Time to work toward 100 percent renewables?

Good morning! TGIF. It’s inauguration Day. So, in honor of the festivities, whether you’re watching in adoration of the incoming president, in morbid curiosity, or just plain ol’ hate watching, we’ll keep it short this morning.  

• Environment: “It’s time to talk 100% renewable energy, California Senate leader says,” writes the Los Angeles Times. 

• NFL: “The Oakland Raiders have made good on a threat that loomed over hometown fans for months, filing paperwork Thursday to move the National Football League team to Las Vegas.” SF Gate has more. 

• Trump: “Scientists in California have named a newly discovered moth species after President-elect Donald Trump, saying the white and yellow scales on the insect’s head are reminiscent of Trump’s blond hairdo.” Capital Public Radio/AP have more. 

• Pensions: “San Diego county and city pension funds have nearly $7 billion less in the bank than they need to cover benefits already earned by current and former employees, a deficit that’s risen 90 percent in just two years, new reports show.” Voice of San Diego has more.

• Obamacare politics: “Democratic legislators took their pro-Obamacare message on the road Thursday, convening a hearing in Bakersfield to examine the repercussions of repealing the Affordable Care Act. The state Senate health committee pointedly held its hearing in the Central Valley — far afield form the state Capitol and the home districts of most members in attendance, but the home turf of key Republican members of California’s congressional delegation including House GOP leader Kevin McCarthy.” The Los Angeles Times has more. 

Legislature:

• Gone till Monday. 

Gov. Brown:

• No public events announced. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @JonathanArambel

After SF rail system hack, concerns remain

Good morning! Lots going on today. Gov. Brown will introduce his budget this morning, while his nominee for attorney general, Rep. Xavier Becerra, D-Los Angeles, receives his first hearing.

But beyond the day’s headlines, six weeks after some 900 computers used by the San Francisco Municipal Railroad were hacked with ransomware, many concerns remain about the incident — especially as coverage of U.S. cyber vulnerabilities has become more extensive than ever.

San Francisco’s light-rail system, known as Muni, faced an emailed demand from an unknown hacker that he be paid about $73,000 in bitcoins if it wanted to regain control of the computers.

Apparently in fear that more computers had been hacked than the ones displaying a message, “You Hacked, ALL Data Encrypted,” the transit agency shut off ticket machines and fare gates at rail stations from the morning of Friday, Nov. 25, through Sunday, Nov. 27, allowing passengers free rides that weekend.

The following Monday, Muni officials announced that not only had they not paid the ransom, they never even considered paying it, confident in their tech prowess. Many targeted companies and organizations feel they have no choice. Last April, the Hollywood Presbyterian Medical Center in Los Angeles paid nearly $17,000 in bitcoins to recover access to data that had been encrypted by hackers.

Federal and state security officials have kept mum about the attack since it happened.

CalWatchdog has more.

In other news:

• “The powerful storms that soaked Northern California over the past week did more than trigger power outages, mudslides and flash floods. They sent roughly 350 billion gallons of water pouring into California’s biggest reservoirs — boosting their storage to levels not seen in years, forcing dam operators to release water to reduce flood risks and all but ending the five-year drought across much of Northern California, even though it remains in the south, experts said Monday.” The San Jose Mercury News has more. 

• “The fate of two of California’s four NFL teams should become much clearer this week. The Chargers have to decide by Sunday, Jan. 15, whether to exercise their option to share a $1.7 billion stadium being built in Inglewood by the Rams or to stay in San Diego despite voters’ sharp rejection of a Nov. 8 ballot measure to use an increase in the hotel room tax to contribute hundreds of millions of public dollars to build a billion-dollar-plus stadium in the city’s lively downtown.” CalWatchdog has more. 

• “President-elect Donald Trump’s plan to build a wall along the border will run into resistance in California, Lt. Gov. Gavin Newsom said in an interview with The Golden State podcast. The state could sue under the California Environmental Quality Act or its federal equivalent, said Newsom, utilizing a common tactic to delay or kill all sorts of development projects around the state.” The Los Angeles Times has more. 

• “Backers of a recent tobacco tax initiative ballot have agreed to pay a $2,500 fine for failing to identify that billionaire Tom Steyer was a major funder of the campaign in a YouTube video that urged voters to support the measure, according to documents released Monday.” The Los Angeles Times has more. 

