tag:blogger.com,1999:blog-2781767787839459944Wed, 28 Aug 2013 00:35:15 +0000libertarianlibertyCaliforniabudgettaxcorruptionpension reformunionregulationscivil libertieseconomic crisisJerry BrownenvironmentalismSan FranciscoLos AngelesbankruptcySan Josemarijuanahealth carenanny statedebteducationGolden State LibertySacramentojobsDrug WarSan DiegoeconomicsVernonhousingBellgreen energyboondoggleCosta MesaOrange Countydisincorporationhigh speed railOaklandLegislatureLos Angeles TimesMontebelloSilicon Valleygreen technologyhumorpoliceredevelopment agencieseconomyoutsourcingprisonsprivacyAB 32ComptonSan Francisco Bay Areagovernment spendingsocialismunemploymentCalPERSFremontFresnoausteritybureaucracyimmigrationLos Angeles CountySolyndraballot initiativesbusiness climateinflationlobbyistsreligiontransparencyAmazonBurbankMendocinoReasonSanta AnaVallejobudget crisisdemocracyentrepreneurshippoliticsproperty rightsrecessionwaterAntonio VillaraigosaBoard of EqualizationFacebookFullertonInland EmpireLegislative AnalystMedi-CalRon PaulStocktonSupreme Courtcommunitycrony capitalismgunorganized laborphilosophyprivatizationpublic employeesrealignmentwelfareAntelope ValleyContra Costa CountyGavin NewsomGoogleNewport BeachPalo AltoRichmondSan BernardinoSanta MonicaSecond amendmentaffirmative actionbailoutselectionseminent domainentitlementsfarmsgovernment wasteperksrecallsecessionviolencewater policyAlamedaAtlas ShruggedBARTBerkeleyBill LockyerCal State systemCaltrainCaltransCentral ValleyFederal ReserveFirst AmendmentFitchGlendaleHalf Moon BayIrvineKamala HarrisMaxine WatersMillbraeNew York TimesObamacareOccupy movementPPICQE2RepublicanRiverside CountyRobert RizzoSalinasSan Joaquin ValleySan Mateo CountySchwarzeneggerTea PartyTwitteralcoholbond ratingcap and tradecard checkchild servicesdigital goldfire feefraudintellectual propertyracesportsActonAlex PadillaAnaheimAntiochAssemblyAthertonAyn RandBarry BondsBreaCARBCalSTRSCalWatchdogColtonConcordConstitutionDarrell SteinbergDeltaDemocratic PartyEconomistFort BraggFresno CountyGeorge ReismanGeorge SkeltonHealdsburgHerculesHomeland SecurityHuntington BeachImperial BeachIndian tribesIrelandJohn DiazJohn PerezJohn Taylor GattoKochtopusLaguna BeachLong BeachMaricopaMay DayMedicareMenlo ParkModestoMountain ViewNancy PelosiNational CityNew UrbanismOrange County RegisterPATRIOT ActPabstPasadenaPelican BayPleasant HillPleasantonPoint ArenaRANDRialtoSacramento CountySan Bernardino CountySan Francisco ChronicleSan Juan CapistranoSanta Clara CountySanta RosaSecretary of StateSimi ValleySocial SecuritySonoma CountySunnyvaleTSATexasThe Social NetworkThousand OaksTim CavanaughTustinUnited StatesUniversity of CaliforniaVentura CountyVeronique de RugyWaiting for Supermanabortionacademiaaccountabilityasset seizureassisted suicidebordercapital punishmentcapitalismcentral planningclassclass warfarecommissionsconcealed carryconspiracy theoriescorporate fraudcrimediscriminationdishonestyenergy policyethicseventsgerrymanderinggovernment workersgun controlhockeyland uselaw enforcementlimited governmentloansmarketsmoneynetworkingpartisanshippensionspolicy analysispolitical correctnesspoliticianspublic transitredistrictingregrent controlrent-seekingsmall businesssocial networkingsocial workerstart-upsstatisticstobaccotrafficurban planninguse taxwealthwelfare statewineGolden State LibertyA libertarian view on politics and life in the late, great land of Californiahttp://www.goldenstateliberty.com/noreply@blogger.com (Nick)Blogger1040125GoldenStateLibertyhttp://feedburner.google.comtag:blogger.com,1999:blog-2781767787839459944.post-5469301010434378358Sun, 08 Jan 2012 23:40:00 +00002012-01-08T15:40:39.697-08:00We'll Meet Again, Don't Know Where, Don't Know WhenFaithful readers of this blog will recognize that we haven't posted in a little while, so this may not come as a surprise. But for a number of reasons, we've decided to end this blog and move on to new projects.<br /><br /> One of the reasons for this decision is practical: I'm about to start a new job that will make it very hard for me to blog at the pace I kept last year, particularly in the weeks preceding the deadline for the new budget and the end of the Legislative session. Sometimes you have to set priorities in life, and Golden State Liberty just isn't one I can afford to hold onto.<br /><br /> But the bigger reason is what you might call a crisis of faith. For me, liberty (and libertarianism) is about taking control of your own destiny, and taking responsibility for creating the life you want for yourself. As such, you sometimes need to ask yourself hard questions about how you spend your days, and whether the things you do actually move you closer to whatever ideal of freedom you envision for yourself. And I've become convinced that spending significant chunks of each day absorbed in the minutae of California's political system is not a ticket to personal liberty. It's horribly depressing to contemplate the state of our politics here on a daily basis, but more to the point, there's nothing to gain from it. Whether California is headed over a cliff is, of course, open to debate; my guess is that the state is headed for a decades-long period of stagnation and an economy that goes sideways, as opposed to an "Atlas Shrugged"-style collapse. Of course, if Californians had an abrupt change of heart and embraced limited government, we'd likely see rapid growth and a more free, livable society here. But there's absolutely no reason to believe that that's going to happen. Most likely, libertarians in California are stuck with the bloated, statist government we've had for decades here. And no amount of bellyaching is going to change that.<br /><br />If I'm right, the options for freedom-loving Californians look something like this: 1) Leave the Golden State for a more hospitable place; 2) Stay, and struggle against overwhelming odds to effect the changes you want through the political system; or 3) Stay, and find your freedom in your everyday life, apart from politics. Some of my best friends in California are pursuing the first option, and I'd be lying if I said it wasn't on my radar as well. I also know a number of people on the second path. I wish them well, but the success of that option is largely out of their hands, as it depends on the hearts and minds of a lot of people with an intense hostility to individual freedom. For me, Door #3 is the way to go. You don't need a blog to find other libertarians in California; trust me, they're everywhere. And with billions in QE2 dollars starting to flood into the state's economy, there are plenty of opportunities to find your fortune here and take care of yourself with it. It might not be perfect, but if you're going to stay, making enough money to give yourself options and spending time in the company of good people isn't a bad way to spend your days.<br /><br />And finally, a sincere thanks to everyone who has read this blog and become part of the commenting/Tweeting community around it. It really wouldn't have been the same without you, and I'm very grateful for the friends I've made in the course of this project. Thanks again.<br /><br />And good luck,<br />GSLhttp://www.goldenstateliberty.com/2012/01/well-meet-again-dont-know-where-dont.htmlnoreply@blogger.com (Nick)3tag:blogger.com,1999:blog-2781767787839459944.post-6761295136156672375Fri, 16 Dec 2011 17:19:00 +00002011-12-16T09:19:53.874-08:00budgetCalifornialibertarianlibertytaxunionTeachers Union Will Not Stop Trying to Drive the Wealthy Out of California<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-xIasEPThqIk/TutuWAQ2yBI/AAAAAAAACMM/Refwe1Md7Wk/s1600/180px-Mr_Burns_evil.gif" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="222" width="180" src="http://4.bp.blogspot.com/-xIasEPThqIk/TutuWAQ2yBI/AAAAAAAACMM/Refwe1Md7Wk/s320/180px-Mr_Burns_evil.gif" alt="Excellent!"/></a></div>Some months ago, we <a href="/2011/04/why_tax_on_millionaires_measure_is.html">wrote about</a> the California Teachers' Association's plan to fix the Golden State's broken finances by slapping a hefty tax on millionaires. We still think the plan is a terrible idea, but we have to give the CTA credit for this much: it takes a particular kind of stubborn courage to stand behind a bad idea for this long. Never mind that noted fiscal conservative Bill Lockyer <a href="http://totalbuzz.ocregister.com/2011/07/13/state-treasurer-says-taxes-on-rich-high-enough/56939/">thinks</a> the rich will flood out of the state if their taxes go much higher. Never mind that California voters are <a href="/2011/06/california_voters_still_not_interested.html">wary</a> of tax hikes and have little faith in Sacramento to spend money wisely. And never mind that arguing for forcible theft of someone else's property is <a href="/2011/07/how_to_defend_your_libertarian_beliefs.html">indefensible</a>. According to the <i>Contra Costa Times</i>, the CTA and other fans of big government <a href="http://www.contracostatimes.com/politics-government/ci_19556854?source=rss">aren't letting</a> the millionaire's tax go gentle into that good night. Even though Governor Jerry Brown has pleaded with other left-leaning groups to unite behind his tax proposal, the CTA-backed Restoring California is going forward with its plan to put a measure on next year's ballot. Under their plan, Californians with incomes between $1 million and $2 million would face a 13.3% income tax rate; incomes over $2 million would be taxed at a 15.3% rate.<br /><br />Brown and other proponents of higher taxes worry that voters will respond to a dizzying array of tax measures with a collective "no" next November, and it's important to keep in mind that many aspects of the six plans with a realistic chance of reaching the ballot directly conflict with one another. Even leaving this aside, it's hard to believe that many wealthy Californians would put up with the punishing tax rates in the Restoring California plan. The group claims that its proposal would send $6 billion to the state's General Fund, but it's hard to believe that millionaires would still find living here worth the cost. People who earn millions in income don't do so by being careless with money.http://www.goldenstateliberty.com/2011/12/teachers-union-will-not-stop-trying-to.htmlnoreply@blogger.com (Nick)2tag:blogger.com,1999:blog-2781767787839459944.post-8843858311708496732Thu, 15 Dec 2011 19:48:00 +00002011-12-15T11:48:55.270-08:00Californialibertarianlibertypension reformSan JoseStanford Researchers: Yes, San Jose's Pensions are a DisasterAdvocates and opponents of pension reform in California are <a href="http://www.goldenstateliberty.com/2011/12/bill-lockyer-throws-tantrum-picks-up.html">abuzz</a> with the release of updated estimates of the Golden State's unfunded pension liabilities, from the Stanford Institute for Economic Policy Research. While data confirming the half-trillion-dollar hole in the state's three largest pension funds are certainly big news, the IEPR has also issued <a href="http://siepr.stanford.edu/system/files/shared/pubs/Nation_public_pension_sj.pdf">another report</a>, this one on the public pensions in San Jose.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-1g9FpqgvTTk/TuopEA1Cs_I/AAAAAAAACMA/JcYP7txHd3I/s1600/220px-Sanjosecityhall.