Last week, the court issued its long-awaited decision in a court case involving a Sacramento local firefighters union that alleged a provision of the 2012 pension reform measure approved by the Legislature and signed by then-Gov. Jerry Brown was illegal under the “California Rule.” That’s the legal concept stemming from a 1955 state Supreme Court ruling that holds the terms of a public employee’s pension benefit cannot be reduced for years not yet worked, only kept the same or increased.

Cal Fire Local 2881 said that the pension reform’s ban on “air time” – the purchase of service credits to enhance pensions – violated the California Rule. But a unanimous state Supreme Court said “air time” was not a comprehensively bargained or legislatively approved vested right.

Yet in the lead opinion, Chief Justice Tani Cantil-Sakauye (pictured) explicitly said she was not taking a position on the California Rule question of whether pension terms could be changed going forward for years not worked.

This mixed message produced media confusion. Some news bulletins declared the justices had approved allowing a rollback of local benefits. Others suggested the California Rule had dodged a bullet.

Was ‘California Rule’ weakened or untouched?

Interest groups were similarly split.

Officials with the League of California Cities saw the court’s willingness to change the terms of pensions on a relatively minor issue as a sign it was open to a significant weakening of the California Rule. The league and many like groups hope for a state Supreme Court ruling that echoes a lower court’s ruling that pensions are not “immutable.” They were heartened by Cantil-Sakauye specifically noting the state had raised the retirement age from 67 to 70 for current as well as prospective employees.

But the Californians for Retirement Security, which represents 1.6 million public employees and former public employees, declared victory after noting that Cantil-Sakauye had specifically said “air time” was changeable because it was not a vested right – unlike basic pension formulas basing retirement checks on years worked times a percent of late-career salary.

The group and others also cited a concurring opinion written by Justice Leondra Kruger and joined by Justice Goodwin Liu that held that government employers could not “withdraw” from the pension terms established upon initial employment by “an implied unilateral contract.”

The state Supreme Court is expected to eventually take up at least two more cases involving union objections to the 2012 pension reform, so the sanctity and extent of the California Rule is likely to remain in the news. In his final year in office, Gov. Jerry Brown repeatedly urged the court to give governments the option to change future pension terms as pension costs have crowded out local, county and school programs and services. Brown’s office defended the 2012 reform law before the high court because of concern that state Attorney General Xavier Becerra was not eager to defend it.

Like 2017 case, ruling seen as murky, not clarifying

But in the meantime, last week’s ruling seems as murky as the court’s decision in the 2017 California Cannabis Coalition v. City of Upland case. Previously, Proposition 218, approved by voters in 1996, had been understood to require that any tax whose revenue would go to a special purpose – building a sports arena, adding libraries, etc. – had to be approved by a two-thirds vote.

Upending decades of precedent, the state Supreme Court held in a 5-2 decision that the two-thirds threshold applied only to ballot measures initiated by local governments. Because they were not local government measures, those qualified by citizen initiatives only needed simple majority support to be enacted.

In dissent, Justice Kruger took square aim at the idea that this interpretation was what voters expected in 1996 when they made it harder for local governments to raise taxes.

Kruger wrote, “A tax passed by voter initiative, no less than a tax passed by vote of the city council, is a tax of the local government, to be collected by the local government, to raise revenue for the local government. None of this could have been lost on the electorate that, also by initiative, amended the California Constitution to set ground rules for voter approval of local taxes.”

The project is being backed by Silicon Valley titan Chris Hughes, whose Economic Security Project gave $1 million toward the effort.

The goal, supporters say, is to ensure that the embattled city’s residents can stay out of poverty and the experiment is designed to assess whether or not the program could be rolled out on a wider scale.

“We’ve overspent on things like arenas and marinas and things of that sort to try to lure in tourism and dollars that way,” Stockton Mayor Michael Tubbs explained, according to Fox News, believing that the model can be used to bolster quality of life in the struggling city – and others like it.

