Taxpayers Held Hostage by Sham Budget

Like the villain in a cheesy hostage movie, Jerry Brown took to the stage last week to deliver his annual budget. His ransom demand to Californians was simple: Vote for more in taxes or I’ll cut $5 billion from education. Upon hearing the threat, citizens across the state yawned and then went about their business knowing that the gun pointed at their wallet wasn’t even loaded.

Brown’s proposed tax hike wasn’t really a surprise as just a few weeks ago he laid out the plan to increase income and sales taxes on Californians by $35 billion over five years. If this sounds familiar, it should. These are the very same taxes voters rejected less than three years ago by a two-to-one margin. Indeed, voters have rejected the last seven tax hikes dating back to 2006. But ignoring the admonition that those who ignore history are doomed to repeat it, the Governor not only assumes that voters will approve taxes, but he is so confident of this that he built the revenue into his budget. Brown envisions a seven percent hike in spending for 2012-13, the largest annual increase in six years.

Brown might want to rethink his role as a Tony Soprano wannabe. Quite frankly, the part doesn’t fit a former Jesuit. But more importantly, California shows nascent signs of economic recovery on its own (despite our policy leaders doing all in their power to strangle the state’s economy in its crib). Revenues have increased more than three percent and the unemployment rate has declined to 11.3 percent, the lowest level in nearly three years.

So why choke off this fledgling economic recovery with taxes? Simply, California politicians lack the intestinal fortitude to live within their means. Sure, the Governor talks a good game. He even referenced paying down the ‘wall of debt’ again in his speech last week. But he followed that up with asking for a $12 billion water bond, continued support for California’s High Speed Fail, er Rail, program and a cap-and-trade scheme that will drive Californians’ energy costs through the roof.

Whether the recovery is weak, robust or nonexistent, it is very unlikely voters will be persuaded to pay the ransom. Not because they don’t want good education, but because they’ve heard all these threats countless times before. What they know — whether they can cite the specifics or not — is that vast sums of their taxpayer dollars are being wasted.

In any campaign for higher taxes — either the governor’s plan, those from dilettante billionaires or from the almighty public employee labor bosses — voters will be reminded by taxpayer groups like HJTA that they are not undertaxed — but that our government leaders simply are not good stewards of their tax dollars. Like seven times before, tax hikes on the ballot will meet the fate they so richly deserve.

Jon Coupal is president of the Howard Jarvis Taxpayers Association -– California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights. This story was originally posted on

Michelle Bachmann repeats female casualties of Presidential race

This past week, Michelle Bachmann suspended her campaign for the Republican nomination for President of the United States.  On August 13th of last year, Bachmann became the first woman to win the Iowa Straw Poll.  A short 143 days later, she came in last in the Iowa Caucuses.

Much will be written about Bachmann’s campaign – her 23 foster children, her standing as the founder of the Tea Party Caucus in the U.S. House, her Midwest accent (strikingly similar to Sarah Palin’s Alaska accent), her energy on the stump and her lack of funds to continue.

Like Hilary Clinton, Bachmann spent a great deal of time focusing on her achievements.  She didn’t avoid talking about her gender and was able to show that she was just as capable of competing as the men on the stage.

Bachmann was called “fun, feisty, and fabulous” by some who knew her in the media.  But others (Chris Matthews and Jimmy Fallon come to mind) criticized Bachmann’s intelligence and occasional factual misstatements more than they did the men in the race on either side.

Bachmann was the Republican Presidential sweepstakes most vocal opponent of Obamacare.  Her suspension of her campaign probably helps Mitt Romney who appears nothing less than invincible in this week between Iowa and New Hampshire.


Thirty-four women received their party’s nomination since 1874 when Victoria Woodhull ran for President with Frederick Douglas as the nominee of the Equal Rights Party.

Surely, you think I’m joking, but I’m not.  Thirty four women representing parties as diverse as the American Woman’s Party, the Communist Party, the People’s Party, the Right to Life Party, and the Green Party World Worker’s Party have served as their party’s U.S. Presidential Nominees.

My all-time favorite is the late Gracie Allen, beloved comedian and wife of George Burns who ran as the nominee of the Surprise Party whose mascot was the kangaroo.  Gracie and George did a whistle stop train tour and as always, she was endearing in her remarks about every day life stating at one stop that “Everybody knows a woman is better than a man when it comes to introducing bills into the house.”

In major parties, a woman has never become her party’s nominee.  However, in 1964, Margaret Chase Smith lost the nomination to Republican Barry Goldwater.  Shirley Chisholm, Patsy Mink, and Bella Abzug ran in 1972, losing to George McGovern.  Chisholm received 152 votes at the Democrat National Convention.

In 1988, Colorado Congresswoman Pat Schroeder (a Democrat) lost to Mike Dukakis and in 1992; Patricia Schroeder (a Republican) received 152 votes to place 12th in the New Hampshire Primary.

The Republicans’ most accomplished and qualified woman, Elizabeth Dole received 231 write-in votes in the 2000 New Hampshire Primary and placed third in the Iowa Straw Poll after dropping out of the race for President.  If Dole had begun her campaign earlier and had the funding, she would have been a contender as she placed second in every poll to George W. Bush during the time she was a candidate for President.  Subsequently, she was elected to the United States Senate from North Carolina.

U.S. Secretary of State Hilary Clinton achieved more than any other women, reaching second place in 2008 Democratic Primaries, securing 1,726.5 Delegate votes and winning more primaries than any other women in history. Clinton won 21 states with more than 18 million votes.  The race between Clinton and Obama was among the closest in history with her winning 48.03% of the popular vote to his 47.43%.

While Michelle Bachmann made it farther than previous Republican women who have run for President, Clinton’s campaign for her party’s nomination appealed across the country and across the board for the longest period of time.

Clinton’s campaign and Dole’s had more commentary about sexism than the others but Bachmann was also was a victim of gender bias.

Whether you are a Republican, Democrat, or Independent or are affiliated with a minor party, the study of the campaigns and the media coverage of women who have stood for the Office of President of the United States is fascinating and in some ways startling.

Part II of this series will examine the media’s treatment of Bachmann, Clinton, Dole and other women candidates seeking to achieve the highest office.

Stay tuned….

(Judy Lloyd is a senior manager and strategist specializing in government affairs, community outreach, development and public relations.)