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="165" width="220" src="http://3.bp.blogspot.com/-1g9FpqgvTTk/TuopEA1Cs_I/AAAAAAAACMA/JcYP7txHd3I/s320/220px-Sanjosecityhall.jpg" /></a></div>Given the news we've heard out of San Jose all year &mdash; <a href="/2011/06/facing_future_in_san_jose.html">layoffs</a> of dozens of police officers, <a href="/2011/06/san_jose_approves_all_cuts_budget.html">broken</a> budgets, and a desperate ploy to save the city by cutting into the pensions of <a href="/2011/05/is_san_jose_next_madison_wi.html">current </a>city employees &mdash; you probably won't be surprised to learn that the city's financial health isn't so good these days. The Stanford authors conclude that the Safety pension fund (which pays benefits to firefighters and police officers) is less than 55% funded, while the Federated fund (which pays all other city retirees) is less than 47% funded. If we use risk-free assumptions on the funds' returns (a fair assumption, if taxpayers are going to effectively guarantee them), Safety is only 47.4% funded, and Federated is only 42.6% funded. Using the more optimistic assumption of a 6.2% rate of return, the total unfunded liabilities of these pensions are estimated at about $3.6 billion (liabilities under risk-free assumptions, unfortunately, are not presented). As such, even if optimistic rates of return are assumed, San Jose has an 88% probability of falling short on its pension obligations in the next 16 years. In order to have an even chance of meeting its obligations, the two funds would need to see an average annual return of 11.4% over that period, and to reach 80% funding, the pensions would need to average 10% returns on investment. By 2016, the IEPR also concludes that San Jose taxpayers will be footing 36% of the cost of Federated pensions and 71% of the cost of Safety pensions; if risk-free discount rates are assumed, taxpayers will pay 53% of Federated pensions and 111% of Safety pensions; in other words, the costs of Safety pensions will exceed total payroll.<br /><br />In other words, the report suggests that the dire fiscal scenario described by Mayor Chuck Reed is a pretty likely outcome. Even under fairly neutral assumptions, spending on pensions would crowd out spending on other public services to a significant degree; if California's economy slides back into recession (keeping in mind that AB 32 is around the corner), this spending will break the city's budget. San Jose's unions, unsurprisingly, dispute the study, pointing to its failure to account for a <a href="/2011/12/pension_armageddon_on_hold_in_san_jose.html">recent analysis</a> that lowered next year's pension bill. This is technically true, but completely beside the point. Both Reed and the Stanford team argue that, without serious reform, San Jose's only option is to make deep cuts to services, salaries and personnel, which is what they spent the first half of 2011 doing. The recent estimates don't reflect a meaningful change in the city's financial prospects; they simply show that imposing a 10% pay cut and laying off hundreds of employees, including 66 cops, will indeed lower pension obligations. In other words, they don't support any argument the unions want to make.http://www.goldenstateliberty.com/2011/12/stanford-researchers-yes-san-joses.htmlnoreply@blogger.com (Nick)1tag:blogger.com,1999:blog-2781767787839459944.post-359042081077213470Thu, 15 Dec 2011 15:26:00 +00002011-12-15T07:26:26.467-08:00budgetCalifornialibertarianlibertytaxOne for You, Nineteen for Me: Notes on Tax Plans<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-3Suvpmc5BeE/TuoHhbeyubI/AAAAAAAACL0/76HYs9FLZes/s1600/taxpayers.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="225" width="300" src="http://4.bp.blogspot.com/-3Suvpmc5BeE/TuoHhbeyubI/AAAAAAAACL0/76HYs9FLZes/s320/taxpayers.jpg" /></a></div>Recently, we <a href="/2011/12/circular_firing_squad_of_california_tax.html">wrote about</a> the bewildering array of tax-increase plans that will likely crowd next November's ballot. With Jerry Brown, the <a href="http://www.goldenstateliberty.com/2011/11/this-day-in-bad-ideas-think-longs.html">elitist</a> Think Long committee, public education unions, and hedge fund manager Tom Steyer all pushing independent (and, on some points, contradictory) tax initiatives, there's a decent chance voters could throw up their hands and turn down all of them, as happened in 2009. Well, apparently you can add another rifle to this circular firing squad: according to the <i>Sacramento Bee</i>, the California Democratic Party chairman, John Burton, is filing his own <a href="http://blogs.sacbee.com/capitolalertlatest/2011/12/california-democratic-party-chairman-john-burton-files-oil-tax-proposal.html">tax hike</a> for the ballot. Basically, Burton's plan would slap an excise tax on oil production in the state, with the proceeds going to higher education and the General Fund. The plan doesn't have any apparent conflicts with the Governor's tax proposal, but Burton is kidding himself if he thinks voters will be happy to see yet another tax plan on the ballot. Of course, with AB 32 soon to be in full swing and a measure to shut down nuclear power possibly coming to the same ballot, you might want to investigate your job and housing options out of state if Burton's bill passes.<br /><br />Also, we couldn't help but notice this <a href="http://toped.svefoundation.org/2011/12/15/jerry-browns-cagily-worded-initiative/">interesting dissection</a> of the Brown plan, from John Fensterwald at <i>Educated Guess</i>. We've already noted the Governor's <a href="http://www.goldenstateliberty.com/2011/12/responding-to-jerry-browns-open-letter.html">slipperiness</a> in describing his plan, but it looks like we were being too kind. In his "open letter to the people" and elsewhere, Brown and his supporters have characterized the $7 billion plan as essential to preserving funding for K-12 schools and public safety, and <a href="http://blogs.sacbee.com/capitolalertlatest/2011/12/majority-supports-jerry-browns-tax-plan-poll-finds.html">poll support</a> for this plan is predicated on the idea that the funds will go to education. Yet, as Fensterwald explains, voters hoping for a $7 billion infusion of funds to public schools should look elsewhere. For one thing, Brown isn't proposing to increase Prop 98 funding by that amount, only to increase school funds in the course of raising taxes. Yet Prop 98 only requires that 40-50% of every tax increase go to public schools; so, realistically, you'd be looking at $3.5 million at most. What's more, Brown's plan also calls for voters to shift $5 billion <i>out</i> of the General Fund budget to pay for things like county realignment; this could shave more than a billion dollars off the total funds schools would see from the tax hike. The end result of all this is that voters will be asked to cough up $7 billion in taxes so that $2 billion can go to schools, with the rest presumably disappearing into the warren of cronyism in Sacramento.http://www.goldenstateliberty.com/2011/12/one-for-you-nineteen-for-me-notes-on.htmlnoreply@blogger.com (Nick)0tag:blogger.com,1999:blog-2781767787839459944.post-4793990622627942135Wed, 14 Dec 2011 22:04:00 +00002011-12-14T14:17:50.789-08:00Bill LockyerCalifornialibertarianlibertypension reformBill Lockyer Throws Tantrum, Picks Up His Marbles and Goes Home<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/-Ktt4Ls6hYFw/TujHU_eYmVI/AAAAAAAACLo/UGqvKCsdGLg/s1600/220px-TsunamiHazardSign.svg.png" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="192" width="220" src="http://2.bp.blogspot.com/-Ktt4Ls6hYFw/TujHU_eYmVI/AAAAAAAACLo/UGqvKCsdGLg/s320/220px-TsunamiHazardSign.svg.png" /></a></div>Those of us concerned about the looming catastrophe known as California's unfunded public pension debt had to be dismayed by the pension reforms Jerry Brown recently <a href="http://reason.com/archives/2011/11/07/pension-reform-goes-nowhere-in-californi">proposed</a>. Partly this is because the plan doesn't go nearly far enough, given the size of the problem &mdash; <a href="/2011/08/california_cities_finally_start_paying.html">conservative estimates</a> put the unfunded liabilities of CalPERS, CalSTRS, and the UC retirement plan alone at $500 billion &mdash; and partly it's because even these tepid reforms don't stand a chance in the face of organized labor's opposition. Like it or not, this is a cliff the Golden State is probably going to drive over. If you don't believe us, <a href="http://latimesblogs.latimes.com/california-politics/2011/12/state-treasurer-resigns-in-protest-from-pension-advisory-panel.html">this story</a> about state Treasurer Bill Lockyer should tell you a lot about Sacramento's receptiveness to pension reform.<br /><br />If you follow the pension issue in California, you're probably aware that the same Stanford research team that produced the $500 billion liability estimate has released a <a href="http://blogs.sacbee.com/the_state_worker/2011/12/new-stanford-study-pegs-pension-shortfall-at.html">new report</a>. Their <a href="http://www.stanford.edu/group/siepr/cgi-bin/siepr/?q=/system/files/shared/GoingforBroke_pb.pdf">original</a> estimate, published in April 2010, found that the state's three biggest pension funds had a total unfunded liability of $425 billion as of 2008; in the absence of more recent data, the researchers assumed that the funds' heavy losses in 2008-09 pushed the unfunded liability north of a half-trillion dollars. Now, we have <a href="http://siepr.stanford.edu/system/files/shared/Nation%20Statewide%20Report%20v081.pdf">the data</a>: using a risk-free rate of return (which makes sense, if taxpayers are guaranteeing the pensions), CalPERS, CalSTRS, and UCRP have a total unfunded liability of $498 billion. Under this assumption, neither CalPERS nor CalSTRS are more than 48% funded (UCRP is 61% funded); fully funding these two funds next year would require government spending on them to rise from $4.8 billion to an astounding $22.7 billion, or over a quarter of the General Fund budget, while fully funding the UCRP would require an additional $3 billion. In other words, if you thought $1 billion in trigger cuts were bad, this would be a catastrophe. Put simply, an honest accounting of public pensions would capsize government in California. In addition to calling for increased agency and employee contributions to pensions, the Stanford authors, led by former Democratic Assemblyman Joe Nation, call for reducing benefits to current workers and raising the retirement age.<br /><br />Making these kinds of recommendations to the union-owned Democratic establishment in Sacramento, of course, will tend to get roughly the same reception as slandering the Koran in a public square in Riyadh. And yesterday, Treasurer Bill Lockyer announced that he was resigning from the pension advisory board of the Stanford Institute for Economic Policy Research, which issued the report. Lockyer's spokesman offered this bit of childish repartee: "When it comes to public pensions, maybe SIEPR should stand for 'Stanford Institute to Eviscerate People’s Retirement.'" Apparently, Lockyer thought the report failed to consider the legal difficulties of reducing benefits for current workers, and didn't account for the effect of including pension retirees on plans' boards. In other words, he ignored the math underlying the report's arguments and raised a silly objection as a way of discounting it entirely. Ladies and gentlemen, your political leadership!http://www.goldenstateliberty.com/2011/12/bill-lockyer-throws-tantrum-picks-up.htmlnoreply@blogger.com (Nick)2tag:blogger.com,1999:blog-2781767787839459944.post-6617420526559396423Wed, 14 Dec 2011 15:36:00 +00002011-12-14T07:36:07.250-08:00budgetCaliforniaJerry BrownlibertarianlibertytaxThe Aftermath of the Trigger CutsAs we (and most of the state's other political observers) <a href="/2011/12/breaking_jerry_brown_announces_1.html">noted</a> yesterday, Governor Jerry Brown has announced $1 billion in mid-year "trigger cuts" to California's budget. A <a href="http://blogs.sacbee.com/capitolalertlatest/2011/12/details-of-browns-trigger-cuts.html">detailed breakdown</a> comes to us from the always-reliable Kevin Yamamura at the <i>Sacramento Bee</i>. Already, the announcement has provoked a range of entirely predictable reactions. Let's break them down.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-u2Qot8TVI8k/TuizjjQavaI/AAAAAAAACLc/8jmg7gX37To/s1600/220px-Trigger_mechanism_bf_1923.