California’s budget process has devolved into a bad joke

Let’s face it. California’s budget process has devolved into a bad joke. The record amount of spending coupled with massive expenditures for wasteful, pork-barrel projects is bad enough. But the more insidious problem is the lack of budget transparency. This is not the way it is supposed to be.

As usual, Sacramento politicians are patting themselves on the back for passing an “on time” budget. True, the main budget bill was passed on June 13, two days before the constitutional deadline. But citizens would be mistaken to believe that the passage of the budget bill completes the budget process.

Ever since 2010, it has become common to enact politically motivated legislation as so-called budget “trailer bills” as a means to avoid meaningful analysis and public hearings.

What happened in 2010 that caused the budget process to be corrupted was the passage of Proposition 25, entitled the “On-Time Budget Act of 2010.”

Voters were told three things about Prop. 25: Budgets would be passed on time; it would increase budget transparency; and that legislators would forfeit their pay if the budget was not passed on time. All three were lies. Moreover, because the primary goal of Prop. 25 was to reduce the vote threshold for passage of the budget bill from two-thirds to a simple majority, it deprives the minority party of any meaningful input.

To read the entire column, please click here.

America’s First Third-World State

“Third World” is now an anachronistic geographical term of the old Cold War. But after 1989, “Third World” was reinvented from a political noun into an adjective to mean more than just Asian, African, and Latin American nations nonaligned with either the West or the Soviet bloc.

Rather, the current modifier “Third World” has come to transcend geography, politics, and ethnicity. It simply denotes poor failed states all over the globe of all races and religions.

Third World symptomologies are predictably corrupt government, unequal or nonexistent applicability of the law, two rather than three classes, and the return of medieval diseases. Third World nations suffer from high taxes and poor social services, premodern infrastructure and utilities, poor transportation, tribalism, gangs, and lack of security.

Another chief characteristic of a Third World society is the official denial of all of the above, and a vindictive, almost hysterical state response to anyone who points out those obvious tragedies. Another is massive out-migration. Residents prefer almost any country other than their own. Think Somalia, Venezuela, Cuba, Libya, or Guatemala.

Does 21st-century California increasingly fit that definition — despite having the nation’s most amenable climate and most beautiful and diverse geography, with major natural ports facing the dynamic Asian economies, and being naturally rich in timber, agriculture, mining, and energy, and blessed with a prior century’s inheritance of effective local and state government?

Click here to read the full article from the National Review

The Top Four Reasons California Is Unsustainable

California is a place unlike any other on the Globe.  It boasts perhaps the greatest natural resources of any state along with shining high-tech industries.  However, like many good economic stories, government policies threaten its future.

Indeed, its government has made California unsustainable.

Of course, it wasn’t always this way. As the 1960s came to a close in California, it had a population of nearly twenty million.  In the decade before, its economic strength afforded the construction of a vast State Water Project and higher education system that was the envy of the world.  Matched with a majestic and trade friendly coastline, along with visionary business leaders, California’s future seemed secured.

No more – and here are the four major reasons California is at such great risk.

1) California’s Infrastructure Deficit

That vast State Water Project was designed for a population not much greater than 25 million.  Today, on any one day, California verges on nearly 40 million people within its borders and is projected to reach 50 million if not higher.

In the last 50 years, however, California’s infrastructure needs have been ignored.

The state’s water system remains essentially is as it was in the 1960s. As for its roads, a recent headline declared that “California’s roads are some of the poorest in the nation and rapidly getting worse.”

According to a 2017 infrastructure report card:

“Driving on roads in need of repair in California costs each driver $844 per year, and 5.5% of bridges are rated structurally deficient. Drinking water needs in California are an estimated $44.5 billion, and wastewater needs total $26.2 billion. 678 dams are considered to be high-hazard potential. The state’s schools have an estimated capital expenditure gap of $3.2 billion.”

In 2017, California’s Governor Jerry Brown estimated California was “facing $187 billion in unmet infrastructure needs.”  However, the Bay Area Council Economic Institute “pegs the cost of California’s unfunded infrastructure needs at up to $737 billion and possibly as much as $765 billion.”  Who is right?  It’s hard to know but all of those figures are more than daunting.

2) Government Debt

How much in debt are the California governments?  That’s hard to know too.  According to a January 2017 study, “California state and local governments owe $1.3 trillion as of June 30, 2015.”  The study was based on “a review of federal, state and local financial disclosures.”

