Sunday, July 31, 2011

How to Defend Your Libertarian Beliefs at Parties, Part II

We've been gratified by the response to part one of "How to Defend Your Libertarian Beliefs at Parties," which we wrote last month. Since then, we've continued to toss these ideas around in our heads, as the philosophy of liberty is a labor of love for us. Recently, we had a conversation with a close friend, who wondered about libertarians who choose not to argue on behalf of their beliefs. After this conversation, we realized that our argument could benefit from elaboration and clarification.

The difficulty our friend was having concerns an important truth: for many people, political beliefs are expressions of lifestyle rather than principle. Many libertarians adopt their political label for no other reason than an antipathy toward taxes and a desire to smoke pot. Nevertheless, this is a tough way to go through life; a lot of other people out there don't want you to have at least some of what you want, and they're the ones with powerful friends. So, unless your politics are nothing more than a pose, you might have to defend what you want if you ever hope to see it. When most people debate politics, they start from a position of considerable agreement, and serious conflict is rare. But what happens when you find yourself trying to argue on behalf of something profoundly unpopular?

The first lesson you learn is one that many libertarians miss: consequentialism is a dead end. Consequentialists define ethics in terms of benefits and costs: the best plan is whatever creates more benefits and fewer costs than anything else. Though most people argue their politics this way, different people attach different values to costs and benefits, and weigh them differently. Many liberals think that one poor person going hungry proves that taxes are too low, while many conservatives think that one story of welfare fraud proves that such programs are wasteful. To the extent that it's nonsense to assume you can aggregate everyone's preferences in any way, it's absurd to argue that these preferences can form a basis for public policy. More to the point, arguing on the basis of benefits and costs requires certainty about outcomes, and certainty never exists in the real world. Many libertarians argue against government welfare on the basis of private charity's greater efficiency and responsiveness relative to public services. While there's good reason to believe that these arguments are true, they're not, in fact, necessarily true. Imagine a community with an unusually well-run public sector and spectacularly incompetent charities; in that community, it might well be the case that you'd sooner trust the public welfare agency to care for the poor than the charities, if you're making your choice based on outcomes. It's also the case that every political policy comes with winners and losers, and it's not a certainty that a given libertarian policy would have more winners than losers. Imagine a community with widespread poverty (let's call it "Fresno"): could you always say that the food banks and soup kitchens would feed as many people as food stamps? Libertarians are often criticized for waving their hands at the negative implications of their policies, and while they don't do so more often than others, we think this criticism is fair.

The point, though, isn't to poke holes in libertarian arguments, but to point out the problem in consequentialism: the uncertainty of outcomes implies that you would have to argue the opposite position in cases where the other side's plan yielded more benefits than costs. Which would make it really tough to argue because, you know, no one knows how a policy is going to turn out in a given instance. You might respond that you're arguing over expectations of consequences rather than actual consequences, but such expectations are subjective, and can't be used to create a rational ethic across different people; that is, you can't settle disputes over scarce resources if the parties involved have different rules for doing so. As such, all consequentialist arguments over politics boil down to this: "Policy A creates greater benefits and fewer costs than anything else, which makes it the right thing to do. And even when it doesn't create greater benefits and has higher costs, it's still the right thing to do, because it creates greater benefits and fewer costs." Which is nonsense, and libertarians need to understand that they're often guilty of arguing this way. A libertarian can use this, rhetorically, in arguments with statists ("Would you still believe in high taxes and welfare if you saw evidence that they'd done no good and harmed the people they were supposed to help?"), but the bigger point is that few people are true consequentialists. Most of those who consistently support a policy do so because they think it reflects a principle or value that holds true in all circumstances. For liberals, this principle is "equality," for conservatives, it's "traditional morality," and for libertarians, it's "liberty." And if they're going to advocate policies knowing that they might harm more people than they help, libertarians need to be prepared to call out their opponents for doing the same thing, and to articulate the values underlying their own arguments.

The next question, then, is where the underlying principles come from. We would argue (borrowing heavily from Hans Hermann Hoppe) that they come from the process of argument. This stands to reason: if there were universal ethical principles enshrined in natural law, we would all necessarily hold them to be true, yet a quick look at the world outside shows you that that isn't true. Rather, they come from consensus between people arguing them. Yet when you argue with someone, you assume that you have a right to the property of your own body (otherwise, what are you doing?) and that the person you're arguing with has the same right to theirs (otherwise, who are you arguing with?); and necessarily, the other person is recognizing the same rights. Moreover, these presumptions must carry forward in time even after you finish arguing. If they didn't, you'd have to check with the owner of your opponent's body before you started arguing, an action that could be prohibited by the owner of the owner of your opponent; in other words, you could never start arguing with anyone. So, to the extent that you believe argument is a justified activity (and how could you argue otherwise?), then you must hold that it presupposes each participant's property right to their own body. Yet this conclusion shows how powerful libertarian ideas actually are, because it shows that arguing for aggressively violating someone's property rights is contradictory.

What does this contradiction imply about taxation? That it can't possibly be ethical to forcibly confiscate someone's property under threat of imprisonment. What does it imply about drug prohibition? That one can never be justified in imprisoning anyone, killing anyone, or seizing anyone's property in response to their conscious choice to ingest a plant without harming anyone else. What does it imply about military attacks on foreign countries? That aggression against another country can never be an ethical choice. The point being that these are all very libertarian conclusions, and ones that can't be disputed without contradiction. The implication, then, is that people who value liberty should focus on arguments like this, and stop bothering with the idea that the ends can justify the means.

(Thanks to freethinker for the help on this.)

Saturday, July 30, 2011

Revenge of the Sith Public Employee Unions

With government budgets at all levels creaking under the weight of unfunded pension liabilities, and unions facing the possibility of having their retirement benefits clawed back by ballot initiatives next year, it was perhaps predictable that the unions would head on the offensive at some point. Right on cue, two stories show us this offensive in action.

The first of these stories comes to us from the Sacramento Bee, which reports that the state's biggest unions are launching campaigns to attack ballot initiatives at their roots, by intimidating signature gatherers and misinforming the public about initiative petitions. The California SEIU is encouraging members to organize and volunteer for so-called "Think Before You Ink" goon squads, which will show up wherever signature-gatherers are stationed in order to talk passersby out of signing a measure that would prohibit unions from automatically deducting dues from members' paychecks. SEIU has also been accused of sponsoring aa union-backed effort called Citizens Against Identity Theft, which has launched radio ads suggesting that petition signature-gatherers could steal the identities of signers. The timing and financial backing of the ads has led initiative supporters and government watchdogs to cry foul, and other groups dedicated to protecting consumers from identity theft (none of which are affiliated with Citizens Against Identity Theft) have denounced the group's allegations about signature gatherers as meritless.

Meanwhile, the city of Palo Alto is taking a break from anticipating the Facebook IPO to focus on the escalating battle between the City Council and the firefighters. At issue is an upcoming ballot measure that would repeal binding arbitration for police and firefighter contracts. The San Jose Mercury News reports that the union filed an unfair labor practice charge yesterday with the state Public Employment Relations Board, and is expected to ask the board to impose an injunction to remove the measure from November's ballot. They claim that the city council violated labor law by failing to consult with them before voting to put the measure on the ballot. Of course, the union was invited to speak to the council and city staff, so it's not clear what they're talking about. But actually prevailing in court may not be the goal: as a similar action involving firefighters in nearby Menlo Park demonstrates, unfair labor practice charges can drag on for years. As such, running out the clock on the measure may be the point.

