fun begins with those less well grounded in economic reality starting the annual ritual of “making it rain” for their favorite projects and special interest employers.

To the governor’s credit, he is paying attention to paying down debt and strengthening the state’s rainy day reserve, a wise move considering that state revenue is highly dependent on top earners and is thus very vulnerable to an economic contraction.

Still, leading Democratic lawmakers want more – a lot more.  They are already complaining that that the budget does not spend enough on early childcare programs, grants to families on welfare, or provide more money for affordable housing.

Let’s concede at the outset that Californians have widely divergent views about how much money should go to all the various things government does. For example, there is a legitimate debate about how much money we, the taxpayers, should be paying to deal with the water crisis. Or how much for K-12 education? Prisons?  The list is fairly extensive.

But too often we neglect a very important topic when it comes to spending. That is, are we actually getting value for our tax dollars?  Per pupil education spending is important, but a poor indicator of educational outcomes. Total spending on prisons is irrelevant if we are releasing dangerous criminals back out on the street. Californians are angry at traffic congestion, but what good is more transportation spending if it doesn’t actually help people get to where they want to go? Californians are sympathetic to the needs of the poor, but are justifiably outraged when needed assistance fails to get to the truly needed and, instead, is used to buy luxury goods or pay for expensive vacations.

We know that Governor Brown is capable of recognizing waste, fraud and abuse. Just a few years ago he put forth a very credible 12 point pension reform plan that would have corrected most of the pension abuses in California. Regrettably, except for dealing with the most obvious of abuses, the reforms were shelved due to intense pushback from public sector unions. This means that the ever increasing percentage of the general fund budget going to address pension obligations is more than it needs to be.

Taxpayer advocates are constantly told that the amount of tax dollars lost to waste, fraud and abuse is but a tiny fraction of government spending. To be blunt, we don’t believe it – and mounds of evidence supports our disbelief. Even the Los Angeles Times several years ago pegged Medi-Cal fraud in the hundreds of millions of dollars.

To understand why more focus in the budget process should be on oversight, the observations of Nobel Prize winning economist Milton Friedman are instructive. He noted that there are four ways people can spend money:

  1. You can spend your own money for yourself. (Being careful both about how much you spend and on what you buy);
  2. You can spend your own money for somebody else. (Being careful about how much you spend but less careful about what you buy);
  3. You can spend somebody else’s money for yourself. (Being careful about what you buy but less careful about how much you spend); and
  4. You can spend somebody else’s money for somebody else. (Where you care less both about how much you spend and what you buy).

Friedman’s thesis is that what government does is spend money in the fourth way. And that is why any discussion about the California state budget needs to include the question of whether taxpayers are getting value for the hard-earned dollars they send to Sacramento.

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 at HTJA.org

Brown Cautious in 2016/17 Budget Proposal

brown prop 30 california budgetChanneling philosopher George Santayana (“Those who cannot remember the past are condemned to repeat it”), Gov. Jerry Brown presented his budget yesterday looking to the future by considering the past. Warning that budget writers “put out of their minds” thoughts of recessions that could cripple state budgets, he vowed not to repeat past mistakes of building budgets that cannot be sustained in difficult economic times.

Brown offered a chart that showed the rollercoaster budgets over the last decade-and-a-half with big budget hits from the dot-com bust and the mortgage crisis. Brown said using the budget history as a template, his team predicted the effects of another budget shortfall, which could happen soon. The average economic recovery period is five years, the governor said, and California is well beyond that point now.

Presenting a chart that showed recent deficits in the red, to prevent future large deficits Brown said, “If you do what I want” there would be less red on a chart during the next recession.

Warning legislators against creating new programs that will continually require state funding—even if the ideas behind the programs are noble — Brown said, “Too many goods, too quickly, become bad.”

Will Brown’s warnings be heard by legislators?

Maybe. With the change in the term limit law, legislators will have more time to serve in the capitol. Actions they take now they would have to live with in the coming years (as long as they are re-elected).