In other words, that $1.3 trillion in debt is the amount to which California governments admit.  Other studies believe it to be more.  Indeed, one study says it is actually $2.3 trillion and a recent Hoover Institute stated that there is over $1 trillion in pension liability alone, or $76,884 per household.  Incredibly, there are 4 million current pension beneficiaries, a number that continues to grow and which exceeds the total population of 22 states.

What’s the right number?  Apparently, it is so large it is hard to accurately estimate.  In every case, the number is staggering.

3) California’s Taxes and Regulations

When you consider the California legal system and its regulatory system, inclusive of the world’s most comprehensive global warming law, California is likely the most regulated state in the Country, if not the World.

California also is among the highest taxed states in the nation.  California has the highest income tax rates.  The top rate is 13.3%. The next closest top tax rate is in Oregon at 9.9%.  However, Oregon does not have a sales tax. California has the 10th highest sales tax.

What is remarkable about the California income tax isn’t just that it has the highest rate, it is how little income it takes, just above $52,000, to qualify for California rate of 9.3%.  Given the high cost of living in California, that means many Californians are subject to that rate.

On the other hand, for more than a decade,  fewer than 150,000 of California’s 35+ million people pay half of all of its income tax – a highly imbalanced system.

Now, many might think California needs all of those taxes given its infrastructure deficit and debt.  The problem with that notion is that those prolonged high taxes, debt burden and regulations limit California’s economic future. After all, why would businesses locate in California in the future with the impending tax-aggeddon that must be in the offing?

Also, California’s middle class has been hollowed. A recent CNBC headline read: “Californians fed up with housing costs and taxes are fleeing state in big numbers.”  Where are they going?  Many have left for low tax states offering more jobs than California.

They have been replaced by those taking advantage of California’s magnet government policies, which increase California’s long-term spending needs. For those that remain, according to Smartasset.com ”California has the highest debt-to-income ratio in the country.”

Little wonder, the demographer Joel Kotkin concluded that “the state is run for the very rich, the very poor, and the public employees.” It is also how California found itself with the worst poverty problem and why “California ranks dead last among U.S. states in quality of life, according to a study by U.S. News.”

All of which brings us to the number one reason California is not sustainable.

4) The California Governments

You would think all of the above would have government officials deeply worried. So much so that they would cut back everywhere they could.  If you thought that, you would be wrong – very wrong.

California spends nearly $200 billion a year on budget and even more off-budget in the form of programs paid with bonds, i.e. debt financing. As for the pension debt, of that nearly $200 billion, in the most recent budget less than $2 billion was allocated to paying down that pension debt.  More than that was spent this year on a high-speed rail project currently estimated to cost $70 billion and which no one seems to want.

Beyond that, as I wrote earlier, California is moving ever farther left and wants the nation to pay for it. The next generation of leaders, Gavin Newsom, Kevin de Leon, Xavier Becerra and Kamala Harris are significantly to the Left of the old (and “conservative” by comparison) Jerry Brown and Diane Feinstein. That new generation of leaders are supported by an influx of friendly voters who are replacing those that are leaving.

All of those leaders support the dozens of lawsuits brought by the Democrat Attorney General Xavier Becerra against the Trump Administration. Many describe those lawsuits as part of California Democrats resistance movement – a resistance designed to result in political gains more than policy benefits.

Gavin Newsom, Kevin de Leon, Xavier Becerra and Kamala Harris also support some form of significantly expanded healthcare benefits if not universal healthcare – which is estimated to cost as much as $400 billion a year (that is not a typo). All of them support the California magnet policies that attracted so many of those in California illegally. In fact, there is no indication that the next generation has any concern for the future debt.  Instead, they support higher taxes.

What taxes will those be?  Within a decade you can expect higher income taxes and sales taxes.  There is always a movement afoot to do away with California’s landmark property tax protection known as Prop 13.  You also can expect a service tax – a tax on lawyers and accountants as well as hairdressers and gardeners. That service tax would be on top of the existing income tax.  Beyond all of that, sooner or later an asset tax will be proposed.  California counties already collect an asset tax on businesses.  Look for that to be proposed statewide as California lurches ever farther to the Left and if forced to confront future debt.

Is there a silver lining in this story?

If you are living in one of the 49 other states, you should learn from the lesson that is California.  If you are living in California, there is always the lesson of how Michigan came to be governed by a more centrist government.  Of course, that came after the failure of the prior government. For now, however, for all its concern for sustainable foods and products, California is on a high-speed rail to unsustainability.