Stockton in recent years has been known as the “foreclosure capital” of the country and drew headlines in 2012 when it declared bankruptcy, becoming a flashpoint for Americans suffering during the Great Recession.

The concept of a universal basic income has gained traction in the Bay Area amid concerns that automation will increasingly displace workers. It’s been propelled by major CEOs like Mark Zuckerberg and Elon Musk, who argue that so-called “free money” may be a necessity as technological advances alter the labor landscape.

“We should explore ideas like universal basic income to make sure that everyone has a cushion to try new ideas,” Zuckerberg said in his Harvard commencement address in May 2017.

Other similar efforts have been rolled out in places like Finland, which announced in April that it was ending its trial run to explore alternative welfare programs instead. The full results will be disclosed next year.

While some experts argue that universal basic income can be a way to lessen poverty by creating a guaranteed income floor, others explain that such a framework is impractical given the current entitlement and welfare state.

“I would be in favor of this if it meant eliminating all other welfare programs and requiring work,” economist and Heritage Foundation fellow Steve Moore told CalWatchdog via email. “The only way out of poverty is a job not a government handout.”

Overall, the experiment will look at how the residents spend the money and the potential economic impact it could have on the city, something that the young 27-year-old mayor is optimistic about.

“We trust that people are smart and resilient to make the best decision for them and their families with the money,” Tubbs said in a CBS News interview back in February. 

Stockton’s effort is expected to begin in early 2019.

In the announcement, de León said that as the state Senate leader, he moved to propel “progressive California values in important policy efforts like immigration, women’s rights, quality education, civil rights, job creation and fighting climate change.”           

“We now stand at the front lines of a historic struggle for the very soul of America, against a president without one,” de León added. “Every day, his administration wages war on our people and our progress. He disregards our voices. Demonizes our diversity. Attacks our civil rights, our clean air, our health access and our public safety. We can lead the fight against his administration, but only if we jump into the arena together.”

The 50-year-old Democrat has long been rumored to be eyeing the seat, as he’s termed out of the state Senate next year. And while few expected him to launch a bid unless Feinstein, 84, decided to retire, calls have been intensifying for a challenge from the left, as Feinstein’s image as a moderate Democrat willing to reach across the aisle is now viewed by many progressives as falling short of the strategy needed to defeat the Trump agenda.

For example, the California senator faced fire this summer after making comments about the president that were seen as too tepid by an audience eager to hear fierce rhetoric on how to defeat Republicans in Washington.

“Look, this man is going to be president most likely for the rest of this term,” the senator said at San Francisco’s Commonwealth Club. “I just hope he has the ability to learn and to change and if he does he can be a good president. And that’s my hope.”

After the backlash, she walked back the remarks.

Feinstein’s perceived strengths – bipartisanship, civility and Washington experience – are now seen as weaknesses in a state that has positioned itself at the center of the so-called “resistance” against President Trump.

The contrast between the two is striking. De León, raised by an immigrant mother in Los Angeles is looking to climb the political ladder. He’s the first Latino to be Senate president pro tem in over a century and has embraced the role of being against all things Trump.

“Do I support impeaching Donald Trump? Well. Let me see. The answer is yes,” he told The New York Times.

Meanwhile, Feinstein is a fixture of the establishment with her roots in the Bay Area. She’s also one of the wealthiest members of Congress, and has found herself aligned with the GOP on issues like national security and privacy.

“On the big issues of our time, she’s been on the wrong side of history,” said progressive Rep. Ro Khanna ,D-Fremont, last week on SiriusXM’s “The Dean Obeidallah Show,” referencing Feinstein’s image as a “war hawk” for her vote for the Iraq war and support for the Patriot Act.

“We’re taking on the establishment, there is no doubt,” de León said. “But I’ve taken on the establishment all my life. … Now is the time for change and I look forward to having this debate of ideas, of vision for the state.”

