California is Burning: Who Will Pay?

The price for California’s plague of wildfires could be political or could be monetary, but political history dictates that someone pays a price for disaster.

Anger and frustration is palpable around the state over endless fires threatening lives and property. The people of California know that something has gone wrong and want answers. The trouble is there are so many villains, depending who you ask.

For some, utilities are corrupt and more concerned about profits than keeping up maintenance on the electric grid. For others politicians are to blame for demanding so much from the utilities that they have lost focus on important upgrades. Still others point to the weakness of humans against the power of nature but add that we are suffering nature’s revenge for damaging the climate.

How does this get sorted out to satisfy the body politic?

Governor Gavin Newsom says he owns the problem putting a target on himself to do something about a complex problem. If he manages to establish a vision for confronting the crisis, even if it means no next-day solution, he could avoid the people’s wrath.

PG&E, with its battered reputation, has little chance of escaping blame. Suggestions to redirect the utilities efforts away from alternative energy spending and putting that money into grid fixes has its own critics.

Meanwhile, the tragedy grows as people are forced from their homes and property is destroyed.

And the property loss is not exclusively homes. Businesses like the Gold Rush era Soda Rock Winery building in Northern California and cultural institutions like the Ronald Regan Presidential Library in Simi Valley have been either destroyed or were put in grave danger.

I was privileged to be at the official opening of the Reagan Library in Simi Valley in 1991. (Way in the back, standing room section, but able to see the five presidents attending the event.) I spent much time there researching a chapter for my book on California’s tax revolt. So I watched with more than general interest the fight to save the library from the Easy Fire.

At the Library I got to handle hand written radio scripts composed by Reagan himself. (Access to the yellow legal pads had to be cleared by Mrs. Reagan, I was told.) I thought about those historical documents susceptible to lose if the fire invaded the library. It only brought home, however, all the valuable documents, precious photos, personal and professional items and all things meaningful lost by so many Californians to the ravages of these fires.

Political nature says someone must pay for these on-going catastrophes.

This article was originally published by Fox and Hounds Daily.

State Auditor: California’s 12 Largest Cities at Financial Risk

Photo courtesy of channone, flickr

According to a new website run by California State Auditor Elaine Howle and her staff, the dozen most populated cities in California all have significant fiscal problems and will be forced into major adjustments in coming years.

Eleven of the cities – Los Angeles, San Diego, San Jose, San Francisco, Fresno, Sacramento, Long Beach, Bakersfield, Anaheim, Santa Ana and Riverside – face what Howle classified as moderate risk. One – Oakland – was seen as a high risk.

All 12 of the cities face considerable stress from the rising cost of pensions. Several – especially Los Angeles – also have vast unfunded health care obligations for their retirees. 

Howle’s findings were depicted as surprising in a Sacramento Bee analysis, which focused on the health of the state economy and the low unemployment rate. But government finance experts have long warned that California’s cities – which have seen the cost of post-employment benefits roughly triple over the last 30 years – are in a far worse position to deal with pension bills that the state and counties. That’s because total employee compensation takes up a much bigger chunk of city budgets.

Howle warns cities to prepare for recession

At a news conference introducing the website, Howle said a primary goal was making sure that both local officials and residents of each city would use her office’s analysis to prepare for a possible economic downturn. Even a mild recession is likely to reduce revenue that cities get from sales and hotel taxes and from development permitting.

“If some of these [cities’] costs continue to go up and these cities aren’t prepared for them, they will have to cut services in order to pay pensions, to pay for benefits, to pay for the debts that some of the cities have taken on,” Howle said, according to the Sacramento Bee. She specifically said nearly half the cities will struggle to meet their steadily increasing payments to CalPERS.

Rankings on the website are based on the 2016-17 fiscal year, with a focus on each city’s pension obligations, pension funding, pension costs, anticipated future pension costs, retiree health care expenses, debt burden, liquidity, general fund reserves and revenue trends.

Overall, 18 cities were said to be at high risk overall, 236 at moderate risk and 217 cities at low risk. Compton – which has not produced an audited overview of its finances in five years – was judged to be in the worst shape, followed by Atwater and Blythe. 