Is Mitt Romney John McCain version 2.0?

The endorsement of Mitt Romney’s presidential bid by John McCain, the 2008 Republican nominee, was the latest indication that Romney is the GOP establishment’s heir apparent.

As Romney, who picked up McCain’s endorsement last week, appears to be gliding to a comfortable victory in New Hampshire’s primary Tuesday, the next major campaign stop, and the GOP establishment begins to rally behind him, he has still yet to capture the trust, energy and esteem of many rank-and-file Republicans, let alone the Tea Party activists.

The prevailing wisdom among GOP establishmentarians and Romney backers may be: “Take it or leave it, it’s going to be Romney versus Barack Obama.” But if Romney is unable to energize his party’s base, he will suffer the same fate as McCain, a clear defeat.

McCain’s 2000 and 2008 bids for the Republican presidential nomination in many ways mirror the candidacy of Romney. In 2000 McCain was labeled the moderate or liberal candidate against George W. Bush. Some went so far to label him a RINO – Republican in Name Only.

In 2008, McCain had experience competing in early primary states and better understood the various constituencies. As such, he pivoted, campaigning as a conservative-ish choice for Republicans. But he still received backlash, especially by the most conservative primary voters who resisted the Arizona senator because they believed he was soft on issues of great importance to conservatives such as campaign finance reform. He suffered a dismal fourth-place finish in conservative Iowa but rebounded in New Hampshire and elsewhere.

McCain’s 2008 campaign pivot was not what won him the nomination though, He essentially prevailed through attrition, an attitude prevailed that McCain was the best of a lackluster lineup – the safe pick with the best chance of beating the Democrats. McCain perhaps also benefitted from a GOP loyalty factor, that is, the belief that he paid his dues and was next in line (a perception that benefitted the successful candidacies Richard Nixon, Ronald Reagan and George H.W. Bush).

Romney is still viewed as a RINO by many Republicans and is not popular among Tea Party activists. In fact, South Carolina Gov. Nikki Haley prompted blowback from Tea Partiers in her state because she endorsed Romney. Many Republican voters see Romney’s record on a plethora of issues as fluid, lacking conviction. And, of course, he has been most roundly criticized for his health care agenda when he was governor of Massachusetts from 2003-07.

This election cycle Romney is benefiting from experience and pre-existing relationships in key primary states such as Iowa (he finished second there in 2008) and in New Hampshire (he also finished second there behind McCain in 2008). Since then he has been a perennial candidate.

Romney’s position in the primary process this election cycle is not too dissimilar from McCain’s in 2008, but Romney is better off considering his photo-finish victory in Iowa. Romney has the potential to all but lock up the nomination by Super Tuesday, March 6, if not as early as the Florida primary Jan. 31.

Before then, South Carolina on Jan. 21 will be Romney’s major test and perhaps the last opportunity for anti-Romney Republicans to rally behind an alternative candidate. A Rasmussen poll released Friday showed Romney leading in South Carolina with 27 percent of likely GOP primary voters; former Pennsylvania senator Rick Santorum followed, with 24 percent.

Nationally, Romney is polling at 29 percent to Santorum’s 21 percent, according to the latest Rasmussen survey.

Another challenge outside South Carolina is that Romney must demonstrate he can “get a majority somewhere,” as former House Speaker Newt Gingrich said. He has yet to do so. Gingrich believes conservatives will “gradually coalesce” around a candidate to defeat Romney. “[O]ne of us,” he told ABC’s “Good Morning America,” “will eventually emerge as the conservative alternative and will beat Romney.”

Santorum may be the anti-Romney conservatives are hoping for.

A nominee who does not excite the Republican base will not fare well against Barack Obama and his polished, aggressive and manicured campaign style. What may unite Republicans more than anything else is their desire to oust President Obama from the White House, and that may be enough to propel Romney or another Republican to a general election victory. But banking on that strategy is risky business.

(Brian Calle is an Opinion Columnist and Blogger for the Orange County Register. His blog is called Uncommon Ground.)

Gallegly retirement opens up new possibilities in GOP-leaning Congressional seat

California’s 2012 redistricting already is shaking up state and even federal politics. The candidates’ dogfight for the new 26th congressional district could determine whether Democrats or Republicans control the U.S. House of Representatives after the November election — or at least the degree of Republican control.

Rep. Elton Gallegly, R-Simi Valley, announced on Saturday that he’ll retire from Congress. He currently represents the old 24th Congressional District, which was drawn after the 2000 U.S. Census.

Gallegly would have had to run an uphill challenge against Rep. Buck McKeon in the new 25th District, based on the 2010 U.S. Census. McKeon has been in Congress since 1993 and is chairman of the powerful Armed Services Committee.

Gallegly’s other option was a tough general election fight in the 26th Congressional district. The new Ventura County-based district, which includes Oxnard, Thousand Oaks, Moorpark and Camarillo, gives Democrats a slight voter-registration advantage.

However, the district has conservative tendencies and voted in favor of Proposition 8, California’s anti-gay marriage initiative. According to Redistricting Partners’ analysis of the district, it went handily to Obama in 2008 and slightly favored Whitman in 2010.

Gallegly’s retirement creates the opportunity for several county politicians to make their moves on the long-coveted seat. The Democratic side already features five announced candidates: Ventura County Supervisor Steve Bennett, Moorpark Councilman David Pollock, community activist Zeke Ruelas, businessman David Cruz Thayne and Oxnard Harbor District board member Jess Herrera.

On the Republican side, state Senator Tony Strickland, R-Santa Barbara, could be challenged by County Supervisor Linda Parks, a slow-growth environmental activist.

What to Watch for in CD 26

10. State Senator Tony Strickland Will Clear the Republican Field

Strickland will have the support of the Republican establishment, both in the county and on Capitol Hill. Ventura County’s field of top-tier Republican candidates has winnowed in the past five years. Bob Brooks, a popular Republican county sheriff and close Gallegly friend, passed on the chance to take over the seat in 2006, when Gallegly first flirted with retirement.Tom McClintock, another longtime county Republican stalwart, couldn’t wait for Gallegly’s retirement and moved to a Northern California congressional seat in 2008.

Other than Strickland, there’s only one Republican elected official in Ventura County with grassroots support, name ID and a strong fundraising prowess: County Supervisor Peter Foy. He told me Saturday night that he’s supporting Strickland. It’s perhaps Strickland’s most important local endorsement because it clears Strickland’s right flank.