Budgepocalypse Now or Budgepocalypse Later?

The San Francisco Chronicle brings us another reminder today that financial disaster could come to California sooner rather than later. Forget the fact that new accounting standards may soon require vastly higher payments to the state's underfunded public pensions. And forget about the possible (though not likely) U.S. government default, which would absolutely devastate governments at all levels in this state by halting their issuance of new debt. Today, we're reminded of how dependent the state is on Washington, and how the cuts being discussed as part of the debt ceiling debate could push California over the edge.

According to the article, $79 billion of the $208.5 billion California will spend this year comes from the federal government, and represents about a tenth of Washington's spending. Though no deal has been reached, currently both sides are aiming at a ten-year cut of $1 trillion from DC's budget. Because all the plans leave tax rates unchanged and won't touch Social Security, Medicare, or Medicaid, many of these cuts will involve domestic discretionary spending. These will fall heavily on states like California, which relies on such programs for billions in block grants for education, social services, and other activities. And since discretionary spending makes up only 19% of the federal budget, finding $1 trillion in savings could require very deep cuts.

The three points to keep in mind are as follows. First. the loss of a substantial chunk of these funds would blow a huge hole in the state's budget, one it might not be able to patch up. Second, this scenario doesn't require either of the disaster scenarios being dicussed (a downgrade of U.S. Treasuries by the major ratings agencies, or outright default) to take place. And third, it should serve as another reminder of how unwise it is for Americans to continue to trust a collapsing Ponzi scheme of an economy for their prosperity..

Friday, July 29, 2011

Gavin Newsom's Five-Year Plan for California's Economy

Right near the top of our list of items that could be painlessly stricken from the state's budget would be Gavin Newsom's $130,000 annual salary. Apart from a fact-finding trip to Texas, where he learned that higher taxes and crushing labor and environmental regulations repel private industry, Newsom has been all but invisible since taking the office of lieutenant governor. Today, according to the San Jose Mercury News, he's decided to crawl out of his bunker and make another public appearance, this time in San Jose, where he's touting his new plan to fix California's economy.

We've never thought Newsom was much more than another empty suit in a long line of vapid, lightweight politicians, and the particulars of his plan don't do anything to change that impression. For one thing, it's pretty much the same plan he unveiled at the PPIC in late May. More importantly, the plan itself is yet another mind-numbing exercise in Sacramento-style central planning. A report articulating his vision says that the California of the future needs to be "more export-oriented, more new manufacturing-oriented, more clean economy-oriented, and more high skill-oriented." To Newsom, California's troubles come down to inadequate bureaucracy. He wants to create a Cabinet-level "jobs czar" in Sacramento to promote "regionally distinct" economic development plans and coordinate the activities of agencies that oversee employment. He still wants to set up an office in China to help broker export deals for California manufacturers. And he wants to create "regulatory strike teams" that help businesses resolve problems in obtaining permits or navigation rules across local, state, and federal levels.

Left out of this, of course, is any appreciation of the role of Sacramento's past "economic development" plans in creating today's problems. For one thing, the idea of making California "more clean economy-oriented" is not a new one. Over at Cal Watchdog, Wayne Lusvardi helpfully reminds us of some other ways in which California has tried and failed to "green" its economy. During his first go-around as Governor, Jerry Brown pushed the construction of two geothermal energy plants in northern California, at the cost of $283 million worth of public bond debt. One of these facilities, South Geysers, was never built, and the other, Bottle Rock, lasted only five years before being shut down due to extreme inefficiency; the ratepayers of the Metropolitan Water District of Southern California began picking up the tab on the bond debt at that point, and won't be done paying until 2024. For another tour down failed-renewable-energy memory lane, you could also visit the Kern County town of Mojave, which has been covered in abandoned windmills since 1998. Moreover, the idea of making the state's economy "more new manufacturing-oriented" flies in the face of its environmental policy. Is any sane entrepreneur going to start opening factories when they're facing a future that includes cap and trade and more expensive energy (since 33% of that energy must come from hydrogen, solar or wind)? And finally, what are the "regulatory strike teams" actually going to do? One aspect of California's poor business climate has to do with the complexity of its regulations, but a much larger and more basic problem is that many of its taxes and regulations are prohibitive to doing business. Internet businesses aren't closing up shop or fleeing the state because they don't understand the Amazon tax; they're doing so because Amazon and others refuse to do business in a state that imposes it. And Carl's Jr isn't looking to shift out of California because the rules for construction permits and labor relations are too complicated. CKE Restaurants understands them perfectly; it just finds them too onerous. Until Newsom and those like him understand that Sacramento is an obstacle, not an aid, to economic growth, they should expect more of the same.

One More Setback for High Speed Rail

The California High Speed Rail Authority got some bad news this morning, with communications director Jeffrey Barker announcing today that he's leaving the troubled agency. Guess he wants to spend more time with Curt Pringle's family. But that's not the biggest blow HRSA's received in the last 24 hours: that would be the latest report from its own peer review group, which is criticizing the authority's ridership forecasts.

HRSA's projection that the rail line will carry 117 million riders every year by 2030 has come under criticism before. A Palo Alto-based group called Citizens for Responsible Rail Design was the first to point out deep flaws in the model underlying this forecast, which was developed by the consulting firm Cambridge Systematics Inc. They suggested that the consultants had oversampled train commuters in developing its estimates of demand, and that Cambridge's post-peer review tinkering with model assumptions made the results impossible to replicate. These critiques were later echoed by researchers at the UC Berkeley Institute for Transportation Studies, which noted that HRSA had focused too closely on train frequency in estimating demand, and said that the paucity of available data made it impossible to verify the project's profitability. To this point, HRSA has brushed these criticisms aside. Now, however, their own peer review panel is adding to them. The panel's criticisms of the Cambridge model include obsolete survey methodology, insufficiently conservative assumptions, improper analysis of ridership levels for varying frequencies of train service, and a failure to consider the impact of competition from air travel.

Of course, HRSA is promising to take these criticisms seriously. Which, in the world of HRSA, means that their plans won't be changing a bit.

Kamala Harris Misses the Point on the RDA Lawsuit

According to the Sacramento Bee, California's Attorney General has weighed in on the lawsuit filed a couple weeks ago by the League of California Cities and others to try to halt the dissolution of the state's redevelopment agencies. In an "informal opposition" on behalf of the Department of Finance, Kamala Harris declared that the lawsuit constitutes a "meritless claim"; the state giveth the RDAs by statute, and the state may taketh the RDAs away by statute as well. Therefore, the Court shouldn't block the dissolution of the agencies until the lawsuit is resolved.

Let's dissect the legal reasoning at work here. The lawsuit isn't challenging the state's authority to abolish the RDAs, but rather the constitutionality of requiring them to pay millions into special funds in Sacramento in return for allowing them to continue to exist. Given that the payments appear to clearly violate Prop 22, "meritless" is not a word we'd use to describe the suit. Nevertheless, because California's government is broke, Harris thinks the Court's priority needs to be ensuring that Sacramento gets its money one way or the other. Therefore, it shouldn't let a little thing like constitutionality get in the way of abolishing the RDAs. This would imply that the Court should allow the (potentially unconstitutional) revenue backfill to proceed as well, since it's part of the Legislature's plan, but this implication seems to escape the Attorney General's mind.