Still, majority Democrats and interest groups plan to test the governor over budget priorities. Brown seemed prepared to confront new demands. “This is not a candy store that you can pick out what you want.”

Some groups would not bother with debating issues in the legislature but are planning to take their proposals to the voters via the initiative process.

Governor Brown was asked about a number of proposed initiatives. While he said he did not want to comment on initiatives, he did, dropping boulder-sized hints of what he was thinking on some prominent potential ballot measures.

On the Proposition 30 income tax extensions, Brown cited a “fatal flaw” in the measure by stipulating that none of the tax revenue collected by the tax extension would end up in the rainy day fund. (Brown’s budget is adding $2 billion to the fund bringing it up to 65% of its constitutional mandate.)

The governor in response to a reporter’s question said that Prop 30 could make a future budget deficit worse because the tax measure relies so heavily on high-end income taxpayers, who see great drops in their capital gains during recession.

On the minimum wage, the governor pointed out that because the state increased the minimum wage a dollar on the first of the month, the budget had to set aside an additional quarter-of-a-billion dollars from the General Fund to cover state workers. Should the $15 dollar-an-hour minimum wage ballot proposal become law that would cost the state an additional $4 billion. The money has to come from somewhere, Brown said.

Addressing the $9 billion statewide school bond already qualified for the General Election, Brown said much of the money would end up with affluent school districts. It is not well targeted, he said, arguing that the legislature can do a better job than the “developers” who put this together.

Originally published by Fox and Hounds Daily

Poverty plan offers a wealth of bad ideas

As reported by the San Diego Union-Tribune:

— As legislators return to the Capitol in January, there’s little question the issue of poverty will be high on the agenda. Legislative Democrats have been dismayed that the governor held the line on new social-welfare spending last session and are eager to step up public funding for new and existing programs. And news reports suggest a major new anti-poverty initiative, backed by some charitable organizations, already is garnering serious donations.

Expect poverty to be “big” this year. Even legislative Republicans haven’t resisted too much. They’ve generally been OK with new spending proposals – provided they’re funded without raising taxes. We’ll have to wait and see any specifics from legislators, but we already know the details of the so-called “Lifting Children and Families Out of Poverty Act.” It’s likely to spark a spirited debate during the November 2016 election season given the size of the tax increase it would impose on property owners.

That initiative is one of several possible tax-hike intiatives on the ballot, and proponents appear ready to start collecting signatures. It would impose what supporters call “a sensible and fair surcharge on properties with values of over $3 million” that keeps “all Proposition 13 property tax protections against reassessments … in place.”

The resulting cash flow – between …

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New California laws 2016: What to expect in the new year

As reported by the Sacramento Bee:

Like bubbles ascending a champagne flute, a bevy of recently passed California policies will float to the surface and take effect this Jan. 1. Here’s a review of some of the major items.

Vaccines

One of 2015’s fiercest fights was over SB 277, which was introduced in the wake of a measles outbreak at Disneyland and requires full vaccination for most children to enroll in school. Schools will begin vetting students to ensure they have their shots in July, before the 2016-2017 school year begins.

Search warrants

Arguing our privacy laws lag behind our technology, lawmakers passed SB 178 to require search warrants before law enforcement can obtain your emails, text messages, Internet search history and other digital data.

Ballot fees

Thinking of filing a ballot initiative? You’ll need more cash. …

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CA Assemblyman Resigns to Take High-Paying Job in Pharmaceutical Industry

henry-perea-california-sate-assembly-Assemblyman Henry Perea, who announced earlier this month his intention to resign from the Legislature, has revealed that he’ll be taking a job with the pharmaceutical industry.

State law bans the Fresno Democrat from lobbying his former colleagues for one year following his tenure in the state Assembly. Yet, the state’s ban on influence-peddling hasn’t stopped the Pharmaceutical Research and Manufacturers of America from hiring Perea as a senior director of state advocacy. Perea, according to published reports, began talking job prospects with the industry group in September.

