By Wayne Lusvardi

How could all of the following so-called impartial ballot guides miss a key controversial component of Proposition 31 that would have ended the original republican form of local government in California?

* The California Legislative Analysts Office;

* The Official State Voter Guide, Arguments FOR and AGAINST;

* The League of Women Voters of California;

* Voter’s Edge California;

* The California Voter Foundation.

Prop. 31 was titled the “Government Performance and Accountability Act.” It promised good government reforms, such as:

* A two-year budget cycle;

* Granting veto power to the governor in case of a fiscal emergency;

* Three-day advance notice of all bills in the state legislature;

* Requiring performance budgeting in all state and local government agencies;

* Requiring all new funding bills in legislature to find new money or cut other programs.

Hardly anyone but this writer pointed out that all of the above reforms were already on the books in one form or another.

On top of that, Prop. 31 had a provision to allow the relaxation of existing laws and regulations under newly formed local government “Strategic Action Committees” if new procedures were “functionally equivalent” to existing laws.  Prop. 31 promised to allow local governments to use gasoline and property taxes routed through the state with few purse strings. This must have seemed like a dream come true for those who have been seeking the deregulation of environmental laws, affordable housing quotas and labor laws.

Who in his right mind could have been against Prop. 31 with all of the above promises?  Why did it go down at the ballot box by a margin of 1,864,603 votes if it would have resulted in all of the above reforms?  Was it because Prop. 31 would have ended, for the most part, California’s republican form of local government?  Noooo!  That wasn’t the reason cited by most news sources!

Republicanism Upheld Only by Accident

The reason attributed to Prop. 31 losing by most sources was not that it would have replaced a republican form of government with unelected regional councils controlled by the Legislature.  The only opposition George Skelton and the Los Angeles Times had to Prop. 31 was that it was “long and complex.”   TV station KQED in Northern California said it was just “too complicated.”

But even those who found it too complicated never mentioned that Prop. 31 would have mostly ended California’s republican form of revenue sharing.   In its place would have been a hybrid regional form of governmental revenue sharing.  The new revenue sharing mechanism under Prop. 31 would have funneled gasoline and property taxes to the Strategic Action Committees, rather than cities, counties, and school districts.  And some of Prop. 31’s provisions could have trumped the “home rule” of zoning, housing, etc.

This would have been one of the most radical changes in California history.  But none of the official voter guides mentioned it.  For the most part, neither did the mainstream media.  And neither Prop. 31’s supporters nor opponents made any mention of this.  Nobody seemed to care if California’s republic effectively ended.

Except for this writer, the only other source to alert the public that Prop. 31 would end the republican form of government in California was Stanley Kurtz of the New York City-based National Review magazine.  Kurtz’s opposition to Prop. 31 was based on his timely book, “Spreading the Wealth: How Obama is Robbing the Suburbs to Pay for the Cities.”

Imagine all those liberal, leftist, green and even big government Republican Party-hating libertarian voters out there who might have voted for Prop. 31?  Satirically: If only they had known it would have ended republicanism and replaced it with regionalism and socialized wealth redistribution, they might have voted for it?

‘Neutral’

So the next time you look at one of those so-called neutral state or third party voter guides, think again about whether you should trust their analysis or recommendations.  One should be reminded of the definition of a neutral person from the New Devil’s Dictionary:

“Neutral, n.  A person whose prejudice is so terribly obscure, so incomprehensible, or so transparent that others see no purpose in silencing that person.”

California’s republic was in peril, but hardly anyone noticed it. As Machiavelli wrote, “The people, when deceived by a false notion of the good, often desires its own ruin.”

Which raises the deeper question of whether much of the media and citizenry entirely miss historical social change?  The winners may write history; but the winners only in error write the news.

Proposition 31 was rightly defeated at the polls but for the wrong reasons. But who would have known or even cared?

By Wayne Lusvardi

Proposition 31 was wiped out by voters yesterday.  The Government Performance and Accountability Act got just 39 percent of the votes, with 61 percent against.

