Why Raise Property Taxes When Revenues Are Way Up?

During this past summer there were dozens of media stories about big increases in property tax revenues. Orange County was typical. The taxable value of real estate went up $33 billion to over $600 billion. Assessments increased in all of Orange County’s 34 cities.

Further north, San Mateo County saw a 7.1% increase in its assessment roll for 2019-2020, the ninth consecutive year of increases. County Assessor Mark Church, in a press release, said there was record growth in commercial and mixed-use development which helped to push the total roll value to a new high.

Other counties showed similar gains: Santa Clara County, up 6.79% to $516 billion; Sacramento County, up 6.53% to $179 billion; Alameda County, up 7.13% to $321 billion; Fresno County, up 5.84% to $90.46 billion; and even Sonoma and Napa Counties saw big increases in assessed values notwithstanding losing over 5,600 structures to the horrific fires of 2017.

All told, statewide assessable property is now worth $6.5 trillion with just last year’s increase resulting in $75 billion in revenue, a 15-fold increase since 1978. All these increases belie the argument advanced by progressives that Proposition 13, which limits increases in taxable values and caps the property tax rate at one percent, has somehow “starved” local governments and schools for revenue.

To read the entire column, please click here.

GM, Toyota, Hyundai back Trump opposition to tougher California fuel standards

The Trump administration’s efforts to bend California to its will on a variety of fronts have been mixed at best. Last week, for example, a panel of judges from the 9th U.S. Circuit Court of Appeals affirmed yet again that federal funding to state law enforcement agencies couldn’t be linked to their assistance in deporting illegal immigrants. Judges have ruled for the state and against the federal government in cases involving other immigration issues and environmental policies.

But the White House can claim a substantial win on vehicle emissions. Last week, many of the largest automakers in the world sided with President Donald Trump in his view that it’s not good for the U.S. economy for the nation’s largest state to have tougher rules on vehicle emissions and miles per gallon than those set by the federal government.

General Motors, Toyota, Nissan, Mazda, Subaru, Hyundai, Kia and Fiat Chrysler are backing Trump’s attempt to end the waiver that California has had for more than 50 years allowing it to set tougher standards on emissions for vehicles sold in the state. Twelve other states – Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington – have adopted the Golden State’s rules.

The fight was triggered by the Trump administration’s decision to scrap rules set by President Barack Obama that required automakers to have their vehicles average 55 miles per gallon by 2025. This led California Gov. Gavin Newsom to reach out to automakers to seek their voluntary compliance with tougher standards, winning support in July from Ford, Honda, Volkswagen and BMW for a plan under which their fleets would average 50 miles per gallon by 2026 – weaker than what Obama wanted but much tougher than Trump’s rules, which would set 37 miles per gallon as the industry standard.

Newsom said then that he was “very confident” other automakers would accept California’s standards. Instead, the largest automakers in the U.S., Japan and South Korea have sided with Trump in filing arguments with the U.S. Court of Appeals for the District of Columbia, which is considering a lawsuit from California and 22 other states seeking to uphold the Obama administration’s fuel-efficiency rules.

The automakers and the National Automobile Dealers Association said that they needed “the certainty that states cannot interfere with federal fuel economy standards.”

Newsom, Brown decry Trump’s global warming skepticism

Obama, Newsom and most climate scientists see requiring higher gas mileage standards as the easiest way to reduce the greenhouse gas emissions that build up in the atmosphere and cause global warming. Vehicle emissions in recent years have passed power plant emissions as the single biggest generator of greenhouse gases.

Trump rejects the conventional wisdom about greenhouse gases. As the New York Times reported Saturday, he has “directed the Environmental Protection Agency to roll back nearly every federal policy designed to curb the heat-trapping fossil-fuel pollution that is the chief cause of global warming.”

In the report, Newsom told the Times that the state’s recent history of devastating wildfires was directly related to climate change.

“We’re waging war against the most destructive fires in our state’s history, and Trump is conducting a full-on assault against the antidote,” Newsom said.

Newsom’s predecessor, Jerry Brown, framed the issue even more dramatically in testimony to Congress last week.

“The seas are rising, diseases are spreading, fires are burning, hundreds of thousands of people are leaving their homes,” he said. “California is burning while the deniers fight the standards that can help us all. This is life-and-death stuff.”

This article was originally published by CalWatchdog.com

How Trump Can Declare War on the Homeless Industrial Complex

California’s homeless crisis is now visible to everyone living in the state. Along with tens of thousands of homeless who are concentrated in various districts of the major cities, additional thousands are widely dispersed. If you drive into most major urban centers, you will see their tent encampments along freeway junctions, under bridges, along frontages, beside drainage culverts. Even in very small towns, they congregate by the dozens in parks and parking lots, along the streets and in the alleys. In California’s largest cities, by the tens of thousands, they erect makeshift housing along sidewalks, using tarpaulins draped over shopping carts, tents, boxes. It is completely out of control. Billions have been spent to ameliorate the situation, and these billions have only served to make the situation worse than ever.

It’s hard to identify ground zero for California’s homeless crisis. But the San Francisco Bay Area and Los Angeles County host, between them, well over 100,000 of California’s estimated 130,000 homeless. And in both of those metros, local government policies have utterly failed. This failure is partly because local elected officials are hampered by state laws which make it nearly impossible to incarcerate petty thieves and drug addicts, or institutionalize the mentally ill, and court rulings that prohibit breaking up homeless encampments unless these homeless can be provided free and permanent “supportive housing.”

The state and federal governments have even mandated that providing “housing first,” and getting every homeless person under a roof prior to any allocations of funds for treatment to overcome drug addiction or manage mental illness, is a condition of  receiving government funds to help the homeless.

As if these laws and court rulings that have made homeless populations unmanageable weren’t enough, California’s state legislators have crippled the ability of developers to cost effectively construct any type of housing. State laws designed to prevent “sprawl” have caused land prices within cities to skyrocket. California’s environmental laws, most notably CEQA (the California Environmental Quality Act), require a dizzying, time consuming and expensive, seemingly endless array of reports from developers seeking project approvals. There are literally hundreds of various applications and fees that developers have to file with dozens of state and local agencies, and often these agencies will take months if not years to process the applications.

But instead of challenging these laws, local elected officials have used them as an excuse to engage in one of the most corrupt misuses of government funds in American history. Without first changing these laws, the problem cannot be fixed. But a special interest movement has been created to spend the money anyway. This alliance of special interests constitutes what has now become a Homeless Industrial Complex, comprised of government bureaucracies, homeless advocacy groups operating through nonprofit entities, and large government contractors, especially construction companies and land development firms.