Beginning on January 4, Perea will direct political operations in California, Arizona and Nevada for the group known around the Capitol by the acronym PhRMA. The group represents the country’s biggest pharmaceutical and biotechnology companies, including Allergan, Amgen, AstraZeneca, Bayer, Bristol-Myers Squibb, Celgene, Eli Lilly and Company, GlaxoSmithKline, Johnson & Johnson, Merck & Co., Novartis Pharmaceuticals Corporation and Pfizer.

“They innovate, they discover cures, they represent a lot of California employers,” Perea said in an interview with the Los Angeles Times. “The debate in health care, especially after the Affordable Care Act, is going to be very robust over the next decade or two and I look forward to being a part of that.”

PhRMA’s Robust Lobbying Operation

Since Perea’s first term in the state Assembly in 2010, the Pharmaceutical Research and Manufacturers of America has spent big money to lobby the governor, state lawmakers and other state government officials.

A CalWatchdog.com analysis of state lobbying disclosure forms found that Perea’s new employer has spent more than $2.59 million in state lobbying over the past five years. That half-million dollars per year in annual lobbying fees doesn’t include money spent by PhRMA’s member organizations.

Just one PhRMA member, the multinational pharmaceutical giant Pfizer, spent more than $3.18 million in lobbying over the same period, according to CalWatchdog.com’s review of disclosure reports.

Perea’s Campaign Contributions from PhRMA

The pharmaceutical industry’s robust lobbying operation in Sacramento has frequently crossed paths with Perea. Over the course of his career, Perea has accepted $157,144 in campaign contributions from the industry, according to FollowtheMoney.org’s analysis of campaign contributions. That ranks him 119th of every politician in the country and, according to FollowtheMoney.org, means he’s accepted more pharma money than Senate President Pro Tem Kevin de León, Speaker of the Assembly Toni Atkins and former Senate President Pro Tem Darrell Steinberg.

During the 2011-2012 legislative session, the pharmaceutical industry contributed more than $74,000 to Perea’s campaign accounts, making it the second largest industrywide contributor to Perea’s campaign, according to an independent analysis by the transparency group MapLight.

Perea’s multiple campaign committees also appear frequently on campaign finance disclosure reports and political action committee summaries filed by pharmaceutical companies. Earlier this year, his campaign committee for a 2018 Insurance Commissioner campaign accepted $2,000 from Amgen. In 2014, Pfizer gave Perea $3,500 and counted his re-election among its important wins.

“We continue to face significant legislative and regulatory challenges and each election cycle is critical to our industry,” Sally Susman, chair of Pfizer PAC, wrote in its 2014 Pfizer PAC annual report, a 102-page report detailing the company’s effort to build “positive public will.”

Perea’s history of luxury gifts, trips

Although Perea has refused to disclose his new salary, it’s likely to be more than the $97,197 annual salary and $33,000 in annual tax-free per diem payments he received as a member of the state Legislature.

Over the course of his career, Perea supplemented his income with tens of thousands of dollars in luxury goods, entertainment and travel, according to his economic disclosure reports.

Money Stackof BillsIn 2011, Perea accepted $9,397 worth of lodging, meals and transportation for a junket to Italy sponsored by the California Foundation on the Environment and the Economy, “a San Francisco-based nonprofit made up of oil companies, utilities and environmental groups.” Two years later, Perea again accompanied the group on its junket to Eastern Europe – a trip valued at $9,984.

Perea’s biggest haul came last year, when he accepted $16,090 from the group, including a $10,221 trip to Chile. He also traveled to: Maui on a $2,148 trip paid for by the Independent Voter Project, Israel on a $11,550 trip paid for by the American Israel Public Affairs Committee, and Central America on a $1,500 trip paid for by the government of El Salvador.

3rd lawmaker resignation since 2013

Perea will become the third California lawmaker in two years to quit in the middle of a term in order to take a job with a Capitol interest group. In 2013, Democrat State Senator Michael Rubio abruptly quit his position to take a job with Chevron’s government affairs unit. That same year, Republican State Senator Bill Emmerson quit mid-term for a high-paying job with the California Hospital Association.