Legislature:

• Assembly will hold 9 a.m. hearing on the appointment of Rep. Xavier Becerra to state attorney general.

Gov. Brown:

• Unveiling the proposed state budget today at 11 a.m. in Sacramento. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @RareCat

The St. Louis Rams may have once again become the Los Angeles Rams, capping off the biggest suspense story in the National Football League, but the controversy over the city’s final lineup of teams has flared up yet again.

Chargers ’16

In San Diego, where the Chargers have gone down to the wire with city officials on a possible move that once looked like a done deal, the next twist depends on voters. Although analysts and fans have cautioned that one NFL team may be plenty for Los Angeles, especially so soon on the heels of the Rams’ return, the stadium deal holding the Chargers’ future in the balance has failed to rally popular support. According to a YouGov poll conducted late last month, only “a quarter of San Diego adults strongly or somewhat support the proposal for a new, taxpayer-funded $1.8 billion stadium and convention center downtown,” as USA Today recalled. “The poll showed more than half — 52 percent — strongly or somewhat opposed the measure, with the other 23 percent not stating a preference.” 

“To win the vote, the team needs two-thirds of voters to approve the project because it’s a tax hike for a special purpose in California. If the vote fails, the Chargers have until Jan. 15 to decide whether to move to Los Angeles, where they have an optional deal to share a lucrative new stadium with the Los Angeles Rams.”

If the push to use the ballot to keep the Chargers in San Diego has been a slog, however, city officials’ backup plan has emerged as a potentially dramatic Hail Mary pass — to the judiciary. City Attorney Jan Goldsmith told radio host Darren Smith “he would ask the state’s high court to ‘take jurisdiction’ over the city’s November election as it pertains to two stadium-related ballot initiatives: the Chargers plan to raise the city’s hotel tax to build a stadium and convention center, and the Citizens’ Plan, which would increase the tax to help pay for tourism marketing and an off-the-waterfront convention center,” according to U-T San Diego. Although “no public money could go toward stadium construction,” the city’s inquiry “could come as early as next week, if county officials examining signatures declare that either or both initiatives have qualified for the ballot,” the paper added. 

Vegas or bust?

Oakland’s Raiders, the other California team caught up in the L.A. relocation game, have struggled to strike a deal with their own home town. According to NBC Sports, League Commissioner Roger Goodell appeared to discourage another move to L.A., suggesting “you never want to see a community lose their franchise once, much less twice,” making reference to the Raiders’ ping-ponging over the decades between L.A. and Oakland. “I think there’s a solution there, but it takes the community to help identify it,” he said. In the wake of the Rams deal, and unable to count on the Chargers to come through on the stadium-sharing deal that had briefly given the duo a bettor’s edge against the Rams, the Raiders have shifted their attentions from L.A. to Las Vegas.

“Of course, the NFL has allowed communities to lose franchises twice: St. Louis lost both the Cardinals and the Rams,” NBC Sports noted. “So it wouldn’t be unprecedented for the Raiders to vacate Oakland twice. But Goodell said the recent authorization of a new stadium in Las Vegas isn’t enough to bring the Raiders to town.”

Nevertheless, Las Vegas has thrown its considerable weight behind serious plans to lure the team in. The Southern Nevada Tourism Infrastructure Committee recently cast a unanimous vote “to recommend $750 million in public funding for a $1.9 billion stadium,” ESPN reported, drawn from hotel taxes. That sum would be added to $500 million from owner Mark Davis, “which includes a loan from the NFL for a new stadium, to the project,” the network added. “The family of Sheldon Adelson — chairman of casino and resort outfit Las Vegas Sands Corporation — has pledged another $650 million for the proposed 65,000-seat, domed venue, which would be shared with the UNLV football team.”

“It is time that big beverage companies dip into their millions of dollars of profits and help pay for the damage their products cause,” Mary Pittman, president of the Oakland-based Public Health Institute, told KQED. The $6 million to $12 million the tax would generate annually would be divvied up by an advisory panel for worthwhile public health programs, the PBS affiliate noted.