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="163" width="220" src="http://3.bp.blogspot.com/-u2Qot8TVI8k/TuizjjQavaI/AAAAAAAACLc/8jmg7gX37To/s320/220px-Trigger_mechanism_bf_1923.jpg" /></a></div><b>Litigation:</b> In a sign of just how much people love their automobiles in Los Angeles, Brown had barely finished announcing the cuts when the LA Unified School District <a href="http://blogs.sacbee.com/capitolalertlatest/2011/12/los-angeles-schools-to-sue-california-over-bus-cut.html">announced</a> it was suing to block $248 million in cuts to school busing. We'll give you a moment to get past the surprise of hearing that the cuts have triggered a lawsuit. LAUSD is required, under a 1981 court order, to provide busing to some 35,000 students, and must bus an additional 13,000 students with disabilities. Taking funds from classroom instruction to make up for the busing cuts will leave LAUSD spending less per pupil than other districts, which Superintendent John Deasy argues violates students' constitutional right to equal education opportunity. Stay tuned.<br /><br /><b>Meaningless gestures of protest:</b> According to the <i>San Bernardino Sun</i>, some 60 Inland Empire residents gathered in downtown Riverside last night to freeze their butts off and <a href="http://www.sbsun.com/news/ci_19542172?source=rss">stage a "vigil"</a> in protest of the triggers. We're sympathetic to the concerns of those who will be directly affected by these cuts &mdash one of the protesters interviewed by the <i>Sun</i> has a developmentally disabled sister who will be affected by the social-service cuts &mdash but let's be honest: Jerry Brown has made it clear that he <a href="/2011/07/riverside_county_supervisor_proposes.html">doesn't care much</a> for the plight of Californians who are represented by Republicans.<br /><br /><b>A holiday from logic:</b> Unsurprisingly, Governor Brown used the trigger cut announcement as a chance to flog his plan to raise taxes next year, and higher taxes on the rich seemed to be on the minds of many of the Riverside "vigil" attendees. Yet, as Dan Walters points out <a href="http://www.sacbee.com/2011/12/14/4121213/dan-walters-good-budget-news-complicates.html#mi_rss=Dan%20Walters">here</a>, this makes no sense: if Sacramento can make $1 billion in spending cuts while largely sparing K-12 schools and public safety, and the state's economy is (in Brown's estimation) improving, why do they need $7 billion more to spend on these things? Moreover, the trigger cuts are not the fault of insufficiently generous wealthy Californians: if you're blaming anyone, you have to blame Brown and the Democrats in the Legislature (since they had no input on the budget, we'll give the Republicans a pass here). The cuts are a direct consequence of the decision to cover a $4 billion budget hole with a gimmick rather than a real solution. Assuming that $4 billion in unanticipated tax revenues would arrive to plug the gap was preposterous in the context of the state's ongoing recession. And it's because of this terrible, lazy decision that cuts are being implemented now.http://www.goldenstateliberty.com/2011/12/aftermath-of-trigger-cuts.htmlnoreply@blogger.com (Nick)2tag:blogger.com,1999:blog-2781767787839459944.post-7298764049363074412Tue, 13 Dec 2011 22:47:00 +00002011-12-13T14:47:23.689-08:00budgetCaliforniaJerry BrownlibertarianlibertytaxBREAKING: Jerry Brown Announces $1 Billion in Trigger Cuts<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-vu6uJmkwMLg/TufL1LGpSaI/AAAAAAAACLQ/zhjsAh4fadQ/s1600/jerrybrowncrushhead.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="249" width="320" src="http://3.bp.blogspot.com/-vu6uJmkwMLg/TufL1LGpSaI/AAAAAAAACLQ/zhjsAh4fadQ/s320/jerrybrowncrushhead.jpg" alt="We were THIS CLOSE to a balanced budget!"/></a></div>In a piece of breaking news that we've been waiting to report since <a href="/2011/06/budgepocalypse_2011_what_have_we.html">late June</a>, the day of reckoning for California's budget has finally arrived. As reported by pretty much every news outlet in the state, Jerry Brown has announced $1 billion in mid-year "<a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/12/13/BAI81MBUEJ.DTL&tsp=1">trigger cuts</a>." About $250 million in state spending on school buses will be slashed. The rest of the cuts will come to higher education, Medi-Cal, libraries, counties, and social services. Largely because of improved tax revenue numbers in November, the cuts were lower than the Legislative Analyst's Office had expected.<br /><br />Of course, the accounting on the trigger cuts doesn't account for the fact that state spending has outpaced the budget by some $2 billion this year. So, strictly speaking, these cuts don't represent a meaningful change in the broader pattern of out-of-control spending. What's worse, the Governor's remarks at the presser announcing these cuts only demonstrate how central he is to the problem. As Steven Harmon reported via Twitter, Brown discussed his $7 billion tax proposal in the context of these cuts by describing a frustrated and dicontented electorate that wants more government spending to reduce inequality. We'll apologize in advance if we're misrepresenting the Governor's remarks, as we can't locate a transcript anywhere. But if they're accurate, Brown is doing himself no favors by conflating his good-government argument for taxes with a class-warfare argument. Just as there's no amount of tax revenue that can satisfy Sacramento's urge to spend, there's no amount of redistribution that's going to satisfy Brown's supporters in California. Given the state's extreme lack of credibility when it comes to spending money wisely, the good-government argument is going to be tough enough to sell to the voters; the idea of solving California's problems via socialist redistribution, however, isn't going anywhere.http://www.goldenstateliberty.com/2011/12/breaking-jerry-brown-announces-1.htmlnoreply@blogger.com (Nick)2tag:blogger.com,1999:blog-2781767787839459944.post-7633476138360347181Tue, 13 Dec 2011 17:27:00 +00002011-12-13T09:27:09.174-08:00CaliforniacorruptiondisincorporationlibertarianlibertyVernonThe Price of Survival: Vernon's Deal with the DevilWe spend a lot of time writing about the ugliness of California politics, so it takes a particularly awful story to surprise us at this point. Unfortunately for the people who live there, the worst slimy-politician stories in the Golden State all seem to come from the same place: southeastern Los Angeles County. As an example, consider the <a href="http://www.latimes.com/news/la-me-vernon-money-20111213,0,6169391.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fnews+%28L.A.+Times+-+Top+News%29">latest developments</a> out of the tiny city of Vernon.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-WqamX5ph5hk/Tud9BR-2tJI/AAAAAAAACLE/IqM8hOfYj6M/s1600/vernon_catxsign.jpg" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="217" width="320" src="http://1.bp.blogspot.com/-WqamX5ph5hk/Tud9BR-2tJI/AAAAAAAACLE/IqM8hOfYj6M/s320/vernon_catxsign.jpg" /></a></div><br />Until this year, Vernon was known for two things. As the home of thousands of warehouses and factories, it's one of the few thriving centers of economic activity in LA County. And, like the neighboring city of Bell, it spent much of 2010 embroiled in political scandal, as its leaders <a href="/2011/06/scandalpalooza_old_school_graft_in.html">were found</a> to have awarded themselves massive salaries and benefits and given tons of money to firms owned by their relatives. In the first half of 2011, it became known for something else: Assembly Speaker John Perez's push to <a href="/2011/04/vernon_update_los_angeles_county_moves.html">forcibly disincorporate</a> the city via AB 46. While Perez claimed that dissolving Vernon was necessary to the cause of good government, AB 46 was more likely an attempt to seize Vernon's tax revenues and public utility for the benefit of LA's political elites (like Perez's cousin, Antonio Villaraigosa) by turning the town into an unincorporated part of LA County. Unfortunately for Perez, the bill provoked an <a href="/2011/04/vernon_businesses_to_los_angeles_county.html">angry response</a> from an unlikely coalition of business interests and labor unions: whatever its other flaws, Vernon provides cheap power and excellent response times from police and fire services, and many businesses feared that disincorporating the town would cause their insurance costs and utility rates to skyrocket. As such, the debate over AB 46 soon turned from the city's corruption to the jobs that would be lost if it passed.<br /><br />Still, the ground didn't really disappear from under Perez's feet until late August, when one of the bill's co-authors and key backers abruptly <a href="/2011/08/breaking_key_backer_of_vernon.html">changed his mind</a> about it. State Senator Kevin de Leon, whose district includes Vernon, said at the time that he was concerned about job losses and the ability of Los Angeles County to manage the unique challenges of overseeing the city. In a letter to Vernon City Administrator Mark Whitworth, he offered to drop his support for AB 46 if the city adopted a number of aggressive reforms. They did, and he did, and days later, the bill <a href="/2011/08/breaking_vernon_lives.html">failed</a> on the floor of the Senate. At the time, we speculated that revelations of Vernon's <a href="/2011/08/energy_speculation_gone_wrong_in_vernon.html">massive public debts</a> were behind de Leon's change of heart; we guessed that the same people who wanted the city's tax dollars got cold feet when they learned that $500 million in debts would be part of the package.<br /><br />Yet today, it looks like we were wrong. According to the <i>LA Times</i>, de Leon's about-face occurred not because of cold feet, but because of a well-timed shakedown. Apparently, de Leon approached Vernon officials back in August and offered to oppose AB 46 in exchange for the creation of a $60 million grant program to fund the creation of parks and other community projects in the surrounding cities. Vernon, of course, agreed to the deal, and is now stuck trying to figure out how to pay for the grants. De Leon, unsurprisingly, is unsympathetic; to him, this is a way of punishing Vernon for the pollution, traffic and loss of tax revenues for neighboring cities associated with its many businesses. As far as the grant program, known as the Environmental and Community Benefit Fund, it reeks of cronyism: the funds will be allocated by a nine-member committee appointed by state and local lawmakers, with Vernon having only one representative. The first two grants will go to projects chosen by de Leon himself, improving Huntington Park's Salt Lake Park and supporting the Boyle Heights non-profit Legacy LA. If you think this sounds like a way for de Leon to create a slush fund for his friends and supporters, well, you're probably right.http://www.goldenstateliberty.com/2011/12/price-of-survival-vernons-deal-with.htmlnoreply@blogger.com (Nick)0tag:blogger.com,1999:blog-2781767787839459944.post-1816536005266233659Tue, 13 Dec 2011 15:50:00 +00002011-12-13T07:50:38.220-08:00business climateCalifornialibertarianlibertySacramentotaxWaste Connections Pulls Out of the Sacramento Region<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-LMH1BO0naL4/Tudlm4R7yYI/AAAAAAAACK4/4k6PFC_InvU/s1600/exodus-modern.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="198" src="http://4.bp.blogspot.com/-LMH1BO0naL4/Tudlm4R7yYI/AAAAAAAACK4/4k6PFC_InvU/s320/exodus-modern.jpg" width="300" /></a></div>Every few months, it seems we get another reminder that California's persistently high unemployment is due, in large part, to its toxic business climate. Businesspeople around the country are <a href="/2011/09/another_day_another_survey_declaring.html">uniformly negative</a> in their opinion of the state's tax and regulatory regimes, and Irvine-based Joseph Vranich continues to <a href="/2011/06/business_is_booming_for_irvine_company.html">find success</a> helping companies move to other states. And today, we have word, from the <i>Sacramento Bee</i>, that Vranich may have a <a href="http://www.sacbee.com/2011/12/13/4118518/folsom-based-waste-connections.html#mi_rss=Top%20Stories">new client</a> soon: Folsom-based Waste Connections is moving its corporate headquarters to Texas.