The California Redevelopment Dispute

The fate of California’s redevelopment agencies (RDA’s) is frequently discussed in the news these days. However, resolution is close—on November 10th, oral arguments will be heard by the State’s Supreme Court in the case California Redevelopment Agencies v. Matosantos.

The issue at hand in this important case is the constitutionality of Governor Jerry Brown’s proposed elimination of all 400 of the state’s redevelopment agencies. A critical facet of his budget proposal, Brown claims the move will save the state $1.7 billion this year. Characterizing the state’s redevelopment agencies as a “piggy bank” from which the state must now draw, he plans to redistribute the money back to counties, schools, cities and other special districts.

However, he’s also proposed that RDA’s can avoid elimination if certain steps are taken by their local jurisdictions, including an agreement that the RDA’s will pay $1.7 billion this fiscal year and $400 million in subsequent budget years in statutorily mandated revenues to school entities and other special districts.

Panicked redevelopment agencies are contending that the proposed cuts violate Proposition 22, passed by voters in November 2010, which prohibits the state from borrowing or taking funds used for transportation, redevelopment or local government projects.

Opponents to Governor Brown’s proposal feel that RDA’s are needed more now than ever as the state struggles to recover from the recession. The wholesale elimination of RDA’s, they maintain, eliminates important tools to spur job creation, increase tax revenues, and induce economic growth.

However, proponents of Governor Brown’s proposal, including State Controller John Chiang, claim that RDA’s are mismanaged and waste funds that would be better used to pay for schools and other critical services. Chiang, who recently reviewed 18 RDA’s statewide, cited numerous reporting flaws, questionable payment practices and inappropriate uses of affordable housing money.

This issue –like so many the justice system and voters encounter– begs the question: which decision will positively impact the most people? If political radical and philosopher Jeremy Bentham, an early advocate of utilitarianism, were to ponder the situation, would he lend support to Jerry Brown, attempting to balance a budget and mindfully funnel funds into what he believes are our most critical areas of need; or would he cast his vote with the RDA’s, who enable and encourage local government autonomy and revitalization?

There’s no denying that the ruling by California’s top court – whether in favor, or a rejection of Governor Brown’s controversial move – will impact taxpayers and jurisdictions across the state.

The court has promised a decision by January 15, 2012, which is when the first RDA payments would be due.

(John Hancock is the President of the California Channel.  This article was first posted in Fox & Hounds.)

Steven Greenhut: Brown pension plan going nowhere

From Redding.com:

Despite some encouraging details in Gov. Jerry Brown’s recently announced pension-reform proposal, there’s virtually no chance the state will seriously reform — or even seriously attempt to reform — a system creaking under the weight of up to an estimated $500 billion in unfunded liabilities.

The proposal isn’t bad. It doesn’t go far enough to fix the problem even if implemented in its entirety, but it goes further than most pension reform advocates had expected from a Democratic governor who, to date, has governed as an extension of the public-employee unions that elected him to office.

But the plan probably is dead on arrival in the union-dominated Legislature. One might even argue that Brown is being cynical here — offering reasonably tough reform proposals that he knows will go nowhere. Then he can claim that he has tried to fix the problem but could not surmount the insurmountable.

(Read Full Article)

Jerry Brown hating on small businesses

Jerry Brown hates me.

Hates me.

We’ve never met.  It’s not like I ever caused him any personal harm or grief.  It’s not like I hit on Linda Ronstadt or anything.

But the guy just hates my guts.  I think he wants to destroy me.

I’m not paranoid.

I’m just a California business owner.

On some level, Jerry Brown must hate all of us.

I call it payroll envy.  It’s the feeling that people who have spent most if not all of their lives in government have about people who actually start a business, work really hard, hire people, and meet a payroll every two months.

People in government feel as though they’re missing out on that experience, which I consider one of the most important life experiences an individual can have.

It’s not just that we business owners get to create our own destiny, make all the money we can, and bring about wonderful lives for ourselves, those we love, our employees and their families, our communities, and the charitable organizations we support.

It’s the sense of building something.

It’s the sense of creating something that actually serves people and makes money at the same time.

This isn’t to say that government has never done anything for the people.  If it weren’t for our government, we wouldn’t have a military, although why we are busily defending borders thousands of miles from our nation instead of eighty miles from my home in Orange County is a mystery to me.

If it weren’t for government, we wouldn’t have freeways, although when you look at the state they’re in, you start to wonder whether government is the best guarantor of our nation’s infrastructure.

If it weren’t for state government, we wouldn’t have the UC system, perhaps the finest public education system ever created in the history of man.

What’s wrong with a little California-style hyperbole?  Anyway, it’s probably true.  The problem is that when government exceeds its responsibilities to protect us, help us get from point A to point B in our cars, and educate our kids effectively, it gets into trouble.

Pretty much every single time.

It rewards people who do not deserve to be rewarded, like teachers who are not dedicated to teaching, unions that are more interested in protecting pensions than serving the state, and all of the other shenanigans that we know all too well.  When government lacks sufficient resources to take care of its own citizens and yet opens its borders, its schools, its hospitals, and other expensive and vital resources to anyone old enough to break into the country, something’s wrong.

That’s why I think Jerry Brown must hate me.  All I’m doing is running a business, meeting a payroll, and wondering what obstacle government will throw up in my path next.

Governor Brown has lived in a state where Hollywood is located, so maybe he’s been influenced too much by what he sees on TV and at the movies.  The number one villain, year in year out, on the small screen and the big screen, isn’t terrorists, or foreign agents, or any other murderous bad guys.

It’s business people.

Hollywood loves, loves, loves to make movies and TV shows about larcenous business owners, thieving corporate executives, and greedy Wall Street types.

Of course there is excess and chicanery in the business world.  We live in the real world, and in the real world, sometimes people do bad things.

But business can’t be all bad.  The governor, and the legislators in Sacramento, like the cars they drive (or are driven in), the five-star hotels where they stay, the expensive restaurants where they dine, the movies they view, the basketball games they attend from luxury of their business-related donors all these goods and services are the products of businesses, and most all of this happens on our dime as taxpayers.

The point is that you can take all the potshots you want at business, but at the end of the day, Governor, you need us.  You need us to create things.  You need us to create jobs.  You need us to create tax revenue.

And we’re not stupid.  We can read balance sheets—both ours and yours.  Don’t tell us that the California budget is so complicated that only a few people can understand it and that we taxpayers are too dumb to figure it out.  We know when you are spending more than you’re taking in.  We know when you’re pandering to the unions, to illegals, and to other shortsighted special interest groups that are more interested in the question of “Where is mine?” than the question of “What’s right?”

Governor Brown, stop hating me just because I own a business and I make a payroll.

And if you’re going to tell me that you don’t hate me, that’s terrific.  But let your actions demonstrate that you’re not trying to choke business owners like me.

Without us, there won’t be any tax revenues for you to distribute to your friends and supporters.

And unlike your friend in Washington, you can’t just print more money to solve your problem.

Governor Brown, you don’t have to love me.  All I ask is that you leave me alone.

(New York Times bestselling author Michael Levin runs BusinessGhost.com, which provides books for business owners to distinguish themselves in their crowded marketplaces.)