They have used money from the state general fund, from state bond funds, from special local taxes and fees, and from local bond measures, to construct housing for the homeless, heedless of the per unit cost. While a few thousand units of actual housing units have been constructed so far, billions have already been spent.

An audit recently released by L.A.’s City Controller Ron Galperin exposed the City’s inability to build enough homes with the $1.2 billion in Prop HHH voter approved bond funds to address the crisis of homelessness. At an average cost of $550,000 per apartment unit of “permanent supportive housing,” small wonder. Similar or even higher average per unit costs are typical of previous efforts in Los Angeles as well as throughout California.

Diverting nearly all funding to “Housing First” at the expense of treatment, and elevating the costs of that housing through legalized corruption, guarantee that billions more will be wasted as homelessness in California only gets worse. California’s local, county, and state governments have demonstrated themselves to be administratively and ethically inept. It is time for the Federal government, under the vision and leadership of President Trump, to intervene and solve this problem with a comprehensive interagency response.

If several federal agencies launched a coordinated effort to get California’s homeless crisis under control, it could be accomplished in months instead of several years. As it is, California’s homeless crisis is out of control and getting worse every day. Federal action would not solve the homeless crisis overnight, but it would prevent something truly catastrophic occurring such as a disease epidemic, and it would set the stage for Californians more swiftly implementing permanent solutions, for which there currently is no end in sight.

For example, the IRS could reform the laws governing nonprofits to curb the legalized waste of billions that pour into what have become special interest behemoths.

The SEC could classify the taxpayer as having investor rights, in a long-overdue move that would make it a lot more difficult for public projects to squander public funds.

The SEC could also require consultants to public agencies to register as financial advisers and be subject to the same restrictions on political donations that govern these consultants in the private sector.

The Justice Dept. could investigate some of the more egregious wasteful projects allegedly launched to help the homeless to possibly uncover cases of collusion or racketeering.

The Justice Dept. could also send in DEA agents to break up the criminal gangs and drug traffickers who exploit California’s lenient drug laws and hide among the homeless encampments.

The Dept. of Housing and Urban Development could reform the Low Income Tax Credit program to put a cap on per unit costs for housing projects to qualify. They could repeal the disastrous “housing first” mandate that prevents homeless programs from prioritizing treatment equally to constructing shelters.

The Dept. of Education could get even more aggressive against the teachers union which resists competition in K-12 education, and is consequently responsible for thousands of students graduating into homelessness instead of productive lives.

The Centers for Disease Control could declare a health emergency and sweep through the homeless encampments, cleaning up the trash and human excrement.

The EPA could participate in that effort by declaring – quite accurately – homeless encampments to be Brownfields, in order to save California’s soil, water, and runoff to the ocean.

The Dept. of Labor could implement an executive order preventing Project Labor Agreements from being used to inflate the cost of housing projects, as if with the shortage of construction laborers in California, there is any need for PLAs.

And the Dept. of Veterans Affairs could house homeless veterans on unused sections of California’s abundant military bases.

These and other suggestions are covered in detail in the remainder of this article.

How Federal Agencies Could Work Together to Tackle the Homeless Crisis

Treasury Department/Internal Revenue Service (IRS)

One of the biggest sources of legalized corruption that victimizes the American taxpayer is the fact that there has been no reform to nonprofit tax law. A nonprofit is the most tax-advantaged way to legally launder profits and act as an advocacy wing of major corporations. The US Tax code has been greatly abused by large national nonprofits who have turned charity work into a bankable industry, the power of which now rivals the private sector. 

Today’s large charitable organizations are part of the Homeless Industrial Complex. These nonprofits outrival many small businesses today by using the tax code to their benefit. Why pay taxes if you can find a loophole in the tax code? According to one report the nonprofit sector – 10% of the American workforce or 11.4 million jobs – is the third largest workforce in the U.S., behind retail and manufacturing. Total charitable giving in the U.S. in 2016 was about $390 billion, a 2.7% increase from 2015.

One of the most tax advantaged ways to legally embezzle public dollars is via a nonprofit entity, which then creates a for-profit subsidiary. All of the revenue goes directly to the nonprofit controlling entity, wherein there are no caps on salaries and everything is effectively a write-off, and it becomes a zero sum game to show zero profits. They can pay consulting and contracting fees to for-profit entities, which often can result in additional pay if the same employee is on the payroll of both entities. Why use a for profit business to own property when you can create a nonprofit entity, therefore excluding yourself from property taxes? The really savvy nonprofits know how to use the tax code to their advantage by hiring the most sophisticated tax attorneys and accountants, and creating multiple entities in order to do this.

Recommendations: The IRS should comprehensively reform the regulations governing nonprofits. For example:

  • Set a threshold for annual (pre-tax) revenue from all sources of income and contributions, and once that maximum is exceeded, the IRS will automatically reclassify the nonprofit as a for profit entity, and tax accordingly.
  • Require all tax-exempt organizations to file public consolidated financials to replace current 990 requirements. Currently, under IRS guidelines, whether or not a tax-exempt organization has a parent, affiliate, subsidiary, and/or related entities, only the tax-exempt organization needs to file a public tax return. This is how they avoid disclosing their true assets and total salaries paid to employees. When an organization has multiple entities, an employee can work for any of these entities, with different titles and roles, while also receiving a salary from each of them. Without consolidated financials, it is impossible to determine how much a nonprofit executive, board member, or consultant makes. Additionally, Private Foundation tax-exempt entities are not required to disclose current 990’s to the IRS, which every other tax-exempt entity is required to do.
  • Make the above requirement effective to-date, with a 2 year retroactive look back provision in order to be in good standing and maintain its tax exempt status. By doing so, you would likely see a sudden drop in organizations seeking a tax exempt status, and find many entities suddenly converting to traditional for-profit organizations. If an entity was not in compliance within a certain time frame, you could freeze its tax exempt status until it was able to do so, ultimately cutting off their fundraising ability.
  • Impose a tax on excess executive compensation among tax-exempt organizations. Even a limit of $500,000 for any individual or executive pay would have a huge impact. While a limit of $500K per year may seem high, some of these nonprofit executive salaries are much higher. At these rates of compensation the entity is no longer a public benefit, as it now benefits a specific employee.
  • Tax all public charity organizations in the same manner, as private foundations. While there are 30 types of 501(c) organizations, there are two different types of 501(c)(3)s, Private Foundations vs. Public Charities. Private Foundations pay taxes on net investment income which generally includes interest, dividends, rents, royalties, and capital gain net income, and is reduced by expenses incurred to earn this income. In reaching the asset threshold, the assets of related organizations are considered. A 501(c)(3) public charity follows different taxation rules from that of a Private Foundation.
  • Disallow Private Foundations from 501(c)(3) exemption. A Private Foundation consists of nonprofits that don’t qualify as public charities. Foundations may be sub-classified as private operating foundations or private non-operating foundations and receive some of the advantages of public charities. Well-known foundations include the Rockefeller Foundation, Bill and Melinda Gates Foundation, and the Getty Foundation. In essence, highly profitable, multinational corporations have figured out how to take advantage of the tax code, and the creation of a private foundation is THE best and most tax advantaged way to do so.
  • Tax tax-exempt organizations for any business activity outside of their chartered IRS exemption.
  • Hold all 501(c)(3) organizations to the same lobbying disclosure rules. Other tax-exempt organizations that lobby, must either notify their members as to how much of their dues are nondeductible because they’re spent on lobbying or pay a proxy tax at the highest corporate rate, yet this rule does not apply to 501(c)(3) organizations.