<br /><br />While many will point to the lobbying battle the firm lost this year, when it pushed for a failed bill that would've made it easier to move trash among the state's different landfills, as the cause of the move, Waste Connections' concerns have run deeper than that for some time. In a phone interview, CEO Ron Mittelstaedt said that California is "structurally and fiscally broke," and said "[t]his state has the highest state tax rates in the nation, and they're going higher." On the other side, an attorney for an environmental group that fought Waste Connections over the landfill legislation offered this reaction to the news: "They aren't really a California firm; they're a national mergers and acquisition firm." Somehow, this speaks volumes about how politically-connected environmentalists in California view the private sector. If you're not willing to submit to every business regulation Sacramento can dream up, and you don't believe that your business exists to create tax revenue for the government, then you're not "really a California firm."<br /><br />Waste Connections is apparently already on the move to The Woodlands, a suburb of Houston; it expects to completely relocate its headquarters by next September. The move will wipe out only about 100 jobs, but the loss of the Sacramento region's largest publicly traded company carries a symbolic significance in a corner of California that's lost 75,000 jobs in the past five years, and expects its economic future to center around <a href="http://www.goldenstateliberty.com/2011/07/unions-misread-public-sentiment-yet.html">government retirees</a>.http://www.goldenstateliberty.com/2011/12/waste-connections-pulls-out-of.htmlnoreply@blogger.com (Nick)0tag:blogger.com,1999:blog-2781767787839459944.post-8950907413760444854Tue, 13 Dec 2011 02:10:00 +00002011-12-12T18:10:17.984-08:00budgetCaliforniaJerry BrownlibertarianlibertytaxResponding to Jerry Brown's "Open Letter"Last week, Governor Jerry Brown emerged from his fortress of solitude with an "<a href="http://www.jerrybrown.org/open-letter-people-california">open letter to the people</a>". We haven't written about it until now because, frankly, it seemed silly to us. Still, in the spirit of Steven Greenhut's <a href="http://reason.com/archives/2011/12/12/jerry-browns-disastrous-plan-for-califor">takedown</a> of the letter at <i>Reason</i>, we thought we'd review it, and clear up any points of confusion for our readers.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/-HgII2EQkdIk/Tuajp6D-xGI/AAAAAAAACKs/BGcO6WmgKmk/s1600/170px-GravityTap.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="184" width="170" src="http://2.bp.blogspot.com/-HgII2EQkdIk/Tuajp6D-xGI/AAAAAAAACKs/BGcO6WmgKmk/s320/170px-GravityTap.jpg" alt="What we do every time we parse Jerry Brown's version of English."/></a></div>Brown's letter to the people opens by noting that he came into office facing a $26.6 billion budget deficit, and began in January by proposing "a budget that combined deep cuts with a temporary extension of some existing taxes." We would quibble with the description of his planned cuts as "deep," in proportion to the depth of California's overspending problem. One sign of how serious this problem is: nowadays, everyone is <a href="http://www.contracostatimes.com/politics-government/ci_19525841?source=rss">talking about</a> the dreaded "trigger cuts," with tax revenues $1 billion short of projections; yet isn't the real story the fact that the Golden State has already <a href="http://www.foxandhoundsdaily.com/2011/12/california-still-has-a-spending-problem/">overshot</a> its budgeted spending by <i>$2 billion</i> this year?<br /><br />Unfortunately, the Moonbeam starts to strain the rails almost immediately after that. "I asked the legislature to enact this plan and to allow you, the people of California, to vote on it. . . I don’t know how you would have voted, but we will never know." And then he delivers this awful paragraph:<br /><blockquote>Forced to act alone, Democrats went ahead and enacted massive cuts and the first honest on-time budget in a decade. But without the tax extensions, it was simply not possible to eliminate the state’s structural deficit.</blockquote>Where we do we start with this? As far as not knowing how Californians would've voted on his tax plan, Brown's argument is muddied by the <a href="/2011/06/california_voters_still_not_interested.html">opinion polls</a> that showed, repeatedly, that voters were ready to shoot his plan down at the ballot. What's worse, though, is that the Governor seems to have forgotten a few empirical facts. For one, his May revise called for the Legislature to impose his tax increases without voter approval (are we really the only people in California that remember the "<a href="/2011/05/gsl_budget_review_jerry_browns_revised.html">bridge tax</a>"?). For another, California's budget was <i>not</i> on time: does Brown really not remember <a href="/2011/06/breaking_jerry_brown_vetoes_democrats.html">vetoing</a> the Legislature's first budget and <a href="http://www.goldenstateliberty.com/2011/06/breaking-california-controller-to-dock.html">costing</a> lawmakers their pay? As far as his characterization of the budget as "honest," we'll leave you to ponder the $4 billion in magical tax revenues that the budget assumed would arrive, the Amazon Tax that <a href="/2011/09/amazon_ditches_principle_in_its_battle.html">won't happen</a> this year, the <a href="http://www.goldenstateliberty.com/2011/07/bureaucrat-on-bureaucrat-crime.html">revenue backfill</a> from the state's redevelopment agencies, and yes, that $2 billion in deficit spending. As far as "eliminating the structural deficit," are we really supposed to believe that Sacramento is capable of taking a massive pile of money and using it for deficit reduction, rather than new spending?<br /><br />But things are looking up. "The good news is that our financial condition is much better than a year ago." Brown points to the $10 billion in budget cuts made this year, though he focuses on meaningless gestures like taking away government cars and cell phones and looks past some of the elephants in the room, like the state's gargantuan unfunded <a href="http://www.goldenstateliberty.com/2011/04/how-california-walked-to-edge-of-cliff.html">pension debt</a> and the fact that his vision for economic recovery involves burying the state's taxpayers under a mountain of <a href="/2011/09/are_californians_beginning_to_reject.html">interest payments</a> on bonds. "Spending is now at levels not seen since the seventies." Ah yes, the seventies; an era of limited government if there ever was one! Sadly, it doesn't occur to Brown that the state's financial condition is improving <i>because</i> of spending cuts, not in spite of them. "Schools have been hurt and state funding for our universities has been reduced by 25%. Support for the elderly and the disabled has fallen to where it was in 1983. Our courts suffered debilitating reductions." Because, of course, it makes complete sense to look to public schools, social service agencies, and courts as models of economic efficiency, given the tremendous competitive pressures they face to use our money wisely.<br /><br />Brown then moves on to his tax plan, which calls for hikes on sales taxes and income taxes on high earners. Tellingly, Brown misrepresents the plan as he <a href="/2011/12/circular_firing_squad_of_california_tax.html">unveiled it</a> just days before issuing this letter. According to the letter, "[n]o family making less than $500,000 a year will see their income taxes rise." This is technically true, but fails to mention that individual filers with incomes between $250,000 and $300,000 would see their income tax rate jump 1%, while those with incomes between $300,000 and $500,000 would see a 1.5% rise in tax rates. The Governor claims the new revenues will be directed solely to public safety and education, but remember that this is Jerry Brown: the new taxes are about protecting the pay and pensions of unionized prison guards, cops, firefighters, and teachers, which doesn't necessarily translate into safer streets or better schools (ask a resident of Vallejo or San Jose if you don't believe us). Brown justifies the call for more taxes as follows:<br /><blockquote>The stark truth is that without new tax revenues, we will have no other choice but to make deeper and more damaging cuts to schools, universities, public safety and our courts.</blockquote>So there you have it. Californians have a choice: maintain the status quo of <a href="/2011/05/california_budget_expected_to_keep.html">rising government spending</a>, or . . . maintain the status quo via slightly lower levels of spending. And going the first route involves, essentially, giving Sacramento so much of our money that it can't find new ways to spend it, thus leading to some deficit reduction.http://www.goldenstateliberty.com/2011/12/responding-to-jerry-browns-open-letter.htmlnoreply@blogger.com (Nick)0tag:blogger.com,1999:blog-2781767787839459944.post-5614596184322523194Mon, 12 Dec 2011 15:47:00 +00002011-12-12T07:47:31.826-08:00CaliforniaLegislaturelibertarianlibertySacramentoHow to Fix Sacramento: Keep the Politicians Away from ItOver the weekend, we got a piece of good news from the <i>Sacramento Bee</i>. Apparently, California voters may get a chance to keep their lawmakers away from the Capitol Dome, where they can do less harm: according to the <i>Bee</i>, Bakersfield Assemblywoman Shannon Grove and the political watchdog People's Advocate are planning a ballot measure to convert California to a <a href="http://www.sacbee.com/2011/12/10/4113001/part-time-status-proposed-for.html">part-time legislature</a>.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-aOvWntpn_PU/TuYVvsx5IxI/AAAAAAAACKg/-Jc5R1DHleI/s1600/220px-California_State_Assembly_room_p1080879.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="165" width="220" src="http://4.bp.blogspot.com/-aOvWntpn_PU/TuYVvsx5IxI/AAAAAAAACKg/-Jc5R1DHleI/s320/220px-California_State_Assembly_room_p1080879.jpg" alt="Any day this room is empty is a good day."/></a></div>If their effort is successful, California's Legislature would meet no more than three months per year: 30 days in January, and 60 days in May and June. Governors would be permitted to convene special sessions, but these could last no more than 15 days. What's more, lawmakers' pay would be scaled back significantly, from the nearly $8,000 per month they enjoy now to $1,500 per month. The Legislature would be required to submit a balanced, two-year budget by June 15 in every odd-numbered year, and would forfeit their pay for every day it's late. Finally, lawmakers would be prohibited from accepting state employment or appointments to state boards while in office and for five years afterward.