Part of the likely reason it lost big was that it was undoubtedly the most confusing voter initiative on the ballot.  Factions of both Democrats and Republicans opposed and endorsed it.

The California Republican Party endorsed it but the California Federation of Republican Women opposed it.  The American Federation of State, County and Municipal Employees and the California Teachers Association opposed it.

But the liberal leaning think tank California Forward, headed by former Democratic state Assembly Speaker Robert Hertzberg and funded by European billionaire Nicolas Berggruen, were its main supporters.

The official position of the Libertarian Party of California was opposed to Proposition 31.  Interestingly, the California Green Party lined up with Libertarians in opposing it.  However, the proposition has appealed to many libertarian-leaning organizations, such as the Lincoln Club of Orange County and the Reason Foundation.

Voters that may have been looking for who supported or opposed Prop. 31 as a guide to how to vote were often confused.  The typical guides of party label did not serve as reliable.  This indicates that political parties in California have a decreasing hold on voters, despite the emergence of a de facto Fusion Party in California.

Confusion

The confusion by the Republican Party was perhaps typical of the party’s problems in California.

Moreover, few recognized that, if enacted, Prop. 31 would make it nearly impossible to make any substantial cuts to the state budget, including to public pension plans.  Neither would it limit the use of bonds or voter initiatives to fund local public projects.

Until later, many supporters did not look at the fine print that created a new unelected layer of local government — called Strategic Action Plan Committees — that would regionalize revenue sharing in California.

Prominent author Stanley Kurtz wrote an article in National Review, “California’s Awful Prop.31: Is This Your Future?”, and came out against California Proposition 31. He cited my articles here at CalWatchDog.com.

Then Republicans began to take notice.  The question then became: Could  the collective Republican mind be changed after the party had officially supported it at their annual convention? Given that Prop. 31 lost, apparently that happened.

In its September newsletter, the California Federation of Republican Women reconsidered its prior position on Proposition 31 and reversed its position to oppose it.  This was partly in response to our article “California Prop. 31 Will Regionalize State Revenue Sharing.”

Prop. 31 did have some good points that should be brought back in future reforms, such as two-year budgeting. But this time around, voters saw that the bad outweighed the good.

By Wayne Lusvardi

The California Taxpayer’s Association spotted a provision in Proposition 31 whose importance no one has noticed until now. It appears to prohibit making any cuts or increases to the state budget of $25 million or more.  In other words, it appears to freeze 99.999 percent of the state budget at its current funding level.

This sounds like the reincarnation of Proposition 13, the 1978 initiative that froze property taxes at the 1975 level until properties were re-sold.  But CalTax opposes Prop. 31 because it could be gamed and turned into Frankenstein monster on Nov. 6 — right after Halloween.

The key tax provision of Prop. 31 is Section 4.  In effect it would prohibit the Legislature from passing any bill that reduces or increases taxes by $25 million or more — unless the same bill provides for a tax increase or spending cut from some other program.  CalTax says that the $25 million threshold is so low that it would apply to any meaningful tax reduction or tax incentive.  It also would apply to any tax increase of $25 million or more.

Prop. 31

Under Prop. 31, a revenue reduction would apply to any “tax, fee, penalty reduction, or elimination of any type of incentive, tax exemption or tax deduction,” says CalTax.  But CalTax has the following concerns about Prop. 31:

* Any change to an existing job creating tax incentive would be affected.

* It could be gamed by bad budget estimates that may kill its touted tax limitations.

* Past budget reform proposals have only included budget increases, not revenue reductions.

* Prop. 31 has to be taken as a package of reforms with the bad as well as any good.

* Prop. 31 says it is about greater budget transparency.  But CalTax is concerned that the Department of Finance, state tax agencies, and the Legislative Analyst’s Office would exercise sleight of hand behind the scenes to create an appearance of new tax revenues or budget cuts where none really exist.

