Another California Tax Revolt on the Horizon

While 1773 and 1978 may seem like they have nothing in common, both years go down in history books as two famous taxpayer revolts.

The Boston Tea Party’s protest on December 16, 1773 by American colonists sent a strong message to Britain that Americans would not take taxation sitting down.

Fast forward two centuries later, inflation and property taxes were skyrocketing 3,000 miles away from the Boston Harbor.

Families were being pushed out of their homes because their property taxes were unbearable, and a taxpayer revolt was brewing in California.

On June 6, 1978, California voters overwhelmingly passed Proposition 13, which tied property taxes to one percent of the purchase price and capped annual increases at two percent a year, bringing certainty to homeowners and businessowners by allowing them to predict their property taxes long into the future.

Sadly, California politicians have forgotten about the taxpayer revolt that occurred just over four decades ago.

To read the entire column, please click here.

Thought San Francisco’s Quality of Life Couldn’t Get Worse? Think Again

San Francisco garnered national headlines with the election of its new district attorney, a progressive, which means there will be zero progress made in the homelessness crisis, and little if any made toward reducing crime in the city and county.

Chesa Boudin, a one-time deputy public defender who has never tried a case, was elected in a close race, and will assume office in January. Before he had a chance to decide if the new drapes in his office were going to be socialist red or blue state blue, Boudin announced that he would not prosecute quality-of-life crimes such as “public camping, offering or soliciting sex, public urination, blocking a sidewalk, etc.” We assume public defecating on streets and sidewalks, today’s San Francisco “treat,” will also go unprosecuted.

There’s no other way to take Boudin’s statement than as a warning that the quality of life in the city is going to decline. If those crimes aren’t prosecuted, they will increase, and as they do, the living conditions will slip.

Doug Wyllie, a San Francisco resident who trains law enforcement officers, said in an interview that those crimes have largely gone unprosecuted and unenforced for about 10 years. Boudin’s statement, however, codified the practices “essentially as policy.”

Although he said he is reluctant about “predicting the future,” he’s convinced the city “will get worse in the next 10 years.”

It’s no leap to believe that other crimes will grow, as well. Though now a prosecutor, the former public defender’s future appears to be one long irreconcilable conflict with law enforcement. At Boudin’s election night party, Sandra Lee Fewer, a member of the San Francisco Board of Supervisors, lifted her middle finger in the air and lead the crowd in a riotous “f*ck the POA (Police Officers Association)” chant. Boudin has not distanced himself from the hate, explaining it away as “an expression of the frustration that so many San Franciscans … feel with the POA’s electioneering.”

Though identified as a progressive, Boudin is much more — less, really — than that. Predictably, and not necessarily inappropriately, he’s been called a red diaper baby. His parents, Kathy Boudin and David Gilbert, were members of the Weather Underground, a domestic terrorist group, according to the FBI, responsible for multiple bombings and the murders of two policemen and an armored-car driver in Nanuet, New York, during a 1981 robbery gone bad.

Boudin learned of his election while flying back to California from New York after visiting his father in prison, who is serving what amounts to a life sentence at the Wende Correctional Facility east of Buffalo. Kathy Boudin was released after 22 years in prison for her role in the crimes. Boudin himself was 14 months old at the time of the murders. He had been dropped off at a babysitter.

Because his parents were sent to prison when he was a child, Boudin grew up with Bill Ayers and Bernardine Dohrn. The couple are unrepentant Weather Underground members who went into hiding in 1970 after a bomb intended to kill army officers at a dance in New Jersey instead blew up a townhome in New York’s Greenwich Village.

They turned themselves in a decade later, but “were never prosecuted for their involvement with the 25 bombings the Weather Underground claimed,” says Politico. Boudin role model Ayers, now a university professor, is famous for saying “guilty as sin, free as a bird,” when he learned he and Dohrn were going to avoid justice.

Rather than the sob story of a kid who had to grow up without parents, his is a tale of extremist and revolutionary connections that run deep. Uncle Louis Boudin was a Marxist theoretician. Grandaddy Leonard Boudin was a lawyer who represented Fidel Castro.

