Prop. 6 – Gas Tax Repeal – is a grassroots initiative

Gas PricesProposition 6 is an initiative measure appearing on the ballot less than one month from now that would repeal the tax hike on gasoline and cars imposed by Sacramento politicians last year without a vote of the people. If Prop. 6 passes, California’s gas and car tax would still be in the top five among all 50 states.

Supporters of Prop. 6, those advocating for the repeal of the tax hikes, have focused their campaign on several compelling points including California’s overall tax burden (highest income tax rate and state sales tax rate in the nation) and California’s high cost of living. Other arguments favoring Prop. 6 include the well-documented waste of taxpayer dollars spent on transportation, the lack of any reforms and a decades-long history of diverting transportation dollars away from roads and highways.

The Yes on Proposition 6 campaign is being advanced by a coalition of grassroots taxpayer organizations and the state’s Republican Party. It has virtually no big corporate support.

The opponents of Proposition 6, those who desire to retain our status as a high-tax state, consist of interests that benefit financially from public construction projects. These include construction companies, labor organizations and local governments who thirst for ever more taxpayer dollars. They have contributed tens of millions of dollars to the opposition campaign for an obvious reason. The millions they invest in a political campaign produce a great return on investment if the payoff is more than $5 billion of new taxpayer spending annually.

It is apparent at this point that the opponents of the gas tax repeal will outspend supporters by a 10-to-1 margin.

But the tactics of the opposition campaign have put it in hot water.

To read the entire column from the Los Angeles Daily News, please click here.

Public Servant Who Made $327,491 in 2017 Asks Us to Support Higher Taxes

Every two years, around this time, political mailers inundate the mailboxes of California’s registered voters. This week, many Sacramento residents received a “Vote No on Prop. 6″ mailer. Prop. 6 is that pesky, subversive citizens ballot initiative that, if approved by voters, will roll back the gas tax.

But Prop. 6 isn’t the topic here. Rather, the topic is all taxes in California. Why is there relentless pressure to increase them? And what special interests are paying for these campaigns to increase (or preserve) taxes across California?

In that context, this No on Prop. 6 mailer is instructive. Because blazoned across the cover of this four page, 8.5″ x 11” glossy full color flyer, is Darrell Roberts, representing the California Professional Firefighters. Roberts is the president of IAFF Local 2180, the Chula Vista Firefighters Union. In addition to his duties as president of Local IAFF Local 2180, Roberts is a Fire Battalion Chief for the Chula Vista Fire Department. In that capacity, he earned $327,491 in 2017, including $99,887 of overtime.

Prop. 6 photo

Now let’s back up for just a moment and make something perfectly clear. This isn’t about disrespecting firefighters in general, or Mr. Roberts in particular. Quite the contrary. Firefighters perform dangerous, challenging jobs that require years of intense training. Every year in California, a few of them die in the line of duty. In some years, more than a few. Furthermore, firefighters constantly witness trauma, often horrific, every time they respond not only to fires, but medical emergencies and automobile accidents. Their jobs are tough.

For these reasons, critics of public sector compensation trends should always temper their observations with respect. It is far too easy to observe, accurately, that many other jobs carry higher risk of injury or death, while forgetting that first responders stand between citizens and mayhem not just in normal times, but also in extraordinary times. In a truly cataclysmic event, and 911 is a perfect example, firefighters are obligated to occupy the front lines. They are the ones who must stop whatever destructive storms afflict our society. They are the ones who must go in before safety is restored, and rescue the stranded victims.

With that necessary preamble, and without diminishing it in any way, a difficult conversation remains necessary regarding public sector compensation, and the political power of the public sector unions who push for continuous increases in compensation.

A California Policy Center analysis published nearly two years ago, using 2015 data, calculated the average pay and benefits for a California firefighter at $196,370 for those employed by cites, $198,959 for those working for counties, and $145,938 for those working for the state. Those averages have not fallen in the past three years, and they do not include the additional cost per firefighter, if and when their retirement pensions are adequately funded.