The other cities listed at being high-risk: Lindsay, Calexico, San Fernando, El Cerrito, San Gabriel, Maywood, Monrovia, Vernon, Richmond, Ione, Del Ray Oaks, Maryville, West Covina and La Habra.

Among the cities found to be in the best shape: Rancho Cucamonga, Chino Hills, Poway, Indian Wells, Rancho Mirage, La Quinta and Mountain View.

The fact that 2-year-old information was being presented by the auditor as a snapshot of cities’ current fiscal health prompted criticism from the League of California Cities.

“It doesn’t tell the story of now, and so we’re not really clear on how helpful this dashboard is to the public, to the cities or basically anybody,” Jill Oviatt, director of communications and marketing for the league, told the Bee. She likened Howle’s rankings to “a data dump that’s void of context and analysis.”

This article was originally published by

Trump’s Executive Order Strengthens Medicare in Face of ‘Medicare-for-All’ Threat

Earlier this month, President Trump signed an executive order designed to defend Medicare against the threat of “Medicare-for-all.” Speaking to a crowd in The Villages, Florida, the president promised that his order would “strengthen, protect, and defend Medicare for all of our senior citizens.”

This order couldn’t come at a better time. As Democratic presidential candidate Sen. Elizabeth Warren rises in the polls, “Medicare-for-all” is becoming the Democratic Party’s official stance on healthcare reform.

But “Medicare-for-all” would end Medicare as we know it and make it harder for seniors to get care. President Trump’s order, by contrast, would improve the program for those who need it most.

The executive order lays bare what “Medicare-for-all” would mean for seniors. By enrolling everyone in the same government-run insurance plan, “Medicare-for-all” would destroy traditional Medicare. Seniors would lose the privileged place they currently occupy in the healthcare system. As the order states, this is unfair to those who have contributed to Medicare “throughout their lives” and expect to receive quality health benefits in old age.

By contrast, the president proposes strengthening the program, particularly by shoring up Medicare Advantage. Private insurers administer these plans, which combine the hospital and doctor benefits covered by Medicare Parts A and B. Many Advantage plans also include prescription drug coverage.

Medicare Advantage enrollment has nearly doubled over the past decade. One-third of all Medicare beneficiaries are covered by Advantage plans this year. The Congressional Budget Office predicts that nearly half of all Medicare enrollees will be in these plans by 2029.

Medicare Advantage is popular because it delivers high-quality care at low cost to beneficiaries. There are several reasons for this. Every year, the government determines what it will pay to cover Medicare Advantage enrollees in a given area. Insurers who provide coverage for less than that amount get back the difference in the form of a government rebate. Insurers also get bonus payments for receiving high-quality ratings.

As a result, insurers are incentivized to keep beneficiaries happy. They do so not just by keeping a lid on costs for enrollees but by offering benefits not covered by traditional Medicare. Nearly 70 percent of Medicare Advantage plans provide dental benefits; close to 80 percent include vision care. Over 70 percent offer some type of fitness benefit.

The president’s executive order would further empower Medicare Advantage plans to provide top-tier benefits to seniors. For instance, the plan directs the Secretary of Health and Human Services to find ways that plans can incorporate telemedicine — that is, care delivered remotely with the help of technology.

That’s great news. Telemedicine can give seniors access to far-away specialists they wouldn’t otherwise be able to see. It can also allow seniors to receive care from the comfort of their own homes.

And telemedicine is proven to improve patient health while containing costs. One Maryland hospital’s telemedicine program reduced hospitalizations for chronic disease patients by 90 percent; it’s cut the cost of care for these patients in half since 2016.

Traditional Medicare beneficiaries would also benefit from the Trump executive order. An entire section is devoted to reducing regulations so doctors can spend more time with patients. Right now, nearly one-third of doctors spend just 15 minutes with each patient they see, in large part because they have to spend so much time on paperwork and administrative tasks to comply with Medicare’s rules. Slashing red tape will allow doctors to focus on actually delivering care.