Can there possibly be more? Of course there is. Before he went to law school at Yale, Boudin went to Venezuela, where he was a translator for Hugo Chavez’s regime. “Understanding the Bolivarian Revolution: Hugo Chávez Speaks” made it into English thanks to Boudin’s translation talents.

Boudin also authored “The Venezuelan Revolution: 100 Questions-100 Answers,” as well as “Gringo: A Coming Of Age In Latin America,” and “Letters From Young Activists: Today’s Rebels Speak Out.”

All of this is well-documented old news. It’s no accident that San Francisco got exactly what it wanted for now: a radical prosecutor. The regrets will come later.

This article was originally published by the Pacific Research Institute.

Democrats Hammered by Pundits After Trump Tax Law Thrown Out

Gov. Gavin Newsom and fellow Democratic lawmakers have expressed no contrition for their failed attempt to force President Donald Trump to release five years of tax returns to gain access to the California ballot in the 2020 general election.

The California Supreme Court recently ruled unanimously that Senate Bill 27, signed by Newsom in July, violated the state Constitution. The opinion by Chief Justice Tani Cantil-Sakauye at times had an incredulous tone, noting that advocates appeared unaware of SB27’s obvious conflict with Proposition 4. That’s a 1972 amendment to the California Constitution easily passed by state voters that requires presidential primaries must be open to all “recognized” candidates.

Further reflecting the state high court’s view that the law was frivolous, the unanimous verdict was delivered just 15 days after justices heard testimony in the case. Court watchers said that was highly unusual.

A federal judge had already ruled the law violated the U.S. Constitution in September. That decision was appealed by Secretary of State Alex Padilla, but the appeal was dropped after the state Supreme Court’s ruling.

Nevertheless, a spokesman for Newsom continued to depict the now-void law as well-intentioned.

Jesse Melgar told the San Francisco Chronicle that the governor “would continue to urge all candidates to voluntarily release their tax returns. … Congress and other states can and should take action to require presidential candidates to disclose their tax returns.”

Padilla issued a statement expressing disappointment with the state high court’s decision but also declaring “the movement for greater transparency will endure. The history of our democracy is on the side of more transparency, not less.”

‘Ridiculous’ bill said to reflect ‘arrogance and hypocrisy’

Defenses of the law were scoffed at by opinion writers.

The Sacramento Bee editorial board – which had ripped SB27 as “silly and destructive” when Newsom signed it into law – wrote that the measure  “was so ridiculous and flawed that even California’s justices could barely conceal their disdain.” 

The Southern California Newspaper Group’s editorial noted that the state high court “quoted former Gov. Jerry Brown’s veto of a similar bill in 2017: ‘Today we require tax returns, but what would be next? Five years of health records? A certified birth certificate? High school report cards?’

“Democratic lawmakers and a new governor refused to learn from that message. They tried again and embarrassed themselves. They richly deserved the court’s smackdown.”

The Los Angeles Times editorial board wrote that the tax-returns law “accomplished only one thing: giving Trump more ammunition against the state he loves to mock.”

Times columnist George Skelton was the harshest critic of all, noting that many of the Democrats who claimed the moral high ground in backing the tax-returns requirement were not transparent about their own finances.

“This is not about whether Trump should release his federal tax returns,” he wrote. “Rather, it’s about Democrats enacting a blatantly unconstitutional law with a straight face for purely political reasons. It’s about arrogance and hypocrisy.”

Part of SB27 that was reportedly included at Newsom’s behest remains intact. It’s the requirement that gubernatorial candidates provide five years of tax returns to qualify for the ballot beginning with the 2022 election.

The bill was introduced by Sen. Mike McGuire, D-Healdsburg, and Sen. Scott Wiener, D-San Francisco. It passed in Senate on a 29-10 vote and in the Assembly on a 57-17 vote in early July.

This article was originally published by CalWatchdog.com

California Lawmakers Approved $4.4 Billion in New Taxes

State lawmakers and the governor approved more than $4.4 billion a year in higher taxes and fees this year, even as the state was experiencing a revenue windfall from existing taxes, according to the new Tax and Fee Report published by the California Tax Foundation. 

The increases enacted this year include a renewal of California’s Managed Care Organization tax, two cellphone surcharges and a renewal of a surcharge on electricity ratepayers.