Thursday, July 28, 2011

This Day in California's Jobs Exodus: July 28, 2011

If the LA Times' Peter Schrag is really hoping that immigrants from Mexico and points south will buy up all of California's empty homes, this report from the Sacramento Bee must have felt like a punch in the gut. Apparently, since 2008, the relative strength of Mexico's economy has drawn many of California's undocumented immigrants back across the border. With an unemployment rate under 5%, a far lower cost of living, rising living standards, and annual GDP growth in the neighborhood of 4-5%, many Mexican citizens are ironically finding that their dream of a middle-class existence is more easily had in Mexico. Much as many native-born Californians are finding in places like Texas, Colorado, and Nevada.

Speaking of Texas, the latest example of smug, air-headed Texas-bashing out of California comes to us today from Greg Lucas at Capitol Weekly. We can't really recommend reading the piece, but we'll offer you this summary: Texas might have a lower unemployment rate, cheaper housing, and more robust job growth than California, but that's only because it pollutes like crazy, creates lots of minimum wage jobs, and leaves its citizens poor and uninsured. Lucas quotes California Treasurer Bill Lockyer as follows, "It’s a bit like Dukakis' 'Massachusetts Miracle,' which turned out to be a partial truth. There’s some Perry puffery going on right now." Basically, the argument is that if you take away Texas' oil industry and California's housing market, things would be essentially equal between the two states, except that California has more venture capital, major ports, and the largest population in the country.

For a clue to what Lucas might be missing, you might want to glance at this report in the San Jose Mercury News, about the continued havoc the Amazon tax continues to wreak on California's high tech economy. The article tells the story of ex-Livermore entrepreneur Nick Loper, who's now moving to Nevada to keep his business going. Lucas's article is a classic example of citing statistics that are entirely beside the point. California has Silicon Valley and the ability to attract elite tech-industry talent, but because of its taxation and regulatory climate, it lacks any incentive for businesses to plan for long-term growth here. As far as its production of minimum-wage jobs, is it really better to be unemployed than to have crappy work? Texas may not be the capitalist utopia that some suppose, but the fact remains that most Americans are reasonably happy if they can get a good job and not lose sleep over money. And California most emphatically doesn't offer those things. If you want a chance at riding the next hopeless economic bubble to millions in worthless paper, California's a good bet; if you want something better for yourself and your family, look elsewhere.

Thirty Days of Hell: Bell Hires Another Interim City Manager

For those of who were worried (you know who you are), the troubled Los Angeles County city of Bell has found a short-term replacement for its first short-term replacement for disgraced ex-City Manager Robert Rizzo. According to the LA Times, the former city manager of San Luis Obispo, Ken Hampian, is coming out of retirement to hold the world's most thankless job, City Manager of Bell, for the next 30 days. An experienced hand in the city-government world, Hampian's responsibilities for the next month will include forming a plan that solves the city's $5 million budget deficit and addresses its bond obligations. To do this, he'll have to work with a dysfunctional city council and a town disgusted with politicians. No word on whether he'll be asked to put cover sheets on the TPS reports as well.

Goodwin Liu's Nomination is this Week's Depressing Political Fact

If you're at all concerned about the consistent leftward stumble in California's politics, Jerry Brown probably ruined your Tuesday this week when he nominated Berkeley law professor Goodwin Liu to the state Supreme Court. By tapping Liu for the Court, Brown is bringing in a radical reminiscent of Justice Rose Bird, whom he nominated in 1978 and who is still the only Chief Justice ever removed by the voters. As Steven Greenhut explains at Cal Watchdog, Liu's book Keeping Faith with the Constitution firmly states the professor's commitment to the idea that the Constitution means whatever we interpret it to mean. In the dark, un-progressive ages, Liu writes that "the Supreme Court articulated a restrictive view of federal and state authority that blocked measures to reduce some of the inequities, hardships, and economically harmful conditions that accompanied the industrialization and urbanization of the economy." Once the Court started being more expansive in its interpretation of the role of government, we ended up in this paradise:
Today, Americans do not think twice about the authority of government to respond to economic needs. Social Security, Medicare, collective bargaining and minimum wage laws, disaster assistance, regulation of the financial markets, and robust initiatives to stabilize the economy comprise large parts of the work we expect our federal and state governments to do. Reasonable people may disagree about the specific policies needed to deal with various economic conditions, with regulation of the marketplace, and with the economy as a whole. But there is no question that developing, enacting, and implementing such policies are an important and legitimate part of what government does.
In other words, at a time when any thinking Californian should be deeply concerned about the role of the government in both the economy and civil society, our Governor just nominated, for the Supreme Court, a man who believes the law should not place any limits on government activity.

For the Politically Connected, Los Angeles Red Light Tickets Were "Voluntary"

We've been going around in circles for weeks about whether to shut down the red-light camera program in the city of Los Angeles, so many observers were happy to learn that the City Council finally voted yesterday to kill it. What was less pleasing, however, were the circumstances under which the vote occurred: as reported in the LA Times, the move came in response to considerable public backlash over revelations that many city officials considered payment for camera tickets "voluntary."

Apparently, LA court officials made the decision not to pursue violators who failed to pay their fines. According to the Times, "For a variety of reasons, including the way the law was written, Los Angeles officials said the fines were essentially 'voluntary' and that there are virtually no tangible consequences for those who refuse to pay." Drivers, of course, were not told this at any point. When this came to light last week, it predictably created an uproar among drivers who paid their fines. Just as predictably, Los Angeles has refused all requests for refunds, and some drivers are exploring a class-action lawsuit to recover these fees, which can run as high as $500. If this sounds familiar, it should: back in May, LA motorists were outraged to learn of the existence of the so-called "Gold Card Desk", a little-known avenue for getting traffic tickets fixed. So it's looking like the city's well-connected have enjoyed more than one special service from the Department of Transportation at the expense of everyone else.

PPIC: Californians Love Green Energy, Just Not Understanding It or Paying for It

If you want to understand why California has the environmental policies it has, you really need look no further than the latest public opinion survey from the Public Policy Institute of California.

First up, we have the silly and self-congratulatory ignorance. A plurality of the survey's respondents (44%) believe that air quality in their part of California has gotten worse in the past 10 years, and about 62% said it hadn't gotten better. This is ridiculous: no less an authority than the EPA found that pollution levels in the San Joaquin Valley and the LA Basin had improved substantially over that period; and no less an authority than the California Air Resources Board recently revised the emissions target for AB 32 downward after realizing that the state's sluggish economy was producing fewer greenhouse gases. Moreover, even though we've just experienced one of the wettest, coldest winters in years, the proportion of Californians who believe we're already experiencing the effects of global warming shot up 7% from last year. Worst of all, almost half (47%) believe that state action on environmental issues will create jobs. Evidently most Californians don't realize this has been tried before.

Second, we have an unreserved embrace of government power. Two-thirds of respondents support AB 32, and 57% favor the idea that Sacramento should act on its own without waiting for federal policies to combat global warming, and should do so regardless of economic conditions. Almost 80% favor government action to curtail greenhouse gas emissions; 54% favor cap and trade, while 60% favor a carbon tax. The new requirement that one-third of California's energy come from renewable sources gets a thumbs-up from 77% of residents. Strong majorities favor tougher federal standards on auto emissions (84%) and federal subsidies for wind, solar, and hydrogen technologies (80%). Moreover, large majorities also support new ways of controlling climate change, including requiring utilities to produce more renewable energy (82%), encouraging local-government planners to push less driving through their designs (79%), and requiring greater efficiency from buildings and appliances (74%). The PPIC did not ask respondents how they felt about green energy given that the technology meant to deliver it is still embryonic.