Nonprofit organizations have become corrupt and politicized, and gone far beyond the charitable missions for which their tax exempt status was originally conceived. Reforming the tax laws governing nonprofits will not only result in leaner, more effective nonprofit advocacy for the homeless, which translates into less expensive homeless shelters and less expensive housing for the homeless. It will remove the incentives for individuals and organizations to abuse the nonprofit exemptions in all segments of American society.

Securities and Exchange Commission 

Affordable housing developers are not disclosing the value of City Land, therefore engaging in what is arguably taxpayer backed fraud by not disclosing the full project costs to the investor, which in this case is the taxpayer. All real estate – whether it is single family, commercial, or investment – is an investment made by an individual, who pays property taxes to local governments. Property taxes are allowable deductions for investment properties, therefore, the property owner is an investor.

Recommendations: Use the SEC Act of 1933 and 1934 to do the following:

  • Recognize the American taxpayer as a protected class of investors by the SEC.
  • Recognize any interest in real estate meets the definition of a “security.”
  • Apply insider trading laws to real estate investing.

If the American taxpayer is afforded the same rights that investors are accorded in private investment transactions, it will become far more difficult for public agencies to get away with waste and fraud. This will not only lower the costs for public homeless shelters and public housing for the homeless, it will lower the costs for all taxpayer funded public projects.

Securities and Exchange Commission / Division of Enforcement 

Local elected officials accept campaign donations from special interest groups, and in return, give them the rights to large redevelopment projects. This is a pay to play scheme. These groups are not registered as investment advisers, yet they provide investment advisory services to municipalities. 

Recommendation: Apply Section 206(4) of the Investment Advisers Act of 1940 to all industries who partake in municipal contracts, requiring that investment advisers are subject to a two-year timeout from providing compensatory advisory services or political contributions. 

Why should investment advisers have to register and adhere to campaign finance restrictions in the private sector, but not in the public sector? Holding them to the same rules as in the private sector will eliminate obvious conflicts of interest, and make the bidding process for homeless projects and services more competitive.

Justice Department / AntiTrust Division

The special interest movement known as the Homeless Industrial Complex may be engaging in collusive practices to substantially lessen competition, and this may include price-fixing schemes where one person holds property for the benefit of another. We are facing a manufactured crisis today by special interest groups and elected officials, who stand to benefit financially from the crisis, thus potentially making this a racketeering case.

Recommendation: Invoke the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914, to prohibit cartels and the abuse of monopoly power.

Taking these steps will make all the stakeholders involved in helping the homeless, where billions have already been spent, far more careful in what sorts of partnerships they form, and what sort of “arms-length” transactions they execute.

Justice Department / Drug Enforcement Administration (DEA)

In California, voter enacted Propositions 47 (downgraded property and drug crimes) and 57 (early release of nonviolent inmates) have worked together as a perfect storm only to perpetuate a constant cycle of drug use and the need to commit crimes to pay for them. Drug dealers now operate their businesses with minimal deterrents. Organized drug traffickers are able to hide under the guise of homelessness within homeless encampments. 

Recommendation: Drugs are still illegal on a federal level, and the DEA needs to get involved in fighting drug trafficking that is camouflaged within the homeless communities. 

California’s policymakers have abandoned their citizens to an epidemic of drug use. State laws make it nearly impossible to stop public use of hard drugs. Traffickers and users operate with near impunity, and the state has become a magnet for both. With rampant drug use comes organized crime, exacerbated mental illness, property crimes to support drug habits, and public disorder. A federal crackdown will get this all back under control.

Justice Department / Law Enforcement Agencies 

The State of California and City of Los Angeles no longer enforce the core responsibility of any government, which is to guarantee public safety. Private property is no longer respected under this diminished rule of law, thus violating the civil rights of law abiding residents victimized by a state of lawlessness. 

Recommendation: Activate and deploy Federal Law Enforcement Agencies such as the US Marshals and Federal Bureau of Investigations to restore law and order to citizens. 

With federal agencies cooperating with local law enforcement to enforce federal crimes, including robbery and larceny, the deterrent against property crimes that went away with the enactment of Prop. 47 will be reestablished.

Housing and Urban Development / Federal Housing Administration

Federal tax credit programs and taxpayer-backed dollars are being abused by special interest groups, under the guise of social redistribution policies. Specifically, the LIHTC (Low Income Housing Tax Credit) program may be unduly influenced by non-profit housing developers with no incentive to build cost effective solutions, and are now reaching “affordable housing” per apartment costs that can exceed $750,000. These high costs are due to California’s state and local governments requiring hundreds of permits with exorbitant fees and lengthy processing times, excessive environmental regulations, and prevailing wage requirements. Very few developers are capable of complying with this punitive array of obstacles, ensuring that the “subsidy” goes to powerful and favored special interest groups, defeating the underlying policy of the program in general.

Recommendations:

  • Repeal “housing first” which prevents funds from immediately being shared with treatment programs.
  • Federal tax credits must be prioritized towards projects that are cost-effective.
  • Withhold Community Developer Block Grants from the State of California.
  • Require the exemption of state prevailing wage requirements in order to use the Federal LIHTC.
  • Set a maximum costs per bed/unit in order to receive public funding.
  • Reform the LIHTC program so that it only financed “affordable housing” within 60-120% of area median income, but require developers to prove that residents could afford to live there, using household budgeting tools that take into account utilities and surrounding expense factors.
  • Reform LIHTC so that deeper LIHTC subsidy models in the 30-50% of AMI have their own program, similar to HUD programs like Section 8.
  • The HUD Office of Inspector General should identify examples of abuse of federal subsidies and prosecute offenders.

