The Golden State No More

 

 

When our company recently expanded the number of its restaurants in Texas, I was startled to receive a call from Governor Rick Perry thanking me for our decision.

In the 10 years I’ve been CEO of CKE Restaurants, owner of the Carl’s Jr. and Hardee’s brands, no governor had ever made such a gesture. Perry went further during our conversation and asked what it would take to move our headquarters from California to Texas.

This is a question weighing on many California CEOs right now. Do we grow our businesses here where the tax and regulatory hurdles remain high, or do we relocate to a more business-friendly state like Texas?

CKE’s history in California stretches back to 1941 when Orange County entrepreneur Carl Karcher and his wife Margaret bought a hotdog cart for $311. Today, we have over 72,000 employees, approximately 18,500 of them in California.

We at CKE love California, but the hard truth is this:  California is the most business-unfriendly state in which we operate. While we have kept our corporate headquarters in California so far, our company’s real job-creating engine has already moved.  Our current plans for domestic development are principally centered in Texas where it is easier to build and operate restaurants, unemployment is lower, and consumers can spend more of the money they earn because there is no state income tax.   While we will continue to operate our existing California restaurants, we will be building 300 new restaurants in Texas this decade.

When we open a new restaurant we invest over $1.2 million in the community and create about 25 permanent jobs within the restaurant itself, not to mention the numerous outside jobs supported by our constructing, maintaining, advertising and supplying food and paper products to the restaurant.  Texas’ business-friendly environment is one of the reasons its unemployment rate remains below the national average while California faces one of the nation’s highest unemployment rates, fleeing businesses and a severe erosion of its tax base.  Our 300 new restaurants will create about 8,000 new jobs in the restaurants in Texas and at least 16,000 additional jobs for our suppliers and service providers.  These are jobs we would love to create in California.

What it would take to bring our business development back to California? I would offer the following suggestions:

Reduce out of control permit costs and construction regulation. Excessive fees, oppressive environmental regulations, exorbitant street maintenance costs and unreasonable construction permitting requirements unique to California add up to $200,000 in additional costs for each restaurant and can take up to two years to process through state and local bureaucracies.  On average, the permitting process in California takes about 8 months.  In Texas, it takes six weeks.  That time difference alone materially increases our costs to open a new restaurant.

Allow managers to be paid as managers. California considers General Managers subject to overtime salary requirements if they work 50% of their time in non-managerial tasks.  This is not the case in most states or under federal law.  Our General Managers receive substantial salaries, bonuses and benefits to run their restaurants as entrepreneurs, like they own them.  In the great majority of states, our General Managers can do their jobs as they see fit whether the tasks they choose to perform are strictly managerial or as simple as speaking with guests and busing tables in the dining room.  If you are managing a restaurant and a cook fails to show up, you had better know how to cook and be prepared to do so.  While that is a non-managerial task, it is exactly what you would do if you owned the restaurant.  To avoid costly class action lawsuits on overtime claims in California, many retail businesses, including ours, have had to convert their salaried General Managers to hourly employees so they can do their jobs.   Our General Managers consider this a demotion but we have little choice.  It is simply common sense that General Managers should be classified as managers able run their restaurants as they choose.

Eliminate the overtime work day, pay overtime on a weekly basis. California requires overtime for employees working more than eight hours a day, not just those working over 40 hours a week as in most states. This deprives employees of the flexibility to work six hours one day and make up the time on another. Because managers are also hourly employees, this limits their ability to work more hours on busy days and fewer hours on others without again incurring overtime costs.  We have actually had to terminate General Managers for working overtime; in other words running their businesses as if they owned them, and failing to claim the overtime. A failure to do so would result in the very class action lawsuits we made them hourly employees to avoid.  The reality is that California law is requiring us to fire general Mangers for doing their jobs.  This law also impacts our crew employees who can ill afford to lose working hours in this economic environment.  Such employees may want to work 6 hours on one day, for family or personal reasons or to attend school events, and 10 hours on another day so we can compensate them for a full forty hours.  In California, that is not an option.