While the announcement is grabbing early headlines, de León faces an uphill fight. Feinstein has the backing of the Democratic Senatorial Campaign Committee, major party leaders like U.S. Sen. Kamala Harris, D-Calif., and enjoys almost universal name recognition. Furthermore, she has a robust fundraising apparatus, enjoying a strong donor base across the state – something that de León lacks.

Bill Carrick, an adviser to Feinstein, had harsh words for the challenger, describing his campaign to the Los Angeles Times as “wasting money and energy on what will turn out to be a rather difficult campaign for Sen. de León. … He’s a termed-out politician looking for a gig.”

Meanwhile, the race is also bringing more focus onto the state’s jungle primary system, with it being possible that de León and Feinstein face off in the primary and the general, leaving out a Republican voice in the overwhelmingly liberal state.

“This challenge makes the point of why the top two primary is bad for California,” conservative author and commentator James Lacy told CalWatchDog. “De Leon and Feinstein are likely to face off against each other twice, once in June and again in Nov., and in the meantime a reasonable Republican viewpoint will be lost in the noise.”

But still, Republicans are welcoming the intra-party conflict, seeing the race as one that can push the party even further to the left and divert resources away from congressional races in the state.

“Senator Feinstein’s rough start to her re-election campaign is every indication of what California Democrats can expect in 2018,” RNC spokesperson Christiana Purves said in a statement. “Democrats across the state should be prepared to embrace the calls of far-left progressives who support a failed single-payer healthcare system and a $52 billion gas tax increase, or brace themselves for well-funded primary challengers,”

The primary fight comes at a time of soul-searching for Democrats nationally. Reflecting on the failures of 2016, many left-wing activists see a need to push back against the old guard, in hopes that a new crop of talent could re-energize the base and lead to more victories in 2018 and 2020.

“We won’t defeat Trump and his Republican Party with corporate Democrats pushing Republican-lite policies and weak leadership,” argued Charles Chamberlain, executive director of Democracy for America. “We win when candidates offer a progressive vision for America and fight to make it happen.”

As expected, NFL owners meeting at a Phoenix resort have given their blessing to Raiders owner Mark Davis’ plan to move the team from Oakland to Las Vegas on a 31-1 vote.

The Monday decision came after NFL Commissioner Roger Goodell rejected Oakland Mayor Libby Schaaf’s last-minute appeal to delay the relocation vote and consider a new stadium proposal unveiled last week. The plan called for building a $1.3 billion football stadium on a 55-acre parcel south of the Oakland Coliseum, where the Raiders now play – a proposal that Schaaf described as a “fully financed, shovel-ready project.” It was structured around a $600 million commitment from the Fortress Investment Group, a New York hedge fund.

But in a lengthy letter released by the NFL, Goodell made clear the league didn’t buy the idea the proposal was either fully financed or shovel-ready. It stated that none of the various proposals offered by the city and its potential development partners at any point had ever come close to meeting the league’s basic requirements to retain the Raiders.

“We have been prepared for nearly two years to work on finding a solution based on access to land at a certain cost, without constraints on the location of the stadium or timing of construction, and clarity on overall development,” Goodell wrote. “However, at this date, there remains no certainty regarding how the site will be fully developed.”

The Nevada Legislature’s October decision to commit to providing $750 million in public dollars to a new Raiders stadium proved decisive, as many NFL insiders had predicted.

Raiders will keep playing in Oakland for at least two years

The pain of losing a team with one of pro sports’ most fanatical fan bases will be particularly acute for Oakland. That’s because unlike the last two NFL team relocations – the San Diego Chargers in January to Los Angeles and the St. Louis Rams a year ago to Los Angeles – Oakland will continue to be the Raiders’ base for two or even three more seasons as a $1.9 billion, 65,000-seat stadium complex is built in Las Vegas. The 35,500-seat Sam Boyd Stadium in Las Vegas used by UNLV’s college football team is not up to NFL standards.