The executive order also contains a variety of provisions designed to increase competition in Medicare. One section directs various federal agencies to research how to “inject market pricing” into traditional Medicare so that prices throughout the benefit would “more closely reflect the prices” paid in Medicare Advantage. Elsewhere, the order calls for rules that would provide beneficiaries with price and quality information to help them shop for the best-value plans and providers.

Taken together, these provisions could make traditional Medicare look a lot more like Medicare Advantage. That’s good news for beneficiaries — average Medicare Advantage premiums have been declining since 2015, dropping to just $29 a month this year.

Protecting Medicare for seniors will require more competition, not more government control. Kudos to President Trump for realizing that the future of this program lies with Medicare Advantage, not “Medicare-for-all.”

This article was originally published by the Pacific Research Institute.

Are the wealthy fleeing California taxes?

Here is an indisputable fact about California taxation: More than two-thirds of state general fund revenues come from personal income taxes and about half of those taxes are paid by the 1% of taxpayers atop the income scale.

In other words, K-12 schools, state colleges and universities, health and welfare support for the poor, prisons and many other services for 40 million Californians are utterly dependent on the ability and willingness of a few thousand very high-income residents to cough up tens of billions of tax dollars each year.

There’s a perpetual political debate about that dependency. If nothing else, it creates what is called “volatility” — the tendency of state revenues to soar during periods of economic prosperity but plummet during downturns.

There is, however, another aspect of being so dependent on wealthy taxpayers. As their tax bites increase, some react by voting with their feet and moving from high-tax California to a state with low or no income taxes, such as neighboring Nevada.

There have been anecdotal accounts suggesting such flight.

The state waged a nearly three-decade-long battle to collect taxes from high-tech inventor Gilbert Hyatt after he decamped from Southern California to Las Vegas.

Two years ago, the Wall Street Journal published an article about the $31.1 million sale of a Lake Tahoe estate once owned by casino tycoon Steve Wynn to Michael and Nora Lacey, a very wealthy couple who lived in a 30,000-square-foot Tudor mansion in Los Altos Hills.

They changed their official residencies to their new estate on the Nevada side of Lake Tahoe. “The Wynn estate is our permanent home and our main home and the Morgan estate is a beautiful place when we want to get away,” Mrs. Lacey told the Journal.

By joining other wealthy residents of Incline Village, the Laceys would be able to shield at least some income from California taxes.

The Oakland Raiders football team will soon become the Las Vegas Raiders and when the team’s quarterback, Derek Carr, who grew up in Fresno, negotiated a new contract a couple of years back, it was “back-loaded,” meaning most of the money will be paid after the team relocates. The Tax Foundation calculated that Carr would save $3.2 million a year in state taxes by plying his trade in Nevada.

A highly detailed study by two Stanford University economists, Joshua Rauh and Ryan Shyu, provides new fuel for debate over California’s dependency on the rich. They conclude that the out-migration and “behavioral responses” of high-income taxpayers increased markedly after voters approved Proposition 30, a 2012 measure that sharply increased their income taxes, and the effect was a reduction in net revenues to the state.

The 2012 increase, sponsored by former Gov. Jerry Brown, was to last only a few years, but a 2016 ballot measure, Proposition 55,  extended it to 2030, thus increasing the incentive to move out or otherwise limit tax exposures. Moreover, a federal tax overhaul signed by President Donald Trump tightly limits the deductibility of state and local taxes, still another incentive.

In fact, as he introduced his last budget in 2019, Brown worried aloud about a potential flight of wealthy Californians. “People with higher incomes pay a lot more money, and some of them may be tempted to leave,” Brown said.

The study by Rauh and Shyu implies that some have already succumbed to temptation. And with public education advocates proposing still another income tax hike on the wealthy for the 2020 ballot, they could have still another incentive to depart.

Dan Walters is a columnist for CALmatters.

This article was originally published by CalMatters

Split Roll Can’t Fix What Ails California

After several fits and starts, the battle over the defense of Proposition 13 began in earnest last week as progressive interest groups began gathering signatures for their new and hardly improved ballot measure to impose a multi-billion dollar “split roll” property tax on Californians. These same tax-and-spend interests had already qualified a previous version of their initiative for the 2020 ballot until they realized that it was full of drafting errors and were forced to try to replace it.