Simplify the confusing meal and rest break laws. These laws are so complex that it is difficult for employers or employees to understand the requirements, let alone comply with them.  Opportunistic lawyers often sue companies for minor and often unintentional violations. Employees, including our General Managers, are forced to take breaks during the busiest times of the day, to their frustration as well as that of their co-workers and customers.  You may have seen restaurant employees sitting in the dining room while you wait in a long line for “fast food.”  They are taking their mandatory rest breaks.

Tame the lawyers. With some 200,000 lawyers, California needs to put some limit on their ability to file class action lawsuits against some perceived threat as though each one were his or her own private attorney general. Like many California businesses, our company has wasted $20 million defending such cases in the last eight years, a majority of that money going to the attorneys’ pockets rather than to the creation of economic prosperity.  This is a major impediment to businesses deciding to grow in California as opposed to other states.

Reduce oppressive state taxes. California has some of the highest tax rates in the nation for businesses and personal incomes. The state must lower taxes to retain the businesses it has and to encourage others to locate or expand here.

California is one of the most beautiful locations in the country and California’s labor pool remains, for now, the most creative and knowledgeable in the world. We want to stay and we would like nothing better than re-energizing our job creating restaurant development here in California. But the laws and regulations I have discussed add substantial additional costs to doing business here and create the impression that our State government fails to understand or value the contributions private enterprise makes to the State’s prosperity.  In essence, it is very difficult and expensive to build a restaurant in California.  If you manage to build it, California law makes it onerously difficult to operate.  If you manage to build it and operate it at a profit, you are hit with a big tax.  The decision whether to grow in California or another more business friendly state is really quite simple.

Over the last two years, whenever I tried to discuss these issues with state political leaders, I was either brushed off or told there was a lack of political will for change.  That changed in February when Governor Brown, the Governor’s Office of Economic Development, the Lieutenant Governor and legislators from both sides of the aisle contacted me concerning these issues.  Whether these discussions will result in any progress is yet to be seen, but at least we are talking.

Republican or Democrat, liberal or conservative, any legitimate political agenda requires prosperity for the people of California.  Absent another unsustainable economic surge such as the dot-com boom or the housing bubble, to again experience economic prosperity California must strengthen the fundamentals of its business community by reducing both regulations and taxes.

Andrew Puzder is the CEO, CKE Restaurants and author of Job Creation, How it really Works and Why the Government Doesn’t Understand it

Teachers unions continue their assault on school choice in California by Larry Sand


The California Federation of Teachers is sponsoring AB 401 – which if passed would limit charter school growth in California.

In April, Rasmussen Reports released the results of a poll which addresses American voters’ sentiments about our public schools. Some of the more interesting findings are:

• 72% say taxpayers are not getting their money’s worth from our schools, while only 11% think we are.
• By a margin of 41-34 (25% were unsure), those polled said that spending more money on education would not improve student performance.
• 61% believe that public educat ion has become worse over the last ten years. [Read more…]

When elephants fly – the end of the dreaded RDAs

By Shawn Steel

California National Committeeman

Republican National Committee

Something strange happened in the first six months of the Jerry Brown administration. He killed the invidious Redevelopment Agencies [RDA] which many California cities used to confiscate private property against unwilling land owners, in the name of abolishing “blighted” neighborhoods. Through Assembly bill 26X, the legislature voted to disband redevelopment agencies unless they are willing to share property tax revenue in the future to help finance public schools.

[Read more…]

Mend, don’t end, redevelopment

By Richard Lyon, Senior Vice President, California Building Industry Association

California’s Economic Development Department recently reported that our state shed more than 29,000 jobs in the month of May – giving rise to fears that the California economy could be headed for a double dip recession.  In light of this reality, you’d think that policymakers in Sacramento would be doing everything they could to increase job opportunities and stimulate economic growth in our state.

Unfortunately, you’d be wrong.

Rather than work to create jobs, the Legislature last week passed legislation to effectively abolish local redevelopment agencies in California. In doing so, the Legislature has turned its back on one of the few economic development tools available to local governments’ to create jobs and economic opportunity.