Ventura County Supervisor Linda Parks, a registered Republican, won’t gain any traction with any of the county’s Republican establishment if she decides to enter the race. Ventura County Republican Chairman Mike Osborn, a close Strickland ally, led the county party’s independent expenditure campaign against Parks in 2010. Republican women proved to be the key voter demographic in that race. Expect the same in this match-up between Tony Strickland and Parks. If Parks is able to make the runoff, Republican women will be the most crucial voting bloc.

On Capitol Hill in Washington, D.C., expect House Majority Whip Kevin McCarthy, R-Bakersfield, to quickly lock down key endorsements and financial support for Strickland. The Strickland-McCarthy friendship dates back to McCarthy’s tenure as Assembly Republican leader.

Strickland served as an important member of McCarthy’s inner circle in Sacramento, and he’ll want to add Strickland as a loyal member of his team in Washington. (Fun fact: The pair overcame a one-time “young Republican” feud. McCarthy came up through the Bill Thomas machine; Strickland the more conservative crowd. The split was so bad it led to the creation of two separate young Republican organizations.)

9. Left-Wing Fight: Latino Democrat vs. Environmentalist Liberal

The CD 26 race could turn into a nasty fight between a Latino Democrat and a progressive environmentalist. Ruelas and Herrera will fight to be the consensus Latino candidate, while Bennett and Parks jockey to be the environmentalist candidate. (Yes, even though Parks is a registered Republican.) One quarter of the voting age population is Latino. Unless another Latino candidate enters the race, Herrera, a five-term commissioner on the Oxnard Harbor District, likely has the advantage over Ruelas.

The environmentalist battle might be avoided altogether. Bennett and Parks share the same base of anti-growth supporters. Both have served for decades as leaders in the SOAR movement (Save Open-Space and Agricultural Resource). SOAR opposes property rights in favor of protecting obscure wildlife.

In late December, the Ventura County Star reported that Bennett was having second thoughts about the race. If Bennett drops out, he’ll likely support Parks, despite her Republican registration. Bennett has endorsed Parks in the past and even contributed money to her supervisorial campaigns. Expect environmentalists to unite early in an “anyone but Strickland” coalition.

8. Regional Split: West County (Oxnard) vs. East County (Thousand Oaks)

Ventura County’s natural geographic divide is the Conejo Grade.  East County includes Thousand Oaks, Newbury Park and Moorpark. It’s wealthier, more Republican and increasingly moderate.

West County, which includes Port Hueneme, Oxnard and Ventura, is the major source of Democratic votes, due to its working class and primarily Latino population.

The first signs of a geographic split will be internally, between the environmentalists Bennett and Parks. Bennett represents West County; Parks East County. Parks should have the edge because she’ll have support from a broad base of community leaders in the East, while some of Bennett’s Democratic support will go to the Latino consensus candidate. Prior to her election to the county board, Parks served as a member of the Thousand Oaks City Council. Assuming the environmentalist crowd consolidates behind Parks, there’ll still be a geographic split with the Latino candidate from Oxnard.

Strickland has represented all of these areas in either the state Assembly or Senate, with most of his support coming from Camarillo, Moorpark and Thousand Oaks.

7. The Heretofore Unknown Wealthy Republican Who Wants to be Called “Congressman”

Strickland’s biggest competitor for traditional Republican votes could come from the heretofore unknown wealthy Republican who wants to be called “congressman.”

In 2006 and 2008, wealthy attorney and businessman Michael Tenenbaum ran to replace Gallegly. He seized on Gallegly’s “will-he-or-won’t-he” moment to fill that role.

Another wealthy Republican could follow the Tenenbaum model. Gallegly has held the seat for 24 years, so you can expect a few wealthy businessmen to think twice before passing on their chance at a congressional seat.

6. Big Labor Will Decide Who Makes the Runoff

Big Labor will play heavily in this race, but it’s unclear whom they’ll support. Both Parks and Bennett have strong, pro-union records on the Board of Supervisors. Herrera and Ruelas are former and current longshoremen.

Labor could stay out of the primary and keep its powder dry for a general election fight against Strickland. Or, it could decide to get behind the potentially stronger candidate, Parks.  There’s even the possibility that a few unions might consider supporting Strickland.

Whomever Big Labor gets behind will be the candidate to make the runoff.

5. Strickland’s  Pre-Primary GOP Endorsement Undermined by … Tony Strickland

Parks’s Republican registration, despite being in name only, complicates Strickland’s chances for a pre-primary endorsement from the California Republican Party. A party endorsement could provide crucial financial support. During last year’s internal party endorsement debate, party kingpins Jon Fleischman and Mike Schroeder proposed an easy pre-primary endorsement process that would favor conservative candidates. Their plan was defeated in favor of a complicated local convention system.

Under the current party rules, two-thirds of the county central committee members in Los Angeles and Ventura Counties must approve a pre-primary endorsement. Then, two-thirds of the California Republican Party Board of Directors must authorize the endorsement.

It’s a complicated but feasible hurdle for Strickland to overcome. Of course, Strickland has no one to blame but himself. He provided critical support for the more complicated plan. It was the brainchild of none other than McCarthy. The question will be if fringe, anti-Strickland Republicans can marshal enough votes to block an endorsement at the local level.

4. Outside Groups Will Play Heavily in the Race

Environmental groups, labor unions, Indian tribes and business interests will all play in this congressional race. Strickland, a former president of the California chapter of the influential Club for Growth, can expect major support from anti-tax, pro-growth advocates.

Parks is a quintessential RINO — Republican in Name Only. She’ll ignite the ire of anti-tax, anti-union activists throughout the country. Think Dede Scozzafava, the New York Republican politician just appointed to a post by liberal Democratic Gov. Andrew Cuomo; but Parks sports a record of quashing property rights to save squirrels. The Sierra Club and state public employee unions will play in the race in favor of the consensus liberal candidate.

3. The Most Expensive Congressional Race in California History

If you’re a Republican donor in California, chances are you’ve already received a fundraising pitch from Strickland. It’s been 24 hours since Gallegly announced his retirement. That’s enough time for Strickland to contact several hundred donors.