A crucial concern is that the $25 million limit on budget increases or decreases can be gamed in several ways.

One way it can be manipulated is by creating many $24.9 million expenditures.  Another way could be by using projected revenues for increasing spending, thus running up more deficits.

Expenditure bills could also be padded.  By inflating the budget of a program or project the governor then could use the veto power granted him under Prop. 31 to create the appearance he cut its budget in half.

The $25 million circuit breaker funding clause in Prop. 31 will only work with a responsible Legislature that does not use budget gimmicks.  Limiting spending is not likely to happen with a tax-and-spend California Legislature, or with the local “Strategic Action Plan Committees” created under Proposition 31.

No Limits on Big Ticket Funding Items

Another big difficulty with Prop. 31 is that it apparently does not put any limits on using bond financing or voter initiatives for state or local programs and projects.  As even the liberal Los Angeles Times wrote:

“But Proposition 31 simply fails to deal with the big-ticket items: bond measures, which add new annual payment obligations, and voter initiatives, which routinely impose new costs without identifying new revenue. Lawmakers thus would have a new incentive to rely ever more often on bonds and the ballot box — to the state’s fiscal detriment.” 

A recent example is the city of Pasadena, which is considering using $3 million in state water bond funds under Proposition 84 to re-landscape a flood control basin, expanding recreation facilities and open space, and installing a public bathroom as well as some upgrades to water works facilities. This is a local parks project funded by statewide taxpayers.

Water treatment

The city of Maywood is also planning on using statewide water bond revenues to finance a new water treatment plant under the guise of cleaning toxins from groundwater.  Statewide taxpayers would end up paying for local public works projects wearing the mask of an environmental project.

Under the mechanism of bonds, the financing of local parks, open space acquisition, public recreation, and local water and sewer projects are being regionalized.  The “user pays” principle is being abrogated and the financing of projects and programs is becoming socialized.

Under Prop. 31, this regionalization of public financing would be expanded. The stated purpose of Prop. 31 in its own wording is:

“To improve results, public agencies need a clear and shared understanding of public purpose. With this measure, the people declare that the purpose of state and local governments is to promote a prosperous economy, a quality environmental and community equity.  These purposes are advanced by achieving at least the following goals: increasing employment, improving education, decreasing poverty, decreasing crime, and improving health.”

In other words, Prop. 31 would be used to transfer funds from a large state or county taxpayer base for local prisons, public schools, and health and welfare programs. What regionalization — or socialization — does is create the image that everything that politicians can promise can be had for nearly free, or for a pittance of taxes.   It would do this by spreading the financing base over a wider tax base than city governments.  But the reality is that taxes would then become out of control.

A major concern about Prop. 31 is its silent “tax sharing” component.  It provides for the creation of regional government committees that would transfer taxes from suburbs to big cities and big-city school districts that are broke.

Prop. 31 is the opposite of Prop. 13.  It is a Frankenstein monster wearing the tax fighter mask of Howard Jarvis or the Jerry Brown mask of a monk.  Prop. 31 is an after-Halloween trick, not a treat.

By Katy Grimes

With the 2012 election in full swing, everyone’s focus seems to be on the candidates and ballot initiatives.

We are inundated with ludicrous, often irrelevant political advertising. But what happens after the election? What happens if President Obama gets reelected and California passes all of the tax increase ballot measures, along with the 35 local sales tax increase measures?

The presidential race

Should Obama win reelection, he will still be stuck with a Republican U.S. Congress, and possibly even a Republican Senate. Either way, expect to see more of the last four years of gridlock and executive orders.

Obama will continue to “look at how we can work around Congress.” And for that

work-around, expect to see many more executive orders. Obama signed 140 Executive Orders during his first term.

Because of the country’s $16 trillion debt, and the reckless spending habits of the Obama administration, some in the finance world expect that the entire U.S. economy will crash if President Obama is reelected.

If Mitt wins…

If Mitt Romney wins, he has promised to repeal Obamacare on day two, and begin immediately to undo some of the business killing policies put in place by the Obama administration.