Eliminating redevelopment is bad economic policy and will kill jobs and economic expansion at the worst possible time.  Statewide:

  • Redevelopment activities support an average of 304,000 full- and part-time private sector jobs in a typical year, including 170,600 construction jobs;
  • Redevelopment contributes over $40 billion annually to California’s economy in the generation of goods and services; and
  • Redevelopment construction activities generate $2 billion in state and local taxes in a typical year.

Abolishing redevelopment is extremely shortsighted. California’s construction sectors are experiencing historically high levels of unemployment. More so now than ever before, California needs to embrace policies of opportunity and economic growth.

Redevelopment offers that hope of opportunity and growth. It works to kick-start construction in urban areas that the business community largely cannot undertake on its own. By remediating environmental waste, building basic infrastructure, and making other improvements, redevelopment lures private investment in housing, jobs and businesses that otherwise would not occur. These investments mean jobs and opportunity in our most downtrodden communities.

Fortunately, by vetoing the main budget bills, the Governor has temporarily postponed the implementation of the redevelopment elimination legislation. The Legislature should take this time to pull back the legislation.

Instead of abolishing redevelopment, the legislature should instead adopt the compromise reforms being supported by a broad coalition of local governments, organized labor, housing advocates and business leaders that would reform redevelopment to strengthen what works and eliminate what doesn’t.

SB 286 (Wright) and AB 276 (Alejo) significantly enhance transparency and accountability, reduce the footprint of redevelopment, provide funding to schools, and ensure more targeted uses of redevelopment dollars.

Eliminating redevelopment will thrust our state economy into further recession, by reducing jobs and stalling economic growth. We should mend rather than end redevelopment. It is an essential tool to improve our economy and stimulate job-creation.

Governor axes redevelopment—Finally the bleeding stops

By Chris Norby, Assemblyman, 72nd District

Yesterday, Governor Brown formally signed AB26x, a long-overdue bill that ends redevelopment agencies in California as we have known them for over 50 years.

Redevelopment was originally created by the legislature to address urban blight and to revitalize decaying residential and commercial districts. Cities were empowered to create local redevelopment agencies with enhanced powers to divert property taxes, sell bonds, expand eminent domain and subsidize private development.

By the 1980s, a tool once used by a few large older cities had spread statewide. Newer suburbs were declaring raw land to be blighted to build new malls, auto plazas and big box retail centers—all subsidized at taxpayer expense. By 2000, over 30% of all urbanized land statewide had been declared blighted and included in redevelopment areas.

Tax increment financing diverted ever more property tax revenues into redevelopment agencies—at the expense of public safety and education. By 2010, over 12% of tax revenues had been hijacked by redevelopment agencies—over $6 billion statewide.

Eminent domain became the tool of choice to assemble the huge new parcels needed for redevelopment projects—all motivated by promised economic benefits. Homeowners, small merchants and even churches were targeted for taking on behalf of politically connected developers.

Repeated studies showed that redevelopment subsidies produced no net economic benefits. Savvy retailers, auto dealers and NFL team owners played one city against another for greater subsidies and land write-downs, but for the state as a whole it was a zero-sum game. California became littered with half empty malls, auto plazas and strip centers all over-built with huge public subsidies.

Meanwhile, bonded indebtedness soared to $90 billion, as agencies could encumber future property taxes without a vote of their constituents.

With the state facing a $25 billion shortfall, the losses to redevelopment agencies became unsustainable. The state could no longer backfill the fiscal bleeding to local schools and services. The signing of AB 26x saves the state budget an immediate $1.7 billion. Once the debts are paid off the full $6 billion annually will be restored to fund public services and education.

Redevelopment was never indented to be a permanent drain on the public treasury, never intended to be a permanent cash cow to subsidize development that the market alone could not support.  Credit Governor Brown for ending a program that had long outlived its usefulness.

Opposing View: Eliminating Redevelopment Agencies threatens local cities, services

by Lacy Kelly, CEO

Association of California Cities – Orange County


The Association of California Cities – Orange County (ACC-OC) believes that redevelopment agencies need reform, not elimination.