Tom Del Beccaro is the author of The Divided Era – a historical perspective about why there is so much division in America today.

This article was originally published by Forbes.com

How Can California Reduce the Costs of Incarceration?

California Governor Gavin Newsom has agreed to give state prison correctional officers a 3 percent raise. According to the Legislative Analyst’s Office, there is “no evident justification” for this raise.

recent article in the Sacramento Bee summarizes portions of the LAO report, writing “The last time the state compared state correctional officers’ salaries to their local government counterparts, in 2013, state correctional officers made 40 percent more than officers in county-run jails, according to the LAO analysis,” and, “Since 2013, salary increases for state correctional officers have increased by a compounded 24 percent, according to the LAO.”

Within the LAO report, it is made clear that the rising cost for pensions is a major factor in escalating compensation costs for California’s prison guards. In theory, the cost to provide pension benefits is reasonable. The so-called “normal cost” of a pension is how much you have to pay if your pension system is fully funded. Unfortunately, that’s a big if. Today, the normal cost is only a small fraction of total pension costs. Most of the money going to CalPERS is to pay down their unfunded liability, built up over years of insufficient annual payments, along with lower than projected investment returns, and benefit enhancements that were justified using overly optimistic financial projections. CalPERS, the pension system that serves the California Correctional Officers, is underfunded by at least $138 billion. It is only 71 percent funded.

To see how this translates into the cost of individual pension benefits for California’s prison guards, useful information can be had by downloading raw data for state agencies from the California State Controller’s “public pay” online database. For example, using the most recent available data from the State Controller, in 2017 there were 21,558 prison guards who worked full time that year and were eligible for a “3@50” pension (pension equals three percent, times years worked, times final year base pay – eligibility at age 50). The average base pay for these guards was $87,460. Their average pension cost was $40,061, forty five percent.

State Controller data also offers insight into how much the modest PEPRA reforms of 2013 reduced pension costs, since California’s Dept. of Corrections also had 7,161 prison guards who in 2017 worked full time and were eligible for a “2.5@55” pension – in some cases this reduction was due to PEPRA. Their average base pay was $93,054, and their average pension contribution was $21,716, which equates to 23 percent, only half as much.

It’s easy to rail against the pay and pension benefits collected by public employees in California. And in the case of overpaid, underworked state and local bureaucrats who often are incompetent and indifferent towards business owners and homeowners who are trying in good faith to navigate California’s ridiculously excessive rules and regulations, that ire is appropriate. But before leveling that criticism at California’s correctional officers, one might consider what it takes to manage the criminally insane, or members of international gangs with friends inside and outside of prison, or, for that matter, the general prison population of thieves, thugs, wastrels and predators. If it’s such a cush job, go apply.

Nonetheless, especially when it comes to California’s pensions, something’s got to give. One solution which could be done overnight, without legislation or litigation if the CCPOA would agree, would be to reduce the pension multiplier from 3.0 percent to 2.5 percent for all future work by all correctional officers regardless of hire date. The three percent accrual for work performed to-date would be preserved. This single change could save the state tens of billions.

Government union members need to understand something unequivocally: There is no special interest in California that even approaches government unions in terms of raw political power. With great power comes great responsibility.  Conscientious members of these unions should demand this power is used for the common good.

In the case of the prison guards, that would not only involve a voluntary, and significant concession on the question of pensions, as described. It would involve aggressive political involvement in correcting some huge, and very recent, policy mistakes. To cite just one example, California’s Prop. 47, the so called “get out of jail free” law, needs to be repealed through a ballot initiative. Somehow, the tens of thousands of drug addicts, drunks, and mentally ill who currently constitute the bulk of California’s unsheltered homeless need to be cost-effectively reincarcerated.

California’s prison guards union can and should play a productive role in reforming the laws that prevent society from getting these most problematic of the homeless off the streets. They should then work creatively with legislators and local authorities to figure out how best to help these people. Why can’t state and local mental health professionals in partnership with the Dept. of Corrections build less expensive work camps for nonviolent addicts and alcoholics, where they could dry out and contribute to society? Why does it have to cost $71,000 per year to incarcerate the average prisoner in California? Why are comparable amounts necessary to shelter the homeless? This is ridiculous.