Perea’s resignation will trigger a 2016 special election that is expected to cost Fresno taxpayers several hundred thousand dollars. The March 2014 special election to fill Emmerson’s seat cost Riverside County taxpayers $415,000, according to the Press-Enterprise.

Two candidates had already announced their intentions to run for the 31st Assembly District: Democrat Joaquin Arambula and Republican Fresno City Councilman Clint Olivier.

Originally published by CalWatchdog.com

What Taxpayers Want from Santa

Photo courtesy Franco Folini, flickr

Photo courtesy Franco Folini, flickr

A time-tested Christmas joke describes the four stages of life: First, you believe in Santa Clause. Second, you don’t believe in Santa Clause. Third, you are Santa Claus. Fourth, you look like Santa Claus.

As they look down from their lofty perches in the State Capitol, members of the political ruling class see taxpayers as perpetually being in the third stage, supplying a never ending supply of goodies (i.e., tax revenue) to be collected by lawmakers and bureaucrats, and kept, or redistributed, as they see fit.

When taxpayers look back at the politicians, they see them in the juvenile first stage, naively believing in Santa Taxpayer who can effortlessly fulfill their every desire and whim.

Of course, taxpayers can best be described as being in the cynical second stage. They don’t believe in Santa Claus, they work hard, they understand there is no free lunch and they are wary of politicians who try to buy voter support with the money they have extracted from our wallets and pocketbooks.

However, if Santa Claus does exist, here is a list of requests that taxpayers might send to the North Pole:

  • A $39.95 toy train to go under the tree. This will be less expensive, and just as useful, as the $100 billion bullet train the governor and the Legislature want taxpayers to put in their stocking.  Based on the current estimate of costs, the dream train for “good” politicians will cost a family of four over $10,000.
  • Gas tax relief. Counting carbon penalties, Californians pay the highest gas taxes in the nation. Most working Californians, who need their cars for work, cannot afford to drive Teslas. While less expensive alternative fuel vehicles are developed, average folks on modest incomes don’t need to be faced with having to make a choice between being able to fill the gas tank or the grocery cart.
  • Time to catch our breath. In an already high tax state, where the government is running a hefty surplus, taxpayers would like to see a moratorium on tax increase proposals and on efforts to undermine Proposition 13 protections.
  • Reversal of both state and federal policies that have led to the 30 hour work week, instead of the 40 hour week, being considered the standard for full employment.
  • For those taxpayers who have reached the fourth stage of looking like Santa Clause, they wish for a normal life in retirement so they don’t to have to work late in life. That’s a big ask in California because high taxes, which allow government workers to retire comfortably, make life difficult for other seniors who aren’t so lucky.

Asking for more, such as having the politicians stop treating taxpayers like second-class citizens, might seem greedy. So Santa, if you could just deliver any of our wishes above, we would be very grateful.

P.S. There is nothing wrong with looking like Santa Claus.

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.

CA Doesn’t Need Additional Tax Revenue

TaxesThere is an old expression, “carrying coals to Newcastle,” to describe a useless activity or fool’s errand. Sort of like shipping pineapples to Hawaii or, bringing it closer to home, sending more tax dollars to Sacramento.

The truth is, Sacramento is awash in cash. The Legislature’s budget analyst estimates that this fiscal year will end with $3 billion more than anticipated and, by 2017, state reserves may even top $11 billion.

For the political ruling class, this is an embarrassment. Last summer, the governor called a special session of the Legislature in an attempt to secure legislative approval of a new health care tax on managed care organizations (MCOs) because the current tax is about to expire. He also called another special session to deal with transportation funding. In both cases, Republicans in the Legislature are making trouble for those backing new taxes by pointing to the obvious: The state already has plenty of money.

This embarrassment of riches is also bad for the morale of special interests looking to increase taxes via ballot measures. Public sector unions are pushing for an extension in the “temporary” tax increase approved by voters in 2012.