In fact, the vast majority of redevelopment agencies and the projects they oversee are proven economic generators for California’s cities and provide exceptional returns on investment for the taxpayer.

Balancing these benefits with meaningful change is precisely why the ACC-OC developed a comprehensive set of redevelopment reform best practices. These ideals are meant to protect the new jobs, tax revenue and beneficial projects produced by the redevelopment process, while simultaneously addressing the isolated problems.

For example, we believe in greater transparency in the redevelopment process through robust online disclosures. In fact, our principles require that agencies post the past five years of redevelopment expenditures as well as all future funding obligations. Additionally, taxpayer oversight committees should be mandated for all redevelopment agencies in order to ensure that the original intent of redevelopment is protected and government abuse eliminated.

In Orange County, for example, the Orange County Transportation Authority has had great success with its Measure M-mandated Taxpayer Oversight Committee. This panel scrutinizes projects and expenditures against the original intent of the voter-approved half-cent sales tax. This can serve as a model for all redevelopment agencies.

We strongly recommend that redevelopment agencies also follow consistent, statewide benchmarks to curb abuse, including:

  • Cap administrative costs at 20 percent
  • Prohibit land banking for speculative purposes
  • Promote and develop affordable housing within redevelopment projects

All of the ACC-OC’s Redevelopment Best Practices can be found online at www.ACCOC.org/publications.

The ACC-OC agrees that redevelopment reform is needed.  But we must not throw the baby out with the bathwater. The wholesale elimination of a tool that creates jobs, increases revenues and removes blight during a time when cities are struggling to keep police on the streets and parks maintained is highly misguided and threatens economic viability in many California communities.

The ACC-OC will continue its vocal support for redevelopment agencies and champion the reforms necessary to ensure that they remain healthy, sustainable tools for California cities.

Eliminating Redevelopment Agencies: A Good Idea Implemented For the Wrong Reasons

By Allan Mansoor – Assemblyman, 68th District

Last week I voted to end redevelopment agencies (RDAs). While RDAs have been the source of wasteful spending at the local level, the biggest problem with RDAs is that they are a conduit used to initiate eminent domain actions against private property owners. In doing so, cities pick winners and losers by interfering with the free market.

The proposal to end RDAs was introduced by Democrats. Democrats generally oppose eminent domain reform measures and regularly use RDAs to support earmarked spending in their districts. With this in mind, their proposal deserved skepticism. What was their motive?

At a time of major budget deficits, the Democrat budget proposal included cuts to education along with increases to welfare and social services and new benefits to public employees. Their motivation in ending RDAs wasn’t an altruistic vision that RDAs are wrong. They wanted RDA money to pay off their public employee union supporters.

Redevelopment agencies are funded from the $45 billion Californians pay in property taxes. The RDA money in question is about $1 billion in savings that will be recognized after RDAs are eliminated. These are property tax revenues that I think should remain with local government. I am aware that there is abuse at the local level, but that abuse pales in comparison to what can happen at the state level where the abuse is more severe and more difficult to correct.

Raiding local treasuries is particularly troublesome in the current economic environment. I served on the Costa Mesa City Council and am aware of the fiscal crises facing many cities. For many cities, the unexpected taking of RDA funds is going to make tough times even worse.

The measure to end RDAs was actually two measures. One ended RDAs and the other took their money. My Republican colleagues who called the proposal a “money grab” were right when they focused only on the end result. But taken by itself, the bill to end RDAs was one of the most important pieces of legislation affecting private property rights in recent memory. I supported it even though I opposed the other. Unfortunately, the money-grab-measure passed.

In California, even the slightest victory in the fight for protecting property rights is cause for celebration, but victories public employee unions give us on a silver platter are hollow victories. As long as public employee unions control Sacramento, they can recreate RDAs anytime RDAs will serve their interests.

Let Freedom Fest ring

Join us at Freedom Fest! Come be a part of the world’s largest gathering of free minds at Bally’s Las Vegas from July 14-16, 2011. We will be hosting a panel discussion, featuring Brian Calle, editor of the California Political Review. The following editorial from the Orange County Register provides more details on the exciting weekend of free political thought, discuss and debate.