<br /><br />Critics of the measure will likely haul out their usual laundry list of complaints; if you've ever listened to critics of term limits, you've probably heard them already. Blah blah blah, not enough time to develop the necessary expertise to do the job well, blah blah blah, reliance on lobbyists. Grove and People's Advocate representatives like Ted Costa are pursuing the plan as a way of curbing the worst instincts of a Legislature dominated by organized labor. This is understandable, but it misses the point. To see why California needs this proposal, you need only look at the comments from John Vigna, spokesman for Assembly Speaker John Perez: Vigna said, essentially, that a large economy like California's needs full-time leadership. Yet what sort of "leadership" does our Legislature actually provide? Primarily, it confiscates an ever-increasing share of private capital, funnels large portions of that capital toward wasted endeavors (like green energy) and make-work projects for organized labor (like high speed rail), slaps crushing regulations on private enterprise, and thinks up more and more ways to interfere in the lives of law-abiding citizens. Any day these people aren't in Sacramento "leading" in this fashion is a good day for the rest of us.http://www.goldenstateliberty.com/2011/12/how-to-fix-sacramento-keep-politicians.htmlnoreply@blogger.com (Nick)3tag:blogger.com,1999:blog-2781767787839459944.post-4485069863933235906Fri, 09 Dec 2011 22:29:00 +00002011-12-09T14:29:07.653-08:00budgetCaliforniadebtlibertarianlibertyThe Bond Market's Day of Reckoning ApproachethAmong libertarian and fiscal conservative observers of the Golden State, it's almost an article of faith that debt markets may ultimately force California to make the hard spending decisions that its politicians are incapable of making. Yet the tough thing about dramatic predictions is that they can take a long time to come together, and you never know what might change in the meantime. Judging by <a href="http://www.calwatchdog.com/2011/12/05/bond-party-hangover-strikes-calif/">this analysis</a> from Wayne Lusvardi in <i>Cal Watchdog</i>, though, we might be starting to see the last word on the bond market prediction.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-soEmaco6nls/TuJsikWBqfI/AAAAAAAACKU/O8W6QXPXKVw/s1600/empty-pockets-168x300.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="300" width="168" src="http://4.bp.blogspot.com/-soEmaco6nls/TuJsikWBqfI/AAAAAAAACKU/O8W6QXPXKVw/s320/empty-pockets-168x300.jpg" /></a></div>The canary in the coal mine, for Lusvardi, was California's October issue of general-obligation bonds. In contrast to 2010, investors purchased just 22% of the $1.8 billion issue, even with the state's preposterous plan to issue bonds in denominations as low as $25. Treasurer Bill Lockyer cited "paltry yields" to explain the weak demand, but Lusvardi has a slightly more nuanced explanation: between the robust rise in stock values, munis tracking the rock-bottom yields for U.S. Treasuries, and bond investors being spooked by the weakness of local-government finances, stocks are looking like more secure investments these days. With the rise in muni bond speculation through ETF trading, the value of these bonds is more volatile than in years past; as such, low yields mean that investors are quite sensibly pulling back from government bonds.<br /><br />For California, this presents a real conundrum: how to pay for all of Sacramento's grand designs, when investors won't let us borrow at low interest rates and tax revenues will never keep pace with our government's <a href="http://blogs.sacbee.com/capitolalertlatest/2011/12/california-revenues-spending-beat-projections-in-november.html#mi_rss=Top%20Stories">spending habits</a>? This is why we're seeing <a href="/2011/12/circular_firing_squad_of_california_tax.html">so many</a> calls for higher taxes from the powers that be. Increasingly, even the real men (and women) of genius in our government are realizing that the well of borrowed money is drying up.http://www.goldenstateliberty.com/2011/12/bond-markets-day-of-reckoning.htmlnoreply@blogger.com (Nick)0tag:blogger.com,1999:blog-2781767787839459944.post-5596118210967524776Fri, 09 Dec 2011 18:51:00 +00002011-12-09T10:51:06.984-08:00CalifornialibertarianlibertyregulationstaxThis Week in California Statism: Bad News for Personal LibertyWe don't usually do "morning links" types of posts, but we've been busy this week and a number of stories have slipped through the cracks. So, without further ado, here are some unforunate things going on in California these days.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-tptTIB8FAdE/TuIxzIv3vTI/AAAAAAAACJ8/omuSY_Ld_F8/s1600/jerrybrown2.jpg" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="197" width="316" src="http://4.bp.blogspot.com/-tptTIB8FAdE/TuIxzIv3vTI/AAAAAAAACJ8/omuSY_Ld_F8/s320/jerrybrown2.jpg" alt="Something something dark side something something complete."/></a></div><br /><b>Tax News:</b> We know this will surprise a lot of people, but the city that wants the highest <a href="/2011/05/taxes_taxes_everywhere.html">sales taxes</a> in the Bay Area, and whose mayor thinks Spanish socialist <a href="/2011/11/workers_of_um_richmond_unite.html">collectives</a> are a model for economic recovery, now wants to slap a <a href="http://www.contracostatimes.com/news/ci_19486690?source=rss">new tax</a> on sodas as well. In addition, voters in Contra Costa County appear likely to see a new <a href="http://www.insidebayarea.com/news/ci_19484451?source=rss">parcel tax</a> on a ballot next year. This tax is intended, in theory, to support the County's floundering Fire Protection District.<br /><br /><b>Green Energy Again:</b> If we needed any more reminders that making California a renewable-energy paradise won't come cheaply, San Diego Gas & Electric is here to help us out. According to the <i>San Diego Union-Tribune</i>, SDG&E solar customers will see their <a href="http://www.signonsandiego.com/news/2011/dec/06/county-wont-take-on-sdge-over-higher-solar-rates/">rates double</a> if the utility's plan to unbundle grid use from power costs is approved by the state Public Utilities Commission. Homes with roof-mounted panels would see an average monthly increase of $22, while large government agencies would see their monthly bills go up thousands of dollars. The current arrangement, SDG&E argues, lets solar users off the hook for the cost of maintaining the electricity infrastructure. Critics of the network-use charge argue that it would kill (<a href="http://www.goldenstateliberty.com/2011/08/green-jobs-cheerleaders-begin-to-lose.html">largely fictional</a>) solar installation jobs.<br /><br /><b>Medical Marijuana, Legal in Name Only:</b> This also won't be a surprise, given the federal government's declaration of <a href="/2011/10/obama_administration_declares_war_on.html">open war</a> on medical marijuana in California: Sacramento County's board of supervisors has voted to <a href="http://www.sacbee.com/2011/12/08/4107877/sacramento-supervisors-outlaw.html#mi_rss=Top%20Stories">wipe out</a> dispensaries within the city limits. In keeping with the Obama administration's policy of trampling states' rights, the County declared that business permits will not be issued to establishments whose trade conflicts with "either state or federal law, or both." Which basically only applies to medical pot dispensaries.<br /><br /><b>Big Brother is Still Watching You:</b> According to <a href="http://www.latimes.com/business/la-fi-underground-economy-20111209,0,6550311.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fbusiness+%28L.A.+Times+-+Business%29">this <i>LA Times</i> report</a>, California's governments believe that they're losing some $7 billion in tax revenues every year to the state's "underground entrepreneurs." And whether it's employers who pay workers cash under the table to avoid payroll taxes and workers' comp insurance regulations, or just simple folks like <a href="http://www.goldenstateliberty.com/2011/05/underground-entrepreneurs-in-los.html">these</a>, agencies like the Employment Development Department and the Contractors State Licensing Board are determined to go after them. Whether or not you believe that employers like these are cheating the rest of us, you have to worry about unelected bureaucrats going on a fishing expedition through companies' records to try to identify them. Which is exactly what they'll be doing.http://www.goldenstateliberty.com/2011/12/this-week-in-california-statism-bad.htmlnoreply@blogger.com (Nick)2tag:blogger.com,1999:blog-2781767787839459944.post-835372089817078021Fri, 09 Dec 2011 15:18:00 +00002011-12-09T07:18:54.395-08:00Californiaeconomic crisislibertarianlibertyCalifornia: Where All the Middle Incomes are Below AverageWe tend to write a lot about the minutae of politics in the Golden State &mdash its broken public finances, its underfunded pensions, its hopeless hostility to private enterprise, etc. But it's important to remember that California's struggles have a human face. The high taxes, the high cost of living, and the regulations on business all carry the predictable consequence of making life more difficult for average Californians, whether you're talking about finding work, paying bills, or saving for the future. And apparently the Public Policy Institute of California agrees with us.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-OqwSul-a7Fc/TuE33bum-EI/AAAAAAAACJw/NwIAO2LnRZM/s1600/Empty-Wallet-300x198.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="198" width="300" src="http://3.bp.blogspot.com/-OqwSul-a7Fc/TuE33bum-EI/AAAAAAAACJw/NwIAO2LnRZM/s320/Empty-Wallet-300x198.jpg" /></a></div>The <i>Contra Costa Times</i> has <a href="http://www.contracostatimes.com/news/ci_19493665?source=rss">the story</a>: according to the PPIC, the proportion of Californians characterized as "middle class" slipped under 50% last year, marking the first time in decades that the middle class is not a majority in the state. The analysis uses an inflation-adjusted national bracket to define the middle class as anyone with annual incomes between $44,000 and $155,000. The Occupy protesters are likely to paint this as evidence that the rich are getting richer, but the data suggest that the lower-income middle class has gotten poorer at a far greater rate than the upper-income middle class has gotten richer. This is the predictable result of the collapse in housing, both in home values and in employment in related industries. In the current recession, the PPIC found California employers slashing hours and cutting jobs rather than lowering salaries; in other words, wages have stayed fairly flat, and the dropping incomes are largely a product of unemployment and underemployment.<br /><br />Thoughtful observers, of course, will find none of this surprising, because they realize that the erosion of the middle class didn't begin in 2007. For that, you have to look back to the early 1990s and the end of the Cold War, when the state's aerospace economy vanished almost overnight and took tens of thousands of white- and blue-collar jobs with it. Rising home values allowed California's middle class some borrowed time, as their paper equity gave them the illusion of wealth, but this was never sustainable. Unfortunately, no one in Sacramento realizes this; the political and media classes in California seem convinced that the state's troubles are little more than a prolonged bump in the road, and have no relation to its high taxes or poor business climate. Yet unless you really believe that the federal government is about to shower the Golden State with funds on par with the Cold War military build-up, you have to view our political leaders as hopelessly out of touch. And you have to be pessimistic about the future of the middle class here.http://www.goldenstateliberty.com/2011/12/california-where-all-middle-incomes-are.htmlnoreply@blogger.com (Nick)1tag:blogger.com,1999:blog-2781767787839459944.post-6002473840506738255Thu, 08 Dec 2011 02:14:00 +00002011-12-07T18:14:25.415-08:00budgetCalifornialibertarianlibertytaxFiscal Conservatives Offer a Rebuttal to California Tax PlansCalifornia libertarians may be distressed to read about all the plans afoot these days to <a href="/2011/12/circular_firing_squad_of_california_tax.html">raise their taxes</a>. Yet the news isn't all bad. In addition to the possibility that the numerous tax plans will cancel one another out, there's apparently also a <a href="http://www.contracostatimes.com/politics-government/ci_19483247?source=rss">spending cap</a> measure in the works.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/-fWyeh6_xGuU/TuAYCB53f-I/AAAAAAAACJk/Eewthg7cbp4/s1600/bottlecap.