One of the best fundraisers in the state, I’d look for Strickland to post a massive fundraising number at the end of the first reporting period. (Yes, I just raised expectations.) The combination of Strickland’s fundraising and outside groups will make the 26th congressional district one of the most expensive races in California history.

2. Linda Parks Will Re-Register as a Democrat

A potential game changer in this race is when Parks re-registers as a Democrat. In a debate, I’d ask Parks to name the last Republican presidential candidate she has supported. (Not that anyone can blame her for abandoning the anti-freedom Sen. John McCain.)

If Parks re-registered as a Democrat, she’d have the formal support of her Democratic friends and allies. Check Parks’s past endorsement record and you’ll find a “Who’s Who” of Democratic activists. It’d be so much easier for her to campaign as a Democrat instead of as a moderate Republican.

If Parks fails to make the runoff, look for her to endorse the Latino Democrat, regardless of her party registration.

1. The Race Will Remain Undecided for Days, Possibly Weeks

Get the lawyers ready for a heated ballot review process in November. It is easier to list the races that “Landslide Tony” has won easily than identify the races he’s barely squeaked out. Most of his victories have been decided weeks after Election Day.

The only race Strickland has won by a comfortable margin was his final re-election to the State Assembly in 2002. In 1998 and 2000, Strickland beat schoolteacher Roz McGrath by a hair. The 2008 state Senate race against former Assemblywoman Hannah Beth Jackson took weeks of ballot checking before a winner was declared.

And then there’ll be the rematch for District 26 in 2014.

Bonus Prediction: Epic Ground War Between Strickland and Parks

The best ground campaign activists in California Republican politics will reunite to run the ground campaign in this race. Strickland has trained a network of activists and should be expected to reinstitute his flop-house walk program. That’s where poor college students are convinced to spend day and night walking for the cause. Look for the best political operatives in conservative politics to forgo their lucrative state salaries and temporarily take LWOP — leave without pay — to support Strickland’s bid.

The Strickland machine will face its toughest test yet in Parks’s environmental operation. Every activist who has chained himself to a tree to save the spotted owl will mobilize to support Parks. She is a serious and credible candidate with high name ID. If she doesn’t re-register as a Democrat, this may be the first and only race to feature a Republican versus Republican general election match-up.

(Full disclosure: The author previously worked for Tony Strickland, a candidate for District 26. This article was first posted on Cal Watchdog.)

Hayashi’s Shaky Claim That Brain Tumor Caused Shoplifting

The late Friday news reported that Castro Valley Assemblywoman Mary Hayashi  has a benign brain tumor, and that is what caused her to shoplift $2,500 in clothing from Neiman Marcus in San Francisco.

Interestingly, the judge assigned to her case reduced her felony grand theft charge to a misdemeanor. Hayashi’s husband is Alameda County Judge Dennis Hayashi.

But the tumor defense was not used in court yesterday, when Hayashi pleaded no contest to the reduced charges. The  court was given nothing indicating that Hayashi had or has a brain tumor.

The tumor defense, similar to the Twinkie defense,  only came up after she plead guilty to the charges. And it was after leaving the court room that her attorney mentioned it for the first time- late on Friday.

Prior to yesterday’s court appearance, Hayashi had been saying that she was innocent and her attorney  told everyone in the media that this was a “silly case.” Hayashi spokesman Sam Singer has called the incident “a mistake and a misunderstanding.”

Her attorney and spokesman have stated that she had intended to pay for the items but became distracted by a cellphone call and a snack at the cafe and inadvertently left the store without paying. “According to sources close to the case, a week before the Neiman bust, a store saleswoman noticed that a dress was missing after a woman matching Hayashi’s description tried it on. The saleswoman did not know who Hayashi was, but when Hayashi showed up Oct. 25, the clerk alerted store security and they began tracking her with surveillance cameras,” the San Francisco Chronicle reported.

Drudging up the Carole Migden defense, Hayashi’s attorney, now says that a “brain tumor” is the real culprit. In 2007, Migden smashed her state-issued SUV off a concrete median on Interstate 80 and nearly ran other motorists off the freeway before slamming into the back of another vehicle. Former State Sen. Carol Migden, D-San Francisco, said she was reaching for her official cell phone when the wreck occurred. But many of the other motorists said that she had been driving erratically for miles. And 9-1-1 tapes proved it. Migden claimed she was under medical treatment for leukemia, and the medication she was on caused her to crash.

But amazingly, she was cured of the dreaded disease and back at work in no time. Midgen subsequently lost her reelection attempt.

A medical excuse is actually brilliant because no doctor will release medical records to prove or disprove it. It’s the same as running into a church for refuge.

However, Hayashi’s case of forgetfulness doesn’t remotely ring true. She doesn’t just casually stop by Union Square on her way somewhere. Hayashi had to make the 30 miles drive from her home in Castro Valley, cross a bridge, and find parking in Union Square, in order to shop at Neiman Marcus. She brought her own shopping bag with her into the store.  And it was reported that store employees said they were already on the look out for Hayashi because they suspected she had shoplifted from that store only weeks before.

Now, the “brain tumor” PR campaign is in full swing. But her attorney said she’s out of the woods and has a clean bill of health.

Several years ago, Hollywood actress Winona Ryder was caught shoplifting at Saks Fifth Avenue in Beverly Hills. Ryder was ordered to pay restitution, and had to serve hundreds of hours of community service. The judge told her that if she was ever in his courtroom again, he’d send her to jail.

Many are questioning why Hayashi has not been asked to take a leave of absence from the Assembly.

But Hayashi’s charge was miraculously reduced from a felony to a misdemeanor. She now only has to pay a $200 fine, and did not receive any community service time as a punishment. But the biggest gift to Hayashi with the misdemeanor charge is that she does not have to give up her Assembly seat. A felony would have required her resignation.

That’s too bad – if she had resigned, Gov. Jerry Brown could have provided her a soft landing and appointed her to the new state department he created to manage California’s mental hospitals – the Department of State Hospitals.

(Katy Grimes is CalWatchdog’s news reporter. Grimes is a longtime political analyst, writer and journalist. This article was first posted on CalWatchdog.)

Jerry Brown in Incomprehesible Denial on High-Speed Rail

Like many other observers, we have found the California High-Speed Rail Peer Review Group has made a convincing case for a fresh look at the feasibility of the California high-speed rail project. The Group’s report was issued as eleven House Democrats — eight from California– joined an earlier request from twelve Republican House members for an independent GAO investigation of the embattled project.