The poll only pokes two holes in this picture of strong support for climate control: when asked whether they'd support the mandate to produce one-third of the state's energy via renewables even if it created higher utility bills, support for the mandate dropped from 77% to 46%. Interestingly, a surprisingly high proportion (46%) of respondents also supported oil drilling off of California's coast. Guess they haven't enjoyed those gas price increases.

So, if we're reading the PPIC results correctly, it looks like Californians are enthusiastic about tackling climate change. As long as doing so places no net burden on businesses, government action has no unintended consequences, the technologies work as expected, and taxpayers outside the state pick up most of the costs. With the failures of renewable-energy projects piling up, businesses fleeing the state's hostile (and uncertain) regulatory climate, and a crisis looming with respect to AB 32's political legitimacy, it'll be interesting to see how these results stand in a year or two.

Extremism on the Move: Will Huntington Beach Follow Costa Mesa's Lead on Pension Reform?

Someone better get Steve Lopez on the phone and clue him in to the "extremism" that may be on the rise in the Orange County city of Huntington Beach. The Orange County Register reports that the town may soon become known for something besides surfing and drunken mobs on Main Street: emulating the aggressive cost-control measures of its neighbor, Costa Mesa.

According to the Register report, there are growing divisions on Huntington's city council regarding how to approach coming negotiations with police and other unions. While some council members advocate taking the unions up on offers of concessions before their contracts expire, another faction, led by Councilman Don Hansen, note that doing so extends these contracts by another year and kicks the can on meaningful reforms. Hansen would prefer to allow the contracts to expire before negotiating, and attempt to extract deeper concessions at that point, including "a timeline for union members to fully fund their share of their retirement expenses." The first group, in contrast, seems almost desperate to avoid association with Costa Mesa. Its leader, Joe Shaw, had this to say in a newsletter to supporters: "A few of our council members want to reject these immediate savings and demand more, following the aggressive tactics that have turned Costa Mesa into a battleground. Our employees have been more than generous in meeting with us and willing to give back." Shaw seems reluctant to involve Huntington with Costa Mesa in other areas, such as partnership agreements to share services like SWAT, emergency dispatch, and animal control.

Either way, the council will begin discussing these issues next week. Stay tuned.

Violent Flash Mobs Come to the West Coast?

The phenomenon of flash mobs has been popping up in cities around the country this summer. In cities such as Chicago and Washington, DC, social networking technologies have been used to organize large, "spontaneous" public gatherings. While some of these so-called flash mobs are peaceful, gathering for dancing or political protest, others have committed crimes, including shoplifting, muggings, and random attacks. Well, last night appears to have brought us the first example of the phenomenon on the West Coast, as thousands of people showed up unexpectedly at Hollywood and Highland in Los Angeles last night.

The flash mob coincided with the Hollywood premiere, at Grauman's Chinese Theater, of "Electric Daisy Carnival Experience", a documentary about the Electric Daisy Carnival techno music festival. The premiere, which was to feature DJs, acrobats and a red carpet, as well as an after-party at the Supper Club hosted by DJ Kaskade, was invitation-only. It's still not clear what happened, but Kaskade himself may have contributed to the problem, as he told his 90,000 Twitter followers yesterday afternoon that he was going to a "block party" at the theater. Either way, many, many people showed up, and LAPD riot police were deployed; bottles and taunts were thrown at the cops, a police cruiser was damaged, and several fights broke out in the crowd. Ultimately, batons and rubber bullets were used to drive the crowd back, and two were arrested on felony vandalism charges. A Tweet from DJ Kaskade at 7:30 described the scene as follows: "News choppers overhead. The man trying to shut us down…. This is crazy." This was followed shortly by this message: "EVERYONE NEEDS TO GO HOME NOW! I DON'T WANT THIS TO REFLECT BADLY ON EDM OR WHAT WE ARE ABOUT. BE RESPECTFUL AND CHILL OUT!!!"

Wednesday, July 27, 2011

BREAKING: San Francisco Circumcision Ban Cut from Ballot

Today is a sad day for San Francisco's busybodies and Nazi sympathizers: the San Francisco Chronicle reports that Superior Court Judge Loretta Giorgi has ruled that the city's proposed ban on male circumcision must be withdrawn from the November ballot. In her tentative ruling, the judge ruled that the California Business and Professions Code prohibits local regulation of medical procedures, thus making the measure "expressly pre-empted" by state law. As such, there's no point in having an illegal measure on the ballot.

The city will hold a public hearing on the matter on Thursday, but observers say Judge Giorgi is unlikely to change her mind. City residents hoping that local politics wouldn't take such a poisonous and anti-Semitic turn are doubtless relieved, and Matthew Hess will have to find another venue for his hateful Foreskin Man comic. And to all the insane people who briefly filled our blog with vile comments on the posts we wrote on this subject, we hope you enjoy these apples, and that you crawl back into your f***ing holes now.

What is Los Angeles County Hiding About Its Employees' Pensions?

In recent months, appeals courts have ordered the public employee pension systems in Sacramento and San Diego counties to comply with public records requests for information on the pension packages of retired workers. In response, many counties with pending appeals in similar cases have abandoned their resistance to requests for pension data. But one county is standing firm. That would be one of California's most corrupt, Los Angeles County.

Apparently, the Los Angeles County Employees Retirement Association plans to continue refusing the LA Times' requests for the names and pension packages of its retirees. The most recent such refusal came with this statement from the pension's attorney: "Our member records are deemed confidential by statute, and may not therefore be disclosed to anyone except by order of a court of competent jurisdiction or by written authorization of the member." For those keeping score at home, this is pretty much the exact argument that the judges rejected in the Sacramento and San Diego county cases. In both of these counties, the forced disclosures revealed abuses of the pension system, and given that this is LA County we're talking about, we'd guess the abuses are absolutely breathtaking there. Yet the pension fund's lawyer says that, until a pending appeal regarding Sonoma County's retirement plan is resolved, there's no reason why LA should feel compelled to act. We'd think, given that the county spends about $1 billion every year on pensions, that the public interest of the taxpayers would constitute such a reason. But then we'd remember that this is Los Angeles County.

Dan Walters Calls for Abolishing the Board of Equalization

Ever since we first heard its creepy, Maoist-sounding name, we've disliked California's Board of Equalization, the bureaucracy charged with overseeing the collection of property, sales, and use taxes and handling income tax appeals to the Franchise Tax Board. Well, today it appears that Dan Walters of the Sacramento Bee is with us, as the dean of California journalism calls for the Board's abolition.