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="101" width="125" src="http://2.bp.blogspot.com/-fWyeh6_xGuU/TuAYCB53f-I/AAAAAAAACJk/Eewthg7cbp4/s320/bottlecap.jpg" /></a></div>According to the <i>Contra Costa Times</i>, groups like the Howard Jarvis Taxpayers Association and the California Taxpayers Association are moving ahead with an initiative for next year's ballot. If approved, it would lock in the 2010-11 state budget as a baseline (we would've preferred the even-lower 2011-12 spending levels, but even libertarians have to be content with not getting everything they want in politics). After adjusting for population growth and inflation, revenues above that base would be allocated as follows. If the state's outstanding public debt is less than 5% of total tax revenues, excess revenues will go to schools and be put into a reserve fund. If the reserve fund ever exceeds $2 billion, the excess would be sent back to taxpayers. If outstanding public debt is greater than 5% of total revenues, excess tax dollars will be spent paying down that debt. The plan would also close a Prop 26 loophole allowing the Legislature to hike local taxes by a simple majority vote, a tactic you may have <a href="http://www.goldenstateliberty.com/2011/05/cal-watchdog-agrees-with-us-on-sb-653.html">heard about</a> before. Speaking of the plan, Jon Coupal had the following to say: "We need a mechanism to make sure that the drunken sailor DNA of our Legislature doesn't kick in and that we put that money away and use it for debt reduction."<br /><br />The measure's supporters will need to collect some 808,000 signatures. Yet with the Legislature clearly maneuvering to kill ACA 4 (the spending cap they agreed to with Republicans during last year's budget crisis), the timing couldn't be better.http://www.goldenstateliberty.com/2011/12/fiscal-conservatives-offer-rebuttal-to.htmlnoreply@blogger.com (Nick)0tag:blogger.com,1999:blog-2781767787839459944.post-6063041733551656054Wed, 07 Dec 2011 15:44:00 +00002011-12-07T07:44:50.130-08:00bankruptcyCalifornialibertarianlibertypension reformSan JoseunionApocalypse Now: San Jose to Vote on Pension Reform<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/-B8E3WTUyANI/Tt-F7CFwnKI/AAAAAAAACJY/EbZNwMIOm4w/s1600/220px-Sanjosecityhall.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="165" width="220" src="http://2.bp.blogspot.com/-B8E3WTUyANI/Tt-F7CFwnKI/AAAAAAAACJY/EbZNwMIOm4w/s320/220px-Sanjosecityhall.jpg" /></a></div>While much of the focus in California politics these days is on Jerry Brown's <a href="http://www.sacbee.com/2011/12/07/4104883/california-voters-give-edge-to.html#mi_rss=Top%20Stories">tepid proposal</a> to reform public employee pensions, the real news on the pension front continues to be the developments in San Jose. Last spring, Mayor Chuck Reed drew the ire of <a href="http://www.goldenstateliberty.com/2011/05/liberal-on-liberal-crime-san-jose-vs.html">organized labor</a> and the Democratic <a href="http://www.goldenstateliberty.com/2011/06/democrats-continue-full-court-press.html">establishment</a> in Sacramento by pushing a radical plan to rein in the city's spiraling pension costs: declare a state of fiscal emergency, and create a ballot measure asking voters to cut the benefits of current San Jose employees. Insofar as these benefits are widely believed to be "vested," the broader implications of Reed's plan are far more dramatic than those of Brown's proposal, or of the actions taken in cities like <a href="/2011/09/independent_actuary_costa_mesas_pension.html">Costa Mesa</a>. If dire financial problems (which San Jose <a href="/2011/06/facing_future_in_san_jose.html">has in spades</a>) constitute sufficient reason for clawing back promised pensions, then taxpayers in California could have a brighter future than one might think.<br /><br />Originally, Reed wanted to bring his plan to last month's ballot. Responding to pressure and union demands for further negotiations, however, the mayor agreed to delay the measure until 2012. A few days ago, an actuary hired by the city concluded that last year's pay cuts and layoffs had <a href="/2011/12/pension_armageddon_on_hold_in_san_jose.html">lowered</a> San Jose's near-term pension obligations, leading to speculation that the plan might be abandoned. Well, apparently not: as reported in the <i>San Jose Mercury News</i>, the city council has <a href="http://www.mercurynews.com/pensions/ci_19484394?source=rss">approved language</a> for the pension reform plan, and voters there are likely to see it on the ballot next June. Under the official proposal, current employees would be offered the choice between a smaller pension or paying more for the pension they already have. Future bumps in pension benefits would also require voter approval under the measure. Interestingly, the vote on the state of fiscal emergency was tabled, which suggests that the council may be using the measure as a negotiating tactic to extract deeper concessions from the unions. Either way, though, they deserve credit for refusing to back down.http://www.goldenstateliberty.com/2011/12/apocalypse-now-san-jose-to-vote-on.htmlnoreply@blogger.com (Nick)0tag:blogger.com,1999:blog-2781767787839459944.post-4199194197615555691Wed, 07 Dec 2011 01:39:00 +00002011-12-06T17:39:57.462-08:00Californiahealth carelibertarianlibertyMedi-CalMedi-Cal: Single-Payer Without the PayerIf you need a good example of why government-run health care is a bad idea, you could do worse than to look at Medi-Cal. The whole point of health insurance, of course, is that doctors, hospitals, and pharmacists will be willing to accept it as payment for goods and services rendered: if no one can accept your insurance without ending up destitute, do you really have insurance? In the case of Medi-Cal, its historically rock-bottom reimbursement rates have made doctors and hospitals in many parts of California <a href="/2011/09/california_obamacare_and_economic.html">reluctant</a> to serve these patients. As such, many of California's poorest residents receive care only in emergency rooms or on a charity basis. And <a href="http://www.pe.com/business/business-headlines/20111202-health-pharmacists-say-business-threatened-by-medi-cal-cuts.ece">this report</a> in the <i>Riverside Press-Enterprise</i> suggests that their health care access issues might soon get worse.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/-b3YiPJWlbgg/Tt62zuaD_KI/AAAAAAAACJM/ikAMMy5pAu4/s1600/shortageline.jpeg" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="164" width="300" src="http://2.bp.blogspot.com/-b3YiPJWlbgg/Tt62zuaD_KI/AAAAAAAACJM/ikAMMy5pAu4/s320/shortageline.jpeg" /></a></div><br />At issue is the Department of Health Care Services' October decision to impose a 10% cut in its reimbursements to pharmacies. When a Medi-Cal patient fills a prescription, California covers the average wholesale price of the drug and pays the pharmacist a fee. When the drug is a generic, the discount a pharmacist can negotiate with a wholesaler can mean a tidy profit; in the case of a newer medication (many of which are required by Medi-Cal), the difference between the drug's cost and California's reimbursement can be minimal. For pharmacies, the implications for their profits could be dire; according to Don MacKellar, owner of the Perris Hills Pharmacy in Perris, "It could put us out of business, plain and simple." What's worse, the cuts are retroactive to June 1, meaning that pharmacists like MacKellar actually owe Sacramento a ton of money. As a result, many are refusing to fill prescriptions for Medi-Cal patients, since they don't know what additional retroactive cuts might be coming in the future.http://www.goldenstateliberty.com/2011/12/medi-cal-single-payer-without-payer.htmlnoreply@blogger.com (Nick)1tag:blogger.com,1999:blog-2781767787839459944.post-1329162496256775588Tue, 06 Dec 2011 21:03:00 +00002011-12-06T13:03:24.420-08:00boondoggleCaliforniahigh speed raillibertarianlibertyMoney Well Spent: Voters Want to Kill High Speed Rail, Millions in PR Dollars Notwithstanding<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-aKu2HzqiMOE/Tt4yBiwVbpI/AAAAAAAACJA/9LVP21nQK3M/s1600/train-wreck-wikipedia2-250x300.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="300" src="http://4.bp.blogspot.com/-aKu2HzqiMOE/Tt4yBiwVbpI/AAAAAAAACJA/9LVP21nQK3M/s320/train-wreck-wikipedia2-250x300.jpg" width="250" /></a></div>We always feel a little better about our fellow Californians at those moments when they break from form and reject big-government solutions to serious challenges. As a case in point, take the High Speed Rail project. Insofar as it promises years of union labor contracts paid for with borrowed money that sits outside the General Fund budget, Sacramento has put on a full-court press to get the project started, no matter what the obstacles. In recent months, however, two significant sets of problems have emerged. For one, the state's strategy of making budget cuts as <a href="/2011/07/jerry_brown_starves_beast.html">painful and annoying</a> as possible has made Californians suspicious of any calls for dramatically increased government spending. As the rail project's price tag has soared past $100 billion, taxpayers have rightly asked where all the money is supposed to come from. The second set of problems center around the fact that the project remains in the hands of the spectacularly incompetent High Speed Rail Authority. The first rule of asking someone to lend you $100 billion is this: you have to convince them that you know what you're doing. Yet in its brief history, HSRA put together the following record of accomplishments:<br /><ol><li>Blowing through $250 million without putting an inch of track on the ground.</li><li> Failing to comply with environmental regulations tied to receipt of federal funds, leading to:</li><li>Proposing to begin the project with a multi-billion-dollar segment between Corcoran and Borden, two small Central Valley towns that few Californians can locate on a map.</li><li>Having no plan for running trains on this segment.</li><li>Having no plan for actually operating trains at any point.</li><li>Failing to produce credible ridership forecasts.</li><li>Alienating communities all over California, including San Diego, Palmdale, Kings County, and the San Francisco Peninsula.</li><li>Discovering belatedly that its plan to run trains into San Jose won't work.</li><li>Having no plan to obtain over 90% of the funds needed to complete the project.</li></ol>As such, if the rail project is going to be built, taxpayers will be on the hook for pretty much all of the cost, because no sensible private investor is going to lend HSRA money.<br /><br />Recently, we learned that the rail authority had spent some $9 million trying to improve its <a href="http://www.sacbee.com/2011/12/04/4098202/california-high-speed-rail-authority.html#mi_rss=Top%20Stories">public image</a>. Yet today it looks as though that money, like so much else HSRA has done, has gone to waste: according to the <i>Sacramento Bee</i>, some 64% of Californians now want a chance to revisit the 2008 vote that authorized the project. And nearly that many &mdash 59% &mdash want to <a href="http://www.sacbee.com/2011/12/06/4102325/field-poll-californians-want-a.html#mi_rss=Top%20Stories">shut it down</a>.http://www.goldenstateliberty.com/2011/12/money-well-spent-voters-want-to-kill.htmlnoreply@blogger.com (Nick)2tag:blogger.com,1999:blog-2781767787839459944.post-3591496411487749044Sat, 03 Dec 2011 17:32:00 +00002011-12-03T09:32:15.904-08:00bankruptcybudgetCalifornialibertarianlibertyLos AngelesLos Angeles is Badly Broke. AgainIt feels like we keep having to say this, but it looks like the city of Los Angeles is desperately short of money. Last year, you may recall that LA was tasked with <a href="/2011/05/los_angeles_city_council_approves.html">closing</a> a titanic $438 million budget hole in the midst of a <a href="http://www.bondbuyer.com/issues/119_314/los_angeles_electric_rates-1010519-1.html">nearly-fatal</a> fight with the Department of Water and Power. The city was able to fix this deficit, largely through massive cuts and deferred raises to some employees, though the perpetual shakiness of its finances did lead to a downgrades in its debt by both <a href="/2011/07/deadbeat_alert_moodys_downgrades_los.html">Moody's</a> and <a href="/2011/08/las_new_bragging_right_refusing_to_be.html">S&P</a>. And now, just six months into the fiscal year, the <i>LA Times</i> <a href="http://www.latimes.com/news/local/la-me-city-budget-shortfall-20111203,0,7791958.