But there is no hard requirement on what the money be used for. As the San Jose Mercury-News reported, those tax dollars would go into the city of Oakland’s general fund — a detail that wasn’t included in some of the stories about the soda tax.

This infusion would come as Oakland continues to deal with decades of budget headaches. The Silicon Valley economic boom has had far fewer benefits for Oakland’s treasury than those seen in many neighboring cities and suburban communities.

The two-year, $2.4 billion budget approved by the Oakland City Council in June 2015 included money for 40 new police officers and pay “restoration” increases for some municipal employees. But pleas were rejected for extra funding to address and reduce child prostitution; improve programs for refugees; remedy quality-of-life issues; allow for longer hours at libraries and animal shelters; and more.

‘Financial time bomb’ hanging over city

On long-term pension liabilities, Oakland has a huge hole to dig out of because of its pioneering role in borrowing money — so-called pension obligation bonds — to cover pension payments in the presumption that investing the borrowed money would generate such high returns that they could both pay off the borrowing and pay for annual city pension contributions.

As it has periodically since 1985, in 2012, Oakland issued pension bonds — $212 million worth — so it wouldn’t have to make contributions again until fiscal 2016-17. The last budget includes new funding for pension obligations, but the overall problem remains a “financial time bomb,” as the San Francisco Chronicle described it in 2012. The city has continued to use these bonds even though the the investments they were used for haven’t come close to providing the hoped-for returns.

Oakland’s dire fiscal straits also explains city leaders’ disinterest in providing any help to the Oakland Raiders to prevent the storied NFL franchise from moving to Los Angeles, Las Vegas or San Antonio in coming years. As CalWatchdog reported last year, NFL officials were dismayed at Oakland’s unwillingness to provide the sort of help that San Diego was considering to keep the Chargers in town.

When it comes to help from the city, “there is no there, there,” ESPN’s John Clayton wrote in August.

CA has long history of tax bait-and-switch

Perhaps if Oakland voters approved the soda tax in November, the $6 million to $12 million it generated annually would be used for the exact sort of public health programs that advocates. But California has a long history of taxes and fees being pitched for one intended use and being used for another.

In 2011, Gov. Jerry Brown was successful in his push to shut down city redevelopment programs that diverted billions of dollars in local property taxes. Instead of being used to reduce blight, fund economic development and pay for affordable housing, then-Controller John Chiang found the funds were routinely used around the state to pay salaries of city officials, police officers and other government employees not in traditional agencies, as well as to pay for general administrative costs, a day-care center and more.

In 1998, California voters adopted Proposition 10, which imposed a 50-cents a pack tax on cigarettes. The proceeds were supposed to go strictly to early childhood education programs known collectively as “First 5.” But there has been little oversight and years of critical headlines about money being spent on projects having little to do with early childhood education.

In 2006, it was revealed that First 5 chairman Rob Reiner, the Hollywood director/producer, had used $18 million in taxpayer funds on a “preschool for all” TV ad campaign at the same time that he had launched a signature-gathering effort for a “preschool for all” initiative. Reiner and others faced allegations of misuse of public funds, but charges were never filed.

But in Oakland, the Mercury-News reports the list of prominent supporters for the Oakland soda tax is long and growing. So far, the list includes “state Sen. Loni Hancock, state Assembly members Rob Bonta and Tony Thurmond, Alameda County supervisors Wilma Chan and Keith Carson, Oakland Mayor Libby Schaaf, Oakland school Superintendent Antwan Wilson and City Council members Lynette Gibson McElhaney and Desley Brooks.”

The Spanos family, owner of the Chargers, has until January 2017 to decide whether to serve as a tenant in a to-be-built mega-stadium in Inglewood owned by Stan Kroenke and the officially relocated Los Angeles Rams. If the Chargers don’t take the option, Raiders owner Mark Davis will then have a one-year option to join the Rams in Inglewood.

In the days after the Jan. 12 announcement that the NFL had given its blessing to the Rams leaving St. Louis for Inglewood, there was considerable cynicism in San Diego and the sports world in general about the Chargers’ one-year option. The assumption was the team was gone.