By setting conditions on federal funds for homeless projects, and by removing the “housing first” rule that prevents treatment from getting equal priority to shelter, for more assistance will be possible with the same amount of funding.

Department of Education

Where you live determines where you go to school, so California’s inner city youth are most impacted. For a child education is destiny, and it is the only way out of poverty. We are spending billions of dollars on the homeless crisis and job training for the uneducated, and public schools in California rank 40th in the nation. Unless we provide opportunities to Americans, they will fall victim to substance abuse. We have witnessed a market failure in public education, and the only way to correct market failures is to open up competition.

Recommendations:

  • We need an “Education First” policy that recognizes that the teachers union is the primary barrier to improving educational outcomes in the United States;
  • We must improve our failing public education system by allowing competition via new charter schools and allowing for a robust opportunity scholarships (AKA, voucher) programs. 

California’s public education system has been fatally undermined by the teachers unions, which oppose any sort of competition to traditional public schools. Breaking their monopoly through charter schools or even vouchers will provide opportunities to students who today are graduating to homelessness instead of living productive lives.

Health and Human Services / Centers for Disease Control

Our homeless crisis is in large part a mental illness and drug crisis, masked as an “affordable housing” crisis by special interests. The mentally ill are our most vulnerable population, requiring our most help as they are a danger to themselves and others. A recent study by the Los Angeles Times has found that 78 percent of the unsheltered homeless in the City of Los Angeles suffer from mental illness.

Recommendations:

  • Declare a health emergency to address mental illness and substance abuse among the homeless, and,
  • Create a federal tax credit to build and reopen mental healthcare facilities, for locations based outside of urban areas. We are witnessing a mental health and drug addiction epidemic afflicting tens of thousands of homeless, making Los Angeles’ “Housing First” policy ineffective.
  • Subsidize the costs and regulate addiction treatment programs which can cost $30-60K per visit. Funding on these programs needs to revised criteria that creates an incentive for providers who can do it cost-effectively.
  • Directly pay individuals who directly provide care for and house a family member with a severe mental illness.

Getting people back into mental health treatment, either through more cost-effective publicly funded programs, or by making it easier for family members to care for their mentally ill loved ones, would ameliorate some of the most tragic consequences of the ineffective approach to-date.

The homeless crisis is also creating a risk of a disease epidemic. The trash and human excrement accumulating in homeless encampments has spawned an exploding population of disease carrying animals and insects that thrive in these conditions: rats, fleas, mosquitoes, ticks, mites, lice. Los Angeles already has outbreaks of typhus, hepatitis and tuberculosis, as do other cities in California. Shigella, a communicable form of diarrhea, is now common among the homeless. There have even been outbreaks of trench fever, spread by lice.

Recommendation: The Centers for Disease Control should declare a health emergency to swiftly clean up the trash and human excrement. The out-of-control populations of rats, fleas, mosquitoes, ticks, mites, and lice should be exterminated.

California’s policymakers have utterly failed to protect the public from the diseases being spawned and spread by the trash and excrement piling up in homeless encampments. Declaring a health emergency and applying federal resources to the problem can fix it before it’s too late.

Environmental Protection Agency

California’s state legislature recently passed AB 1197, and it was quickly signed by Governor Newsom. The new law only pertains to the City of Los Angeles, and exempts any homeless housing project from the California Environmental Quality Act. Yet because of the homeless, our streets are littered with feces, needles, and trash. While many are campaigning about climate change, far more imminent threats to public health and quality of our oceans is linked to the growing homelessness crisis in California with thousands of tons of human excrement and drug paraphernalia runoff flowing directly in our oceans and water systems. California’s environmentalists have somehow forgotten that all drains lead to the ocean. Equally troubling, the trash and human excrement in these homeless encampments has lead to an explosion of disease carrying rodents. Now there are issues with homeless related fires.

Recommendations:

  • Declare areas where the homeless are concentrated as Brownfields, via the EPA Brownfields program;
  • Mandate a community EPA liaison on any state project given an environmental exemption in order to deter environmental crimes.

Using Brownfield status to bring financial resources and regulatory leverage to bear on homeless encampments may be the only way to stop ongoing degradation of California’s soil, water, and ocean runoff.

Homeland Security

Today we are witnessing organized crime hiding within the extensive homeless encampments, taking advantage of permissive laws to conduct many illicit actives in broad daylight. Criminal organizations are growing among the homeless, understanding our laws and using them to their benefit, in order to diminish the role of law enforcement.

Recommendation: The Department of Homeland Security needs to infiltrate these homeless encampments and root out organized criminal networks.

If the DHS and the Justice Dept. work together to bring federal power and federal statutes into what have become lawless areas of California, the laws that tie the hands of local law enforcement can be overridden.

Department of Labor

States with the highest homeless populations, such as California, are run by special interest groups which require union memberships to work. 

Recommendations:

  • Implement a presidential executive order that exempts housing programs from prevailing wage laws and project labor agreements.
  • Require At Risk Targeted Persons (ARTPs) Employee Hiring Mandates;  ex-felons, persons with mental illness, chronically homeless individuals; sober ex-drug addicts;
  • Develop meaningful federal tax incentives and tax abatements to small business to incentivize employment of ARTPs and provide on-site workforce housing.

By exempting housing programs from prevailing wage laws and project labor agreements, the Dept. of Labor can lower the per unit costs of shelter beds and units of housing. California’s labor market is so tight that these exemptions will not harm the workers. Similarly, by creating incentives for employers to hire at risk individuals, more of the homeless will begin to reenter society. Organized labor should compete for projects and should not hinder the ability of organizations and companies to hire at-risk individuals as nonunion workers, and the Dept. of Labor can ensure that through executive order.

Department of Veterans Affairs

Veterans experience homelessness at a higher rate than the civilian population. About 7 percent of people in the U.S. can claim veteran status, but former service members make up around 13 percent of the country’s homeless population, according to the National Coalition for Homeless Veterans.

Recommendations:

  • Use military bases to house homeless veterans.
  • Work with Department of Labor/ Office of the Assistant Secretary for Veterans’ Employment and Training.

Offering on-base housing to homeless veterans is an idea whose time has come. Giving them this respect after their service to our nation is fitting, and could make use of surplus facilities throughout California’s extensive network of military bases.

Federal Intervention Could Quickly Get America’s Homeless Crisis Under Control

The objective of these recommendations is not to presume they offer the complete set of answers, or even the complete list of federal agencies that can be involved. These solutions that involve the federal executive branch are limited only by how conscientiously and how creatively they can be crafted. But the impact of the recommended changes would be immediate and profound.