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fnews%2Flocal+%28L.A.+Times+-+California+|+Local+News%29">reports</a> that California's largest city is $72 million in the red.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/-SpE05Ul9BW8/TtpTi63mAoI/AAAAAAAACI0/xYrx6o6uTyg/s1600/antoniovillaraigosa.jpg" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="203" width="320" src="http://2.bp.blogspot.com/-SpE05Ul9BW8/TtpTi63mAoI/AAAAAAAACI0/xYrx6o6uTyg/s320/antoniovillaraigosa.jpg" alt="What can go wrong when you hand your city over to organized labor?"/></a></div><br />The first thing you'll want to know about that $72 million figure is this: it doesn't include the cost to the city of cleaning up from the past week's wind storms, or the rehabilitation of public spaces after the Occupy LA encampment is cleared out. So the numbers will almost certainly get worse. The <i>Times</i> report, unfortunately, doesn't offer specifics as to why the city's forecasts were so badly off the mark, but given the grim state of the city's economy one has to imagine that falling tax revenues have a lot to do with it. Still, with Administrator Miguel Santana expecting a budget hole in the neighborhood of $200 million by the spring, it seems clear that Los Angeles is running out of options. Last year's budget was balanced by slashing spending on Recreation and Parks, homelessness, graffiti removal, City and neighborhood council budgets, and public safety. Police officers agreed to defer pay increases, and overtime was suspended altogether; over at the Fire Department, City Hall called for $50 million in cuts, which led to the effective shutdown of a quarter of the city's fire stations and <a href="/2011/06/budget_cutting_los_angeles_fire_chief.html">cost</a> Fire Chief Millage Peaks his job. Now, Santana is calling for $21 million in further cuts to dozens of city agencies; these include a $4 million cut to the LAPD (which cut $41 million just months ago), and a $1.7 million cut to the city attorney's office, whose employees will already take almost six weeks in unpaid furlough days this year. Los Angeles could, of course, consider eliminating costly perks like <a href="/2011/05/tough_budget_choices_in_los_angeles.html">this</a>. But one has to wonder whether it's already too late for LA to start making difficult choices. Especially considering that Sacramento has <a href="/2011/07/jerry_brown_starves_beast.html">no intention</a> of helping them.http://www.goldenstateliberty.com/2011/12/los-angeles-is-badly-broke-again.htmlnoreply@blogger.com (Nick)0tag:blogger.com,1999:blog-2781767787839459944.post-3648414954399486176Sat, 03 Dec 2011 16:04:00 +00002011-12-03T08:04:05.905-08:00CaliforniaDrug WarlibertarianlibertymarijuanaFederal Judge: Nope, States Have No Rights When Medical Marijuana is Involved<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-3vMXmpDEan8/Ttl59474zWI/AAAAAAAACIo/WiwY_l8FWYQ/s1600/ReeferMadnessPoster.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="300" width="198" src="http://3.bp.blogspot.com/-3vMXmpDEan8/Ttl59474zWI/AAAAAAAACIo/WiwY_l8FWYQ/s320/ReeferMadnessPoster.jpg" /></a></div>Since early October, times have been very tough for the ostensibly legal medical marijuana industry in California. Medical pot has struggled to exist in the Golden State since voters legalized it back in 1996; the law enforcement community and the politicians seeking their endorsements at election time have not, unsurprisingly, been supportive. But this was nothing compared to the war the Obama Justice Department <a href="/2011/10/obama_administration_declares_war_on.html">declared</a> on dispensaries this autumn. An estimated 2,500 jobs have been lost statewide since the federal government announced its crackdown, as many dispensaries have shut their doors.<br /><br />This conflict sets up an interesting question of states' rights. On one hand, the possession and use of marijuana for medicinal purposes is part of California's constitution; on the other hand, the federal government makes its possession and use illegal, and DC doesn't believe it has any medical value. Unfortunately, we don't live under a federal government that <a href="/2011/07/obama_doj_clarifies_medical_marijuana.html">respects</a> constitutional limits on its power. The first court challenge to the federal crackdown has already arrived, and the results on the states' rights side aren't encouraging. According to the <i>San Francisco Chronicle</i>, U.S. District Judge Saundra Brown Armstrong has <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/30/BATU1M6G2T.DTL&feed=rss.news">turned down</a> an injunction request from medical pot advocates, who want to halt federal raids on dispensaries until numerous lawsuits against the Justice Department are resolved. Yes, that's what a federal judge thinks of the idea that voters in a democracy have to defy the will of Washington.http://www.goldenstateliberty.com/2011/12/federal-judge-nope-states-have-no.htmlnoreply@blogger.com (Nick)1tag:blogger.com,1999:blog-2781767787839459944.post-5422854078497787994Fri, 02 Dec 2011 19:49:00 +00002011-12-02T11:49:42.756-08:00budgetCalifornialibertarianlibertytaxThe "Circular Firing Squad" of California Tax PlansWith the November ballot and Thanksgiving behind us, the eyes of Sacramento's political interest groups and elected officials are turning back to a familiar subject: tricking Californians into giving up more of their money to the state. As Dan Walters discusses <a href="http://www.sacbee.com/2011/12/02/4094396/dan-walters-californias-tax-hike.html">here</a> in the <i>Sacramento Bee</i>, at least four tax proposals could end up on next year's ballot, to the possible detriment of all of them.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-Uylcj5GQJa4/TtkGgJ5wM3I/AAAAAAAACIc/SYW4hxYBp2U/s1600/taxpayers.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="225" width="300" src="http://4.bp.blogspot.com/-Uylcj5GQJa4/TtkGgJ5wM3I/AAAAAAAACIc/SYW4hxYBp2U/s320/taxpayers.jpg" /></a></div>Proposal One is one we've already <a href="http://www.goldenstateliberty.com/2011/11/think-long-should-think-harder.html">written about</a>: the Think Long Committee plan. This plan would lower income and corporate tax rates, but would broaden the state's sales tax to services and raise taxes on out-of-state employers by imposing the so-called "single sales factor," which would require these firms to estimate their tax liability using the proportion of in-state versus out-of-state sales. Think Long claims this plan would raise $10 billion in new tax revenues, mostly via the tax on services. While this isn't the <a href="http://www.goldenstateliberty.com/2011/11/this-day-in-bad-ideas-think-longs.html">worst idea</a> in Think Long's basket of proposals, levying hefty new taxes on businesses at a time of 12% unemployment doesn't strike us as a wise idea, and the tax on services would inevitably act as a regressive tax paid by consumers (who already pay the <a href="http://www.goldenstateliberty.com/2011/07/california-unions-why-wont-this-golden.html">most regressive</a> taxes in the country).<br /><br />Proposal Two is basically a subset of Proposal One. Evidently, hedge fund manager Tom Steyer really loved Jerry Brown's failed September <a href="/2011/08/jerry_browns_jobs_plan_taxes_and_green.html">jobs plan</a>, because he's pushing the same plan in his own ballot measure: impose the single sales factor to raise about $1 billion in additional taxes, and use the proceeds to subsidize green energy technologies. Our objection to the tax hike is the same as before. And taxing viable businesses to <a href="http://www.goldenstateliberty.com/2011/08/green-jobs-cheerleaders-begin-to-lose.html">throw more money</a> at solar and wind power seems like the last thing California should be doing, given the depth of its economic troubles.<br /><br />Proposal Three comes from Los Angeles lawyer Molly Munger, the daugher of Warren Buffett associate Charles Munger. Essentially, her plan would raise $10 billion by raising income taxes along an unspecified sliding scale, with the heaviest increases falling on wealthier Californians. The funds would be earmarked for K-12 schools and early childhood education programs. This plan, which is endorsed by the state PTA, is a variation on the California Federation of Teachers' plan to raise taxes on millionaires, which we've <a href="/2011/04/why_tax_on_millionaires_measure_is.html">written about</a> before. There's nothing magical at work here: it's just another interest group proposing to loot the taxpayers for their own benefit.<br /><br />Proposal Four comes from the Moonbeam himself. Following his protracted failure to convince the <a href="/2011/06/california_voters_still_not_interested.html">public</a> and Republican <a href="http://www.goldenstateliberty.com/2011/06/jerry-brown-democrats-abandoning-tax.html">lawmakers</a> to sign on to five more years of higher income and sales taxes, Jerry Brown yesterday <a href="http://www.sacbee.com/2011/12/02/4094599/jerry-brown-has-plan-to-hike-sales.html">unveiled</a> the tax plan he's crafted after months of consultation with Democratic colleagues and their employers in organized labor. Essentially, rather than renew his call for 1% increases in income and sales tax rates, Brown will call for a half-cent increase in the state sales tax and increases in income taxes for wealthier Californians. Specifically, those with incomes between $250,000 and $300,000 would be taxed at a 10.3% marginal rate; incomes between $300,000 and $500,000 would be taxed at a 10.8% rate; those with incomes between $500,000 and $1 million would be taxed at 11.3%; and those with incomes over $1 million would be taxed at 12.3%. This strikes us as the sort of plan you get when you spend too much time with political consultants. Getting regressively-taxed Californians to agree to a regressive tax hike (i.e., the sales tax increase) is a tall order these days, and the state's business community is likely to vehemently oppose the upper-income tax hikes. Just as important, these tax hikes would only raise about $7 billion; given that the state currently has a budget deficit of almost $13 billion, this doesn't jibe with the talk about "enough cuts" coming from Sacramento.<br /><br />Got all that? If not, you're not alone, and that may be a problem for the backers of these plans. If all four proposals reach next year's ballot, voters will likely be overwhelmed by the barrage of information on them, both from advocates and opponents. What's more, it's entirely likely that supporters of one will openly criticize the other plans. As such, this could set up a repeat of the 2009 ballot, at which voters responded to the dizzying complexity of various tax proposals by rejecting all of them. Proponents of higher taxes in California may hope that some grand bargain can be struck here, but let's keep in mind that many of the state's biggest egos are involved, and many of these plans are in direct conflict.http://www.goldenstateliberty.com/2011/12/circular-firing-squad-of-california-tax.htmlnoreply@blogger.com (Nick)0tag:blogger.com,1999:blog-2781767787839459944.post-1376561354645971002Fri, 02 Dec 2011 15:47:00 +00002011-12-02T07:47:39.587-08:00Californialibertarianlibertypension reformSan JoseunionPension Armageddon on Hold in San JoseFor months now, we've been following the <a href="/2011/06/facing_future_in_san_jose.html">simmering battle</a> between San Jose mayor Chuck Reed and the city's public employee unions. Basically, after years of budget deficits and deep cuts in staffing, California's third largest city is fast approaching a point where the cost of employee pensions and health care benefits stand to crowd out all other city services. In order to avert a nightmare scenario in which taxes are still high and public services nonexistent, Reed has offered a <a href="/2011/05/is_san_jose_next_madison_wi.html">radical plan</a>: declare a state of fiscal emergency, and use it to roll back the pensions of current city employees, benefits which are widely believed to be "vested." Facing a projected budget deficit of $80 million, Reed was expected to call for a City Council vote on the state of emergency next Tuesday. Now, however, the story has taken another turn.