But in the past 10 days, there have been glimmers of hope that the Chargers may yet be able to work with the city and county of San Diego to build an NFL-worthy stadium with $350 million of public subsidies. The main reason is the emergence of Fred Maas — a high-profile developer and former leader of the Centre City Development Corp., which oversaw highly successful redevelopment efforts in downtown San Diego — as a special advisor to the Chargers helping get a stadium built. The Union-Tribune has more:

“(Maas) has been around San Diego a long time,” Chargers chairman Dean Spanos said on a video posted to the team’s web site. “… He’s very familiar with all the political aspects of what goes on in the city, how all that works. His knowledge of San Diego as a whole will help us.” …

 

Maas was the stadium point man for former Mayor Jerry Sanders, as well as the former director of the Centre City Development Corp.

 

The Chargers suggested to Faulconer that he consider Maas to head the city’s side of stadium negotiations in 2014.

 

After meetings with Faulconer, Maas withdrew from consideration, citing concerns about the commitment he would have to make considering all that the new mayor was working through. … It was around that time in late 2014 that many people close to Spanos began to indicate he had essentially given up on getting a stadium deal in San Diego.

The San Diego Reader offered this tart description of Maas: “a specialist in steering public money into private real estate ventures.”

Raiders owner blasts A’s over long lease

Meanwhile, in Oakland, no Maas-type figure has emerged to help owner Mark Davis deal with local governments. While the Raiders renewed their lease for another year at O.co Coliseum, Davis is sounding increasingly downbeat about the lack of progress toward a new stadium — especially because of the actions of the Oakland A’s, the other primary tenant at the Coliseum.

“There’s an elephant in the room, and that’s the Oakland A’s,” Davis told CSNBayArea.com … . “They signed a 10-year lease while we were negotiating with Oakland officials, and it kind of put somebody right in the middle of things. There isn’t much you can do. They’ve tied our hands behind our back. Now it’s up to the A’s to make a declaration of what they want to do. If they don’t do that, I don’t see how we can make a deal.”

That’s from coverage in the Las Vegas Review-Journal. Leaders of Nevada’s largest city are wooing Davis. Their strongest argument is the prospect of the Raiders not having to pay much or anything toward construction of a new stadium that an NFL team could share with the University of Nevada-Las Vegas’ football team. Last month, the Review-Journal reported, Davis went to Vegas and …

… met with casino giants Sheldon Adelson and Steve Wynn, Ultimate Fighting Championship owner Lorenzo Fertitta, UNLV president Len Jessup and former school president Donald Snyder. Adelson’s Sands Corp. has proposed building a $1.2 billion domed stadium … .

Long-standing NFL concerns about having a team in America’s sports betting mecca remain intact, if not as prominent. Dallas Cowboys owner Jerry Jones and New England Patriots owner Robert Kraft have come under fire for their early investments in DraftKings, a daily fantasy sports betting site that has exploded in popularity since 2014, and they may be forced to sell their shares.

charamelody / flickr

The NFL’s ungainly effort to determine the fate of three potential Los Angeles teams will drag on into 2016. A mid-January meeting in Houston will give owners their next opportunity to opt for or against the competing relocation plans, which would shift the St. Louis Rams to Inglewood in the first instance and the San Diego Chargers and Oakland Raiders to a shared Carson stadium in the second. 

The slow-motion scramble for L.A. has arisen because each of the three teams wants newer and better stadium facilities, which would increase team revenues. “According to Forbes 2015 NFL franchise valuations, the median team revenue is $322 million. However, the Chargers ($304 M), Rams ($290 M) and Raiders ($285 M) rank among the league’s bottom third, with the Rams and Raiders among the worst three revenue-earners in the league,” as Patrick Rishe observed at Forbes.

St. Louis reaches

So far, neither plan has mustered adequate support, reported the Los Angeles Times, which added that the city of St. Louis has banked on a counterproposal that depends on a loan package far in excess of what the NFL has been historically willing to provide. “The plan is predicated on the league providing a $300 million loan — $100 million more than has been approved by owners,” according to the Times. “In a recent letter to the task force, NFL Commissioner Roger Goodell said the premise that $300 million will be available is ‘fundamentally inconsistent’ with the league’s program of stadium financing.”

According to Rishe, Rams owner Stan Kroenke has “indicated to the NFL’s relocation committee that he would be willing to take on an equity partner — a reluctant move made when Kroenke concluded he wouldn’t get the necessary 24 votes of support without it. 