If these recommendations were implemented, California’s homeless crisis would quickly improve. Criminal drug traffickers would be looking over their shoulders. The CDC and EPA would declare an emergency and clean up homeless encampments. Homeless veterans would find immediate shelter. And the power of the Homeless Industrial Complex, a special interest movement that has been enriched by going slow and overspending on everything, would be shaken to its foundations.

Nonprofits would no longer be able to legally squander funds intended to help the homeless. Taxpayers would have the same rights as private sector investors, making it less likely public agencies could waste money on projects. Federal funds would be contingent on cost-effective projects. Unions would have to compete to participate in projects, and with the shortage of construction workers in California and the many projects awaiting funds, that would not be a hardship to them. Over time, maybe a sustained effort by the Dept. of Education to introduce competition to the monopolistic union controlled public schools might even change both the aptitude and the attitude of students graduating into California’s workforce.

Eventually, maybe the other root problem connected to homelessness, prohibitively expensive housing, could get addressed. Not only through many of the reforms proposed here, which could apply to low income housing as easily as to permanent supportive housing, but through a loosening of the requirements to run building permit applications through an obscene gaggle of local and state agencies. Projects that take as little as 20 days in Texas to get approved, and at most 20 months in most states, can take up to 20 years in California. Small wonder there’s a housing shortage. These countless applications with their exorbitant fees and endless delays constitute criminal negligence and naked, insatiable public sector greed, masquerading as a public service.

In California, at the state and local level, despite well-funded rhetoric to the contrary, there is a shortage of creativity and a shortage of conscientiousness. The residents of the most hard hit cities facing this problem are trailblazers, pointing out that Emperor Newsom has no clothes, yet their cries for help have been ignored.

California’s policymakers are puppets of special interests. Those special interests include their own bureaucracies, which are controlled by public sector unions that gain membership dues and power whenever a public sector challenge worsens. Similarly, the other special interest members of the Homeless Industrial Complex, developers and nonprofit corporations, gain profits and revenues when the homeless crisis worsens.

It is time for the federal government to take decisive action where our public servants on the state and local level have utterly failed the public. It must never be forgotten that this failure victimizes not only the taxpayers and the members of the public who live in areas overran with homeless people. It also victimizes the homeless themselves, who are not getting shelter, and who are not getting treatment.

The power of the special interests who have turned homelessness into a self-serving, taxpayer funded industry, must be broken.

An executive order from President Trump declaring a state of emergency, followed up by an interagency effort according to a blueprint patterned after this checklist, could get America’s homeless crisis under control. And it could happen in months instead of interminable years.

This article originally appeared in American Greatness.

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Free Markets: Power to The People

Gov. Gavin Newsom announced last week that he was going to name an energy czar “in the wake of Pacific Gas and Electric Company’s prolonged power outages,” says the Sacramento Bee, because. According to the governor, “the entire system needs to be reimagined.”

“We cannot afford the kind of public safety power shutoffs we’ve experienced over the last week,” he said.

Ana Matosantos, Newsom’s cabinet secretary, was tapped for the job.  She will keep her day job while still directing “the state’s efforts to fight wildfires, protect vulnerable Californians and ensure that going forward, Californians have safe, affordable, reliable, and clean power.”

Worthy goals, all, but they’re too much to ask even of a czar. Those objectives can be reached in California only through divine intervention, given this state’s political climate, dominated by a party bent on banning fossil fuels.

Nevertheless, Matosantos has her orders. So, let’s help her out.

Fighting wildfires. Only about 10% of California wildfires are started by the electrical utilities. Even if Matosantos ordered them all shuttered, the state would still burn as nature has intended. It would be helpful, though, if she could find a way to bypass the regulatory and activist roadblocks that stand in the way of clearing the dead trees and other fuels that feed wildfires. If Matosantos can advance appropriate forest management practices, her tenure will be off to a solid start.

Protecting vulnerable Californians. This one is a bit vague, though it makes a fine political slogan. She’s on her own, here.

Safe power. Deregulate. Providers operating in a free market have a strong incentive to deliver their products safely. Regulated utilities that have been granted a government-protected monopoly not so much.

Affordable power. Deregulate. Deregulate. Competition always drives prices down.

Reliable power. Deregulate. Deregulate. Deregulate. A government-protected monopoly has less incentive to reliably deliver its products than a provider operating in a competitive free market that knows it will lose customers if it doesn’t perform.

Clean power. Go back to the future on nuclear power. It’s as green as any renewable source and more reliable, since it doesn’t have to depend on sun or wind, or batteries, to generate electricity.

Rethinking California’s archaic system isn’t a difficult task. What works isn’t a secret. Even the most cockeyed observers know markets work, even if their politics don’t allow them to admit it aloud.

Nor would it be radical to correct the course. In Florida, a constitutional amendment that “requires the Legislature to adopt laws providing for competitive wholesale and retail markets for electricity generation and supply” will be on the ballot next fall.

A bit farther north, a “politically diverse coalition” made up “of several Virginia organizations of surprisingly varied political stances” has “come together to try and put an end to the monopoly Dominion Energy has on Virginia’s electrical supply.” The aim is to “create a competitive free market for energy” in the state.

Texas, which has become California’s most bitter rival, has already gone where those states are hoping to go. “Trust in a free market system has served us well,” says a recent Dallas Morning News editorial comparing the two state’s power systems.

“We urge Texans to continue to hold fast to their trust in our free market system, and don’t go monkeying with a good thing, adding socialized or highly regulated functions,” says the Morning News editorial board. “We need only look to California for an example of what not (emphasis added) to do.”

Implementing a reimagined system will of course find strong resistance in Democrat-dominated Sacramento. We wish Matosantos the best in her new job.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

This article was originally published by the Pacific Research Institute.

The California Exodus is Real

Not unlike the Hebrews departing Egypt and the Okies exiting the dust and famine of the 1930’s Midwest the number of Californians getting the heck out of Dodge so-to-speak is staggering.

In just one decade about 5 million Californians left between 2004 and 2013. Roughly 3.9 million people came here from other states during that period, for a net population loss of more than 1 million people. The trend resulted in a net loss of about $26 billion in annual income.

Although foreign immigration has fueled California’s population growth for decades California natives are moving out. Starting in the 1990s, California has been losing more residents to other states than it has gained.

For the better part of three decades, the state has experienced a net exodus of residents every year to the point that there are now more than 7 million people born in California that call other states home.

You may ask why the exodus? The high cost of living fueled by (pun intended) the high cost of electricity and other utilities including unparalleled fuel costs at the pump.