This extended goodbye doesn’t sit well with some in the Bay Area. “Mark Davis didn’t deserve the fans he had. Get out of here, right now,” one columnist wrote Monday afternoon.

In a Phoenix news conference, Davis acknowledged fans’ pain and said he would “use the coming days [to] try to explain to them what went into making this difficult decision.”

Now Schaaf and other Oakland leaders will need to make big decisions about whether to pursue another NFL team – similar to decisions still to be made in San Diego, where a Major League Soccer team has its eyes on the Qualcomm Stadium site.

But Goodell’s letter – while polite – offered clear hints about the chilly reception Oakland might get if it seeks another team without having fully established and vetted funding to pay for most or nearly all of a stadium project. Goodell noted Schaaf’s acknowledgment that substantial direct taxpayer funding is very unlikely.

Oakland’s hope for future NFL team: Benevolent billionaire

Unless one (or more) deep-pockets billionaires emerge who is willing to mostly or entirely fund a new stadium – like Rams owner Stan Kroenke is doing in Inglewood – this creates a bad dynamic for Oakland. The city will never be considered a serious contender to get a relocated team without a stadium in place. But building a stadium without first getting an NFL commitment is a billion-dollar-plus gamble.

The NFL owners’ decision adds to what has been a rough year for Oakland. The Raiders’ delayed exit adds to the angst stemming from the Ghost Fire blaze that killed 36 people in January and the pending departure of the Golden State Warriors from the Oracle arena in Oakland for new digs by the ocean across the bay in San Francisco.

Enough blame for everyone with Oakland housing crisis

Good morning! The governor gives his State of the State address today and it’s a pretty good bet he’ll discuss housing and the shortage of affordable options.  

From the Mexican border to the Bay Area, local governments along the California coast fret about short-term rental operations such as Airbnb eating up already limited housing stock.

In response, homeowners who use such rentals to deal with the high cost of living fire back with claims that they’re being scapegoated for local officials’ ineffective response to the Golden State’s affordable housing crisis.

In Oakland, these arguments keep growing more intense as tech workers keep moving in. Uber’s plan to build a new headquarters in the city by 2018 only adds to city leaders’ concerns about housing costs.

But recent reports and surveys leave little doubt that in Oakland, both short-term renters and local officials bear responsibility for severe housing headaches.

CalWatchdog has more.

In other news:

• Agriculture: “Agriculture leaders expressed disappointment over President Donald Trump’s decision Monday to pull out of a 12-country trade deal that would have boosted exports from San Joaquin Valley farmers,” reports The Fresno Bee. 

• Regulation: “Under legislation passed in 2011, environmental lawsuits against mega-projects would face significant restrictions, forcing any litigation to take no longer than nine months. Instead, the Warriors’ case lasted nearly a year. Overhauling the environmental law, the California Environmental Quality Act, is a perennial issue at the Capitol, and the measure benefiting the Warriors arena was one of the most high-profile CEQA reforms in recent years. But the failure of the 2011 legislation to meet its stated goals reveals the difficulty lawmakers have had in making meaningful changes to the law.” The Los Angeles Times has more. 

• Politics: “Orange County could hold the key to Republican success nationwide with the fastest growing slice of the electorate, Asian American voters.” The Orange County Register has more.

• Poverty: California has the highest real poverty rate in the country, reports PolitiFact California.

Legislature:

• At the State of the State festivities.

Gov. Brown:

• Swearing in ceremony for state attorney general and State of the State address at 10 a.m. in the Capital.

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @SD_TaxFighters

But it seems safe to say the rail authority didn’t expect implacable, unyielding opposition from this group: Wealthy equestrians. For months, they have targeted plans to put the tracks for high-speed rail in parts of the San Fernando Valley that are beloved by horse owners and riders.

Attempts to reassure the equestrians that the effects would be minimal blew up in the rail authority’s face in March. The authority touted a study from the San Jose State-based Mineta Transportation Institute that said the bullet train would have little effect on horses and riding along the Tujunga Wash and other communities in the Santa Clarita-Sunland area.