The proponents’ revised measure is no improvement and still represents the largest tax increase in the history of California. But that’s not what they will tell voters as they seek more than one million signatures to qualify the initiative. Indeed, their deception began immediately as their signature gatherers are already telling people that the property tax increase actually protects Prop. 13. But nothing could be further from the truth.

It is important for voters to understand the proposal. Here are the basics and why they should fear it. “Split roll” is a shorthand term for proposed changes to Prop. 13 that would allow higher property taxes on businesses than on homeowners. The “roll” is the county assessor’s property tax roll, the list of all real estate parcels that are subject to property taxes. “Split” refers to a division into two parts: residential and nonresidential property.

Under Prop. 13, which became part of the state constitution when voters approved it in 1978, all property in California is assessed under the same rules and taxed at the same rate. The tax rate is 1 percent, and the assessment is set at the property’s fair market value, usually the sale price, at the time it changes ownership. Thereafter, Prop. 13 limits increases in the assessed value to 2 percent per year or the rate of inflation, whichever is lower, until the property changes ownership again.

The initiative would revoke Prop. 13’s protection from nonresidential business and commercial property and require the reassessment of those properties to current market value. This would result in a tax increase on office buildings, retail stores, shopping malls, movie theaters, gas stations, supermarkets, warehouses, auto dealerships, car washes, restaurants, hotels and every other business in the state. Even very small businesses that lease space in a strip mall would see their operating costs jump sharply as a result of tax increases passed. The cost of living, already high in California, would be pushed even higher by this tax increase.

To read the entire column, please click here.

Addiction and Decriminalization Fuel a West Coast Shoplifting Boom

When I was a kid, a television show called Supermarket Sweep featured teams of middle Americans bolting through grocery store aisles and filling their carts with food, household products, and pet supplies. The show’s premise was that, for two minutes, the rule of law—in this case, the law against shoplifting—would be suspended. The team with the largest haul could take home their bounty of groceries, win prizes, and compete for the championship.

Today, in some West Coast cities, the Supermarket Sweep isn’t a game show—it’s a dark reality, fueled by addiction, crime, and bad public policy. From Seattle to Los Angeles, a “shoplifting boom” is hitting major retailers, which deal with thousands of thefts, drug overdoses, and assaults each year. Since 2010, thefts increased by 22 percent in Portland, 50 percent in San Francisco, and 61 percent in Los Angeles. In total, California, Oregon, and Washington reported 864,326 thefts to the FBI last year. The real figure is likely much higher, as many retailers have stopped reporting most shoplifting incidents to police.

Drug addiction is driving this shoplifting boom. In recent years, West Coast cities have witnessed an explosion in addiction rates for heroin, fentanyl, and meth; property crime helps feed the habit. According to federal data, adults with substance-abuse disorders make up just 2.6 percent of the total population but 72 percent of all jail inmates sentenced for property crimes. Addicts are 29 times more likely to commit property crimes than the average American. Furthermore, as the Bureau of Justice Statistics found, “[39 percent of jail inmates] held for property offenses said they committed the crime for money for drugs”—the most common single motivation for crime throughout the justice system.

Unfortunately, as West Coast cities grapple with an addiction epidemic, the shoplifting boom has only accelerated because of decriminalization. California’s Proposition 47, approved by nearly 60 percent of voters statewide in 2014, reclassified many drug and property felonies as misdemeanors, effectively decriminalizing thefts of $1,000 or less.  Many criminals now believe, justifiably, that they can steal with impunity. For example, in San Francisco, police reported 33,000 car break-ins last year; the city now leads the nation in overall property crime. In Portland, a repeat offender nicknamed the “Hamburglar” stole $2,690 worth of meat in one year. He bluntly told police officers: “I know the law. I know the rules. I know what I can and can’t do . . . I’m never going to get over $1,000 at any store.” The Portland Police Department, which doesn’t assign officers to retail theft cases, admits that official statistics vastly underreport actual crime.