Acrimony in San Diego

Wednesday marked the league deadline for the three teams’ current cities to submit proposals that would keep them local. San Diego’s offer, in excess of $1 billion, “outlined a previously released plan that calls for the city and county to contribute $350 million toward a new stadium, contingent on a public vote next year,” the Times reported separately. But the team itself reiterated their opposition to the deal. “The Chargers don’t believe voters will approve the plan based on polling the team conducted in August,” noted the Times. “They also believe an environmental-impact report for the potential stadium was rushed and leaves the concept vulnerable to litigation.”

That calculus was partly reinforced by remarks from League Commissioner Roger Goodell. As ABC News reported, Goodell “said earlier this month that the league wants certainty in proposals from San Diego, Oakland and St. Louis, which means no time for letting cities have voters decide the fate of stadium projects.”

Cash strapped Oakland

The huge sums flying back and forth in San Diego and St. Louis discussions have dwarfed what’s on the table for the Raiders, although the stakes for the NFL — and local fans — remained just as high. In contrast to the two cities’ schemes, “Oakland Mayor Libby Schaaf has no such lavish plan to keep the Raiders in town,” the San Francisco Chronicle reported, “but says she hasn’t given up trying to persuade the team to stay. Schaaf says Oakland needs more time to iron out a deal with the Raiders, negotiations that are made complicated by the Oakland A’s 10-year lease on the Coliseum.”

Although Schaaf’s Tuesday letter to the league offered “no plan for replacing the crumbling, 50-year-old Coliseum,” the Chronicle added, it promised “a new stadium through a lease agreement with the Raiders or from property tax revenue generated by future development around the site.” Ironically, cash-poor Oakland may prevail in its bid to keep the Raiders because the team is on a budget as well. “If the St. Louis Rams and the San Diego Chargers stay put, then Raiders owner Mark Davis could lose his chance to move to a $1.7 billion stadium in the Los Angeles suburb of Carson,” the Chronicle added. “He has planned to share the space and the financing with the Chargers.”

A series of unflattering media reports have depicted Raiders owner Mark Davis as clueless and outmatched by his responsibilities, with relatively few financial resources. Even if Davis had the best press in the world, however, he would have huge obstacles to overcome. Unlike the owners of the San Diego Chargers and the St. Louis Rams — the other teams in the L.A. triangle — he has no leverage with his home-town officials. Between their own budget headaches and a long history of scraping with Mark Davis’ late father, previous owner Al Davis, Oakland officials have no interest in offering a subsidy of any kind to the team and appear indifferent to the team departing.

Meanwhile, the Raiders’ and Chargers’ announcement earlier this year that they wanted to build a shared $1.7 billion stadium in Carson in southwest Los Angeles County is far less advanced than Rams owner Stan Kroenke’s planned $1.8 billion Inglewood stadium project. Kroenke has all has necessary environmental OKs to begin construction, and as the league’s second-wealthiest owner, the multibillionaire has no need to hunt for public subsidies or partner with other teams.

If Kroenke is willing to flout league rules and move a team without permission from three-quarters of team owners — as Al Davis did when he moved the Raiders from Oakland to Los Angeles in 1982 — he has clear sailing ahead. But if the league puts up enough obstacles to a unilateral move — say, NFL Commissioner Roger Goodell trying to withhold TV contract money or threatening some other highly punitive action — Kroenke would be forced to reconsider. As the past three years have shown, Goodell is the most unpredictable commissioner of a major U.S. sport in memory.

No team has enough owner support to relocate — yet

Pro Football Talk, generally the best connected of any media covering the NFL, looks at a possible — perhaps likely — scenario. It appears to be what Jacksonville Jaguars owner Shad Khan was talking about last week after owner meetings in New  York City when he referred to a “Plan C.”

With Chargers owner Dean Spanos definitely having the nine votes needed to keep Rams owner Stan Kroenke out of L.A. and Kroenke likely having the nine votes needed to keep Spanos out of L.A., the future of the NFL in Los Angeles could hinge on the ability of Spanos and Kroenke to work something out. …

 

Some owners actively oppose Kroenke’s desire to move the Rams, believing that Spanos has tried long enough to get a new stadium in San Diego, and that St. Louis is on the verge of crafting a viable stadium proposal to keep the Rams. But if at least nine owners feel strongly enough about Kroenke getting the L.A. market to vote against the Chargers, the situation will remain at impasse, with both teams in limbo.