But perhaps even more importantly, Romney would eliminate and replace the entire cabinet of far-left extremists that Obama appointed.

Gone will be some of the more notorious statists with unchecked power:  Energy Secretary Steven Chu, Secretary of Health and Human Services Kathleen Sebelius, Homeland Security Secretary Janet Napolitano, Secretary of the Interior Ken Salazar, and Secretary of State Hillary Clinton.

What happens to California?

California already levies a 7.25 percent general sales and use tax on consumers, which is the highest statewide rate in the nation, according to the California Taxpayers Association.

California’s statewide gasoline taxes and fees total 48.6 cents per gallon, the second highest in the nation. Many counties add local sales taxes on top of that.

California’s personal income tax has the second-highest top tax rate, at 10.3 percent,  and one of the most highly progressive structures in the nation.

Only eight states have a higher corporate tax rate than California’s 8.84 percent flat rate, which CalTax reports is the highest corporate tax rate in the Western states.

Even with Proposition 13, California’s property tax rate is 14th highest in the country. While each tax may or may not be the highest, put them all together, and Californians are living in a very high tax state.

According to the California Taxpayers Association, “California’s business tax climate will worsen and the state will have a tougher time attracting and retaining jobs,” if Propositions 30 and/or 38 are passed by voters.

In the 2013 State Business Tax Climate Index, a new study by the Tax Foundation, “a survey of all 50 states, ranks California’s tax structure 48th — worse than all the other states except New Jersey and New York.”

The study  found that, if both Propositions 30 and 38 are approved, the results will “reduce California’s score in individual tax and overall.”

“The evidence shows that states with the best tax systems will be the most competitive in attracting new businesses and most effective at generating economic and employment growth,” according to the report.

Perhaps one of the most important issues to remember is, “States do not enact tax changes (increases or cuts) in a vacuum,” according to the Tax Foundation. “Every tax law will, in some way, change a state’s competitive position rela­tive to its immediate neighbors, its geographic region, and even globally. Ultimately, it will affect the state’s national standing as a place to live and to do business. Entrepreneurial states can take advantage of the tax increases of their neighbors to lure businesses out of high-tax states.”

This will impact business even more, including business decisions, job creation and retention, business location, competitiveness, the transparency of the tax system, and the long-term health of a state’s economy.

“Most importantly, taxes diminish profits,” the Tax Foundation reports. Taxes cut into a business and often prevent the business from reinvesting back into the community.

The Tax Foundation explains, “If taxes take a larger portion of profits, that cost is passed along to either consumers, em­ployees, through lower wages or fewer jobs, or shareholders. Thus, a state with lower tax costs will be more attractive to business investment, and more likely to experience economic growth.”

It’s that simple, and that ugly.

Ending union dominance in CA

Proposition 32 would prohibit corporations and public employee unions from making direct contributions to political campaigns. And, it would ban automatic payroll deductions by corporations and unions of employees’ wages to be used for politics.

Should Prop. 32 pass, it would level the political playing field and give grassroots organizations and voters a political voice in California once again.

Labor union leaders call Prop. 32 a fraud, and claim that its backers have exempted themselves from the new rules. But with most of the Democratic state legislators handily assisted into office by the state’s  public employee unions, it is no wonder labor leaders are in a frenzy.

This should make every working man and woman in California ecstatic. If Prop. 32 passes, union employees will get to keep more of their pay, and unions will no longer have such a huge financial influence in elections.

Real reforms?

Proposition 31 is packaged with some real reform measures in it, but there are too many flaws in the measure for the reforms to really matter. However, if it passes, expect another layer of government bureaucrats added to California’s already top-heavy system. Prop. 31 would also prohibit future legislation on reducing taxes.

According to CalTax, Prop. 31 would “effectively prohibit legislation (including the state budget) from reducing taxes by $25 million or more unless the same legislation included a tax increase or spending cut.”