Many tax and fee proposals are still pending in the Capitol, and could be pursued when the Legislature returns in January – unless the sponsors decide that enough is enough. 

The state has a $7 billion operating surplus and $26 billion in reserve accounts, according to a new projection from the nonpartisan legislative analyst. The analyst noted that revenue from California’s three largest taxes – the personal income tax, sales tax and corporation tax – increased an impressive 30 percent from 2012-13 to 2018-19 (in 2018-19 dollars).

Property tax revenue also is increasing throughout the state. The State Board of Equalization just reported that the taxable value of property in California increased 6 percent this year, pyramiding on top of similar increases during each of the past four years. This translates to billions of dollars in additional property tax revenue for local governments and public schools.

The property tax revenue is increasing even as individual property owners are protected from unmanageable increases. Under Proposition 13, property tax increases are capped at 2 percent per year, unless there is a change of ownership or new construction (including stadiums and office buildings that generate large amounts of property tax revenue, with no negative tax impact on homeowners).

Thanks to this influx of tax dollars, the state constitution’s minimum guarantee for education funding in 2020-21 will be $84.3 billion, an increase of $3.4 billion (4.2 percent) over the current level, according to the legislative analyst. With school spending already at a historic high, this is very good news indeed for education. 

The government’s tax windfall illustrates the well-known principle that the best source of new revenue for schools and other government programs is a thriving economy. When income goes up, income tax revenue goes up. When sales increase, sale tax revenue increases. When businesses put more workers on the payroll, payroll tax revenue increases. 

Given the revenue surplus, the $3.4 billion increase in school funding and the big state reserves, is there any possible scenario in which tax and fee increases would make sense?

Lawmakers will provide their answer to this question in a matter of months. The Tax and Fee Report reveals that they proposed a total of $20.4 billion worth of annual taxes and fees this year, and 19 proposed tax and fee increases remain in the hopper awaiting possible action in 2020. Additional taxes and fees might be unveiled in January and February, the peak months for introducing legislation to be considered in the new year.

Taxpayers also will have a chance to directly answer the question of whether tax increases make sense. A large property tax increase initiative already has qualified for the ballot, and an income tax measure has been filed, so voters will decide in November 2020 whether they want to keep filling the state reserves or find their own uses for their money.

Dustin Weatherby policy and Communications Associate for the California Taxpayers Association.

This article was originally published by Fox and Hounds Daily.

California Pioneers Subsidized Housing for Public Employees

When it comes to affordable housing, what California’s state legislators have done epitomizes what happens when you have a government bureaucracy that serves itself instead of the public, one that is under the complete control of special interests.

They have enacted laws that have made it nearly impossible for the private sector to build homes, which has made homes unaffordable. Then to supposedly solve the problem they created, they brought in the public sector to build “affordable housing.” Their “solution” is a preposterous fraud that has already wasted tens of billions, and the worst is yet to come.

Nothing about publicly subsidized affordable housing is affordable. As a matter of fact, government funded “affordable housing” costs far more to construct than privately funded housing. But thanks to the politically engineered shortage of privately funded housing, and thanks to the result of this, a politically engineered and unaffordable price to rent or purchase homes, public housing is being sold to voters as a humanitarian necessity. And after the taxpayers foot the bill to construct this housing, taxpayers then foot the bill to subsidize the “affordable” rental rates charged the lucky occupants. Forever.

Subsidized housing developments were once known as the “projects,” which back in the 1960s were built as part of the “war on poverty.” These attempts at providing free housing backfired, as tenants with no ownership stake had no incentive to care for their property. But at least the projects were built cost-effectively. No such luck this time around. Certainly not in California. By the time the litigation has ran its course, and the many expert consultants have taken their share, and the public bureaucrats have collected their fees, and the financial middlemen have been allotted their skim, the cost of these new public housing “projects” exceeds over $500,000 per unit.