That is why we find Governor Brown’s reaction— that the Peer Reviewers’ report  ”does not appear to add any arguments that are new or compelling enough to suggest a change of course” —incomprehensible.  Either the Governor issued the statement without the benefit of having read the report, or he is so ideologically committed to the project that he refuses to look the facts in the face.

Precisely which conclusions of the report are not compelling enough, the Governor’ s spokesman has not made clear.  Is it the statement that “the Funding Plan fails to identify any long term funding commitments” and therefore “the project as it is currently planned is not financially feasible”?

Is it the Reviewers’ assertion that “the [travel] forecasts have not been subject to external and public review” and absent such an open examination, “they are simply unverifiable from our point of view”?

Could it be their statement that “the ICS [Initial Construction Section] has no independent utility other than as a possible temporary  re-routing of the Amtrak-operated San Joaquin service…before an IOS  [Initial Operating Segment] is opened”?

Or, is it the Panel’s conclusion that “…moving ahead on the HSR project without credible sources of funding, without a definitive  business model, without a strategy to maximize the independent utility and  value to the State, and without the appropriate management resources,  represents an immense financial risk on the part of thState of California?”

To us, the findings seem at least deserving of a respectful consideration.

But the California High-Speed Rail Authority (CHSRA) is not ready to concede anything. Here is the opening paragraph of its response: “While some of the recommendations in the Peer Review Group report merit consideration, by and large this report is deeply flawed, in some areas misleading and its conclusions are unfounded. …Although some high-speed rail experience exists among Peer Review Panel members, this report suffers from a lack of appreciation of how high-speed rail systems have been constructed throughout the world, makes unrealistic and unsubstantiated assumptions about private sector involvement in such systems and ignores or misconstrues the legal requirements that govern construction of the high speed rail program in California.”

It is not our intention to delve in detail into the Authority’s response and judge the soundness of its arguments. No doubt, the CHSRA response will come under a detailed examination by the Authority’s critics in the days ahead. Suffice it to say that, having carefully and with an open mind examined the Authority’s rambling nine-page response, we find that it did not satisfactorily rebut the Peer Group’s central point: that it is not prudent, nor “financially feasible,” to proceed with the $6 billion dollar rail project in the Central Valley (including $2.7 billion in Proposition 1A bonds) in the absence of any identifiable source of funding with which to complete even the Initial Operating Segment. To do so, would be to expose the State to the risk of being stuck, perhaps for many years, with a rail segment unconnected to major urban areas and unable to generate sufficient ridership to operate without a significant state subsidy.

The Authority’s lashing out at the Peer Group and the dismissive tone of its response suggest that it has already made up its mind to stay the course and circle the wagons. That is not a wise posture to assume in the face of an already skeptical state legislature.

(Ken Orski is a Public Policy Consultant and former Principal of the Urban Mobility Corporation. This article was first posted on Fox & Hounds.)

Wishful Thinking Already Pushes State Budget

There’s already plenty of wishful thinking surrounding the state budget rolled out Thursday and most of it doesn’t come from Jerry Brown.

Republicans and Democrats alike, each for reasons uniquely their own, see nothing but the bluest skies ahead for a California economy that’s featured little but storm clouds in recent years.

For Republican legislators, the growing economy means that the state can make out just fine without the $6.9 billion tax increase the governor wants to put on the November ballot.

“Revenues are up by 3.5 percent this year and are projected to grow at a fast pace in the years to come,” newly elected GOP Senate Leader Bob Huff said in a statement. “The anticipated growth in revenues will help us to bring spending in line with revenues without a $7 billion increase in taxes.”

Then there are the Democrats, who say that the new money spewed out by a growing economy is just the thing to avoid the $4 billion in program cuts the governor says are needed to balance the budget.

“I am wary of continuing down that path” of more budget cuts, Senate President Pro Tem Darrell Steinberg said in his own statement Thursday. Projected revenues increased $1.5 billion in the November-December round of state estimates, he said, and “if that trend continues even slightly, we may avoid the need to make the kinds of cuts and governor now suggests.”

Highlight the word “may.” Steinberg doesn’t mention that even with those projected increases, the state still fell about $1.9 million short of what last year’s optimistic budget forecast predicted. And while Huff and his Republican colleagues are quick to dismiss the need for any additional revenue – aka, taxes – they are a lot slower when it comes to saying what programs should be slashed to bring the budget into balance without that new money.

Brown, for his part, is working a hire-wire act. He’s proposing more that $4 billion in cuts in welfare, Medi-Cal, the Cal Grant college scholarship program, childcare and education, programs Democrats have fought to keep whole. But he’s also backing a tax initiative, which party leaders long have yearned for.

Both the cuts and the taxes are necessary, Brown warned Thursday.

“These are not nice cuts, but that’s what it takes to balance the budget,” the governor said.

The new budget “keeps the cuts made last year and adds new ones,” he said in his budget message. “The stark truth is that without some new taxes, damaging cuts to schools, universities, public safety and our courts will only increase.”

If that tax measure doesn’t pass in November, Brown’s backup plan calls for a mid-year slash of $4.8 billion in K-12 school spending, which is the cost of three weeks of classes. The UC and state college systems would lose $200 million each and court funding would be cut by $125 million, which could force three days of closure each month.

Republicans immediately complained that Brown is holding the state hostage, threatening to hamstring popular programs like education and public safety unless voters pass his tax increase. “A cynical, scare tactic budget strategy,” is how Republican Party Chairman Tom Del Beccaro described it.

He’s right, of course, but so what else is new with campaigns surrounding any money measure that hits the ballot. The Republicans and their anti-tax allies will have a chance to make their own case in November and anyone who thinks they won’t come up with a “cynical, scare tactic” strategy of their own hasn’t been paying much attention to California politics over the years.

But Brown’s more immediate problem is with his own party, since they have the votes needed to pass his budget – no Republicans need apply. Democrats didn’t like the cuts in last year’s budget and really won’t want to double down and make the ones Brown’s proposing this year. They’re likely to take any bit of positive economic news in the next few and declare that happy days are here again and no heavy lifting – or unpopular votes to cut state programs – will be required.

Steinberg already has said he doesn’t see any need to quickly make major cuts that will take effect in March, even though the delay could mean deeper cuts will be needed later in the year.