Some retailers have adopted a policy of private decriminalization, in many cases prohibiting their security guards from physically apprehending shoplifters. Liability losses, they believe, outweigh property losses. When I asked the manager of Seattle’s 96,000-square-foot Target if employees followed a “no touch, no chase” policy, he responded: “Officially, I can’t tell you our policy, but if you watch our front door for an hour, you’ll see pretty clearly what’s happening.” According to reports, the store likely has ten to 40 “security incidents” a day, including a dramatic incident last year when a drug-frenzied man went on a 15-minute rampage, destroying displays and merchandise, only to walk out the door with duffel bags full of goods. Police never arrived.

The shoplifting crisis isn’t limited to the West Coast. Retailers across the nation report $16.7 billion in losses to shoplifting. In many cases, they simply pass along the cost to consumers, with one study suggesting that this “shoplifting tax” costs the average family $400 a year. In Seattle, the shoplifting boom has forced some retailers to close stores in the downtown commercial district, citing massive losses and the threat of violence against employees. Another store, Outdoor Emporium, called 911 more than 200 times last year, but the city prosecuted only one of the incidents. Other retailers have stopped reporting shoplifting altogether—in a recent survey, downtown Seattle businesses reported “less than 5 percent of the daily crime they experience.”

Business groups have started to fight back. In Seattle, an association of downtown retailers have pushed the city to tackle “prolific offenders” who repeatedly rob, steal, and assault innocent people in downtown. Citizens, too, are rebelling against higher prices at the register. In the city’s south end, a disabled veteran made headlines for confronting a habitual shoplifter in a Safeway aisle by blocking the man’s exit with his motorized cart. Such displays of popular frustration should inspire reform, but the shoplifting boom remains a challenge for policymakers. How will progressive cities balance a desire to reduce incarceration rates with a commitment to protect businesses? For now, city leaders refuse to consider how mass decriminalization fuels a breakdown in public order.

Christopher F. Rufo is a contributing editor of City Journal, documentary filmmaker, and research fellow at the Discovery Institute’s Center on Wealth & Poverty. Hes directed four films for PBS, including his new film, America Lostwhich tells the story of three “forgotten American cities.” Follow him on Facebook and Twitter.

This article was originally published by City Journal Online

Climate Litigation Brings Divisiveness Instead of Unity to California

In the run-up to the 2020 election, voters have been tuning in to a series of debates, and town halls featuring the Democratic candidates, several of which were dedicated solely to global warming and climate change (GWCC). However, new polling found GWCC “barely registers as a priority issue.” Voters are more concerned about the economy, jobs and healthcare. California voters share those same concerns with added worries about the state’s homelessness crisis. In New York they are concerned about economic development and every day issues like road paving.

Then why have local officials in California, New York City, and elsewhere chosen to sue energy companies over climate change, an issue low on the list of voters’ priorities? No rational person disputes that climates are always changing.  Nor does any rational person dispute that we must also address the issue of climate change. The debate then becomes how we take on this global challenge. At the recent United Nations climate summit, 500 scientists sent a letter urging leaders to follow a climate policy based on “… realistic economics and genuine concern for those harmed by costly but unnecessary attempts at mitigation.” Litigation fails to meet these criteria.

These lawsuits—and ones filed in Colorado, Maryland, Washington State, and Rhode Island—utilize the legal theory of “public nuisance.” Plaintiffs’ attorneys working on a contingency fee basis who stand to pocket millions should they find courtroom success in are driving this litigation.

The San Francisco, Oakland, and New York City cases were dismissed last year, but are currently under appeal in federal circuit court. Now conflicting legal rulings in five, state-level, district courts could bring muddied legal decisions. To date, courts are unsure where to adjudicate these weather-related claims; or whether voters, city councils, legislatures, Congress, and the U.S. executive branch should decide energy policies. 

Legal victories may fill attorneys’ coffers, but they won’t do much to solve the global problems at hand. Over 2 billion people are without electricity, and 600 million of them are in Africa. According to the U.S Energy Information Administration, “global energy-related CO2 emissions will increase through 2050.” This growth is coming from China, India, and Africa through population growth, economic advancement, and higher energy usage rates. Approximately $2 trillion a year of energy investments is needed until 2040 to keep pace.