But they have yet to show a united front and are fighting over who will get the money. Whether the proceeds go to education, as favored by the state’s most powerful special interest, the California Teachers Association, or to the health care industry, as is supported by other union and hospital interests, has yet to be decided.

Health care interests may also pursue a new tobacco tax of $2 a pack. Since smokers and tobacco companies are only slightly more popular than ISIS, pundits believe – perhaps naively – that this initiative will pass. (They’ve been wrong before as tobacco taxes are highly regressive.) Or perhaps the “evil” oil companies will be the target in a state where motorists already pay 75 cents a gallon more than the national average. Good luck with that.

Campaigns for initiatives to impose new or higher taxes tend to use happy talk to focus on the benefits to the needy or the general population and ignore the actual goal. For example, Proposition 30, the sales and income tax increase, was sold as a boon to education when, in reality, much of the revenue is needed to keep the teachers’ pension system solvent.

For any tax increases being pushed by special interests, voters should keep in mind that actual beneficiaries tend to be the providers of services – think pay and benefits — not the recipients.

This brings us to another potential initiative with the sympathetic sounding title of “Lifting Children and Families Out of Poverty Act.” The measure would place a property tax surcharge on higher value homes and property.

If this proposal actually reaches the ballot, it will, no doubt be marketed as a tax on the well-off so they can pay their “fair share” to help needy children. Backers of this tax will not mention that, as usual, those receiving the majority of benefits are likely to be the providers of services, not those in poverty. And don’t expect voters to be told about California’s already generous entitlement programs or, even with record spending, the hefty state surplus. The fact that this measure would be the first step in destroying Proposition 13 protections for all property owners, including those of modest means, will be glossed over as initiative promoters use the less fortunate as human shields to justify themselves.

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.

Still Thankful for Liberty in 2015

Statue of Liberty seen from the Circle Line ferry, Manhattan, New York

With the recent terror attacks against France, America’s oldest ally, most Americans are rightfully concerned for the welfare of our friends abroad as well as our own safety.

With the French, we share a common heritage of a dedication to liberty. The Statue of Liberty that stands proudly in the harbor of New York is a gift from the people of France.

Acknowledging the contributions of French officer the Marquis de Lafayette to the success of our revolution, Lieutenant Colonel Charles Stanton a commander of the American Expeditionary Force in WW I, told Parisians on arrival, “Lafayette, we are here!”

While Americans and the French are victims of terrorism because of our beliefs and way of life, both nations continue to value and be grateful for our republican form of government that allows citizens to elect their representatives. And we share a common conviction that we will prevail over adversity.

In California, there is a tendency for taxpayers to see the elected Sacramento political class as working against the interests of average citizens. Nonetheless, we are grateful for elections that allow us to rehire or fire our elected representatives. As Proposition 13 author Howard Jarvis said, “The people we elect are not the bosses, we are.” Howard did not believe that complaining would solve problems, we, the people, had to take responsibility. If we don’t like the service we are receiving from the politicians, he reminded us, it is up to us to fire them and hire a better class of representatives.

Taxpayers are also grateful that over the last year, despite an anti-taxpayer majority in the Legislature, a strong coalition of grassroots citizens led by the Howard Jarvis Taxpayers Association succeeded in defeating all the attacks on Proposition 13. Taxpayers are grateful to every one of these citizen activists as well as those lawmakers who stood firm in defense of the interests of taxpayers.

Although proposals to repeal or weaken Proposition 13 will return in January, the coalition to protect Proposition 13 remains intact, and for this, too, we are thankful.

Howard Jarvis liked to quote the last line of our national anthem, “The land of the free and the home of the brave.” “This means” he would say, “that people cannot be free if they are not brave.” This remains true in the face of international terror as well as when struggling over fundamental principles of government at home.

Finally, it has been said that America has the worst government in the world – except for all the others. And while complaining about government is an American birthright, we must remember that billions of souls around the world risk imprisonment or death for speaking out against their despotic governments or leaders. So, in keeping with the season, let us be thankful that we live in a country that, despite her faults, remains the last, best hope for mankind.

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.