Brown warned that it’s impossible to guarantee that the budget numbers will hold up over the next year. The numbers could get better, but they also could get worse.

Based on the past few years, it’s not hard to guess which way to bet.

“It’s an honest budget, but it’s not a fortune-telling budget,” he said. “We don’t have clairvoyance at the Department of Finance.”

Brown described the budget as tough medicine and admitted that the plan “will be very hard to digest in this building.”

The “big if” behind the budget is the need “to hold the line on spending and make the tough cuts or the equivalent of what I’ve put in the budget,” he said.

The question now is whether anyone on the Democratic side of the aisle is willing to listen.

(John Wildermuth is a journalist and political commentator. This article was first posted on Fox & Hounds.)

Crony Capitalism Rebuked by CA Supreme Court

On December 29, the California Supreme Court handed down what the state’s urban redevelopment agencies (RDAs) and their supporters called a “worst of all worlds” ruling—first upholding a law that eliminates the agencies, then striking down a second law that would have allowed them to buy their way back into power. This was great news for critics who had spent years calling attention to the ways modern urban-renewal projects distorted city land-use decisions, abused eminent-domain policies, and diverted about 12 percent of the state budget from traditional public services to subsidies for developers, who would build tax-producing shopping centers and other projects sought by city bureaucrats. As of now, the agencies are history, though the redevelopment industry is working to craft new legislation that would resurrect them in some limited form.

California’s redevelopment agencies were first introduced in the 1940s to combat blighted urban areas by providing a tax-sequestering mechanism so that cities could concentrate investment in struggling areas. But after Proposition 13 placed limits on local property taxes and various ballot initiatives further constrained the way state and local governments could spend their revenues, redevelopment mutated into a tool for tax-hungry cities to capture dollars that would otherwise go to counties and the state. Restoring decrepit areas took a back seat to grabbing revenue. The RDAs loved to oversee the construction of shopping centers and auto malls, for example, because those projects generally filled city coffers with sales taxes.

As California faced a protracted structural budget deficit, however, there were fewer and fewer pots of money for officials to plunder. Though operated by cities, RDAs are actually state agencies. In 2009, Governor Arnold Schwarzenegger tried to “raid” redevelopment funds, but the powerful League of California Cities and the California Redevelopment Association (CRA) struck back in 2010 with Proposition 22. This ballot initiative, sold to voters as a means to keep Sacramento politicians away from local transportation budgets, forbade the state from taking RDA funds. After its passage, the measure’s advocates viewed redevelopment funds as sacrosanct.

In fact, Proposition 22 planted the seeds of redevelopment’s demise. Since the agencies’ money was now off limits, new governor Jerry Brown decided simply to shut them down. Yet as a sop to the legislature’s many redevelopment supporters—especially in the Democratic Party—the governor also signed another bill that let the agencies stay in existence by paying what the League and the CRA called “ransom.” Redevelopment critics were happy when the governor signed the first bill, but dismayed when the second enabled many of the biggest and most abusive agencies to remain alive by spending tax dollars.

Redevelopment officials, for their part, weren’t happy with any funding loss and filed a lawsuit challenging both laws. This was a controversial strategy—and proved a devastating mistake. “We’re very gratified that the California Supreme Court has agreed to take our case, issued the stay we requested to preserve the status quo, and that it is moving forward on an expedited basis,” the League of California Cities’ executive director, Chris McKenzie, wrote in August. But McKenzie failed to see the strategy’s perils, which other redevelopment boosters, such as State Senator Bob Huff, had warned about.

The court ruled 7–0 on the first bill that ending the agencies was “a proper exercise of the legislative power vested in the Legislature by the state Constitution. That power includes the authority to create entities, such as redevelopment agencies, to carry out the state’s ends and the corollary power to dissolve those same entities when the Legislature deems it necessary and proper.” Then the court ruled 6–1 that the second measure was unconstitutional: “A different conclusion is required with respect to Assembly Bill 1X 27, the measure conditioning further redevelopment agency operations on additional payments by an agency’s community sponsors to state funds benefiting schools and special districts. Proposition 22 . . . expressly forbids the Legislature from requiring such payments.” For critics of the RDAs, using Prop. 22 to deliver redevelopment’s final blow was the sweetest part of the ruling.

The redevelopment agencies are fighting to return, but unlike last year, when most Republicans opposed the effort to dissolve the agencies, 2012 may see a minority party doing the right thing. A number of assembly Republicans who refused to support Brown’s anti-RDA legislation claimed that they did so because the package of bills would just resuscitate the RDAs. Well, the state supreme court has now killed that argument. Will Republicans side with property rights and limited government at the local level, or again stand up for these misguided and destructive bureaucratic bodies?

(Steven Greenhut is director of the Pacific Research Institute’s Journalism Center, editor in chief of, and a columnist for the Orange County Register. This article was first posted on City Journal.)

Super PACs – A California Specialty Goes National

California has come to Iowa, and maybe the nation.  The most striking result in Iowa was the collapse of Newt Gingrich.  As recently as December 6, he led the field for the Iowa GOP caucuses by 13 points; he was ahead in every national poll from November 13 until December 19 – and then it all ended.

Newt was the victim of a new phenomenon in American politics, the “Super PAC”.  The Super PAC can raise money from any source, and most importantly, it can spend unlimited amounts of money on behalf of any candidate as long as “independent” of the candidate.  In Newt’s case, a Super PAC called Restore Our Future, funded by Mitt Romney supporters, spent $3 million attacking Gingrich in Iowa the weeks leading up to the January 3 caucuses.  One of the more effective ads talked about Newt’s “ton of baggage”, including ethics charges, while bags rolled onto an airport carousel.


Super PACs are an outgrowth of a 2010 US Supreme Court ruling called Citizens United that said corporations, unions or anyone else could spend unlimited funds on independent expenditures.  The ruling set off howls from liberal campaign finance reformers that unlimited campaign funds would wash over American politics.  This is not entirely untrue, but money can only take you so far.  After all, Newt did have lots of baggage. And despite the huge expenditures of the Romney Super PAC, it was the nearly unknown Rick Santorum who benefited.

Super PACVs might be new nationally, but they are very common in California, although not under that name.  Here they are called independent expenditure committees, and they have been legal in California for decades.  To see how they will work nationally, look at how they work in California.