Originally published June 24, 2011

Anyone curious about the direction of the conservative or libertarian movements, priorities for Tea Party enthusiasts or Republicans – or anyone generally interested in the hottest topics for right-leaning politicos – ought to pay close attention to what happens at Freedom Fest, set for July 14-16 in Las Vegas. This conference may be a bellwether for issues going into next year’s presidential election and could well help shape the debate during the GOP presidential nomination season.

Freedom Fest is dubbed “The worlds largest gathering of free minds,” where some of the most influential free-market, right-leaning intellectuals, business leaders, political pundits, entrepreneurs, activists and economists discuss and debate political and economic issues ranging from the national debt, inflation, foreign policy, public employee unions, technology, drug legalization, school choice, education reform, inflation and health care.

Last year an estimated 2,000-plus attendees filled Bally’s Hotel and Casino for the event. Organizer and founder Mark Skousen hopes participants this year will number more than 3,000.

Scheduled speakers include Steve Forbes, on “Are We Headed for an American Revolution – or a French Revolution?” The libertarian co-founder of PayPal, Peter Thiel, will speak on “Stalled Technology in America: End of the Future?” Whole Foods CEO John Mackey will talk about “Re-Branding Capitalism in the 21st Century.” Register Columnist Brian Calle and contributor Steven Greenhut will speak on public-sector pensions, education reform, California government and military interventionism.

Representatives from the Cato Institute, Reason Magazine, Hillsdale College, the Foundation for Educational Choice, the Heritage Foundation, the Pacific Research Institute and others are scheduled to participate.

Last year’s Freedom Fest reflected the political mood of a large segment of the electorate, and signaled a change in sentiment nationally that ultimately ushered in to office more conservatives and Republicans. This year, we hope the session again delivers greater insights into the political winds of the liberty movement for this election cycle.

Is Texas the new California?

Originally published in the Orange County Register on June 24, 2011

Chart courtesy Esmael Adibi, Chapman University

Written by Brian Calle

Is Texas the new California? A bustling economy, housing at affordable levels and some of the most aggressive examples of business-friendly public policies in the country make Texas desirable not only for entrepreneurs and retirees but also right-leaning voters desperately searching for some hope for a fiscally responsible public-policy renaissance and a new face for a Republican Party that needs one.

California, once a Republican stronghold (believe it or not), helped steer national political discourse and boasted its viability as an economic leader among states. But with a mass exodus of both business and job seekers, a confining regulatory infrastructure and a high cost of living, California appears to be riding off into the sunset, economically speaking.

Today, Texas is the big state leading the pack and, based on its public policy approaches, it should. The parallels though between today’s Lone Star State and the Golden State of the 1960s, 1970s and 1980s are apparent. So much so, in fact, Texas seemingly has become the new California – that is, the economic engine of the country, the innovation capital and perhaps, its political powerhouse, too.

Comparisons of the politics, economics and public policy of California and Texas have become en vogue, and rightly so. Both states are big, iconic and yes, eccentric. California is the largest state by population in the United States; Texas is second. By area, Texas is the second largest state and California is third. (Alaska is first.) Both states have significant (and growing) Latino populations. And both states share a border with Mexico.

In some ways, both states represent the broader future, and possible directions, of the nation – demographically, politically and economically. One a blue state. One a red state. One liberal in public policy, the other conservative in political approaches. One faltering, the other thriving. While the Gold Rush has seemingly ended for California, Texas is in high growth mode. In fact, since the start of the nation’s economic recovery, more than one-third of new jobs came from Texas, according to the Federal Reserve Bank in Dallas.

Texas governor Rick Perry put it this way in a email to me: “Here in Texas, we’ve worked hard to create an economic environment that allows people to risk their capital and get a good return on their investment by focusing on keeping taxes low, maintaining a reasonable and predictable regulatory climate and fair legal system – which was further strengthened with the passage of loser pays legislation this session – and developing a skilled workforce. These principles, combined with competitive investments from the Texas Enterprise Fund and Texas Emerging Technology Fund have helped attract investment dollars and thousands of jobs to our state, and top researchers to our universities.”