The Board of Equalization: Where everyone's equal, and we're in charge!
As with any bureaucracy, there's ample reason to shut down the BoE on the basis of wasting tax dollars; if you don't believe us, read this doozy of a story about the Board's Qualified Purchaser Program from Cal Watchdog. But Walters is after something else; he wants to wipe out the Board not for its inefficiency, but because it's become politicized. The latest example of what he's talking about: the Board's decision to move forward with implementing the Amazon tax, in spite of a coming voter referendum on the tax and a Legislative Counsel opinion advising against moving forward until the referendum is resolved. In Walters' estimation, it's absurd that tax administration should be subject to the whims and ideological preferences of politicians. Because the Board's five members are elected, and two of its members constitute the three-person Franchise Tax Board, we see frequent examples of tax policies being decided on the basis of political pull. Walters recommends abolishing both boards and subsuming their functions in a new Department of Revenue. This wouldn't go nearly far enough for our tastes, but it's a good start.

Wall Street Journal Cries Us a River on California Counties' Shrinking Tax Revenues

Every once in a while, we're reminded that the Wall Street Journal isn't nearly as laissez faire as its reputation suggests, and a piece in today's Journal offers one of those moments. Forget the homeowners and businesses that have been wiped out by the recession, and the rest of us continuing to struggle through it; Justin Scheck has found the real victims of California's economic crisis: county governments whose tax take has been devastated by falling property values.

Scheck takes us on a tour of California counties to demonstrate a pattern: while Prop 13 places limits on how quickly property taxes can rise, it places no floor on how far they can fall. As such, the plunge in home values since 2007 has meant steep declines in property tax revenues for many counties. San Diego County's property tax revenues dropped by $100 million in 2010, Stanislaus County has seen such revenues fall by almost 12% in the past two years, and over the past three years, Calaveras County has seen its property tax rolls shrink by 18%. Predictably, this has led to steep cuts in services and personnel, and put county assessors in a difficult position of having to defend re-assessed values against political criticism.

Scheck frames this as an unintended consequence of Prop 13, but this misses the point by a fair margin. While few people anticipated a day when California property values would decline steeply, the point of Prop 13 was precisely to prevent governments from hiking property taxes during recessions to cover their budget shortfalls. This is absolutely a feature, not a bug. Furthermore, the article fails to ask whether it was ludicrous for governments around the state to base spending decisions around a real-estate boom that was impossible to sustain. It also ignores a couple of important facts: government spending in California continued to skyrocket right through the economic recession, climbing 60% between 2006 and 2010, and many local governments continued to sweeten public employees' pension packages at the same time. In other words, these county governments have no one but themselves to blame for failing to take the state's economic weaknesses seriously by cutting back.

California's Government Tackles the Tough Issues!

It's not often we get to write about silly legislation that doesn't involve either state Senator Alex Padilla or the city of San Francisco, but today is one of those days, as Jerry Brown has signed two absurd new regulations into law.

First, the LA Times reports that Brown has signed SB 917 into law. In signing this bill, Brown has demonstrated his willingness to move beyond trivial issues like the state's grim finances, its gargantuan pension debt, its crippling taxes, and its miserable business climate to finally tackle something important: poorly run puppy mills. SB 917 bans the sales of pets on street corners and other public property, and toughens the penalties associated with animal abuse or animal cruelty; someone convicted of these crimes may now face up to a year in jail and a fine of $20,000. We love animals, but did Sacramento really need to take the time to pass this law? And are local police really going to go out and proactively enforce this? Given the recent rash of videos showing bureaucrats harassing kids with unlicensed lemonade stands, it's easy for us to imagine police somewhere pressing charges against a kid trying to give away puppies outside his house.

Second, do you remember that moment in Wall Street when Michael Douglas says, "If this guy owned a funeral parlor, no one would die"? With growing uncertainty about sovereign debt pushing gold prices into the stratosphere, Brown just signed a bill that will (wait for it) make gold mining more difficult in California. In a story we first noticed back in June, Brown has approved AB 120, which extends a moratorium on suction dredge mining for a further five years. Suction dredging is a technique that uses motorized rigs to suck mud and gravel out of riverbeds, and uses gravity to sort out bits of gold from the muck. Environmentalists claim it disturbs spots where salmon lay eggs and releases mercury into the water, though these claims are unsubstantiated by research. So, for those of you keeping score at home, California's environmentalists are so hostile to economic activity that the state is willfully taking itself out of the business of mining something that's selling for over $1,600 an ounce these days.

What Do We Want? Houses We Can't Pay For! When Do We Want Them? Now!

Yesterday's contribution to the Bad Ideas list came to us from the San Francisco Chronicle, which reported on a growing movement called Take Back the Land. The group's cause? Protesting home foreclosures, in order to get banks to allow broke homeowners to stay in their houses. While not currently active in California, these folks are building on what they've seen in countries like Spain to organize several protests on the East Coast. In one of the group's protests in Rochester, NY, the group blockaded a home for two weeks to prevent the residents from being evicted. The Chronicle reports that the group may hold its first national conference in California.

We concede we're probably being pedantic in our quaint insistence on property rights, but something just doesn't add up here. Isn't a mortgage an agreement to borrow money to buy property? If it is, then does it really make sense to call it your home when the bank puts up almost all the money to buy it? It's more accurate to call it the bank's home, and to say that the bank lets you live there while you pay back your loan. While foreclosure obviously isn't a good state of affairs, we don't think there's anything particularly unjust about it. If you stop making your payments to the bank, and your finances are so shaky that renegotiating your loan's terms isn't possible, the bank would seem to be within its rights to ask you to leave. Because, after all, they bought you the house.

If Take Back the Land picks up steam, the consequences are predictable: the use of force to take away the foreclosure option will make banks even less inclined to make mortgage loans. And we'd hardly blame them: long-term loans in a shaky economy are risky enough as it is. Of course, if you're one of those who believes that a recovery in the housing market is essential to ending the broader recession, you probably won't welcome this news.

Tuesday, July 26, 2011

Another Vital Government Service: Harassing Nudists

Today we have more evidence of the state's Washington Monument Syndrome in action: even though the state's budget is so tight that we had to close 70 state parks back in May, the Parks Department still has enough money to harass nude sunbathers on the beaches near San Onofre.

In a classic example of a conflict that private property could resolve painlessly, rangers at San Onofre State Park have been trying for two years to enforce a ban on nude sunbathing at the Park's Trail 6, a stretch of beach frequented by nudists for decades. As a result, the nudists have tried to find other places in the park to strut their stuff, and have begun venturing onto beaches controlled by the Camp Pendleton Marine base. And they report that the park rangers are starting to devote considerable attention to them, spying on them and following them onto federal land. According to one San Clemente resident, "You have rangers hiding within rocks, in trees, with cameras trying to take pictures. This is more than childish. This is harassment." The so-called "naturists" also claim the Park is recruiting military officials to help them; one claims to have been approached by a Marine who seized his camera and deleted video of the encounter. They also claim the rangers are overstepping their jurisdiction by spending a great deal of time bothering nudists on federal land. The superintendent in charge of San Onofre points to the absence of citations for lewd behavior as a sign of the ban's success; a lawyer representing the nudists questions that thinking, noting that most of those citations have been thrown out by San Diego County courts.

While you won't see us on one of these beaches any time soon, this would seem to be a typical instance of government overreach. Were these beaches privately owned, the owners would certainly be within their rights to permit or prohibit this behavior as they chose. In the case of public property, this is a case of government harassment insofar as these people don't want anything other than to be left alone on a beach. And, of course, proactively enforcing a nudity ban is a complete waste of taxpayers' money.