Leaders of the equestrian communities in the north San Fernando Valley —  home to an estimated 10,000 horses — dismissed the report as untrustworthy because rail authority Chief Executive Jeff Morales and former bullet-train board member Rod Diridon serve on the institute’s board.

Bullet-train board chairman Dan Richard further undermined confidence in rail authority claims at a March public meeting when he noted that in Europe, cows have become used to the noise of passing bullet trains. The comparison of cows to horses — considered an unusually high-strung animal — prompted laughter and disbelief.

‘Environmental justice’ move not paying off

The bullet-train route was changed in ways that outraged equestrians in response to criticism that previously planned routes would bisect working-class, largely Latino communities in more populated parts of the San Fernando Valley. Richard likened this decision to “environmental justice” at the March public meeting. But the route change hasn’t won much praise from opponents of the previous alignment, who still see the bullet train as more trouble than it is worth.

Now rail authority officials find themselves caught in an unexpected crossfire from both wealthy and working-class critics in the San Fernando Valley. A recent Los Angeles Times story treated the rich equestrians’ grievances with the same sympathy that previous coverage had shown for protesters from Pacoima and Sylmar:

Dale Gibson grimly shook his head, his white cowboy hat blocking out the bright afternoon sun.

“How about this mess,” he said, walking through his Sunland ranch in the shadow of the San Gabriel Mountains.

Gibson, a rodeo cowboy and stuntman who has performed in more than five dozen films, was pondering the prospect of 220-mph bullet trains rocketing about 100 feet from his competition arena along the Big Tujunga Wash. He boards about 100 horses on 5 acres and, on many days, is out teaching children and actors the finer points of riding.

“It would be like trying to ride your horse down the runway at LAX,” Gibson said. “We will be done.”

Study seeing minimal effect widely ridiculed

Meanwhile, the Mineta Institute study’s findings continue to draw mockery from equestrians who see it as confirmation that they’re not being taken seriously. The study stated that compared to humans, “horses are somewhat deaf.”

The assertion outrages Gibson who, to prove his point, made a kissing sound to a horse about 50 feet away. The animal raised its head. “Does he look deaf to you?” asked Gibson, who serves on the Los Angeles Equine Advisory Committee.

“Deaf?” he said. “I don’t think so.”

That’s also from the recent Times account.

The only conceivable way to placate both the equestrian community and residents of San Fernando, Sylmar, Pacoima and neighboring towns is to build a 20- to 24-mile segment of the bullet train underground. But given that studies suggest it costs nine times as much to build underground tracks as above-ground tracks, that could balloon the cost of the estimated $64 billion project by at least $20 billion.

The state government presently doesn’t have enough money to complete the project’s initial $21 billion segment in the Central Valley. The prospect it may have to spend far more than expected to bring the bullet train to the Los Angeles region could make it even more difficult to attract the private investors that the rail authority has been hunting for without success since 2008.

So everything is looking positive for the Warriors coming back to San Francisco? Not exactly. Critics have assembled a multimillion-dollar legal fund to fight the project at every turn, and a classic NIMBY battle between well-funded interests looms.

The main opponent “came out of nowhere” in April. The San Francisco Business Times had details:

A group of University of California, San Francisco, donors is threatening to sue or push a ballot measure against the Warriors’ potential Mission Bay arena over parking and traffic concerns. …

 

The group, a nonprofit called the Mission Bay Alliance, worries that arena traffic will bottle up to ensnarl ambulances headed to nearby UCSF Medical Center and threaten the neighborhood’s ability to grow as a biotechnology hub. Its proximity to AT&T Park and possible overlapping game days will exacerbate that, the group says.

 

Sam Singer, who is representing the alliance’s public relations efforts, [said], “The alliance wants to see the (arena) and office towers halted completely. If that doesn’t happen through the EIR and public participation process, the alliance will consider a lawsuit and going to the ballot to stop the stadium.”