Prop. 39: Another corporate tax

Proposition 39 would require businesses headquartered out of the state to use the “single sales factor method,” in which their tax liability is based solely on their amount of sales in the state.

Prop. 39 is backed by wealthy hedge fund manager Tom Steyer, who stands to benefit from the passage of the measure. While the state stands to collect about $1 billion in added revenues each year, half of that money must be used on the Clean Energy Job Creation Fund for the first five years. After five years, all of the additional tax revenue would go to the state’s General Fund.

Steyer, who is pushing hard for passage of Prop. 39, is the co-chairman of the Clean Energy Job Creation Fund, and is heavily invested in green, clean-tech businesses, which many have said potentially stand to benefit somewhat from the $1 billion of additional tax money.

The measure is written to sound as if big business has a sweetheart deal with the state. But anything designed to squeeze more taxes out of any business right now could devastate California’s economy even worse.

Should Prop. 39 pass, expect to see more business shrinkage, jobs lost, and multi-state businesses pulling operations out of California.

Local tax increase measures

Thirty-five California cities have tax increase measures on the ballot, totaling a whopping  241 tax and bond measures. Of the 2012 local tax elections, the majority are school bonds.

There are nine local ballot measures proposing a 1 percentage-point increase in the sales tax, which would increase the tax on gasoline significantly. That would be on top of the 7.25 percent state sales tax levy, plus any local sales taxes already on the books. Cha-ching.

Final blow to California economy

Some cynics suggest that we should just allow everything to pass in order to speed up California’s demise. The more optimistic folks believe that California could be turned around, but only if unions are no longer running the state’s Democrats.

If these ballot measures pass, there will be much higher unemployment, and businesses large and small will not reinvest. Some businesses will shrink even more, some will close and even more will move, if possible. Taxpayers will be squeezed even more, shrinking everyone’s take home pay.

However, on a lighter note, Californians have rejected the last eight tax increases on the ballot. While another rejection of tax increases sends a loud message to Gov. Jerry Brown, he and the Democrat-controlled Legislature have demonstrated that they are not beholden to voters; their constituency is the unions.

However, if Prop. 32 passes, California voters and taxpayers just might get the ear of the Democrats.

By Wayne Lusvardi

Tom Elias’ Oct. 2 column in the Redding Record Searchlight newspaper inferred Proposition 31 is only being opposed by some right-wing crackpots. Actually, Prop. 31 is far from only a rightwing issue. It should be an left-wing issue as well. Perhaps the Occupy Movement will take it up.

Prop. 31 is another slush fund for billionaires to play with the public’s money in California. The sponsor of Prop 31 is California Forward, a political organization founded with $16 million in grants from foundations established by wealthy elites.  Nicolas Berggruen, a European billionaire, is the biggest sponsor of California Forward, with a $1 million donation to the pro-Prop. 31 campaign.  Berggruen owns the IEC vocational school chain, which could stand to benefit from Prop. 31.

Prop 31. creates unelected Strategic Action Plan committees that will add an unneeded layer of government between the state and local governments.  State gasoline taxes, property taxes for schools and junior colleges, and vehicle license fees can be diverted from cities and counties to these committees.

Billionaires are not supporting Prop. 31 only to bring about true “good government” reforms.

We only need to look at Proposition 71 from 2004. It granted $3 billion to  a new state stem cell research agency. Where did the money go?

Stem Cell Initiative as Forerunner of Prop. 31

The sponsor of Prop. 71 was Robert Klein, a wealthy real estate developer who donated $3 million to its election campaign. Upon approval by the voters, Klein installed himself as the Stem Cell Institute’s top paid officer, making $150,000 a year for half-time work. In 2008, Klein had to step down as president of the stem cell lobbying group Americans for Cures as a potential conflict of interest with his serving as board chairman of the stem cell agency.

The Sacramento Bee recently exposed that 90 percent of the monies granted thus far by the stem cell agency — $1.5 billion — went to research organizations of past and present board members of the agency.  In 2008, even the prestigious journal “Nature” opposed the incestuous cronyism at the stem cell agency.