BREAKING Bad News in Bell: Interim City Manager Gets the Axe

After finding out that they weren't going to be paying for Robert Rizzo's legal bills, the residents of the scandal-devastated Los Angeles County town of Bell might have thought this would be a good day for their town. Unfortunately, those same people just got a healthy dose of bad news today. The LA Times is reporting that Rizzo's replacement, interim city manager Pedro Carrillo, left without a replacement yesterday, and freshman mayor Ali Saleh is assuming his duties.

As we noted a couple weeks ago, Bell has had a hard time finding a new city manager and auditing firm in the wake of last year's corruption scandals; after Rizzo's exploits and the rampant book-cooking that went on during his tenure, these open positions are, needless to say, not very appealing. As such, while Carrillo's contract with the city expired last Friday, he offered to stay on and help Bell identify a replacement. Nevertheless, the City Council chose to turn down his offer. Carrillo had worried about serious problems in meeting payments on the city's bond obligations, and had prepared a detailed budget proposal for the current fiscal year that imposed deep cuts, including leaving executive positions unfilled, firing the three highest-ranking Bell police officers, and requiring city workers to pay for half of their retirements. Yet Saleh said the council is likely to scrap this plan and start over. The move is likely to please many of the community activists who led recall campaigns against the disgraced officials brought down by the scandal; the influential group BASTA had viewed Carrillo with suspicion, as he was appointed by the old council. Nevertheless, it only deepens the uncertainty over Bell's solvency.

Medical Marijuana Takes Steps Forward, Backward

In the cities of Los Gatos and Isleton, times are tough for medical marijuana advocates. The San Jose Mercury News reports that the Los Gatos City Council voted unanimously last night to ban medical pot dispensaries in this wealthy Silicon Valley enclave. As in many other California towns, the ban makes permanent a 2009 moratorium. No public discussion took place at the council hearing, and members offered no reasons for the ban. When contacted by the News, an official for the city pointed to six recent armed robberies at dispensaries in San Jose; a city report reads, "Current and prior investigations revealed that many MMDs are, in fact, opportunistic criminal enterprises that are engaged in illicit sales for profit." Which makes complete sense, because, after all, San Jose and Los Gatos are in no way different at all. Way to show us democracy in action, Los Gatos!

Meanwhile, the Sacramento Delta town of Isleton is continuing its fight against the Kafka-esque forces regulating medical marijuana cultivation. Isleton, you may recall, was hoping to use a massive medical pot farm to revive its struggling economy, and was on its way until being shut down by the Department of Justice and Sacramento County. A month ago, a county grand jury released a scathing report denouncing the planned farm as "a project that is perched on the blurry edge of marijuana law . . . not because of any desire to test the limits of the law, but because of the promise of money and jobs." Today, the Sacramento Bee reports that the city is fighting back, and its response to the grand jury is, well, spirited. According to Isleton's lawyers, the grand jury report claimed the jury's report was riddled with errors, that the county has failed to keep them apprised of the status of its investigation, and that the pointless investigation has cost the cash-strapped city $100,000 in legal costs. Presumably the ball is back in the Star Chamber's court now.

On the positive side, California's second largest city has backed down on an ordinance restricting where medical dispensaries can be located. Apparently, rather than finance a ballot election that would've put the ordinance before San Diego voters, the City Council has chosen to rescind it. Given the speed with which advocates were able to gather enough signatures for the ballot measure, the ordinance would likely have died in the election. So it makes sense that San Diego didn't view it as worth fighting for.

Also on the positive side, the backers of the Regulate Marijuana Like Wine Act have gotten the green light from Attorney General Kamala Harris to begin collecting petition signatures. The initiative now has until late December to gather roughly 505,000 signatures in order to qualify for the ballot. This initiative would decriminalize the possession, sale, cultivation, processing, and transportation of marijuana by anyone 21 or older, and would instruct state and local officials to not comply with the federal government's ban on the drug.

Robert Rizzo's Latest Bid to Screw Bell's Taxpayers Falls Short

The beleaguered taxpayers of Bell just got some good news: according to the Orange County Register, a judge has denied ex-City Manager Robert Rizzo's request to compel the city of Bell to reimburse his legal costs. You read that correctly: the guy being sued for defrauding the small Los Angeles County town out of millions wants the people suing him to pay for his lawyers.

In a lesson of what can happen when you sign binding agreements with bureaucrats, because Rizzo's alleged misconduct occurred during the course of his employment, defense attorney James Spertus had argued that Bell was bound by a 1996 contract, in which it agreed to pay the city manager's legal expenses. City attorney Deborah Fox, however, countered that Rizzo's actions were intended to enrich himself, and were unrelated to city business. A jury may still rule that the expenses can be reimbursed, but that would preclude settling the matter without a trial. In any case, the city's residents will doubtless be happy to know that no more of their money is going into Robert Rizzo's pockets.

California Supreme Court Makes it Easier to Seek Refunds of Illegal Taxes

Some good news: according to the San Francisco Chronicle, California's Supreme Court ruled that taxpayers in the state may file class action suits against cities and counties to seek refunds, if a local tax is found to be illegal. The ruling reduces a substantial barrier to seeking compensation, and overturns lower-court rulings requiring taxpayers to file requests for redress individually. The ruling pertains to a 2006 case, in which the city of Los Angeles was sued for a telephone tax that was linked to an invalid federal excise tax. On the down size, the ruling does come with limitations: cities like San Francisco, which has laws prohibiting class actions for tax refunds, would likely be exempt from the ruling, and class actions still can't be filed in areas where the law spells out procedures for seeking individual refunds. But it's a good thing.

While we're on the subject of illegal taxes, KQED raises an interesting point about the coming referendum on the Amazon tax: assuming the company is successful in getting its measure on the ballot, would the tax have to be put on hold until the vote? According to an opinion from the Legislative Counsel's office in Sacramento, yes. The ironies here are manifold. The Amazon tax has already cost California jobs, and there was never reason to believe it would actually realize the $200 million in revenues that Sacramento expected, but Governor Brown and leaders in the Legislature just had to have the symbolic victory of higher taxes. Now, by pushing the tax over the objections of firms like Amazon and Overstock, the backlash might ultimately end up blowing a bigger hole in the budget. What's more, Brown is now poised to sign a bill cancelling next February's presidential primary, a move which proponents claim will save money. Yet it would carry the consequence of pushing the referendum off until June, potentially costing the government more in Amazon tax revenue than it would save. Oh, what a tangled web we weave.

Great Moments in Public Education: July 26, 2011 Edition

It's already a lousy day for liberty in California, as the forces of government corruption and taxpayer abuse are keeping themselves very, very busy. Let's run through the details.

First off, the Educated Guess blog reports that CalSTRS and teachers' unions are working hard to gut SB 27, the anti-"pension spiking" measure being pushed by Sen. Joe Simitian. In its current form, the bill would subject a public employee's pension to an audit by the relevant pension system if records showed that he or she received a pay raise of 25% or more in the final five years of employment. It would also push back on "double dipping" by preventing retired workers from returning to public employment for at least 180 days after retirement, and would prevent non-salary income (e.g., car allowances, unused vacation time, life insurance) from counting towards a worker's pension. (For a good example of "double dipping" and how wasteful it is, see this story.) Of course, in California not even an obvious abuse like spiking can be given a quiet funeral: CalSTRS and the California Teachers Associations are both pushing amendments to the bill that would prevent it from applying to current government employees, arguing that the benefits of current workers are "vested". It's truly a sad spectacle that government workers here view pension spiking as a vested right. Though it certainly explains a lot.