Poll suggests public not sold on arena

On the eve of the supervisors’ vote, the Mission Bay Alliance released a poll of 540 voters that showed much less support than the Warriors have asserted. This is from a statement on the alliance’s website:

Based on what they know today about the proposed arena plan in Mission Bay, fewer than half of voters say they support it:

 

Support – 49 percent

 

Oppose – 42 percent

 

Don’t know – 10 percent  …

 

Once voters became aware of the facts surrounding the proposed arena and the expected regional impacts, including traffic gridlock, the lack of parking and clogged emergency access for adjacent UCSF hospitals, support for the arena plummeted even more:

 

Support – 38 percent

 

Oppose – 59 percent

 

Don’t know – 3 percent

 

Parking and traffic ranked as the two most problematic impacts, with 65 percent of voters concerned about traffic gridlock and 67 percent about a lack of parking in and around the arena. … [The project] does little to alleviate the burden the arena will put on regional transit like BART and CalTrain.

Being a popular champion helps sway debate

But the Warriors and the city leaders who back them up on the planned move could benefit tremendously from timing. San Diego voters agreed to help pay for PETCO Park for the Padres in the city’s downtown area in November 1998 — a month after the team won a rare National League title and advanced to the World Series.

The contrast is sharp with present-day San Diego and seemingly broad opposition to having local governments help the Chargers pay for a new NFL stadium. Other factors certainly come into play. San Diego’s reputation as “Enron by the Bay” has faded, but the city’s years of financial struggles have left scars. The city is debating a huge infrastructure program, prompting questions about why $200 million that might go to fix pocked roads and add fire stations would instead help a billionaire build a stadium. But it hasn’t helped the let’s-hold-our-noses-and-accept subsidies crowd that the Chargers have been hugely disappointing since their 14-2 season in 2007, rarely living up to expectations.

The Warriors, by contrast, sharply exceeded expectations in 2014-15, when they won their first NBA championship in 40 years. This season, meanwhile, they got off to the fastest start of any team in NBA history. That could be an ace in the hole for team owners Joe Lacob and Peter Guber.

The bonds use money paid to lease the facilities they build to pay off construction and financing costs. The Chargers would presumably be expected to be the main payer of lease fees to the city-county consortium that Mayor Kevin Faulconer and county Supervisor Ron Roberts hope will build the new stadium and keep the team from heading to a stadium proposed for Carson in southwest Los Angeles County.

But the Fourth District Court of Appeal has ruled that using such bonds for a stadium is legal under state law — a ruling the city quickly relayed to the NFL and to other team owners who have been skeptical San Diego has the wherewithal to build a modern football stadium. The ruling upheld the state trial-court’s decision from a year ago.

The Union-Tribune noted that the ruling …

… may alleviate one of several concerns league officials raised in a Nov. 10 letter to the city’s lead stadium negotiator.

 

City negotiators have been working directly with the NFL since June, when the Chargers terminated stadium talks as the NFL considers whether the Chargers, St. Louis Rams or Oakland Raiders can move to Los Angeles next year. ….

 

City officials say they are drafting a response letter to the NFL that will include an explanation of last week’s appellate ruling, which City Attorney Jan Goldsmith called a significant victory.

 

“Whether you like them or not, lease-revenue bonds are a legal way to pay for public infrastructure projects,” Goldsmith said.

 

Critics say lease-revenue bonds, where city buildings and other assets are used as collateral to borrow money, violate the spirit of state law by skirting the two-thirds voter approval that would typically be required to raise such money.

Mayor has repeatedly promised stadium vote

But just because San Diego can issue the bonds with a public vote doesn’t mean city officials are likely to do so.