Famed humorist Mark Twain said, “Everybody talks about the weather, but nobody does anything about it”. In California, everyone talks about the high cost of living, the high costs of electricity and fuels, and the over regulations, but nobody does anything about it. 

Well a vast number of California voters are talking with their feet.  They’re frustrated with the way their tax dollars are being spent and feel their votes have no say as to how to change it.

When you examine the facts, you see the grim data:

  • • Some of the highest cost of housing and living in the nation.
  • • Some of the highest costs for electricity and fuels in the nation.
  • • Unstoppable costs of more regulations, taxes and increased minimum wages targeted toward businesses that are just passed through to the consumers of the services and products from those businesses.
  • • The frustrating growth of the homeless, poverty, and welfare populations driven by the costs of housing, electricity and fuels.
  • • Frustration toward the deteriorating electrical grid that has allowed utilities to turn off power prior to threatening winds to protect themselves from liability lawsuits, producing manmade blackouts.
  • • Growing congestion from the increasing numbers of registered vehicles impacting transportation infrastructures that are not equipped to accommodate such increases. 
  • • The state has chosen to become a leading importer of manufactured goods, electricity, and crude oil rather than manufacture or generate them in-state.
  • • California has relinquished its environmental stewardship to other states and countries that have significantly less environmental controls.

Getting clobbered by taxes is taking its toll on the psyche and pocketbooks of its residents, along with the high cost of living and doing business. Moreover, Since 2008, more than 10,000 businesses have either fled the state or reduced their investments, says Investor’s Business Daily

From burger franchise Carl’s Jr. to international vehicle manufacturer, Toyota, big businesses are leaving the state in droves. The small ones find themselves with no choice but to leave as well. They simply can’t compete with the big corporations that stay and take the hit in taxes. 

With California so lax on enforcing federal immigration law, its open-borders sentiment is frightening responsible employers away. Businesses that remain in California are stuck in a “lose-lose” situation. 

Here’s the Catch-22. The Immigrant Worker Protection Act (GC, Section 7285.1) says an employer who follows federal immigration law is now violating California law, is committing a crime, and is subject to significant fines. At the same time, it is also a crime if an employer fails to follow federal immigration laws. 

In California’s one-party state everything in the state, everything, is controlled by the Democratic Party and its union allies.  The governor and legislature rushed through a massive tax hike on gas and diesel fuel along with higher car registration fees and hardly anyone outside the party noticed.

I see no good future for anyone in California thanks to the current political environment. It is sad to see this in a state where my parents were able to make a go with their businesses with nothing more than ambition, hard work and no big government to get in their way. 

Even farming, is becoming more and more arduous as the ill-informed legislature tries to run the only true environmentalists out of the state. If farmers don’t understand how to care for the land and environment, then no one does.

As to the state’s many complex public-policy challenges, like affordable housing, transportation congestion and inequality, we need the public and private sectors to work together to address these issues head on. That doesn’t so much require partisanship as it requires competent leadership.

While many Californians consistently express their pleasure with its current leaders at the polls, tapped-out taxpayers and businesses are voting with their feet and leaving the one-party state. Sadly, most who understand the destructive path the Democratic Legislature is on, have already left, not wanting front-row seats to the implosion, leaving little hope of overturning the irrationality that is California politics.  

The future exodus projections do not bode well for the state as across all counties, all age groups, and all races and ethnicities, about fifty percent of Californians are considering moving out.  Like rats leaving a sinking ship or major stockholders purging their portfolios, the smart ones are opting out of the failing enterprise called California.  The exodus is real.

Ronald Stein is founder and Ambassador for Energy & Infrastructure of PTS Advance, headquartered in Irvine, California.

This article was originally published by Fox and Hounds Daily.

Should Non-Citizens Vote in Los Angeles School Board Elections?

The state’s largest school district is moving forward with plans to explore giving voting rights to non-citizen parents in the district.

The Los Angeles Unified School District’s board on Tuesday is expected to pass a resolution directing Superintendent Austin Beutner to organize a work group that will study the possibility of giving voting rights to all parents and legal guardians of students in the district, regardless of citizenship. The study group will report back to the board within 180 days with a decision on whether to propose a ballot measure that would give those parents the right to vote and make Los Angeles the second city in California to do so.

San Francisco last year became the first city in the state and one of only a few in the nation to allow noncitizens to vote in a local election. The impact of the change, however, has been limited, as only a small number of non-citizens have registered to vote in the city, likely because of fear of national immigration policy under the Trump administration.

Allowing non-citizens to vote in Los Angeles could have a significant impact. California has more immigrants than any other state and more immigrants live in Los Angeles County than any other region in the state, according to the University of Southern California.

Among other tasks, the Los Angeles Unified study group would explore ways to ensure the confidentiality of non-citizen parents if they are provided the right to vote, a hurdle San Francisco has yet to overcome. On its election website, San Francisco warns non-citizens that information provided to the Department of Elections — including name and address — may be obtained by Immigration and Customs Enforcement (ICE) and other agencies and individuals. 

The Los Angeles resolution was unanimously approved by the board’s Legislative Advocacy Committee last month. It provides no specific timeline for implementation, but if the district decides to move forward with the proposal, it would need to be approved first by the Los Angeles City Council and then placed on the ballot. If approved by voters, in addition to San Francisco, Los Angeles would join Chicago and several cities in Maryland in allowing non-citizens to vote in some elections.

Experts say that allowing non-citizen parents to vote in elections could improve outcomes for students, who perform better academically when their parents are more engaged.

Kelly Gonez, the board member who authored the resolution, said she was inspired to introduce the proposal in part because of her experience running for school board in 2017, when she often interacted with immigrant parents. 

“Many of them were very interested and passionate about the issues that were at play in the school board election but didn’t have the ability to make the decision for themselves as to who would represent them on the school board,” she said.

L.A. Unified does not track the number of individuals without citizenship in the district, but Los Angeles County is home to about 3.5 million immigrants

Chicago has allowed non-citizens to vote in school board elections since 1989. About a dozen towns in Maryland — including Takoma Park, Chevy Chase and Hyattsville — allow non-citizens to vote in local elections.

In San Francisco, voter participation among non-citizen parents has lagged since they were given the right to vote in school board elections. Ron Hayduk, a professor at San Francisco State University with expertise in immigrant voting rights, said there is “no doubt” that fear over retaliation from federal authorities has deterred those individuals from voting.

Advocates in Los Angeles have said they are concerned about the confidentiality of immigrant parents if they are provided the ability to register for elections and fearful that Los Angeles Unified could similarly see low voter turnout. 

Juan Ramirez, a vice president of United Teachers Los Angeles, said during a committee hearing when the resolution was introduced that the teachers union’s “only concern” is the privacy of parents. 