Mr. Robert’s own City of Chula Vista provides an example of these rising pension costs. In 2017 the average pay for a Chula Vista firefighter was $189,715. That included, on average, $41,112 for overtime and $31,381 for employer contributions to their defined benefit pensions. But as they say, you ain’t seen nothin’ yet.

Using CalPERS own projections for the City of Chula Vista, the average normal contribution by the city to fund police and firefighter pensions is expected to grow from 20% of payroll in FYE 6/30/2017 to 22% of payroll by FYE 6/30/2025. Nothing terribly dramatic there. But, get this, the so-called unfunded contribution – that additional amount necessary to pay down the city’s unfunded liability for police and firefighter pensions – is expected to grow from 13% of payroll in FYE 6/30/2017 to 32 percent of payroll in 6/30/2025.

Put another way, the City of Chula Vista’s employer payments for public safety pensions are going to go from 33 percent of payroll to 53 percent of payroll by 2025. And if the stock market decides to end its already record breaking bull run, harming the CalPERS investment portfolio, these payments will go much higher.

It’s also important to recognize the relationship between excess overtime expenses and the cost of pension and health benefits (including retirement health benefits). When public employers pay more than 50% above regular salary to fund pensions and benefits, and in the case of public safety, they do, then it makes financial sense to pay time-and-a-half to existing staff, since that will cost less. Lost in that equation is the stress this excessive overtime inflicts on overworked personnel, as well as the lost opportunity to bring benefit overhead back below fifty percent.

Collectively California’s state and local employers, based on projections already released from CalPERS, are going to have to increase their total contributions to public employee pension funds from approximately $31 billion in 2017 to an estimated $59 billion by 2025.

Maybe veteran firefighters truly believe they are entitled to annual pay and benefits packages in excess of $200,000 per year, or in Mr. Roberts case, in excess of $300,000 per year. But with all the political power these unions wield, they ought to be thinking of ways to help lower the cost-of-living in California. That would help everyone.

And perhaps it may disturb even the most respectful and appreciative among us, when a public servant who made $327,491 last year, asks us to support higher taxes.

*   *   *

Sources:

2017 Salaries for Chula Vista – Transparent California

California’s Public Sector Compensation Trends – California Policy Center, January 2017

Comprehensive Annual Financial Report, FYE 6/30/2017 – City of Chula Vista

Safety Plan of the City of Chula Vista, Annual Valuation Report as of 6/30/2017 – CalPERS

Miscellaneous Plan of the City of Chula Vista, Annual Valuation Report as of 6/30/2017 – CalPERS

2017 City Data, Government Compensation in California – California State Controller

California Government Pension Contributions Required to Double by 2024 – California Policy Center, January 2018

Gas-tax Opponents File Proposal to Kill High-Speed Rail Project

High speed railProponents of Proposition 6, the measure to repeal California’s gas tax hike, filed a new ballot measure Tuesday that would torpedo Gov. Brown’s high-speed rail project and prevent the state from spending gas tax funds on mass transit.

“We’re very pleased with the accountability this measure provides,” said Carl DeMaio, a talk radio host and chairman of the Prop. 6 campaign. He has accused the state’s Democratic establishment of wasting taxpayer money and unfairly burdening motorists — particularly working-class people who have long car commutes.

In addition to killing Brown’s $77 billion plan to send bullet trains zipping from Southern California to downtown San Francisco, the initiative that DeMaio and others submitted on Tuesday would mandate that all gas tax revenue go to roads. It would also dedicate the state’s sales tax on cars to all forms of transportation infrastructure including public transit, require annual audits on road projects and shift decision-making power on gas and car tax revenue from the state Capitol to city and county governments.