 

A brokered deal would hinge, as many such arrangements do, on money and/or other considerations. With each owner able to block the other from moving, one owner needs to persuade the other owner to drop his opposition. In addition, then, to the relocation fee that would be paid to the league generally, the owner who moves to L.A. may have to make a large, separate payment to the one who doesn’t.

 

Likewise, the arrangement could include other terms. For example, if Spanos accepts that the Chargers will stay in San Diego and the Rams will move to L.A., the league could agree that only one team would be in L.A. …

 

It’s becoming more and more clear that something will happen, sooner than later.

Owners eager to set up team in L.A.

Meanwhile, the eagerness of the other owners to get a team in Los Angeles is difficult to overstate. Last week, Dallas Cowboys owner Jerry Jones, Pittsburgh Steelers owner Art Rooney Jr. and Indianapolis Colts owner Jim Irsay all told reporters in multiple interviews that it was quite possible the NFL would have a team playing in the nation’s second-largest market in 11 months.

It seems unlikely that the league would allow two teams to play in temporary quarters at the Los Angeles Memorial Coliseum or at the Rose Bowl in the same season. So NFL insiders offer this scenario as increasingly plausible: Kroenke gets the necessary support in a January vote to allow him to bring the Rams back to Los Angeles — after he makes a big enough payoff to Chargers owner Dean Spanos to drop his interest in Los Agneles.

The NFL has long liked the idea of teams sharing new stadiums, as the New York Giants and Jets do in the Meadowlands facility in northern New Jersey. So perhaps “Plan C” is for the Chargers to sign on as a secondary tenant in Kroenke’s Inglewood stadium. But that’s an awfully complex negotiation to finish by the January vote at which NFL owners want to take decisive action.

But when it comes to Oakland — home of the third team that’s been subject to years of intense speculation about a possible move — Mayor Libby Schaaf has handed negotiations with the Raiders and the NFL over a new stadium to an assistant city administrator, a low-level official more accustomed to helping neighborhoods get better trash collection or to settling disputes over zoning infractions.

Given that the Raiders have a loyal fan base, an international following and a rich history, how is it that local elected officials could be so blase about losing the team?

The most obvious reason is the city’s weak finances and how they relate to the most pressing local issue. Oakland has had persistent budget gaps and has not benefited from the tech boom remotely as much as San Francisco, Santa Clara or many smaller communities in the Bay Area and Silicon Valley.

Fighting crime the priority, not keeping Raiders

Meanwhile, crime has grown steadily in recent years, to the point where Forbes declared Oakland to be America’s third-most dangerous city. Public safety is Mayor Schaaf’s priority, as this April story about her proposed budget in the San Francisco Business Times story makes clear:

The $2.4 billion two-year budget would increase the Oakland Police Department from 722 to 762 officers in the next year and a half, with a long-term goal of 800 officers by 2018.

 

“Oakland will not grow unless people are confident it is getting safer,” Schaaf wrote in a letter earlier this month to the City Council.

That letter identified three priorities beyond public safety, but never mentioned the Raiders or the NFL and their desire for an upgrade from the battered Oakland-Alameda County Stadium.

From the national media perspective, this indifference is being interpreted as a sign the team’s departure for L.A. is inevitable. The NFL executive overseeing Los Angeles relocation issues this week said no “viable” plan had ever emerged from either the city or the team, and a league committee declined to even talk with a Bay Area real estate developer who wants to build a stadium as a centerpiece to a larger, $4.2 billion mixed-use development, believing the plan to be far-fetched.

“As for Oakland, there is no there, there. The area doesn’t have a stadium offer on the table, and time is running out,” ESPN’s John Clayton wrote on Tuesday.

But that presumes the Raiders’ and Chargers’ proposal to jointly build and then share a $1.75 billion stadium project in Carson — where they already have land and regulatory approvals —  is likely to get the league’s go-ahead.