From Flophouse to Bauhaus – Courtesy of Taxpayers

Critics of this astronomical price tag may relax, however, because affordable housing is no longer called “project” housing. It’s been rebranded! The new names, along with “affordable housing,” are “supportive housing,” “community housing,” and “municipal housing.” And instead of stark red brick mid-rise blocks of apartments, reminiscent of Ceaușescu’s proletarian barracks, today’s public housing may still be big boxes of concrete and steel, but they’re designed by visionaries, integrating “social justice” and “green design” into “transit oriented” utopias, replete with curved surfaces, a calming color palette, and “pedestrian paseos.”

The latest scam being foisted onto voters is called “workforce housing.” Never mind that government policies made housing unaffordable – let’s borrow money to build subsidized housing for government workers. This new scam taps into a few reliable voter sentiments. Not only is this “affordable housing,” but it’s financed through a school bond which only requires a 55 percent vote to get approved vs two-thirds for most other public bonds. This scam also taps into voter sentiment favoring anything to support schools and “the children,” as well as sentiment favoring helping our “public servants.”

Perhaps before providing some examples of this scam, let’s reiterate why it is a scam:

(1) Housing is unaffordable in California because government policies have made it impossible for private sector developers to construct affordable homes.

(2) Instead of changing these government policies, a coalition of public sector unions, crony developers, and financial intermediaries have decided to present voters with bond measures – already totaling tens of billions – to construct “affordable housing.”

(3) Due to the morally corrupt (but entirely legal) process costs – government planning and oversight, nonprofit service providers and partners planning and oversight, expert consultancy, litigation and settlement costs, financing costs, “green” compliance costs, “inclusion” compliance costs, project labor agreement costs, permits and fees, plus spectacularly expensive ongoing administrative costs – the total project cost per unit for these affordable housing projects actually exceeds what private development projects incur per unit, to the insufficient, limited extent those private projects are approved.

(4) Public employees are indeed unable to easily afford to live in the communities they serve, but that’s because everyone is unable to easily afford to live in these communities.

(5) It is alleged that representing “workforce housing” as eligible for the lower threshold of 55 percent voter approval because it’s a school bond may be illegal.

Bearing in mind that the first four reasons are reasons enough for this new practice to be a scam in every sense of the word “scam” (scam: “a dishonest scheme”), nonetheless, examples of #5 should be exposed. With help from Richard Michael, who for years has fought local government corruption and publishes (and perpetually updates) his website “BigBadBonds.com,” here are a few:

2018 Local California School Bonds that Included Funds for Workforce Housing

Pittsburg Unified School District, Measure P, $100 million

Jefferson Elementary School District, Measure U, $30 million

Palo Alto Unified School District, Measure Z, $460 million

Monterey Peninsula Unified School District, Measure I, $213 million

Pacifica School District, Measure O, $55 million

Perhaps we should be surprised that only five ballot measures of this nature could be found on local ballots in California during 2018. Then again, this is a whole new frontier of government expansion. Housing as not only a human right, but as an obligatory government entitlement, and never mind the fact that government policies made housing unaffordable.

Maybe the paucity of school bonds with “workforce housing” funding buried in the fine print is because it’s a new innovation. Or maybe it’s the fact that including “workforce housing” in a school construction bond is quite possibly illegal, since school construction bonds are for, imagine this, school construction. But the 55 percent threshold isn’t absolutely critical – three of these five were passed by over a two-thirds vote.

And what of bonds that require a two-thirds vote? How do they fare, and to what extent are these bonds offering “workforce housing”? A look at San Francisco’s Prop. A, which piled another $600 million in borrowing onto the tens of billions already spent by taxpayers to provide “affordable housing” and “supportive housing” offers a glimpse into the future. Because in Prop. A’s allocation of funds – which doesn’t unequivocally require a single unit of new housing, just rehabilitation of existing housing – is $20 million for “educator housing.”

San Francisco’s Prop. A was approved by 71 percent of voters.

Current California Housing Policies Are a Fraud

Across the state, voters have been conned into borrowing – against their future tax payments – tens of billions of dollars in pursuit of housing for the homeless, housing for low income residents, and, now, housing for public employees. All of this is a “dishonest scheme.” It is a monstrous fraud.

It is a fraud because the model being pursued will never solve the problem. By the latest estimates, California has over 150,000 homeless, well over 1.5 million state and local public employees, and at least 7 million people living below the poverty line. Shall all these 8.65 million people receive government subsidized housing?