There’s more. Instead of demanding annual raises in an attempt to cope with the cost-of-living in California, why aren’t government unions supporting policies that might lower California’s cost-of-living? Support an overhaul of California’s excessive environmentalist legislation – why does it take six years or more to build an apartment building in California, when it only takes months in other states? Support deregulation of land development, because high-density infill is an exercise in futility unless it’s matched by new construction on open land within this vast, nearly empty state. Support nuclear power, and reform ill-conceived renewables mandates. Et cetera.

California’s prison guards union may wish to think outside the cell.

This article originally appeared on the website of the California Policy Center.

Proposed Bill Reduces Ballot Measure Transparency

Given their druthers, many government officials would prefer to do their business – our business, actually – behind closed doors and provide sanitized, self-serving versions of their actions after the fact.

Journalists and governmental watchdogs struggle constantly to overcome the tendency toward secrecy and obfuscation, sometimes winning and often losing.

Two years ago, in a rare display of support for transparency in governmental finance, the Legislature and then-Gov. Jerry Brown required local governments and school districts to tell voters how proposed bond and tax issues would affect constituents’ tax bills.

That’s common sense and good government, but local officials complained that the new law, Assembly Bill 195, would be too difficult to implement.

More likely, however, they feared that including an estimate of tax consequences in the brief ballot summary would crowd out their pitches for passage and that telling voters that their tax bills would increase might discourage them from approving the measures.

Last year, the disdain of local officials for the law manifested itself in a budget “trailer bill” that would suspend the transparency law for two years – thereby exempting hundreds of 2018 bond and tax measures.

The author of AB 195, Assemblyman Jay Obernolte, a Big Bear Lake Republican, said the trailer bill was drafted by the Legislature’s Democratic leadership without his knowledge.

For whatever reason, the exemption bill was not taken to a floor vote. Therefore, Obernolte’s disclosure law remained in effect for local tax and bond measures in 2018.

Local officials still don’t like the law and have waged a low-profile drive in the Legislature to get it repealed or watered down and, not surprisingly, a new bill has popped up to fulfill their hopes.

Last week, Sen. Scott Wiener, a San Francisco Democrat, did a “gut-and-amend” maneuver on one of his bills, Senate Bill 268. The measure, which had dealt with welfare benefits and already had passed the Senate, was stripped of its contents and a new bill was inserted.

It would allow local officials to remove the required information about tax consequences from the ballot summary that voters read before casting their votes and place it, instead, in the voter pamphlet or another separate statement, where it would get much less attention.

Moreover, the bill declares, “Failure to comply with this chapter shall not affect the validity of any bond issue following the sale and delivery of the bonds,” which basically lets local officials entirely off the hook.

SB 268 is just what local officialdom wants – a new law that purports to give voters vital information about tax and bond measures but ensures that the data will be buried in official paperwork and that failure to provide it won’t be penalized.

A Wiener spokesman, however, said the senator’s motive is “to make it clear what they (voters) are voting on,” asserting that the 75-word limit on ballot summaries isn’t enough space to adequately explain tax consequences of ballot measures and thus voters might reject taxes and bonds they otherwise would support. “A 75-word limit confuses voters,” he said.

That rationale parrots what local officials have been saying. One might suspect that Wiener is carrying the bill to placate those officials because they had been angered by his authorship of a highly controversial housing bill. That measure, Senate Bill 50, would have overridden local zoning laws to authorize high-density housing near public transit services but was buried in an avalanche of local government opposition.

This article was originally published by CalMatters.org

Two new headaches for beleaguered bullet train project

The California High-Speed Rail Authority – the agency in charge of building the state’s bullet train system – has already faced a tough year, with Gov. Gavin Newsom signaling in February that he’s not confident the full system can ever be built. But now the rail authority has two new public relations headaches on its hands.

In the Central Valley, farmers were already upset over state use of eminent domain to seize their property for construction of the project’s first segment – a 110-mile route from Bakersfield to Merced projected to cost $12.2 billion. But a recent report in the Los Angeles Times documented how slow the rail authority was in paying for seized land and in refunding farmers for the cost of the train project’s effects on their businesses.

The Times’ story focused on a kiwi farmer who lost 70 acres of land to the project more than a year ago and who since has gone unpaid for $250,000 incurred in “relocating wells, removing trees, building a road and other expenses.” It also noted farmers who had been owed $1.9 million and $630,000 for three years, and two others owed $500,000 and $150,000, though for shorter periods of time.

State officials questioned by the Times had no explanation for the delays beyond saying the project was complex in its legal and engineering challenges.