How would these lawsuits address the new, booming, high-emitting “Asian Century?” The plaintiffs aren’t addressing that coal’s high-emission growth is exploding globally, but coal-fired generation declined by 40% in the U.S from 2008-17 by switching to natural gas-fired power plants.

The Oregon Petition, Drs. Judith Curry, Patrick Moore, Richard Lindzen would question how courtroom climate drama would solve the energy problems coming from China, India, and Africa. 

Based on the U.S. Energy Information Administration’s International Energy Outlook 2017 most global emission growth is coming from non-OECD nations. In Congressional testimony, using this knowledge, and advanced climate modeling from the Heritage Foundation, Kevin D. Dayaratna, Ph.D., Senior Statistician and Research Programmer at Heritage said on February 24, 2017 to the U.S. Congress Subcommittee on Environment and Oversight Committee on Science and Technology: The U.S., “in fact could cut its carbon dioxide emissions 100 percent, and it would not make a difference in abating global warming.” This demonstrates how complex, intertwined, and multifaceted environmental questions are to solve, and the folly of pinpointing blame on a handful of energy companies in California.

It was U.S. energy companies that allowed our nation, and California to reduce emissions while meeting the Kyoto Protocol through lowered carbon outputs. Furthermore, Bloomberg has reported the five biggest energy manufacturers are greener by reducing emissions 13% the last ten years, which was far ahead of the U.S. reduction of 4.9% during this timeframe. 

Not only are energy companies more environmentally conscious, they are also greatly contributing to our nation’s bottom line and job market when “80% of humanity lives on less than $10 a day.” It’s legally unclear how they are liable for these allegations when over 6,000 products come from a barrel of crude oil. Modern life in California without oil and petroleum is impossible.  

But litigation proponents in California, New York City, and other supporters  continue pushing damaging lawsuits against energy companies in the belief that chaotically intermittent, mathematically unstable renewables will continue keeping courtroom lights on where they are arguing these claims. Simply put, a green energy revolution is still decades away from happening, and it will come from scientists instead of lawyers. 

Let’s put the gavel down, and work together to fix problems. This will never occur in a deposition hearing. The better model is the California Energy Commission’s “Local Government Challenge” that has given grants to forty municipalities investing in emission reduction goals. 

Technology, human ingenuity, and the quest for enlightenment will lead this new energy revolution. The Manufacturers Accountability Project has highlighted how they are part of this enlightened revolution to reduce carbon emissions while advancing sustainability efforts, and powering our communities. Others are also advancing pioneering technology to remove carbon from the air.

With climate litigation, the plaintiffs, and their supporters are setting up a false choice between commercial activity, manufacturing, and environmental stewardship. Instead of making fossil fuels into the enemies of infrastructure and human life let’s build together on finding solutions.

California Wants to ANALYZE Your Child for TRAUMA Before Entering School

Parents of California need to be on the alert. The Newsom administration is going to demand that before your child enters school, they MUST go through “a screening” for childhood trauma. This will not be done by someone you choose, but by the government. So, if a child talks about going to church and believing that abortion is murder, the government could consider that a childhood trauma. In the extreme, take the child from the parents. If you thought government mandating that poisons be put into your child was bad — this is a million times worse.

We need a movement, now to stop this threat to families and children. As I have said before government believe your children belong to the State — not the parents. Who is to decide what a trauma is — government?

As Patrice Gaines reported for NBC:

Dr. Nadine Burke Harris has an ambitious dream: screen every student for childhood trauma before entering school.

A school nurse would also get a note from a physician that says: ‘Here is the care plan for this child’s toxic stress. And this is how it shows up,’” said Burke Harris, who was appointed California’s first surgeon general in January.

It could be it shows up in tummy aches. Or it’s impulse control and behavior, and we offer a care plan. Instead of reacting harshly and punitively, every educator is trained in recognizing these things. Instead of suspending and expelling or saying, ‘What’s wrong with you?’ we say, ‘What happened to you?’

Another reason to Recall Gavin Newsom — do it for the children.

Click here to read more on this topic from NBC News.