A few basic calculations provides the answer: To provide “supportive housing” for all of California’s 150,000 homeless, even at $250,000 per unit – which is rock bottom and extremely unlikely to ever constitute the average cost – taxpayers would have to shell out $37.5 billion.

And what about “workforce housing”? Does anyone expect public employee unions to tolerate the lottery style allocation of subsidized housing to a select few, which is the process endured by low income families? One may rather expect these benefits to proliferate, finding their way into operating budgets as well as buried in bond measures. Again, even at a low-balled $250,000 per unit – taxpayers would have to shell out $375 billion.

As for “affordable housing,” it’s fair to say that the sky high home price equilibrium would be broken long before 7 million affordable housing units ever got built. But it’s also fair to wonder how on earth any private sector housing will remain in California – apart from plush high rise condos for the international investor class – when they’re competing with taxpayer funded developments at the same time as punitive laws continue to make it almost impossible to build without subsidies.

When it comes to housing, as with so many other things, California leads the nation. Instead of building practical enabling infrastructure and limiting their zoning laws and building codes to practical necessities, they have institutionalized a system of rapacious yet totally legal corruption, masked by moral imperatives.

It is a fraud of historic proportions, with incalculable cost and tragic consequences.

This article originally appeared on the website California Globe.

Will the UC System Drop SAT, ACT requirement?

Leaders of the University of California system appear strongly inclined to drop the requirement that applicants to UC campuses take the SAT or ACT test, heeding the argument that it hurts the chances of Latino and African-American students to be admitted.

faculty task force is expected to deliver a report on whether the mandate should be retained in February. But UC Regent Eloy Ortiz Oakley, who is also the chancellor of the California Community College system, has already called for scrapping the standardized test requirement. So has UC Berkeley Chancellor Carol Christ and Michael Brown, the provost and executive vice president for academic affairs for the UC system and its 10 campuses. No one who works for UC appears to be standing up, at least publicly, for the testing mandate.

The SAT/ACT test has for decades been criticized for alleged cultural bias against minorities. But that claim is strongly disputed by the College Board, which administers the test and says it has long since fine-tuned the language of questions in the test so that they don’t presume knowledge of white cultural norms. Some academic studies back up this claim of neutrality and find that SATs are a better indicator of college success than grades.

But one of the SAT critiques offered by Ortiz, the regent, is mostly undisputed. It’s that low-income Latino and African-American families are unable to pay for the vast variety of test-preparation classes used by middle-income and wealthy families to help their children. “Perhaps the tests were well-intended, but they are perpetuating a wealth advantage and undervaluing low-income students,” he wrote earlier this year.

The Princeton Review test-prep company, for example, “guarantees” that its 30-hour, $1,599 class will lead to at least a 1400 score on the basic SAT. A 1400 is at the 95th percentile of the approximately 2 million SATs taken each year.

Meanwhile, upper-income families have long been willing to spend whatever it takes to help their children on standardized tests, in particular by hiring specialized English and math tutors who charge up to $450 an hour.

But the College Board pushes back on this front as well, saying it provides free test prep online that helps tens of thousands of students each year.

Nonprofit behind SAT defends UC admission practices

The New Jersey-based nonprofit is so worried that a UC decision to drop the SAT would be copied by many other U.S. universities – as a recent USA Today analysis predicts – that it is offering increasingly thorough defenses of how UC makes its admission decisions.

According to an EdSource report, Jessica Howell, vice president of research at the College Board, appeared at a symposium on the SAT two weeks ago in Berkeley in which she suggested that critics of the test exaggerated its importance to UC admission officers, who consider 14 factors in evaluating prospective students.

“Any effective standardized measure that is one of those factors is going to reveal underlying inequities in our society,” she said. “As researchers, we shouldn’t stop using them, or measuring them because we don’t like what they say. … [Instead,] we should continue to have a discussion about solutions to close the gaps that we see.”

The comment reflects the College Board’s argument that if SAT critics think it’s unfair that students from wealthy families with more resources do better than students from poor families, it’s not the test that’s unfair. It’s American life – the rich can help their kids more than other families.