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-aSE4kZKOnNQ/Ttju-_NPfuI/AAAAAAAACIQ/qLp3xmUJbvE/s1600/220px-Sanjosecityhall.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="165" width="220" src="http://1.bp.blogspot.com/-aSE4kZKOnNQ/Ttju-_NPfuI/AAAAAAAACIQ/qLp3xmUJbvE/s320/220px-Sanjosecityhall.jpg" /></a></div>As reported in the <I>Contra Costa Times</i>, the actuarial firm charged with estimating the city's liabilities for police and firefighter pensions has <a href="http://www.contracostatimes.com/politics-government/ci_19451205?source=rss">sharply lowered</a> its projections for next year. In July, the actuaries at Cheiron had projected police and fire pension costs to rise from $127 million to $160 million; now, those costs are actually expected to fall to $105 million. As such, San Jose's estimated budget gap now falls to $25 million. Union leaders, of course, seized on the news to bash Reed's plan. The mayor, to his credit, is largely undeterred, and still plans to bring his pension reform plan to city voters next June, even as he acknowledges that the city may not have to implement threatened closings of libraries and community centers.<br /><br />It's important to remember that the dip in pension costs doesn't reflect any change in the underlying problems facing the city. According to the actuaries, the revised cost estimate is largely the result of laying off 66 police officers and the 10% pay cut city employees absorbed last year. In other words, the pace at which these costs are growing isn't changing, and unless the unions are willing to take more cuts in pay and staffing, it's still only a matter of time before Reed's worst case scenario comes to pass. Even with the revision, the mayor still expects annual pension costs to hit $400 million in the coming years.http://www.goldenstateliberty.com/2011/12/pension-armageddon-on-hold-in-san-jose.htmlnoreply@blogger.com (Nick)0tag:blogger.com,1999:blog-2781767787839459944.post-318295842883377759Fri, 02 Dec 2011 00:13:00 +00002011-12-01T16:13:22.714-08:00CaliforniaComptoneducationlibertarianlibertyunionTeachers Unions Continue to Fight Compton Parents' Efforts to Help their ChildrenBack in the spring, we <a href="/2011/05/bad_news_for_school_choice_in_compton.html">wrote about</a> the unsuccessful efforts of parents at Compton's McKinley Elementary School to force a conversion to a charter school using the so-called "parent trigger" law. After 61% of McKinley parents signed the trigger petition, the local school district and teachers' union fought back in court, and got the signatures thrown out because they were undated. And now, a <a href="http://www.laweekly.com/2011-12-01/news/pulling-the-trigger-on-failing-schools/">report</a> in today's <i>LA Weekly</i> describes the ways in which the fight is continuing.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-itL3wXZ3UJU/TtfoSyen8fI/AAAAAAAACIE/GcSkdQEE4ck/s1600/220px-Trigger_mechanism_bf_1923.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="163" width="220" src="http://4.bp.blogspot.com/-itL3wXZ3UJU/TtfoSyen8fI/AAAAAAAACIE/GcSkdQEE4ck/s320/220px-Trigger_mechanism_bf_1923.jpg" /></a></div>In a flourish all too typical in California politics, the organization that spearheaded last year's petition drive has adopted a new approach for helping the parents of McKinley students: helping parents organize into "parent unions" that negotiate collectively with the teachers' unions. This organization, Parent Revolution, is apparently trying to downplay its connections to the charter-school industry and its wealthy patrons, and is pushing the new concept in order to play nice with the teaching lobbies that effectively run education policy in Sacramento these days. As such, the new petition the parents are pursuing involves not conversion to a charter school, but rather the creation of a non-charter management organization run by Compton Unified. This might be good for Parent Revolution, but we're not sure why the people who have made McKinley one of the worst schools in California should be trusted to make it better. And once again, the students stand to lose big in the bargain.http://www.goldenstateliberty.com/2011/12/teachers-unions-continue-to-fight.htmlnoreply@blogger.com (Nick)0tag:blogger.com,1999:blog-2781767787839459944.post-4509963235433048848Thu, 01 Dec 2011 15:32:00 +00002011-12-01T07:32:23.391-08:00Californialibertarianlibertynanny stateSan FranciscoPrivate Enterprise Finds a Way: Working Around San Francisco's Happy Meal Ban<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-j19jaHn9xXs/TteWzc-MKQI/AAAAAAAACH4/WNMOs0SKdEE/s1600/ronaldmcdonald.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="320" width="216" src="http://3.bp.blogspot.com/-j19jaHn9xXs/TteWzc-MKQI/AAAAAAAACH4/WNMOs0SKdEE/s320/ronaldmcdonald.jpg" /></a></div>Last year, San Francisco took a big step toward establishing itself as the busybody-est place in California, tackling the phantom obesity "epidemic" by announcing a ban on Happy Meals (and related kids meals) in the city. Specifically, restaurants would be prohibited from offering free toys with children's meals unless the servings totaled 600 or fewer calories, a fruit or vegetable option was included, and a non-sugary drink was offered. McDonald's responded by offering apple slices and smaller-sized French fries in Happy Meals, and introducing low-fat milk and apple juice options; the Jack in the Box chain pulled toys from its meals altogether, and began offering caramel apples. Still, with cities like New York and Los Angeles moving forward with their own plans to curb fast-food offerings, purveyors of cheap, tasty food clearly realize their work isn't finished. According to the <i>LA Times</i>, McDonald's has figured out a <a href="http://latimesblogs.latimes.com/money_co/2011/11/san-francisco-mcdonalds-start-selling-formerly-free-happy-meal-toys.html">new way</a> around the San Francisco law: selling Happy Meal toys separately from the meals, for ten cents apiece, with the proceeds going to the Ronald McDonald House charity. <br /><br />Critics, naturally, decry the new policy; according to the group Corporate Accountability International, "As McDonald’s long has, it is again using a charity that helps children get well to defend a practice that contributes to a range of diet-related conditions like diabetes." To us, this is nanny-statism at its worst. For one thing, are we supposed to think it's a bad thing that Ronald McDonald House is getting more money? This is a charity that sponsors mobile health clinics and maintains properties that make it easier for families to care for hospitalized children. For another thing, in a world that includes the Xbox, hundreds of channels of cable TV, and the internet, are we really supposed to believe that cheap plastic toys are the only reason kids like food from McDonald's? Like it or not, in a free society, restaurants like McDonald's have a right to do business (full disclosure: it's been years since we set foot in one). If you don't like them, no one's forcing you to give them your money.http://www.goldenstateliberty.com/2011/12/private-enterprise-finds-way-working.htmlnoreply@blogger.com (Nick)2tag:blogger.com,1999:blog-2781767787839459944.post-3083602992573240377Thu, 01 Dec 2011 01:53:00 +00002011-11-30T17:53:50.025-08:00CaliforniaenvironmentalismlibertarianlibertyTotalitarianism Redux: California's "Carbon-Neutral" Future<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-SEgkyitSS-w/TtbVU--9KOI/AAAAAAAACHs/bINXTICgeuI/s1600/dustbowl.jpg" imageanchor="1" style="clear:right; float:right; margin-left:1em; margin-bottom:1em"><img border="0" height="293" width="300" src="http://1.bp.blogspot.com/-SEgkyitSS-w/TtbVU--9KOI/AAAAAAAACHs/bINXTICgeuI/s320/dustbowl.jpg" /></a></div>We write a lot about the threat that taxes and business regulations present to Californians' freedoms, but there's truly no greater threat to individual liberty here than the one posed by environmentalism. Politicians here are like most politicians elsewhere: they want to confiscate your money and give it to their friends, and little else. But California's environmentalists are a different matter. All too often, mainstream representatives of this movement sail right past the simple idea of preserving beautiful outdoor spaces, embracing draconian policy prescriptions that would significantly curtain Californians' personal freedoms as well as economic activity. If you don't believe us, please harken back to June, when we <a href="/2011/06/lunatic_fringe_mainstream_environmental.html">wrote about</a> the brave green new world being envisioned by the <a href="http://www.ccst.us/publications/2011/2011energy.pdf">California Council on Science and Technology</a>. Aside from assuming that 20% of the state's energy would be provided by technologies that don't exist yet, the CCST authors were happy to recommmend raising enough tax revenue to replace all natural gas heating in the state via retrofit, to mandate the use of electric cars, and to recommend a number of "behavior change" programs to make us all produce less carbon. You might think that proposals to forcibly return California to the technology of the Dark Ages might only be the work of fringe lunatics, but the CCST report was sponsored by the California Energy Commission, CARB, and SD Bechtel.<br /><br />Of course, in order for this massive social engineering project to get off the ground, the environmental lobby is going to need the news media to downplay the seriousness of what's being proposed. If you want an example of that, check out <a href="http://californiawatch.org/dailyreport/report-offers-carbon-neutral-road-map-california-13786">this piece</a> at <i>California Watch</i>. While we often appreciate <i>CW's</i> work, such as their reporting on the High Speed Rail project, this article reports breezily on an alarming paper recently published in the journal <i>Science</i>. It's not clear that the CCST authors contributed to the <i>Science</i> report (the organizational affiliations appear to be the same), but their ideas are very similar. (The full manuscript is unfortunately behind a paywall; the abstract is <a href="http://www.sciencemag.org/content/early/2011/11/22/science.1208365.abstract">here</a>.) Yet <i>California Watch</i> only focuses on how difficult it'll be for California to achieve huge reductions in greenhouse gases in the next 40 years, and only mentions things like "behavior changes" along the way.<br /><br />If you want the context, we'll help you out. The authors of the <i>Science</i> article are talking about reducing carbon emissions to 80% below 1990 levels by 2050. To put this in perspective, forget about 1990 for a moment: if we were going to bring carbon emissions down by 80% from <i>today's</i> levels, we'd have to bring them to the level they were at in 1935. You know, when only six million people lived in California. You're kidding yourself if you think the changes required to achieve the goal in question won't dramatically affect the way you live your life.http://www.goldenstateliberty.com/2011/11/totalitarianism-redux-californias.htmlnoreply@blogger.com (Nick)0