Gov. Newsom Criticized After Canceling 3 Road Projects

Eleven months after leading a successful campaign against a ballot measure that would have repealed fuel tax hikes approved by the Legislature in 2017, Gov. Gavin Newsom is facing bipartisan criticism over his administration’s decision to cancel three road projects in the Central Valley and San Luis Obispo County.

Newsom has rejected the criticism that he had engaged in a “bait and switch” because he previously emphasized to voters in 2018 that at least 60 percent of the $5.2 billion generated annually by the 2017 tax hikes would go to roads and bridges, as specified in Senate Bill 1.

But his Sept. 20 executive order directed state transportation officials “to leverage the more than $5 billion in annual … spending for construction, operations and maintenance to help reverse the trend of increased fuel consumption and reduce greenhouse gas emissions” and to “reduce congestion through innovative strategies designed to encourage people to shift from cars to other modes of transportation.” 

Soon after, Caltrans – citing Newsom’s order – said the three road projects had been subject to “deletion” from a list of scheduled work at a savings of $32.5 million. It also said other road projects had been reduced in scope, creating a total savings of $61.3 million “to be held in reserve for priority rail projects and other priorities aligned with [the governor’s] executive order.”

Assemblyman Rendon says voters remembered ‘clear promises’

This led to criticism not only from Republican officials in the Central Valley and San Luis Obispo but from Assembly Speaker Anthony Rendon, D-Lakewood.

Gas taxes were raised “with some clear promises … that this money would be used … almost exclusively for roads and repairs,” he told the Los Angeles Times. “Now is not the time to go back on those promises.”

But Newsom said he would honor Senate Bill 1 exactly as it was written and said critics shouldn’t “conflate” his Sept. 20 executive order with the state’s “locked in” commitment to fix roads and bridges.

Nevertheless, Democrats in the Legislature have good reason to be wary about fallout from their support of the 2017 gas tax hike. One of their few setbacks in recent years as they have established lopsided majorities in the Assembly and Senate came in June 2018 when state Sen. Josh Newman, D-Fullerton, was recalled easily after a campaign that focused on his vote for the gas tax hike.

But the potency of the issue has been evident longer than that. In 2002, 69 percent of state voters backed Proposition 42, which made it more difficult for gas taxes to be shifted for use on general needs. In 2006, 77 percent of state voters supported Proposition 1A, which added even more restrictions.

Gas tax revenue diverted to general uses in 2010

Yet these measures were unable to block Gov. Arnold Schwarzenegger and the Legislature from raiding gas taxes again in 2010. Facing a huge budget deficit after the Great Recession had led to a nearly 20 percent drop in state revenue, the Republican governor and Democratic lawmakers and their lawyers came up with a plan to end state sales taxes on gasoline while sharply increasing excise taxes. Because the “gas tax swap” didn’t increase revenue, it was allowed to be enacted on a simple majority vote.

And since there were far fewer restrictions on gas excise taxes than gas sales taxes, lawmakers were able to take $1.8 billion in annual gas excise revenue for general uses.

Senate Bill 1 in 2017 eliminated the law setting up the tax swap.

This article was originally published by

What Did Gov. Newsom Do Right for California Taxpayers?

There is little debate that California is a harsh, anti-taxpayer environment ruled by a tax-happy majority party.  However, in this super-partisan environment that grips both California and the entire nation, it is important to point out when our political adversaries do something positive.

In that spirit, let’s acknowledge what Gov. Gavin Newsom did right for California’s taxpayers.

First, he vetoed Senate Bill 268, which would have weakened important tax transparency laws that the Howard Jarvis Taxpayers Association fought hard to enact several years ago. Specifically, SB268 sought to alter Assembly Bill 809 and AB195 (2015-2016) which, taken together, require that the rate of a tax, its duration, and amount of money sought to be raised be included in the ballot label for local bond and special tax measures, including parcel taxes. That ensures that this critical information is visible to voters on the ballot itself, and not just printed in a separate voter information pamphlet.

The ballot label is commonly the last thing taxpayers see before voting on a measure, and is the most accessible way to reach voters. SB268 would have removed this information for local bonds and some parcel taxes, to instead bury it in the voter information guide, far from the eyes of most voters.

To read the entire column, please click here.