Supporters say these changes — which would go on the November ballot in 2020 — would boost California’s annual road coffers from $5.2 billion to $7.5 billion, and increase funding from general transit infrastructure from $1.8 billion to $7.4 billion a year. Opponents call the measure a repackaging of Prop 6, which strikes down the new 12-cent gasoline excise tax, vehicle fees and 20 cents-per-gallon tax on diesel fuel signed into law last year as SB1. …

Click here to read the full article from the San Francisco Chronicle

California’s Cost of Living is Hurting the Middle Class

Middle classThose interests are financing a multi-million-dollar disinformation campaign claiming that the state’s roads and bridges are unsafe because Californians’ taxes were too low.

It would be funny if it wasn’t so expensive.

The reasons that Proposition 6 is so popular — despite the irresponsible and self-serving claims of its opponents – are legion. California already had the fifth-highest gas taxes in the nation, even before the tax hike. Our state income tax rates and state sales tax rate are the nation’s highest. Add to that crushing regulations and counterproductive progressive policies that result in outcomes opposite of that intended and it’s easy to understand why California is suffering from a massive outflow of citizens to other states.

That exodus to Texas, Arizona, Nevada and other states is being driven by a singular powerful force — cost of living. Few Californians are unaware of how expensive it is to live here relative to other states. Despite a rapidly growing national economy, many citizens here still feel left behind, and for good reason. California’s poverty rate is 20.6 percent, the highest in the nation, when the cost of living is taken into account. In a recent poll, 47 percent of Californians considered themselves “working poor.”

In the debate over Proposition 6, opponents understate the impact on the cost of living that results from these tax hikes. A recent study by the California Policy Center exposes just how punishing last year’s tax increases are for middle-class Californians and why they should be repealed.

According to the analysis, the gas tax and car tax hikes will impose on an average two-car family at least $1,500 in taxes a year. When adjusting for the “average” tax rate, a two-car “average” family must earn almost $2,000 in pre-tax earnings just to pay their California car and gas taxes. Obviously, this isn’t chump change.

The news for low-income families is even worse. A typical two-car low-income family may pay $1,800 in taxes a year. Because low-income families are in a lower tax bracket, that two-car low-income family still must earn almost $2,000 in pre-tax earnings just to pay their California car and gas taxes. …

Click here to read the full article from the San Bernardino Sun

Opponents of Repealing the Gas Tax Are Getting Desperate

gas prices 2There’s an old saying in business: Build a better a mousetrap, and the world will beat a path to your door.

But not everyone builds their success on creating better products or providing better services. There are some that specialize in manipulating the laws and the government as a strategy for increasing profits.

This has sometimes been called “rent seeking,” in the sense that it might apply to a storybook troll under a bridge, collecting “rent” as if he owned the right of way.

There are trolls under the bridges in California this year, and next to the highways. They are the rent seekers who oppose Proposition 6, the grassroots effort to repeal the massive gas and car tax increases signed into law last year. They are engaging in some of the most questionable campaign tactics ever seen in California. These Prop. 6 opponents are making millions of dollars from the massive infusion of taxpayer cash paid by hardworking Californians who need their cars in their daily lives.

First, let’s cover the basics: Proposition 6 does not repeal the entire gas tax — only that portion that pushed us up to just about the highest in the United States. If Proposition 6 passes, California will still have the 5th highest gas tax in the nation. Opponents of Prop. 6 would have voters believe that this level of taxation can’t even keep our existing roads paved, let alone build new highways.

Second, waste, fraud and abuse in California transportation spending is legendary. The nonpartisan Legislative Analyst’s Office says needless overstaffing at Caltrans is costing taxpayers billions.  For what California is spending on the nation’s biggest boondoggle, high-speed rail, we could easily pave Interstate 5 from San Ysidro to the Oregon border.

Third, if transportation is so important, why can’t we spend some of the state’s $9 billion-dollar surplus for one-time expenditures?  Gov. Brown’s father did that when he was governor.

Bottom line is that this is not about transportation or the need to fix our roads. No one disputes that our roads are in terrible shape. But credible plans to address this critical need without raising taxes can’t even get a hearing in the legislature. Why?

The reason is simple. This is about transferring money — and lots of it — from hardworking California taxpayers to special interests. …

To read the entire column from the Press-Enterprise, please click here.