Mariana Magaña, a policy advocate for the Coalition for Humane Immigrant Rights, an immigrant advocacy group based in Los Angeles, similarly said the confidentiality of immigrant parents is a top priority for her organization. 

“That’s always a concern of ours, I think, be it with this situation or with any information that our community members give to any government entity. Our primary concern is what are the legal protections behind it, so that ICE does not have access to it,” Magaña told EdSource. 

Gonez said she understands concerns over confidentiality and won’t support moving forward with a ballot measure until they are fully addressed. Her resolution states that Los Angeles Unified’s proposal must “include strategies for assuring the confidentiality of the right to vote and assuaging fears of retaliation due to immigration status.”

“I think fears and concerns are completely legitimate,” Gonez said. “And that’s why the resolution at the outset made it clear that we don’t want to move forward with any actionable proposal beyond this first step that we’re taking if we can’t ensure that our families’ privacy will be protected and that we are not putting any families in harm’s way.”

The study group will include parents as well as representatives from immigrant advocacy organizations, civic engagement organizations, the Los Angeles County Registrar’s Office, the Office of the City Clerk and district labor partners. 

Allowing non-citizen parents to vote could also improve the academic performance of their children, said Hayduk, the San Francisco State University professor. A body of research shows that increased parent involvement is correlated with greater academic achievements for students. 

“Kids learn better if their parents are connected to their education process,” he said. “And that’s really across the board in academic studies. It’s an indisputable finding.”

Magaña, the policy advocate for the Coalition for Humane Immigrant Rights, said she often witnesses non-citizen parents already engaging in their children’s academic activities. But she added that, if implemented sensibly, giving those parents the right to vote will expand their voices in the district. 

“Granting them that opportunity to participate in a school board election will just further increase their involvement and also increase the success of their children when they go on from LAUSD schools,” she said.

This article was originally published by EdSource.org

Michael Burke is based in Los Angeles and among other topics writes about community colleges and the Los Angeles Unified School District

Pension Costs Hitting Home — Hard

Stanislaus Consolidated Fire Protection District came into being 14 years ago when four small fire departments serving farms and small towns east of Modesto merged.

The district now flirts with insolvency, a case study in how rapidly growing costs for pensions and other employee benefits are clobbering local governments.

Four years ago, Stanislaus Consolidated had 80 employees, most of them firefighters, and more than $13 million in revenues. However, as budget documents reveal, its expenses, mostly for salaries, were already beginning to outstrip income.

The district’s operational shortfall in 2015-16 was exacerbated by a new expense item, an extra $330,858 bite by the California Public Employees Retirement System, which is anxiously trying to offset its $100 billion in investment losses during the Great Recession and prevent its enormous “unfunded actuarial liability” (UAL) from growing.

Cities and fire districts throughout the state are being hammered particularly hard by CalPERS’ extra levies for UAL because their “public safety” employees — police officers and firefighters — have California’s most generous pension benefits and therefore its highest employer costs.

Even with the extra CalPERS charge in 2015-16, Stanislaus Consolidated’s retirement costs were not overwhelming, about 32% of wages and salaries for the district’s employees. But the UAL squeeze was about to get tighter.

It jumped to $397,981 the next year and $517,834 in 2017-18. The agency’s 2019-20 budget sets aside $842,404 for UAL, contributing to a financial freefall.

The district’s persistent operating deficits caused the small community of Oakdale, located just outside its boundaries, to cancel fire protection contracts worth $3.5 million a year to the district. Oakdale is now served by Modesto’s fire department.

With the loss of revenue from Oakdale, the district was compelled to slash operations, shrinking its staff to just 59. But its retirement costs continued to swell, reaching 46% of payroll this year.

Late last month, the fire district’s chief, Michael Whorton, announced the closure of one fire station, citing a $925,000 operational deficit in the current budget — a number not much higher than the budget’s $842,404 UAL payment.

“We are definitely going to open it back up,” Whorton told the Modesto Bee. “We just have to close it right now because of finances and we will open it again as soon as we can.” However, he could not say when, and if, Station 23 will be reopened.

Residents served by Station 23 are nervous about the cut, the Modesto Bee reported. “That leaves us very vulnerable,” Barbara Heckendorf said. “I don’t know where (the firefighters) are going to be coming from.”

“It’s not something that we want to do,” Whorton said, “but we have to be financially responsible for the department. We just need to get our finances in line.”

That won’t be easy. CalPERS has told the district that its mandatory UAL payment will top $1 million within two years.

Throughout California, local officials have complained loudly about the ever-rising CalPERS assessments, saying they’ll have no choice but to cut services unless local voters are willing to raise taxes.

CalPERS officials, on the other hand, contend that they also have no choice because their investments haven’t fully recovered from the last recession and they must improve their balance sheet to cope with the next downturn.

Meanwhile, CalPERS investment returns continue to fall below expectations, thus widening the gap between its assets and what it needs to cover pension promises.

In rural Stanislaus County, where wildfire is always a threat, it means having fewer fire trucks and fewer firefighters to respond when it hits.

This article was originally published by CalMatters.org

Dirty Tricks Used to Increase Your Taxes

Perhaps California’s political structure hasn’t quite devolved into the kind of despotic regime like we see in North Korea or Venezuela, but that doesn’t mean we’re not headed in that direction. As reported last week in this column, the attack on Proposition 13 is now in full gear as proponents of the infamous “split roll” initiative are on the streets collecting signatures for their new $12 billion property tax increase on Californians.

The measure, entitled the California Schools and Local Communities Funding Act of 2020, would remove one of Proposition 13’s most important protections, the limitation on annual increases in taxable value, from commercial properties. Proponents of the measure have made it clear that their ultimate objective is the full dismantling of Prop. 13, even for homeowners. Taxpayers and businesses are ready for a tough battle, but there remains an open question about what happens when the other side cheats. Two things happened lately that reflect the tax-and-spend lobby’s “win at any cost” mindset.

First, with an assist from a politically biased politician serving in the Attorney General’s office, proponents were able to secure a one-sided title and summary to the signature petitions.

The title and summary that Xavier Becerra issued on Oct. 17 begins by emphasizing higher funding for education, a main selling point that is popular among voters. This title differs from the original version of a similar measure that highlighted the tax implication for commercial property — something a recent poll suggests would be rejected by voters.

To read the entire column, please click here.

California Power Outages — A Look Into The Future

California’s Great Blackout of 2019 has begun as the lights keep going out for millions across the state’s northern stretches. What should be the past now seems to be the future.