A follow-up story by Fox News emphasized why the delayed payments are particularly upsetting to many Central Valley residents. Not only is there a chance the initial segment between Bakersfield and Merced will never be completed because the state doesn’t have enough funds, there is a good chance that even if the segment is finished, some of the property that has been seized won’t be used for the project. That’s because even now – more than five years after the administration of Gov. Jerry Brown decided to start the bullet train’s construction in the Central Valley – authority officials still haven’t agreed on the exact details of the final route.

“The property owners are very frustrated that the High-Speed Rail Authority [doesn’t] seem to know what they actually need,” Sacramento attorney Mark Wasser said. “We have farmers who the authority has come back four times to change where they want to take.” Wasser has more than 70 clients affected by the rail authority’s Central Valley project.

Audit warnings validated by ethics probe

Meanwhile, state audits which have long warned that it is problematic for the rail authority to rely so heavily on outside consultants have been vindicated with what appears to be evidence of a conflict-of-interest scandal.

Recently, the authority’s deputy chief operating officer – Roy Hill – was suspended pending an investigation by the state Fair Political Practices Commission. Hill is a top executive with the WSP consulting firm employed by the authority. Evidence suggests that Hill approved a $51 million increase in a bullet-train contract held by the Spanish firm Dragados despite his apparent ownership of more than $100,000 in stock in Jacobs Engineering, a multibillion-dollar multinational corporation that is providing key services to Dragados on the California project.

The FPPC approved the request of Assemblyman Jim Patterson, R-Fresno, to investigate Hill, his actions and his personal economic interests.

“This is such a deep conflict that it calls into question whether the entire High-Speed Rail Authority and the contractors they have put together are involved in a massive corruption,” Patterson told Fresno TV station KMJ.

The rail authority says it will cooperate with the FPPC probe.

Hill has not yet commented publicly on the matter.

This article was originally published by CalWatchdog.com

Healthcare tax for citizens, free healthcare for noncitizens

If there was any question whatsoever as to whether California has gone completely off the rails, proposals in the new state budget should remove all doubt.  Perhaps the most egregious of these involve changes in state law as they relate to health care.

As of this writing, those proposals have yet to be adopted by both houses of the legislature – which is constitutionally required to pass the budget bill by June 15th every year – but statements by legislative leaders have caused a great deal of angst among the taxpayer public.

First among the inexplicable ideas is the proposal to force citizen and legal immigrant taxpayers to pay a new healthcare tax in order to subsidize healthcare for California residents who are living in the country illegally. Yes, you read that right.  The tax that Gov. Gavin Newsom wants to impose is a penalty on all those who don’t comply with the “individual mandate.” If this sounds familiar, it should. The individual mandate was a key component of Obamacare at the federal level until the penalty was repealed by the Republican-led Congress in 2017.

If it passes, California would be one of only four states imposing a tax on those who won’t or can’t obtain the kind of health insurance coverage the government requires. The state-imposed mandate would parallel the federal mandate which, in 2016, amounted to $695 per adult or 2.5 percent of yearly household income, whichever was higher. The tax is projected by Newsom to generate about $1 billion over three years.

To read the entire column, please click here.

California goes even bigger on Obamacare

California is beefing up Obamacare, restoring an individual mandate, expanding health insurance subsidies well into the middle class and covering some undocumented adults through Medicaid. It’s an incremental step toward universal coverage that can animate the Democrats’ party-defining debate over how best to cover everyone — through a mixed public-private system or through “Medicare for All.”

The Democratic-controlled state legislature on Thursday approved a budget, clearing the path for a statewide penalty for failing to purchase health insurance, which will help subsidize coverage for middle-income people earning too much to receive federal financialhelp from Obamacare. California will also become the first state to extend Medicaid coverage to low-income undocumented adults up to age 26, defying the Trump administration’s efforts to shrink government benefits to immigrants.

The moves fall well short of a sweeping Medicare for All-style system vigorously supported by the party’s progressive wing here in California and across the country — and viewed much more cautiously by much of the Democratic establishment.

The idea of expanding Obamacare subsidies could gain traction among more moderate Democrats in Washington who would rather build on the Affordable Care Act than engage in another protracted health reform battle should the party take back control in Washington. And they can sell it as a practical move toward expanding coverage immediately while the party weighs more progressive health plans….