As Chapman University economist Esmael Adibi recently noted, since California’s 2007 employment peak, the state has lost nearly 1.4 million payroll jobs. Meanwhile, Texas is boasting a job boom of more than 200,000 new jobs the past two years. From 2000-10, California has seen a net employment loss of 100,000 jobs whereas Texas saw a net gain of 1.4 million payroll jobs. Moreover, from 2005-09, California saw a net loss of 870,000 residents. People are leaving the state for three reasons, according to Adibi: jobs, housing prices and taxes, both state and local – all factors that play to the advantage of Texas.

California is a notoriously high-tax state, 49th in the United States in overall taxation (New York is 50th). California inflicts a flurry of taxes on residents including a state sales tax that is the second-highest in the nation and the third-highest state income tax, according to an analysis by the Tax Foundation. By comparison, Texas ranks ninth overall; it has no state income tax; and ranks 14th of 50 states for sales tax. To be fair, California scores better than Texas on property taxes because of Proposition 13, which became law in 1978, when the state was at least somewhat fiscally sane.

Even though property taxes are less-high in the Golden State, housing is not nearly as affordable as in the Lone Star State. During Chapman University’s recent economic forecast update, Adibi said that housing in Texas costs a fraction of what it does in California. The median 2009 home price in Austin was $187,400, compared with Orange County’s 2009 median home price of $477,200. “In other words, the median home price in Austin is about 60 percent cheaper than what it is in Orange County,” Adibi said in an email.

Unemployment in Texas is at 8 percent, below the national of 9 percent – while California has the second-highest rate of joblessness, 11.7 percent in May, according to the U.S. Bureau of Labor Statistics.

Regulation also plays a major role in whether a state declines or surges. California’s onerous labor standards, especially for overtime pay, are a disincentive for businesses to come to the state, or to stay and grow. For instance, California requires overtime pay after eight hours in a day; the federal law allows more flexibility, starting the overtime clock after 40 hours in a work week. Texas’ overtime laws are in line with federal standards. Texas is also a right-to-work state, meaning workers cannot be required to join a union or pay dues or fees to a union; California is not.

The cherry on top for Texas, though, is the recent passage of loser-pays legislation, which tends to curb frivolous lawsuits and will likely attract new businesses, especially in the medical field.

Even politically, California has lost ground and influence to Texas, especially within the Republican Party. In the 1960s, ’70s and ’80s California Republicans helped set the tone for national policy and political discourse. Two Republican presidents were elected (two times each) in that time frame from the Golden State – Richard Nixon and Ronald Reagan. The most recent Republican president, though, is from Texas and given recent events, perhaps the next one will be as well.

The Nixon and Reagan eras of the presidency parallel political realities today. The Watergate scandal’s impact on the Republican Party, including Nixon’s resignation, led to Jimmy Carter winning the presidency in 1976. Carter won Texas that year while Republican President Gerald Ford won California. (How times have changed.) Four years later, Reagan ousted Carter and became the 40th president, perhaps a testament to the ideological and public policy leadership from California politicos at the time.

Fast forward to more recent presidential politics: President George W. Bush’s time in the White House ended with a public seemingly fed up with the leadership of the former Texas chief executive and the broader Republican Party, perhaps not to the extent it was with Nixon, but still enough to help usher in the presidency of Barack Obama – a president, some would argue, who is in the same mold as Jimmy Carter.

Current Texas Gov. Perry appears to be weighing a presidential run. If he does decide to announce his candidacy, some, including me, believe he would become the instant front-runner. Not only because the rest of the presidential field is, well, bland, but because Texas, which Perry has governed 10 years, enacted sane economic policy and conservative approaches to government – and is thriving.

While California legislators of the past few decades should serve as examples of how not to govern, Texas is perhaps one of the best examples of how more free-market, fiscally conservative approaches to public policy work to propel economies. It is a message that needs exposure, especially now, and perhaps the best endorsement for a Perry presidential campaign.