To address this issue, the College Board proposed also giving SAT test takers an “adversity score” in May so colleges could quickly determine if a student came from difficult circumstances. But the plan was dropped in August after if faced harsh criticism that it was a facile attempt to label students from wildly different backgrounds with a simple number.

This article was originally published by CalWatchdog.com

Good News and Bad News About California

A son once told his father that he had both good news and bad news and asked his dad which he would like first. The father said, “Give me the good news first.” So the son says, “The good news is that the air bags in your car work perfectly.”

California is a state with both good news and bad news. The good news is that we remain an economic powerhouse with the world’s fifth largest economy, the Bay Area remains the epicenter of venture capital, we have a diverse population, great climate and recreational opportunities that are unparalleled.

Yet despite all this good news, California still feels like a state in decline. High taxes, heavy regulations, business flight, crumbling infrastructure, a housing crisis and seemingly insurmountable problems with our vast homeless population are the issues that confront us every day in the headlines.

Those who point out what is wrong with California are criticized by our political leaders as being “declinists” who are invested in California’s failure. But that’s not true. Most would like nothing more than to see this state succeed and to have our elected representatives pursue policies that would lead to that success.

Much of the discussion about what is good or bad about California is anecdotal. For example, we all know friends or family members who have moved out of California to escape its high cost of living. And every day we hear about another company, either large or small, which has pulled up stakes because it can no longer tolerate California’s anti-business environment.

To read the entire column, please click here.

If You Let Them, They Will Build

California’s housing crisis, particularly in the Bay Area, is notorious and well covered, with news stories chronicling homeless encampments, “pod” housing, and people forced to live in cars. But a surprising and encouraging piece of news emerged from Oakland recently. According to the San Francisco Chronicle, Oakland will produce almost 50 percent more housing units this year than San Francisco — 6,800 versus 4,700 — though Oakland has half the population and only 40 percent as many jobs as San Francisco. Just as surprising is the jump in Oakland’s housing production: the number of units brought to market in 2019 will be almost 15 times the number completed in 2018 and more than three times the number of units produced between 2013 and 2018 combined.

What caused this burst of production? Simple: Oakland told developers that they could build homes. In 2014 and 2015, the city passed a series of neighborhood plans in and around downtown that relaxed zoning and removed parking requirements, making it easier and cheaper to build. Now, after the four to five years required for design, permitting, and construction, Oakland is reaping the benefits of private development. By contrast, San Francisco continues to make it hard to build housing, with byzantine planning regulationsexpensive development feesrestrictive zoning, and long delays.

It’s tempting to compare the 24,000 units San Francisco has added in the past seven years with Oakland’s 9,000 and think that San Francisco is ahead. But, adjusting for population and jobs, San Francisco is clearly falling behind. Just one more year at current rates of production will see Oakland surpass San Francisco in per-capita housing production since 2013—and Oakland has almost 15,000 more units under construction, approved, or in review.

The Bay Area housing crisis is ultimately a production crisis. For decades, supply has failed to keep up with demand. Oakland shows that it’s possible for the private market to produce enough housing if laws allow it. San Francisco is taking the opposite path; instead of reforming regulations, it recently passed two measures to fund publicly built housing and to change zoning measures—but only for teacher housing and subsidized affordable units. These measures will produce only a trickle of units. Even in Oakland, the neighborhood plans cover less than 5 percent of the city. If the Bay Area wants to get serious about housing, it will need to apply the lesson of Oakland’s rezoning far more widely.

Phillip Sprincin is a Marine veteran who lives in the San Francisco Bay Area.

This article was originally published by City Journal Online.

California Regulators Shut Down a Distillery for Serving Alcohol

Blinking Owl, a small craft distillery located in Santa Ana, Calif., outside Los Angeles, temporarily and non-voluntarily closed its doors last week. “We will be CLOSED the following Days: Sunday, November 10, 2019, to Saturday, December 7th, 2019, and Saturday, December 14th,” a message posted atop the Blinking Owl website laments.

Further down the homepage, the distillery— which holds a California craft distiller’s license, known as a Type 74 license in state regulatory parlance—goes into great detail about the saga behind the temporary closure, which appeared to result from little else than confusing regulations and inconsistent instructions from regulators.