Click here to read the full article from Politico

Down the Rabbit Hole on Housing

At the end of his pro-SB50 piece, Scott Lay asks: “Could Scott Wiener become the next Howard Jarvis-like figure?”

A better question would be:  “Could Scott Wiener become the next Gordon Gekko-like figure?”

The notion of painting corporatist Scott Wiener — Wall Street and the CBIA’s strongest advocate in Sacramento — as a populist everyman figure who is fighting for small homeowners against government overreach takes us into truly Lewis Carrollian terrain, even within the truly bizarre world of Sacramento politics.

There are so many false assumptions and “through the looking glass” moments in the article that it’s difficult to know where to begin.

Let’s try starting with the PPIC poll referenced by Joel Fox.  Did the poll ask, for example, if those surveyed felt single-family zoning should be made illegal throughout the state? Do Californians really feel so differently about housing than the rest of America, in which fully 80% of Americans prefer single-family housing, despite the contention of Scott Wiener acolytes that single-family housing is inherently “racist” and “immoral”?  Did the author consider that, hey, even UCLA students might decide someday when they’re older that they might join the majority of Americans and learn to love the virtues of a backyard.

While, despite Scott Lay’s suggestion, UCLA students may also not be exactly representative for California residents as a whole, he also mischaracterizes the opposition to SB50, using Yimby talking points.  No, it’s not just “wealthy donors” who opposed SB50. In fact, members of diverse communities throughout the state have opposed this war on single-family housing and on communities. And in LA, it wasn’t just Paul Koretz.  In fact, a unanimous LA City Council voted to oppose SB50 and Council President Herb Wesson spoke eloquently against the bill at a town hall in, yes, the Crenshaw area of Los Angeles.

What’s curiouser and curiouser is that SB50’s biggest supporters are the tech oligarchs, who are largely responsible for increasing income inequality, which is a key element of the state’s housing affordability crisis.  Wealthy developers and Wall St. are also big supporters: blanket upzoning can create blanket big profits, though it is more than questionable whether more market-rate housing might not, in fact, make the housing affordability crisis worse.  (Because building more Porsches won’t reduce the price of Priuses).

Lay writes: “Nobody is proposing that my childhood home or anybody else’s be plowed down to build condo towers on Montecito.” Except, that is exactly what SB50 is proposing.  In my city, Beverly Hills, which already is as dense as Detroit, Cleveland and Denver, single-family houses would be torn down to build luxury condos, convenient places for global capital to park money without doing a darn thing to address affordability.  In fact, with bills like SB330 from Wiener’s crony, Nancy Skinner, cities would be limited in their ability to force luxury developers to build or pay for more affordable housing. In fact, rumor has it Wall St. is building a monument to both Wiener and Skinner behind the “Charging Bull” statue.

Densification, as Lay writes, can enhance neighborhoods, but it can also detract from them.  It depends. Let’s not forget that slums and tenements were the product of densification. And while times may change (and some things such as reliance on obsolete urban planning models like TOD should change), some things don’t.  One size still doesn’t fit all. People still want to make their own lifestyle and housing choices, without the government or Wall St. dictating “acceptable” levels of densities. Livable communities are still important in providing a sense of place and a sense belonging and a sense of home in an increasingly cold and impersonal world.

Want to address housing affordability?  Then let non-profits build affordable housing. Let Sacramento use the state’s surplus to invest more in affordable housing, including paying the permit fees for non-profit housing providers.  Bring back redevelopment with a focus on building affordable housing. Institute vacancy taxes, foreign investor taxes and speculator taxes. Strengthen anti-trust laws to prevent a concentration of real estate ownership.  Repeal Costa-Hawkins and the Ellis Acts. Institute a statewide rental registry. Limit density bonuses to nonprofits, working in conjunction with individual communities. Address income inequality and consider instituting corporate wealth taxes.  Allow for more regional cooperation in dealing with housing issues. Deal with the root causes of job creation and job concentration. Encourage economic development in underserved areas, working towards the goal of geographic equity.

But don’t destroy neighborhoods.  Don’t take away community choice. Don’t put profits over people. In a state as diverse as California, dynamic, unique communities are the solution, not the problem, despite the best efforts of Sacramento politicians to scapegoat cities.

Finally, my guess is that Lay is also wrong in describing SB50 as dead (or delayed), though I hope he’s right here.  There is too much money for Wall St. and developers at stake: blanket upzoning is the urban planning version of turning lead to gold, and I expect we will see a Wall St. supported version of SB50 return this session as a gory, zombie gut-and-amend.