Second, California Watch reports on the results of a Department of Finance audit of the state Office of Public School Construction, which administers bond funds used to build schools. The audit concluded that the Office's lax adherence to its own policies may have led to millions of dollars being improperly awarded to school districts, and to instances of improper use of funds being ignored. Specifically, Finance concluded that the Office awarded almost $44 million in construction dollars to districts lacking proper documentation, failed to collect over $15 million owed to the state by districts, failed to properly audit almost 700 projects identified as "high risk" for misspending, and failed to require districts to submit annual reports. The audit concluded by questioning OPSC's commitment to its fiduciary duty to taxpayers. This sort of waste is, of course, exactly why we're always being asked to cough up more money for public schools.

Jerry Brown Does Two Things Worth Praising

We don't often get a chance to credit Jerry Brown for doing something commendable, but today we actually have two such things to report. First, in a manner reminiscent of a broken clock being right twice a day, Brown has once again shown the capacity to buck union-sponsored legislation, much as he did when vetoing the "card check" bill beloved by the farmworkers' union. The Sacramento Bee reports that the Governor has vetoed AB 455, which would've required that half the seats on local civil service commissions be held by union members. AFSCME and San Jose Assemblywoman Nora Campos were behind the bill. In his veto message, Brown said AB 455 mandated a "top down, one-size-fits-all solution on all merit and personnel commissions statewide," which was "inconsistent with my administration's efforts to realign state services and to increase local control." Insofar as top-down, one-size-fits-all solutions encapsulate much of what's horribly wrong with California politics, good on Brown for shooting this one down.

Second, in another sign that the heavy stench of the Bell corruption scandal still hangs over this state's politics, Brown also signed AB 23 into law yesterday. This bill, the brainchild of Santa Clarita Assemblyman Cameron Smyth, may eliminate one of the more egregious abuses of the ex-City Council members in Bell: collecting multiple stipends for service on other boards and commissions by scheduling lots of back-to-back or simultaneous meetings, often during City Council meetings. In the years leading up to the eruption of pay scandals in 2010, some Bell council members were making over $100,000 every year by holding such meetings, often lasting just minutes. The new bill will require officials to publicly announce the stipends attendees will receive any time back-to-back or simultaneous meetings are held. While it's sad that it took an act of the Legislature to curtail such a blatant abuse of taxpayer trust, it's a good thing that it's now law.

Monday, July 25, 2011

San Jose Voters: No New Taxes, Thanks

On the same day that the LA Times tried to convince us that California voters wanted new tax options that they didn't need and weren't being offered on any ballot, the San Jose Mercury News offers us evidence of greater sanity on the part of tax-weary Californians. According to the News, a poll by San Jose officials shows little to no support among voters for new taxes to help balance the city's swooning finances. A couple weeks ago, the City Council polled over 1,200 voters about five tax measures that it was considering for a November ballot: quarter-cent and half-cent general sales tax increases, and three special purpose taxes to fund public safety services. None of the three special taxes reached the two-thirds threshold they would require for passage on a ballot. The half-cent tax got only 51% of the vote, making its chances on a ballot very bleak. While the quarter-cent tax got 57%, a unanimous City Council vote to declare a state of fiscal emergency would be needed to get it to the ballot. Given the grim state of San Jose's finances, and the fact that the city has recently laid off dozens of police officers, it says a lot about how the normally-reliably-Democratic voters there feel about their economy.

Are the Pensions of Current Government Workers Really "Vested"?

That's the question Ed Mendel is asking today at Calpensions. We've been following Mayor Chuck Reed's plan to put a rollback of pension benefits before the voters in San Jose since the spring. At the same time, a group called California Pension Reform announced it was preparing an initiative capping agency contributions to public pensions while phasing out defined-benefit plans; they're hoping to have the proposal on a ballot by November 2012. More recently, the Santa Barbara-based California Center for Public Policy field three pension reform initiatives of its own: these would abolish collective bargaining in California, raise minimum retirement ages for public workers, and steeply tax more lucrative pensions. Each would attempt to avert a fiscal nightmare by cutting payments to current workers. Yet many believe the benefits promised to workers are "vested", and cannot be clawed back as such.

While most hold that contract law vests public employees' rights to benefits offered at the outset of their service, both the San Jose effort and the California Pension Reform plan have found openings that, at the least, are not clarified in the law. In the case of the San Jose proposal, Mayor Chuck Reed is essentially arguing that the declaration of a fiscal emergency allows the city to modify vested rights. According to CalPERS, such a declaration by a California government would have to meet a tough standard of need, appropriateness, and "society's best interests," and even then would only be temporary. Of course, where pension liabilities are concerned, "temporary" is an loose term. Reed is hoping to use the emergency declaration to raise retirement ages and cut the rate of salary going to pensions for current workers. The California Pension Reform proposal would curtail pensions to current public employees by capping future agency contributions at 6% of salary. According to the group's leader, Dan Pellissier, CalPERS' own analysis supports his contention that employer contribution rates aren't vested, and can thus be capped.

Both plans promise to be vigorously challenged by CalPERS if they go anywhere, but one thing should be very obvious for anyone not expecting to collect one of these pensions one day: pension reforms targeting only future beneficiaries won't be enough to get this problem under control. As the Little Hoover Commission put it, "Government agencies cannot generate the needed large-scale savings by reducing benefits only for new hires. It will take years if not decades to turn over the workforce, and the government is hardly in hiring mode today."

The Legislature Attempts to Write Its Contempt for the Public Into Law

California Watch offers an update today on an issue we've been following all month: the Legislature's various attempts to gut the state's ballot initiative process.

First up, Ellen Corbett's SB 168 is now on Jerry Brown's desk awaiting signature. If approved, the bill would ban signature-gatherers from being paid per signature. Mark DeSaulnier's SB 448 would require paid signature gatherers to wear a scarlet letter badge distinguishing them from volunteers; this bill has now passed both Houses with slight amendments. DeSaulnier's SB 334, which also passed the Senate, would require ballots to list the top financial backers and opponents of measures on the ballot pamphlets voters receive. Proponents of these measures say they're about regaining control of an initiative process that's been "hijacked by moneyed interests." Critics say they're a power grab intended to make Sacramento less answerable to voters.

So who's right? Well, keep in mind that the worst "reforms" of the initiative process may still be on the way: Mike Gatto's ACA 6, a constitutional amendment that would prohibit placing initiatives on the ballot if they create a "net increase" in government spending (presumably, this would include measures that cut taxes); and Loni Hancock's SCA 15, which would bypass the two-thirds majority requirement for tax increases. Also keep in mind that the Legislature gave ample evidence of its contempt for the voters during the negotiations for the most recent budget. How did they respond to Californians' demand for on-time budgets, expressed last November in the passage of Prop 25? By passing an obviously unbalanced, unconstitutional budget to fit the deadline. How did they respond to voters' insistence, again last November, that local government funds not be raided by Sacramento? By raiding the state's redevelopment agencies to the tune of $1.7 billion. And how did they respond to last year's passage of Prop 26, which affirmed the two-thirds majority requirement for raising taxes and fees? By passing new vehicle and fire fees without a two-thirds majority, and moving forward with Hancock's measure. If the Legislature doesn't want people to think that they aren't grabbing more power at our expense, they really need to try harder.