St. Louis and San Antonio may be team’s future

San Diego officials don’t believe that’s close to inevitable. It’s why their stadium proposal announced this week is actually tougher in its financing terms than a proposal that a task force recommended this spring, as CalWatchdog reported Tuesday. The thinking appears to be that the NFL is far more likely to approve the Rams’ move back to Los Angeles, where its stadium plan is considerably closer to fruition than the Raiders/Chargers proposal. There is believed to be no NFL interest in having three teams in Los Angeles.

Oakland’s mayor and City Council may have a similar take. But unlike San Diego officials, they’re not offering a financing plan, one perceived as “tough” or otherwise, to the Raiders. They appear resigned to having the Raiders eventually leave for a city with a much more lucrative, modern NFL stadium with luxury boxes and more seats.

If the Rams leave town, St. Louis is an obvious option for Raiders owner Marc Davis. This week, Missouri Gov. Jay Nixon expressed confidence that the St. Louis riverfront stadium project that’s now being planned would have an NFL team as a tenant even if the Rams departed for Inglewood.

And the most populous U.S. city to not have an NFL franchise — San Antonio, America’s seventh-largest city, with 1.5 million residents — is also likely to be in the mix. City officials are eager to get a team for football-crazy South Texas. And the Raiders have already had talks with city officials, dating back years.

San Antonio believed it had proven itself as an NFL-ready city in 2005 when the New Orleans Saints got a warm reception after temporarily relocating that season because Hurricane Katrina ravaged the Superdome. But so far it has been unable to attract a team.

On Tuesday, the committee is scheduled to consider a proposal by Assemblywoman Lorena Gonzalez, D-San Diego, that would provide greater labor protections for professional cheerleaders. Assembly Bill 202, which scored a 5-2 win in the Assembly Committee on Labor and Employment earlier this month, would protect cheerleaders of professional sports teams from workplace abuses by classifying them as employees, not independent contractors.

Specifically, the bill would amend the Labor Code to state that “a cheerleader who is utilized by a California-based professional sports team directly or through a labor contractor during its exhibitions, events, or games, shall be deemed to be an employee.”

Gonzalez: Treat cheerleaders fairly

Gonzalez says that professional cheerleaders are being exploited by multi-billion-dollar professional sports franchises.

“AB202 simply demands that any professional sports team – or their chosen contractor – treat the women on the field with the same dignity and respect that we treat the guy selling beer,” said Gonzalez, who was a cheerleader in high school and college. “NFL teams and their billionaire owners have used professional cheerleaders as part of the game day experience for decades.”

She added, “They have capitalized on their talents without providing even the most basic workplace protections like a minimum wage.”

Gonzalez’s legislation, which has the support of the California Employment Lawyers Association, California Labor Federation and Consumer Attorneys of California, comes on the heals of high-profile lawsuits by professional football cheerleaders that allege widespread workplace violations. The allegations include claims that the Cincinnatti Bengals, Buffalo Bills, Tampa Bay Buccaneers, Oakland Raiders and New York Jets failed to pay overtime or even the minimum wage.

Cheerleaders claim NFL teams broke labor laws

Caitlin Yates, one of the former NFL cheerleaders that has filed a lawsuit for labor violations, testified earlier this month before the Assembly Committee on Labor and Employment about her experiences with the Oakland Raiders.

“When I first started working as a Raiderette, I was just happy to make the squad and support my team,” Yates said. “However, over time I realized that the way I was being treated was unfair.”

Yates claimed that cheerleaders were sexually harassed, forced to pay out-of-pocket for job-related expenses and work with injuries.

“There are some teams out there who don’t treat their cheerleaders as employees or pay their cheerleaders a fair wage,” she told lawmakers. “We are professionals who deserved to be paid fairly no matter what team we play for.”

The issue has been a black eye for the National Football League, which has acted quickly to settle lawsuits and avoid similarly embarrassing testimony. Last September, two former Raiderette cheerleaders reached a $1.25-million settlement over accusations of “failing to pay minimum wage, withholding wages for months and refusing to reimburse cheerleaders for their business expenses,” according to the Los Angeles Times. Earlier this year, the Tampa Bay Buccaneers paid out $825,000 to settle allegations that one cheerleader was paid just $2 per hour over two seasons.