First, they operate in an atmosphere where the money a candidate can raise is limited.  At the federal level it is just $2,500 from a single donor; in California it is a little over $3,000 in a legislative race and $20,000 or so for governor.

Second, they are most effective in supplementing an already effective political operation, as was the case in Iowa and has been the case here.  In 2010, Democratic candidate Jerry Brown faced multi-millionaire Meg Whitman, who was spending her own money without any limits.  Brown obviously could not keep up, but his Super PACs could, and a variety of independent expenditure committees funded largely by labor and public employees spent more than $25 million on his behalf.

But that independent spending, while helpful to Brown, was not decisive in his victory in the end.  Whitman actually spent too much and her campaign was mostly over once it was revealed she had hired an illegal alien maid.  Also in Iowa, money was less decisive.  Texas Gov. Rick Perry burst onto the scene last summer as the temporary Republican front runner, but his consultants convinced him all he needed to do was raise money; don’t waste time on debate preparation or on meeting with the media.  The ill-prepared Perry collapsed and he ran fifth, even worse than Gingrich.

The role of Super PACs will be much debated, especially after the Gingrich take down in Iowa.  Campaign reform types that constantly warn about money in politics were not much bothered by the Jerry Brown Super PACs, which came from labor, but they work themselves into a tizzy over corporate spending, as we saw in Iowa and will see through the rest of the GOP primaries, and surely in the fall campaign.

But Super PACs/independent expenditures need to be kept in context.  They would not be there if candidates themselves could raise unlimited amounts, and disclosure would be better if the money was flowing through candidate campaign committees, not shadowy PACs.   And, as the good folks in Iowa proved, sometime independent expenditures do expose candidate flaws that need exposing, and enhance the ability of voters to make sensible decisions.

(Tony Quinn is a Political Commentator and Former Legislative Staffer. This article was first posted on Fox & Hounds.)

California Faces Decisive 2012

It’s fun to gloat about our great weather when calling freezing relatives Back East on New Year’s Day. And some good things are keeping the sun shining this year.

Silicon Valley’s global technology dominance will continue in 2012. Despite the foolishness of the state, if you’re a young computer code jock from any corner of the world, Californy is still is the place you ought to be. Silicon gold. Transistor tea. Swimming pools. Entrepreneur stars. Billionaires.

It’s like Detroit was for a young engineer in the 1920s. Or Edwards Air Force Base for test pilots in the 1950s. Or Hollywood at any time for a starlet.

If that’s the place to be, then you don’t care about the government, the taxes, the regulations. Nowadays, you can run a computer business from a laptop at Starbucks while living out of your 1999 Corolla.

Indeed, the silicon boom well could bring in so much tax cash in 2012 that the calls for a tax increase will be a lot harder to make come November.

Time of Troubles

But California in 2012 also faces so many problems that many folks will break out the parkas and head for the Bad Weather States to find work.

For the good news, the record $13 billion tax increase departed Gov. Arnold Schwarzenegger signed into law in 2009 expired in 2011. It’s not returning in 2012. Although voters might approve a new tax for 2013.

The Schwarzenegger tax certainly is part of the reason why unemployment in California rose from 10.1 percent in January 2009, the month before the tax increase, to 12.5 percent in December 2010 — a 2.4 percentage-point increase.

But in January 2011, the tax increases began to fall off. In that month, Schwarzenegger’s income tax increase expired. In July, the sales tax increase expired.

That’s much of the reason why, in 2011, things got better as the tax receded. The unemployment rate fell steadily throughout the year, from 12.4 percent in January 2011 to 11.3 percent in November 2011, the latest month available.

True, the national economy improved as well, partly because of the new payroll tax cut that was just extended. But California’s unemployment, although still second-highest in the nation after Nevada, improved faster.

This is shown in the following graph. It uses the “Jobs Gap” calculation I came up with two years ago. Notice the green line at the bottom.

Receding ‘Jobs Gap’

In January 2011, there was a 3.4 percentage-point “Jobs Gap,” as I call it, between California and the United States as a whole. U.S. unemployment was just 9 percent, but California’s was 12.4 percent — hence the Jobs Gap.

By November 2011, U.S. unemployment had dropped to 8.6 percent. But California’s had dropped to 11.3 percent. That produced a 2.7 percentage-point Jobs Gap for November.

That means our unemployment rate improved 0.7 percentage-point faster than did the overall U.S. economy.

Throughout the year, Republicans in the Legislature remained solid, for once, in resisting tax increases pushed on them. In this case, the tax increases were advanced by Gov. Jerry Brown, the Democratic Legislature and the powerful government-worker unions.

Brown campaigned all year, pulling out every rhetorical trick for increasing taxes, such as calling his major anti-tax opponents the Four Horsemen of the Apocalypse (picture above).

Clearly, Californians enjoyed having a little more change jingling in their pockets. They used the money not just to buy more Christmas goodies for their kids. They also used it to feed their families. And some used it to invest in new business and jobs creation.

For 2012, Californians know they will enjoy the whole year without a state tax increase. That’s the good news.

The bad news is that state tax increases hang over 2012 like the Sword of Damocles (pictured at right). And at the national level, no one knows who will be president in 12 months, or what his economic policies will be.

Short-Term Thinking

But as my colleague Steven Greenhut noted, if things continue to get a little better (but not a lot better), people likely will forget that state has some big structural problems.

One is an over-reliance on the income and capital gains taxes that flow like Niagra Falls during boom times, but dry up during bad times. This was analyzed in a 2005 report by the Legislative Analyst, “Revenue Volatility in California.”

The following chart from the report shows what happened:

Note how tax revenues from both stock options and capital gains soared during the dot-com boom of the late 1990s, then crashed when the dot-com boom burned into the dot-com bust.

The chart stops before something similar happened during the real-estate bubble of the mid-2000s, which burst in 2007.

The volatility shows the folly of increasing taxes on “the rich.” During boom times, that seems to work. The Silicon Valley boys rake in the cash. The government skims off 10.3 percent of it — or 12.3 percent if Brown’s proposed new tax increaseis enacted. The state then blows all the money.

Then the stock market crashes, as in the dot-com crash, and the revenues stop flowing in. But the spending remains at the high level from the boom. Then calls for more tax increases flow in.