“While Type 74 license states that distilleries can only serve up to 1.5 oz. of alcohol per person per day, we are allowed to have private events, in which the drink restriction is waived,” Blinking Owl explains. “It is under this section of code which many small distilleries in the state have found a much-needed revenue source by hosting private events or functions. To that end, we segregated private events with wristbands, something we believed the public was accustomed to and well understood the meaning of, and we subsequently operated in a manner we understood to be in complete compliance.”

That seems eminently reasonable. But what seems eminently reasonable to a business often strikes regulators—who are interpreting the same, oftentimes poorly worded regulations that businesses are, but with an eye to punishing scofflaws—as something entirely different. Just how the temporary closure came about demonstrates this fact.

Before making his first undercover visit, according to his account, ABC trade enforcement officer Eric Gray did not speak with anyone at Blinking Owl about being part of a private party. When he arrived at the distillery, he was served one drink and was told Blinking Owl could not serve him another legally. He paid and left.

Before his next visit, Agent Gray called Blinking Owl. He was told this met the requirements for being considered a private party. After arriving at the distillery, Blinking Owl confirmed Gray had called ahead to be placed on a private party guest list and was served a second drink.

It was this second visit that caused Agent Gray to conclude Blinking Owl had violated ABC rules, allegedly “by exceeding the amount of 1.5 ounces of distilled spirits that is permitted to be served per person per day by selling two separate cocktails to Department Agents that contained 1.5 ounce in each drink.”

For this purported transgression, the state chose last week to punish Blinking Owl by forcing the distillery to close for 25 days.

“The fact [Blinking Owl] received prior warning and discipline and continued to circumvent and shirk its clear responsibilities is disconcerting,” wrote administrative law judge D. Heubel in a disconcerting June 2019 order that was necessitated—if at all—only by the fact those “clear responsibilities” were never clear.

Where did Blinking Owl get the idea that a person could be served more than 1.5 ounces if they were to call ahead to be placed on some sort of private party guest list? It may have been from regulators themselves.

It turns out Blinking Owl had previously been cited a year earlier for serving more than 1.5 oz. to one undercover ABC Agent Plotnik. In his report, as evidence in support of his allegations, Plotnik noted he could not have been part of a private party because he had not “called ahead to be placed on a guest list” at the distillery.

I spoke this week by email with Brian Christenson, who—with his wife and a close friend—opened Blinking Owl in 2016.

A frustrated Christenson tells me he and his fellow owners have invested at least $3 million in the distillery. He says the state’s “strong Prohibition hangover is pretty shocking in this day and age.”

His customers agree.

“These laws largely serve no purpose other than to ensnare small business owners and produce fines for agencies that struggle to justify their own existence,” Reason subscriber and Blinking Owl supporter Robbie Haglund, who alerted me to the distillery’s regulatory woes, told me in an email this week.

Blinking Owl isn’t alone in finding fault with the enforcement of California’s craft distillery rules. At least one other California distiller I spoke with this week—who did not want me to use their name or that of their distillery for fear of reprisals from state alcohol regulators—say they’ve been targeted by state regulators in a similar fashion in recent years.

(I reached out to undercover state ABC trade enforcement officer Eric Gray this week by email to ask him about the seemingly subjective nature of the rules he’s charged with enforcing—namely the criteria the state ABC uses to determine whether a distillery is holding a permissible private event and/or function or an impermissible one. Agent Gray did not reply.)

The fact regulators have targeted more than just Blinking Owl suggests an urgent need for regulatory reform.

“It is our hope that this campaign awakens lawmakers and state officials to realize the absurdity of inflicting a harsh, unjust punishment when it is obvious that we are chasing legal clarification on a vague, undefined section of the law that it is currently based in constant[ly] changing opinion,” Christenson tells me.

In the end, Christenson just wants the state to treat Blinking Owl, its employees, and its customers fairly.

“Ultimately we want parity with the wine and beer industries,” he tells me, since in California brewery and winery rules are friendlier for businesses and consumers alike. “But in the short term we would like the ability to use our tasting room privileges to serve more and sell more products direct to consumers to create more revenue to help us survive and thrive as a small California business.”

I hope he gets his wish. So do others. Christenson tells me Blinking Owl customers and the general public have been incredibly supportive of the distillery. 