Independent contractor vs. employees

For all of its sex appeal, much of the debate about Gonzalez’s legislation centers on the highly-technical differences in employment law between an independent contractor and employee. Some companies seek to designate their workers as independent contractors to avoid payroll taxes or other workplace requirements that are mandated on employees.

A 2006 study by the United States Government Accountability Office found that “misclassification of workers as independent contractors … cost the United States government $2.72 billion in revenue from Social Security, unemployment and income taxes in 2006 alone.”

“When companies misclassify workers as independent contractors instead of as employees, these workers do not receive worker protections, including minimum wages, overtime pay, and health and vacation benefits, to which they would otherwise be entitled,” a legislative analysis of AB202 contends. “Because employers do not pay unemployment taxes for independent contractors, workers who are misclassified cannot obtain unemployment benefits if they lose their jobs.”

That explains why professional sports teams would want to treat cheerleaders as independent contractors. But, do they meet the standard?

“Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done,” the IRS explains on its information page detailing the differences between employees and independent contractors. “This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.”

The IRS identifies three areas for determining whether the individuals providing services are employees or independent contractors. Those questions are: behavioral, whether the employee has control over the work; financial, who controls the business aspects of the work relationship; and the type of relationship, whether the work performed is a key aspect of the business.

According to the Internal Revenue Service, “You are not an independent contractor if you perform services that can be controlled by an employer – what will be done and how it will be done.”

If the claims in some of the lawsuits are accurate, some NFL teams clearly exercised controlled of what and how cheerleaders performed their jobs.

“If a Raiderettes cheerleader forgets to bring the right pom-poms to practice, she’s fined $10,” Mother Jones summarized of the claims in one lawsuit. “The same thing happens if she wears the wrong workout gear to a rehearsal, she forgets to bring a yoga mat to practice, or her boots aren’t cleaned and polished for game day.”

But the state’s high income tax rates also are a factor when individual players consider accepting free-agent contracts with California teams.

When all-pro tackle Ndamukong Suh decided to leave the Detroit Lions, he considered an offer from the Oakland Raiders. However, he ended up accepting an offer from the Miami Dolphins for $60 million.

On the sports website ESPN, Chris Mortensen pointed out:

“Florida doesn’t have any state income tax, so in order for the Lions and the Raiders to match the after tax net earnings on a $60 million guaranteed, the Lions would have had to pay Suh approximately $64.9 million and the Raiders would have had to pay $70.1 million, said sports tax specialist Robert Raiola, senior manager at the accounting firm O’Connor Davis in New York.” 

The California Taxpayers Association published a more detailed examination of California’s tax rate on NFL player contracts:

“All teams in the National Football League operate under a league-imposed salary cap, but because the cap ($143,280,000 for 2015) is not adjusted for states’ differing income tax burdens, California teams are at a disadvantage because the Golden State has the highest income tax rate in the nation.”

‘Advantage’

The CTA quoted Jim Pagels of Forbes, who wrote:

“Teams in states with low or no income tax have a huge advantage in that they can offer vastly more money to prospective free agents. The difference between teams in Washington, Texas, Tennessee and Florida, where no state income tax is levied, versus those in California, which takes a whopping 13.3 percent, is staggering – $19.1 million. To put that difference in perspective, $19.1 million after taxes is more than any player in the NFL has ever earned per year, meaning teams in taxless states can essentially afford a California roster plus the most expensive player in NFL history on top of that each and every year.”

The state’s income tax may even cause sporting events not to take place in California.

While boxers Manny Pacquiao and Floyd Mayweather finally have decided to duke it out this coming May in Las Vegas, there was serious talk of a Pacquiao-Mayweather fight back in 2009. At that time, the Los Angeles Staples Center arena offered a $20 million site fee to host the event.

As I wrote in my Fox and Hounds column at the time, Pacquiao’s business advisor threw cold water on the offer:

“Noting that Paciquino would have to pay millions in taxes to California under the current 10.55 percent top tax rate, the advisor said the fighter didn’t want to fight in California when there were alternatives in no income tax states like Texas and Nevada.”

Now, after the passage of the $7 billion tax increase from Proposition 30 in 2013, the California’s top tax rate is up to 13.3 percent.