Pacific Gas and Electric began shutting down power early the morning of Oct. 9, when electricity was cut to more than 140,000 customers in Sonoma, Napa, Solano, and Marin counties. Those outages and the ones that followed were ordered because there was a high risk of wildfires. By Tuesday, weeks later, the media were reporting that nearly 2 million Northern California residents were expecting to be hit by the fourth planned blackout of the month,

PG&E is hoping to avoid a repeat of last year, in which electrical transmission lines owned and operated by the utility sparked the Camp Fire, which killed 85 civilians, burned more than 150,000 acres and nearly 15,000 homes, and injured several firefighters. It was the deadliest, most destructive fire in California history.

PG&E labeled the disruption a “public safety power shutoff.” The utility industry calls it “de-energization,” a sort of euphemism that sounds less serious than “blackout.” It’s not a word that should be used in the 21st century in California. But there it is.

This state has long considered itself a model of progress, always pressing forward. Yet California now chooses darkness. And rather than being a rare exception, these autumn blackouts are more likely a preview of coming long night.

A modern state with a modern economy, a state not fighting typhus and other Medieval diseases in its streets, would have resolved the problem before the blackouts began. But California’s system for delivering electricity is primarily managed by utilities that are lumbering, inflexible bureaucracies operating government-protected monopolies.

The entire blame can’t be placed on a utility, though. PG&E might have provided the spark that started the Camp Fire, but government supplies the fuel for forest fires that turn into raging wildfires, burning everything in their path. Federal environmental policy, driven by activists, has “continuously thwarted” the use of “scientific management techniques — including logging, prescribed burns, and thinning — to treat forest fuel loads” in preventing fires, says Hoover Institution researcher Terry Anderson. The eco-groups would rather “let nature take her course.”

While living trees feed the flames, dead trees are high-octane fuel, and there might be nearly 150 million of them in California, says the U.S. Forest Service. Removing them from areas near homes and other structures, including power lines and equipment, reduces risk. But it isn’t easy. Not only do environmentalists oppose their removal, especially in the deep timber, in some instances, government permits are necessary, and on occasion, only a licensed contractor can legally do the job.

With California being “a place that nature built to burn,” according to university professor and fire historian Steven J. Pyne, there’s no avoiding a tomorrow filled with fires if man refuses to harness his environment.

The first two blackouts alone could cost the state’s economy $3 billion, says a Stanford professor, as business and commerce have had to take forced holidays. Students have missed school. Virtue-signalers have had to park their dead electric vehicles. It’s been weeks of people stumbling around in dark homes, few daring to open their refrigerators for fear of spoiling the groceries. Dining by candlelight has been by necessity, not in hope of romance. And only for those who have gas ovens (which have been outlawed in several California cities) and kept manual can openers in their kitchen drawers.

And let’s not forget at least one person died.

California is, both literally and figuratively, entering its own Dark Age. Decades of Blue State policies have fundamentally altered the trajectory of the state. Businesses and residents have been fleeing the slow-motion wreck for years and will continue to do so. No longer is California the land of opportunity, it is a purgatory of high taxes, unaffordable housing, an outrageously steep cost of living, crumbling roads and bridges, soul-grinding traffic, and catastrophic homelessness.

Each of these is a man-made disaster created by public policy that limits and directs rather than frees and stimulates.

Entrepreneurship, once both the heart and backbone of the state, has become increasingly under regulatory assault. Rabid pursuit of green policies promises a Third World energy future. The transport of water over long distances, solved by the ancient Romans more than 2,000 years ago, and before them the Egyptians, baffles today’s policymakers. One party controls both the legislative and executive levers and behaves more like a ruler than a representative.

Far from advancements, these are regressions toward a less-enlightened time. California is falling into the shadows.

This article was originally published by the Pacific Research Institute.

Another High-Profile Company Driven Out of San Francisco By High Taxes

Less than a year after losing by far its biggest-grossing company to Texas – the pharmaceutical giant McKesson Corp. – San Francisco is losing another high-profile firm. Stripe, a financial software company that is the second-highest valued start-up in the U.S., is moving to South San Francisco.

Both McKesson and Stripe were unhappy with Measure C, the “homeless tax” approved by San Francisco voters last November that requires companies based in the city, which have more than $50 million in annual revenue, to pay a levy based on their gross receipts. McKesson moved to Irving, a suburb of Dallas, which has no such tax and much lower overall corporate taxes. While South San Francisco is not as cheap as Irving, it doesn’t have anything akin to San Francisco’s tax, which has helped the city attract many tech firms, in particular biotech giant Genentech.

“Unfortunately, Stripe choosing to leave town is not an anomaly,” Alex Tourk, spokesman for the sf.citi tech trade group, told the San Francisco Chronicle. He said the business community needed to “work together [to] … establish a fair and equitable tax system that we can all rely on.”

But as the fight over Measure C reflected, there is a huge split among San Francisco tech firms. Marc Benioff – the billionaire chief executive of Salesforce, the city’s largest employer – and company employees provided millions in funding to the pro-C campaign. Benioff has disparaged tech firms which balked at the measure and appears open to even more tax measures to deal with San Francisco’s homeless crisis.

“This is a humanitarian emergency and it demands an emergency response,” Benioff wrote last year in an op-ed in The New York Times.

Uber moving entire departments to Dallas

But will more tax hikes be accepted by Uber, one of the city’s most prominent and famous start-ups? Uber was neutral on Measure C. And in a move with parallels to the actions of McKesson before it moved out, Uber announced in August that it was setting up a “second headquarters” with 3,000 employees in Dallas after being wooed for years by city leaders, who provided $36 million in incentives and tax credits.

“Dallas became the first city in Texas where the Uber app was available in 2012, and since then Texas has been a hub of innovation for our platform,” Dara Khosrowshahi, CEO of Uber, said in the company’s announcement. “Uber is excited to bring this major investment to Texas and to increase our commitment to the city of Dallas.”

Yet Uber officials said that too much should not be read into its decision and that San Francisco would remain its headquarters. Uber said there was no change in its plan to move into 500,000 square feet of new office space at the huge, high-tech new Chase Center next year.

Nevertheless, the Dallas Business Times reported that Uber was moving entire departments to Dallas, including the Uber Eats team, and its legal, human resources, recruiting, finance and business development units.

That’s similar to what McKesson did before it confirmed it was leaving San Francisco permanently.

Uber has an even stronger motive to leave than McKesson or Stripe, which are considered healthy companies. Uber lost $5.2 billion in the second quarter of 2019, the company announced in August. Its stock price is down about one-third since then, and analysts are mixed about its future.

This article was originally published by CalWatchdog.com