The Chargers’ popularity in San Diego is at low ebb as another disappointing season plays out. It has become common for fans of visiting teams from across the nation to out-cheer Charger loyalists at Qualcomm Stadium. Meanwhile, Fabiani, a former Clinton White House aide, has emerged as a lightning rod for fan anger over his repeated caustic attacks on Faulconer and other officials who have lobbied the NFL against allowing a money-making team with a loyal fan base to leave for more riches elsewhere.

When Faulconer seeks re-election next year, his handling of stadium negotiations — and his support for using public funds — will be a big issue. The Republican is likely to face a Democrat who is strongly opposed to public funding. He’s also repeatedly said San Diegans “deserve a vote” on a new stadium.

A possible scenario being discussed on sports talk radio was for Faulconer to seek voter blessing of the lease-revenue bonds in a special election with lower turnout. The theory is that using lease-revenue bonds to fund the city’s share of a $1 billion-plus stadium project would be much easier to sell to voters than raising sales taxes, rental-car taxes or hotel taxes, such as other communities have done to help pay for new arenas and stadiums.

Republicans have resisted Democrats’ preferred approach, but California’s business lobby has pressed both parties to embrace new taxes and fees. “Last week, business organizations such as the California Chamber of Commerce and the Silicon Valley Leadership Group said any deal should seek to raise at least $6 billion annually by raising gas and diesel taxes and increasing vehicle registration and license fees,” the San Jose Mercury News reported.

Part of the rationale for increasing fees, instead of simply dialing up gas taxes, has centered around the growing popularity of hybrid and electric vehicles in California — and the state’s interest in squeezing revenue out of every car on the road. “We have these Teslas that are being sold and they don’t pay any gas tax,” complained state Sen. Jim Beall, D-San Jose, as CBS Sacramento noted.

Gas in California has remained higher on average than out-of-state, thanks to cap-and-trade fees and the state’s unique environmental rules about the blends of gasoline that must be sold. Current state taxes include an excise tax of 39 cents, between 30 and 42 cents in sales tax, and 10 cents for the cap-and-trade levy, as Watchdog Arena observed.

Brown stays secretive

At a recent news conference that left some observers hungry for detail scratching their heads, Brown refused to hint at a revenue source for the improvements. “I’m not going to say where the revenue’s going to come from, how we’re going to get it,” he said. “We’ll get it done, but I’m not going to put all my cards on the table this morning,” Brown said, according to ABC 7 News.

Brown was joined at the appearance by Assembly Speaker Toni Atkins, D-San Diego, who signaled separately that negotiations would be tough. “It will be a bumpy road, but our constituents expect us to work together and figure something out,” she told the San Francisco Chronicle.

To date, the governor has not let slip whether he would support or oppose a tax hike to make up the difference.

Assembly Bill 2, authored by Assemblyman Luis Alejo, D-Salinas, would give local governments the power to create new entities that would have the same legal authority as redevelopment agencies. These new Community Revitalization Investment Authorities would have the power to issue bonds, award sweetheart deals to businesses and “acquire and transfer property subject to eminent domain,” according to the legislative analysis of the bill.

Property rights advocates warn that the bill’s language contains no restrictions on eminent domain and could resurrect the abuses made possible by the Supreme Court’s controversial Kelo decision.

“It brings back the right of governments to exercise eminent domain against some private parties in order to resell their property to other private parties,” cautioned Howard Ahmanson, Jr., a property rights advocate and founder of Fieldstead and Company. “Only new and wealthy suburbs would be potentially spared from ‘redevelopment,’ the lower middle class and poor would not.”

12 Assembly Republicans back redevelopment, unrestricted eminent domain

In 2005, the U.S. Supreme Court ruled in Kelo v. New London that government agencies have the power to seize property for economic development. The decision was widely criticized across the political spectrum and inspired states to pass tougher laws limiting governments’ eminent domain powers. Here in California, the momentum for property rights reached its zenith in 2011, when Gov. Jerry Brown pushed through a plan to end redevelopment as part of his plan to balance the state budget.