“The owners of Blinking Owl are some of the nicest, most generous, and honest people I have ever met,” Robbie Haglund says. “They are the type of entrepreneurs we need in this country. They care about their business, their employees, their customers, and the community.”

Christenson tells me he’s spoken with state lawmakers, who he says have been receptive to his complaints and appear optimistic they can engineer a fix.

The will to reform the rules may just be there. As recently as last year, California lawmakers saw fit to ease some of the regulatory burden the state places on small craft distilleries.

Clearly, though, the state still has a long way to go before Blinking Owl and other craft distillers in California will feel like the state isn’t rooting for them to fail.

BAYLEN LINNEKIN is a food lawyer, scholar, and adjunct law professor, as well as the author of Biting the Hands that Feed Us: How Fewer, Smarter Laws Would Make Our Food System More Sustainable (Island Press 2016).

This article was originally published by Reason.com

ICE Not Conforming to California Law on Detention Centers

Democratic lawmakers are harshly criticizing the Trump administration’s attempt to defy the intent of a new state law banning privately run prisons and detention centers.

On Oct. 11, when Gov. Gavin Newsom signed Assembly Bill 32, liberal activists rejoiced. Private prisons are considered far more likely to be inhumane and generally use non-union workers. Private detention centers holding unauthorized immigrants are seen as a symbol of the Immigration and Customs Enforcement (ICE), the federal agency that has become a target for the left since President Donald Trump’s election.

But while the law takes effect Jan. 1, it allows existing contracts to be honored. Five days after Newsom’s signing of AB32, ICE put out a solicitation on the Federal Business Opportunities website for contractors to run detention centers in the general areas of Northern California, Los Angeles and San Diego that had a total of 5,000 beds.

A month later, California Sens. Dianne Feinstein and Kamala Harris and 19 fellow Democrats in the Golden State’s House of Representatives delegation are crying foul. They say ICE is flouting normal procedures in an attempt to ensure three existing facilities keep operating.

“Given the timing and terms of this solicitation – particularly in light of ICE’s history of suspect contract activities and insufficient oversight – we are understandably concerned that the solicitation is intended to favor incumbent contractors,” the 21 Democrats wrote in a letter to several federal agencies. “If so, these efforts would be in direct contradiction with the spirit of full and open competition required by federal procurement law.”

The solicitation asked for interested parties to respond within two weeks instead of the usual 30 days. It also specified that bidders had to have “turnkey ready” facilities with specific ranges of available beds. The contracts are for five years, with the option for two five-year extensions.

Democrats say bidding process is rigged

Democrats said this ensured that the only applicants would be the three companies that are already running federal immigration detention centers in California: GEO Group, which has centers in Adelanto in the Inland Empire and Bakersfield; CoreCivic, which runs a center in San Diego; and the Management and Training Corp., which has one in Calexico in Imperial County, east of San Diego.

ICE signed a $62 million contract with GEO for the Adelanto facility in March in which GEO was the only bidder. Democrats didn’t object to the contract at the time but now say it also was awarded in a way that violated the spirit of federal procurement laws by essentially ensuring only one company had a chance to win.

But an ICE official told the Palm Springs Desert Sun that the agency “remains compliant with federal contract and acquisitions regulations, as we advertise opportunity notices and subsequently implement the decision process.”

AB32’s author – Assemblyman Rob Bonta, D-Oakland – blasted ICE in comments to the Desert Sun, saying the agency was attempting to “circumvent the will of the people of California.”

ICE’s parent agency – the Department of Homeland Security – has a history of claiming more flexibility under federal rules than its critics say it has. The same goes for the Trump administration, most notably in its use of $6.1 billion in defense funding to build sections of a border wall without congressional authorization.

In their letter to DHS and other agencies, the California Democratic lawmakers asked for information on how ICE crafted its solicitation for detention center bids.

Their chances of getting a quick response are unclear. ICE has long faced criticism over its handling of public record requests, which it is supposed to respond to in 20 days or less. The agency was sued earlier this month by the Project on Government Oversight for allegedly withholding information over how it used facial recognition and other technology in surveillance and data collection programs.

This article was originally published by CalWatchdog.com.