This volatility often is used as a reason to attack Proposition 13, which limits increases in property taxes to 2 percent per year. Usually this comes in the form of pushing for a “split roll” on property taxes, with Prop. 13 applying only to home ownership, not business property.

The argument is that soaking business property is a lot more stable than relying on the ups and downs of the stock portfolios of Silicon Valley gearheads.

But once Prop. 13 is breached for business property, it soon would be breached for wealthy homeowners, then for everyone. Prop. 13 remains the bulwark of tax sanity in a state otherwise locked in an asylum basement.


But the real problem is not that, in each boom, the state overspent. Governors, legislators and the powerful government-workers unions never learn. They always assume that the good times will continue rolling forever.

During the height of the dot-com boom, Gov. Gray Davis increased general-fund spending 15 percent in fiscal 1999-2000 and another 15 percent in 2000-01. And during the height of the real estate bubble, Gov. Arnold Schwarzenegger increased general-fund spending 15 percent for fiscal 2005-06 and another 10 percent for 2006-07.

If we have even a modest recovery in 2012, there’s every reason to believe that Gov. Jerry Brown will spend all of it, too, putting nothing away for a rainy day — or a bust. He blew his chance a year ago to put California’s fiscal house in order. He should have pushed for a state version of the flat-tax he proposed in his 1992 presidential bid, a restoration of the Gann Limit on spending he championed 30 years ago, or both.

Fortunately, a spending limit similar to Gann is being advanced and could be on the November ballot.

Brown wasted 2011 on his tax-increase obsession. And he is planning on doing the same in 2012. His State of the State address and budget proposal this month will be geared to push his tax increase.

Tax Increase 2012?

For political junkies, in addition to the presidential election, 2012 looks to be a battle royale on tax increases in California. Not just Brown, but several others are pushing new assaults on taxpayers.

Brown wants $7 billion for schools and public safety.

There’s the Think Long committee’s short-sighted proposal to boost taxes $10 billion, combined with some reform of the tax structure to address revenue volatility. Made up of billionaires, the committee might better spend its time reviving, and booking a gig on, “Lifestyles of the Rich and Famous.”

Molly Munger wants $10 billion for education and deficit reduction.

And the California Federation of Teachers is seeking a $6 billion tax on millionaires.

There will be others.

Maybe the millionaires and billionaires who favor tax increases should just cough up the cash voluntarily and spare the rest of us an election and higher taxes on the middle class.

More Cuts Needed

What often is overlooked is that more waste easily could be a wrung from the wasteful state budget. Start with cutting all the überPolitically Correct college and university courses that cost millions while advancing anti-intellectualism on campus, as Stan Brin described last week.

And the Cal State system is so top-heavy that it actually has more administrators than professors. Reports Michael Barone:

“Take the California State University system, the second tier in that state’s public higher education. Between 1975 and 2008, the number of full-time faculty members rose by 3 percent, to 12,019 positions. During those same years, the number of administrators rose 221 percent, to 12,183. That’s right: There are more administrators than teachers at Cal State now.”

Forced to slash budgets, Cal State, instead of cutting administrative bloat, increased student tuition 9 percent.

No wonder kids are graduating college with $100,000 or more in debt. It’s party time for administrators but indentured servitude for the student-serfs — who also must pay high taxes if they remain in the state. What a racket.

Next, pension reform is essential — and not just the tinkering around the edges proposed by Gov. Brown.

As the latest Stanford University study shows, the state’s pension liability has soared to $497.9 billion. Unless something is done to cut that amount, even taxing millionaires 100 percent won’t be enough to reduce budget deficits.

Schools for Scandal

And something needs to be done about the state’s failing schools, which score close to the bottom on standardized tests. For example, on the 2011 National Assessment of Educational Progress, California scored 46th among the states in fourth-grade reading, 49th for eight-grade reading, 46th on fourth-grade math and 48th on eight-grade math.

For the high-tech center of the universe, that’s just appalling. If the state had its act together, it would act like the owner of an 0-16 NFL team and fire the whole management. But teacher and administrator contracts don’t allow that.

Still, some reforms are advancing. Charter schools remain popular. And my friend Martha Montelongo has featured several reformers on her Gadfly Radio show, Tuesday nights at 8:00 pm on, in which I usually participate.

Martha recently featured Yolie Flores, a former reform member of the school board of the Los Angeles Unified School District. Flores now is CEO of Communities for Teaching Excellence, which promotes putting parents and kids ahead of unions and administrators, while emphasizing effective teaching.

All of the major tax-increase proposals are aimed at boosting school spending. But with the schools so broken, it’s like buying used Yugo and installing a new digital navigation system in it.

Moreover, despite claims to the contrary, California school spending has risen in recent years. A 2010 Pepperdine University study showed that school spending actually soared 21 percent from fiscal 2003-04 to 2008-09.

And the extra money went for administrators, not teachers. For example, in 2008-09, Oakland Unified spent a generous $12,946 per pupil. But just 35 percent of that went to classroom instruction, with 65 percent going to administration.

The schools have administered programs to get kids off junk food and slim down. But it’s the schools themselves that are gorged with fat administrative staffs.

As with colleges and universities, wasteful administration has devoured budgets. More taxes would only feed the beast.

Perhaps 2012 will be the year that reforms by Flores and others will be demanded by parents and forced on sclerotic school systems.

The Radiant Future

California is supposed to lead the world into a Radiant Future, to use a Leninist phrase. That certainly was the boosterism promoted by Gov. Schwarzenegger as he “terminated” the state’s problems by making them worse. Well, at least that poseur is gone. But under him, California’s middle class shrank to less than half the population, as the state nosedived toward Third World status.

The problem in 2012 is that the state government, like the U.S. government, is refusing to acknowledge that its past mistakes have caused today’s discontent. Past budget splurges should require whatever budget cuts are necessary to get out of the red and back to the black. Taxes should be streamlined along the lines of Art Laffer’s flat-tax idea.

Instead, the state is stuck in a “Back to the Future” nightmare in which a revanchist Gov. Brown tries to recreate the Atari Democrat technofuturism of his salad days as governor three decades ago.

But the reality of the here and now in 2012 is of most Californians struggling to keep a grip on middle-class hopes and dreams as the government keeps pounding them down into the ranks of the unemployed and the homeless.

(John Seiler, an editorial writer with The Orange County Register for 19 years, is a reporter and analyst for CalWatchDog, where this piece first appeared.)