Now a decade since Kelo, the horror stories of small businesses being seized to make way for strip malls and condo complexes have faded from public memory. During the state Assembly’s floor debate on the bill, not a single member – Republican or Democrat – spoke in opposition to the bill, which passed by a 63-13 vote.

Surprisingly, a dozen Assembly Republican lawmakers, including Assembly GOP leader Kristin Olsen, joined the Democratic majority in backing the bill. Olsen’s office refused to comment on the bill or explain how the bill fit with the Republican Caucus’ position on property rights. One GOP lawmaker defended her vote by arguing that redevelopment agencies are an important tool for economic development.

“I ran for Assembly to help create jobs,” said Assemblywoman Young Kim, R-Fullerton. “RDAs give us another tool to do just that while turning around poor and disadvantaged areas.”

Redevelopment focused in areas with high unemployment, crime

Under the bill, a Community Revitalization Investment Authority could be created by a city, county or special district if certain conditions are met. The first requirement is that the area have an annual median household income that is less than 80 percent of the statewide median. Additionally, three of the following four conditions must be met:

• Unemployment that is at least 3 percent higher than the statewide median unemployment rate;
• A crime rate that is 5 percet higher than the statewide median crime rate;
• Deteriorated or inadequate infrastructure such as streets, sidewalks, water supply, sewer treatment or processing, and parks;
• Deteriorated commercial or residential structures.

“It’s redevelopment with a kinder, gentler twist,” explains Steven Greenhut, the state’s foremost expert on eminent domain and author of the book, Abuse of Power: How the Government Misuses Eminent Domain. “If AB2 passes, agencies will take property by eminent domain and use public dollars to fund private projects. Localities will run up debt without a vote of the public. As always, the plans of residents will give way to the edicts of the planners.”

There’s overwhelming evidence that redevelopment agencies harm small businesses, while failing in their mission to stimulate economies. That’s most evident in the landmark Kelo case, where a Connecticut town offered a corporate welfare package to the pharmaceutical giant Pfizer, Inc.

“While Ms. Kelo and her neighbors lost their homes, the city and the state spent some $78 million to bulldoze private property for high-end condos and other ‘desirable’ elements,” the Wall Street Journal observed in 2009. “Instead, the wrecked and condemned neighborhood still stands vacant, without any of the touted tax benefits or job creation.”

Those abuses extended to California’s application of redevelopment, property rights advocates say.

“California has rightly earned the reputation as one of the nation’s largest abusers of eminent domain, given that Redevelopment Agencies routinely abused their power of eminent domain to seize homes, small businesses and places of worship for private development,” wrote the California Alliance to Protect Private Property Rights, the state’s leading property rights group. “Time and time again, these obscure agencies diverted taxpayer dollars from core government programs to finance professional sports arenas, luxury hotels, golf courses and strip malls.”

Alejo: Bill needed to help disadvantaged communities

Nevertheless, supporters of AB2 say that blighted areas are a problem that demand government action.

“There are many areas in the state where the streets are broken and old water and sewer pipes lurk below,” Alejo said of his legislation. “In these areas, businesses do not open up shop. This leads to high unemployment, high crime rates and a hopeless community. This bill will work to tackle issues facing our state’s most disadvantaged communities.”

Several GOP lawmakers that opposed the bill dispute Alejo’s arguments.

“Private property rights are a foundational principle declared by our founding fathers,” said Asm. Scott Wilk, R-Santa Clarita, who opposed the bill. “Eminent domain is used by the government to trample on private property rights and as an individual property owner, there are legal protections in place to prevent government encroachment.”

Assemblywoman Melissa Melendez, R-Lake Elsinore, one of only 13 members to oppose the bill, said that she understands her colleagues interest in redevelopment, but can’t back legislation that undermines property rights.

“Stripping away property rights in the name of economic development isn’t the answer,” said Melendez, a former member of the Lake Elsinore City Council. “I think it has become more fashionable to allow the government to take over instead of allowing the free market to do so.”