John Mirisch was elected to the Beverly Hills City Council in 2009 and is currently serving his third term as mayor.

This article was originally published by Fox and Hounds Daily

An Addiction Crisis Disguised as a Housing Crisis

By latest count, some 109,089 men and women are sleeping on the streets of major cities in California, Oregon, and Washington. The homelessness crisis in these cities has generated headlines and speculation about “root causes.” Progressive political activists allege that tech companies have inflated housing costs and forced middle-class people onto the streets. Declaring that “no two people living on Skid Row . . . ended up there for the same reasons,” Los Angeles mayor Eric Garcetti, for his part, blames a housing shortage, stagnant wages, cuts to mental health services, domestic and sexual abuse, shortcomings in criminal justice, and a lack of resources for veterans. These factors may all have played a role, but the most pervasive cause of West Coast homelessness is clear: heroin, fentanyl, and synthetic opioids.

Homelessness is an addiction crisis disguised as a housing crisis. In Seattle, prosecutors and law enforcement recently estimated that the majority of the region’s homeless population is hooked on opioids, including heroin and fentanyl. If this figure holds constant throughout the West Coast, then at least11,000 homeless opioid addicts live in Washington, 7,000 live in Oregon, and 65,000 live in California (concentrated mostly in San Francisco and Los Angeles). For the unsheltered population inhabiting tents, cars, and RVs, the opioid-addiction percentages are even higher—the City of Seattle’s homeless-outreach team estimates that 80 percent of the unsheltered population has a substance-abuse disorder. Officers must clean up used needles in almost all the homeless encampments.

For drug cartels and low-level street dealers, the business of supplying homeless addicts with heroin, fentanyl, and other synthetic opioids is extremely lucrative. According to the Office of National Drug Control Policy, the average heavy-opioid user consumes $1,834 in drugs per month. Holding rates constant, we can project that the total business of supplying heroin and other opioids to the West Coast’s homeless population is more than $1.8 billion per year. In effect, Mexican cartels, Chinese fentanyl suppliers, and local criminal networks profit off the misery of the homeless and offload the consequences onto local governments struggling to get people off the streets.

West Coast cities are seeing a crime spike associated with homeless opioid addicts. In Seattle, police busted two sophisticated criminal rings engaged in “predatory drug dealing” in homeless encampments (they were found in possession of $20,000 in cash, heroin, firearms, knives, machetes, and a sword). Police believe that “apartments were serving as a base of operations that supplied drugs to the streets, and facilitated the collection and resale of stolen property.” In other words, drug dealers were exploiting homeless addicts and using the city’s maze of illegal encampments as distribution centers. In my own Fremont neighborhood, where property crime has surged 57 percent over the past two years, local business owners have formed a group to monitor a network of RVs that circulate around the area to deal heroin, fentanyl, and methamphetamines. Dealers have become brazen—one recently hung up a spray-painted sign on the side of his RV with the message: “Buy Drugs Here!”

What are local governments doing to address this problem? To a large extent, they have adopted a strategy of deflection, obfuscation, and denial. In her  #SeattleForAll public relations campaign, Mayor Jenny Durkan insists that only one in three homeless people struggle with substance abuse, understating the figures of her own police department as well as the city attorney, who has claimed that the real numbers, just for opioid addiction, rise to 80 percent of the unsheltered.

The consequences of such denial have proved disastrous: no city on the West Coast has a solution for homeless opioid addicts. Los Angeles, which spent $619 million on homelessness last year, has adopted a strategy of palliative care—keeping addicts alive through distribution of the overdose drug naloxone—but fails to provide access to on-demand detox, rehabilitation, and recovery programs that might help people overcome their addictions. The city has been cursed, in this sense, with temperate weather, compounded by permissive policies toward public camping and drug consumption that have attracted20,687 homeless individuals from outside Los Angeles County.

No matter how much local governments pour into affordable-housing projects, homeless opioid addicts—nearly all unemployed—will never be able to afford the rent in expensive West Coast cities. The first step in solving these intractable issues is to address the real problem: addiction is the common denominator for most of the homeless and must be confronted honestly if we have any hope of solving it.

Christopher F. Rufo is a contributing editor of City Journal. He is a documentary filmmaker and research fellow at Discovery Institute’s Center on Wealth, Poverty, & Morality. Follow him on Facebook here.

This article was originally published by City Journal Online