Are Californians Already Caving on Higher Taxes? Not Quite

Leave it to the LA Times to not miss a chance to talk up Californians' receptiveness to higher taxes. Today, the Times reports the latest nugget from its recent poll, conducted in partnership with USC's Dorfside College: a majority of the poll's respondents favor allowing local governments and school districts to put their own tax measures before voters. This idea was embodied, of course, in Darrell Steinberg's SB 653. Steinberg largely proposed the measure in order to bully Republican lawmakers into cooperating with tax hikes in the spring, and has shelved it for the time being. But does this poll suggest that voters are already weary of the Legislature's campaign to extort higher taxes out of them by cutting funding to services they want?

The citizens are already caving to our wishes!

For two reasons, not quite. For one thing, the poll population skews towards older Californians, with almost a quarter of respondents 65 and older, and over half being over 50. Insofar as retirees are less likely to appreciate the effects of higher taxes on local economies, and insofar as older Californians tend to be much wealthier than the working-age population these days, it stands to reason that they'd be more attuned to the benefits of new taxes than the costs. To the extent that California is much younger than the poll's population, it's not clear that this result generalizes well.

More importantly, though, the poll does a terrible job of presenting the local-tax issue to respondents. For one thing, the proposition the respondents heard was much more narrow than SB 653: what 58% of respondents said they approved of was allowing local governments and school districts to impose excise taxes on alcohol, tobacco, soda, and oil extraction, with the stipulation that voters would approve the increases. Steinberg's bill, for one thing, included income taxes, other sales taxes, use taxes, and vehicle license fees, and would include medical marijuana in its excise plan. So, to be clear, a majority of respondents don't approve of what might actually be on the table, because they weren't asked their opinion of Steinberg's proposal.

Second, the poll then "educates" respondents on the issue by offering the pro and con arguments on the proposal, and asks them their opinion again. The second time around, only 55% of respondents approved of the local taxes. Yet the poll's presentation of the arguments is terrible. The pro statement reads: "Supporters of this measure say that after years of cutbacks to local schools, public safety, and other services, local governments need options for raising revenue, and those decisions should be up to the voters in the local area." The con statement reads: "Opponents of this measure say that raising taxes hurts businesses and prevents them from creating jobs. At a time when California taxpayers are already overburdened, the state legislature should not make it easier for government to raise taxes." The pro statement makes clear that the matter should be up to the voters, but there's nothing in Steinberg's plan that would prevent governments from imposing them without voter approval. But the biggest problem here? Local governments and school districts already have options for raising revenues! Cities already have the authority to put their own sales tax increases before voters, and can impose hotel and utility taxes. County governments are also able to raise sales taxes. And school districts can bump up their revenues by putting parcel tax measures on local ballots.

In other words, had the question been presented accurately to a poll population that was representative of Californians, we'd be more inclined to agree with the Times' interpretation of these results. But it wasn't, so we aren't.

Sunday, July 24, 2011

More Clashes Between Green Energy and Property Rights

The LA Times reports today on the efforts of green technology firms to fill the Tehachapi Valley, about 100 miles north of Los Angeles, with enough wind turbines to make it look like a porcupine from the sky. The only problem is opposition from the Valley's residents, who find the turbines loud, noisy, ugly, environmentally hazardous, and destructive of their property values.

As we're seeing all over California these days, "going green" by government fiat has brought out the worst in both our bureaucrats and our environmentalists, with terrible consequences for the property owners unfortunate enough to live near these projects. Homeowners on the San Francisco Peninsula, for example, have filed two lawsuits opposing the state's High Speed Rail Project; apparently they're none too pleased about the idea of building ugly elevated rail track through some of California's most valuable land. Homeowners in San Diego County have fought SDG&E;'s construction of the Sunrise Powerlink through their property; the utility continues moving forward with the project in spite of the fact that there's no energy for the transmission line to transmit. Southern Cal Edison is covering the bedroom community of Chino Hills in 200-foot towers carrying electric lines from inland solar and wind farms. And, in the Antelope Valley, Los Angeles County's "Nuisance Abatement Teams" are forcing homewoners to destroy their houses; in what we're sure is a total coincidence, the County Supervisor directing the NATs is also pushing to add large numbers of wind and solar plants in the Valley.

And in the Tehachapi Valley, residents are finding their home values plunging as tax-starved Kern County is pushing for literally thousands more wind projects there. Homeowners worry they'll soon be surrounded by turbines. The presence of construction vehicles and helicopters related to the projects is interfering with the region's farming activities. Some worry about oil from the turbines leaking into well water, while others worry that the turbines will affect landing maneuvers at local airfields. Environmentalists worry about migrating birds being killed in large numbers. Moreover, the turbines' historically faulty wiring leads many to worry about fire dangers. There are concerns that clearing trees to make way for turbines could lead to soil erosion and dangerous floods. The fact that the Valley's soil is sedentary and sits on the Garlock fault line also creates the danger that the turbines could topple in an earthquake. Finally, because green tech firms aren't required to tear down broken turbines, critics say the area is already dotted with these eyesores.

The Federal Government Giveth to California Cities, and the Federal Government Taketh Away

In the free market, the production of goods and services that people, you know, want implies that the spending of money need not be a zero-sum game. In government, which produces nothing of value, every dollar spent has a winner and a loser. To illustrate this, we've seen how local governments are being screwed over by the state via the new budget and a slew of new bills in the Legislature. Today, a pair of reports remind us that the federal government is doing the same.

Sacramento City Hall, now $3.2 million poorer.
First up, the Riverside Press reports that federal funding to widen the 91 freeway through the city of Corona was denied this week. The region's Congressional representatives, as well as Sens. Feinstein and Boxer, had lobbied hard for the $446 million loan from the awkwardly-named Transportation Infrastructure Financing Innovation Act, and Transportation Secretary Ray LaHood is a big supporter of the plan. We would offer the compromise idea of taking this money from the billions of federal transportation dollars about to be wasted on the High Speed Rail Project. Sen. Boxer, however, would rather blame DC Republicans for wanting to cut spending than actually take any responsibility of her own in these (or other) matters.

Similarly, the city of Sacramento is reeling from the news that the Department of Homeland Security is cutting $3.2 million in emergency preparedness funding to the capital this year. After Congress cut a portion of the funding for Urban Area Security Initiative grant program, DHS was forced to scale back from 65 grants to awarding just 31. In a somewhat ironic turn, Sacramento was completely unprepared to lose these funds, and worries it would be overwhelmed in an emergency without them; this suggests to us that the city didn't use past grants very effectively. According to Sgt. Norm Leong of the Sacramento Police Department, "Our budget is terrible right now, though. I don't think the city will be able to breach any gap that will be lost."

Privatize, privatize, privatize . . .

Attention, Bay Area Libertarians: Reason's Matt Welch and Nick Gillespie in San Francisco

We know it's tough for libertarians to contemplate entering the freakish, poisonous confines of San Francisco, but if you happen to be in the area in the next few days, Matt Welch and Nick Gillespie of Reason magazine will be in town, promoting their new book, The Declaration of Independents. As fans of their work, we're guessing this will be an interesting time.

The Sunday event is called Chocolate and Coffee at TCHO, and will take place from 4-6 pm on Pier 17 (Embarcadero and Green Street). We're hoping to be at this one ourselves.

The Monday event is at the Commonwealth Club, and starts at 6:30 pm. RSVP is here; the cost for students is $7, $20 for anyone else.