Of course, Texas is not without its challenges nor is Perry without his questionable policy choices, but when comparing the failed policies of California, those akin to the type of big government philosophy President Obama has brought to Washington, to the taxpayer-friendly approaches deployed in Texas, the choice is clear: Texas, Texas, yeehaw!

Brian Calle is an Opinion Columnist and Editorial Writer for the Orange County Register, a Senior Fellow at the Pacific Research Institute, an Unruh Fellow at the Jesse Unruh Institute atthe University of Southern California and editor of the California Political Review. He can be contacted at bcalle@ocregister.com.

What will it take to wake up an apathetic CA … prisoner release?

As the U.S. budget exploded with the twin trillion dollar TARP and Stimulus bills, Cash for Clunkers and $440 billion in losses at Fannie and Freddie, the voting public responded with the Tea Party movement that swept through America in 2009 and 2010. During the 2010 election cycle, while the nation was electing 80 (of 435) new representatives, California voters paid no heed, returning 96% of incumbents to office – a record that would have made the old Soviet Politburo proud.

This same West Coast voter apathy has allowed a $26 billion budget deficit to remain unresolved for years. Rather than solve the fiscal spending crisis, Governor Brown has proposed tax hikes to close the gap, while protecting the all powerful labor unions in California, whose pension, pay and healthcare tabs have placed many California cities in near bankruptcy. California voters have responded with typical apathy to the Brown tax hike proposal paying little attention and raising no alarm. The same cannot be said for the United States Supreme Court which ruled 5-4 in Brown vs. Plata that California must release up to 46,000 inmates from California prisons citing deplorable conditions which caused “needless suffering and death” and “amounted to cruel and unusual punishment”. Will Californians remain apathetic when tens of thousands of convicted felons are released to the streets and neighborhoods of their communities?

That conditions in California prisons are deplorable cannot be debated. The state’s prisons, which were built to hold 80,000 inmates, hold 143,335 inmates today, according to Matthew Cate, secretary of California’s Department of Corrections and Rehabilitation.

Supreme Court Justice Anthony M. Kennedy, a Sacramento native, spoke of suicidal prisoners being held in “telephone booth-sized cages without toilets” and others, sick and in pain, who died before being seen by a doctor. As many as “200 prisoners may live in a gymnasium, and as many as 54 may share a single toilet,” he said.

Justice Anton Scalia, delivering his own dissent, said the majority had affirmed “what is perhaps the most radical injunction issued by a court in our nation’s history.” He added, “Terrible things are sure to happen as a consequence of this outrageous order.”

Los Angeles County Dist. Atty. Steve Cooley agreed, stating, “Citizens will pay a real price as crime victims, as thousands of convicted felons will be on the streets with minimal supervision.”

How long can Californians remained apathetic to their political and fiscal problems? In 1999, California pols wasted the $25 billion “tobacco settlement” to pay for its current spending instead of “health care through 2025” as was planned. After recalling Gray Davis for running a $30 billion deficit in 2003, they paid scant attention as politicians built another deficit hole that the Legislative Analysts Office reports will be “$20 billion per year for years to come”.

If such fiscal insanity could not stir the California electorate, as it did Tea Party members across America, the release of 46,000 convicted felons may awaken a sleeping giant. California’s 23 million registered voters cleaned up their streets and neighborhood with a no-nonsense “three strikes” policy that put repeat offenders behind bars while creating the nation’s largest prison population. Releasing 46,000 felons, 30% of its inmates, to its relatively safe communities and neighborhoods will undoubtedly cause a spike in crime that may finally gain their attention.

But California voters, if they awaken at all, will quickly learn that they may be too late. City employee pensions, pay and healthcare have also been allowed to spike during the spending binge, resulting in city deficits and lay-offs of police, fire, and probation officers. At the very time when they are most needed, their cities will be forced to lay off these critical employees.

Will California voters remain apathetic, or will this epical Supreme Court decision trigger California’s own Tea Party movement?

About the author: Robert J Cri sti ano PhD is the Real Estate Professional in Residence at Chapman University in Orange, CA, a senior Fellow at the Pacific Research Institute in San Francisco, CA and President of the international investment firm, L88