Occupy Should Join Republicans in Opposing Prop. 31

The phrase “government by crony” is defined in Safire’s Political Dictionary: “An administration in which advisers qualify not by experience or talent but by their longtime friendship with the Chief Executive.”  Prop. 31 would expand this definition to include actual agency heads and government boards, not just advisers.

William Safire notes that most of the “government of” phrases of the last century (e.g., “government by organized money”) were probably coined to compare unfavorably with the phrase President Lincoln popularized: “government of the people, by the people, for the people.”

Said Gary Aminoff, president of the San Fernando Valley Republican Club, “The CRP at the convention voted Yes on 31. After the meeting, several people pointed out to the Board of CRP the reasons not to have endorsed it. They all said they didn’t catch it and if they had to do it over they would not support Prop.  31. It was too late to change it because it was voted on at the convention and would take another convention to undo it. I have since suggested they send out a statement stating this and I am still awaiting it.”

Both the left and the should understand that Prop. 31 will undermine representative government and would lead to crony revenue sharing in California.

By Wayne Lusvardi

Recently I was invited to be the “No on Proposition 31” speaker at a local election forum, which I reported on here.  My honorable conservative debate opponent expressed disbelief that Prop. 31 would end up with regional proxy governments around California that would require sharing tax revenues between wealthy and “disadvantaged” areas.

To help make my case, I cited Stanley Kurtz’s book, “How Obama is Robbing the Suburbs to Pay for the Cities.”  The book explains the emerging social policy of using coerced revenue sharing to form hybrid regional governments for wealth distribution.

But even Kurtz’s book didn’t seem to convince many of those still seduced by the enticements in Prop. 31: a two-year state budget, a “pay-go” requirement for funding any new programs; performance budgeting; promised deregulation of laws identified by local government; authority for the governor to call a fiscal emergency and veto budget items; and the creation of “small is beautiful” regional governments.

The problem is that none of these promised reforms requires voter approval or the necessity of a state constitutional amendment, except one: the provision for the creation of Strategic Action Plans.  Strategic Action Plans is a term for regional government like the socialized European Union, not like county governments in the United States.

Prop. 31 would authorize the formation of SAP committees to undertake regional projects and programs.  A SAP would be run by a committee appointed by a group of local governments that wanted to run their own programs by their own rules.

Such committees would not be miniature legislatures that could pass their own laws, however.  They would still have to appeal to the union-controlled California Legislature to relax rules or pool revenues for joint programs.  This is where the Legislature would mandate that every local regional henhouse would have to include a fox.

To understand how Prop. 31 might work, look at California SBX2 1, the Water Quality, Flood Control, Water Storage, and Wildlife Preservation Act of 2008.  SB 1 repealed the Integrated Regional Water Management Planning Act of 2002.

SBX2 1 is a Mini-Prop. 31

SBX2 1 created a new layer of government for water management in California.  It authorized the California Department of Water Resources and the State Department of Health Services to serve as funding conduits to “regional water management groups.”  These groups would be composed of three or more local public agencies, two of which have to be water agencies.

It was coupled with funding from several water bonds passed by voters:

Proposition 50, the Water Security, Clean Drinking Water, Coastal and Beach Protection Act of 2002. It provided $500 million to fund competitive grants out of a $3.44 billion total bond issue for regional water management groups that had an adopted water management plan.  It passed with 55.3 percent of votes.

Proposition 84, the Safe Drinking Water, Water Quality, and Supply, Flood Control, River and Coastal Protection Bond Act of 2006. It provided $1 billion out of a total $5.4 billion bond issue for water management planning and implementation. It passed with 53.8 percent of votes.

Proposition 1E, the Disaster Preparedness and Flood Prevention Bond Act of 2006. It which provided $300 million out of a total $4.09 billion in bonds for storm water flood management.  It passed with 66.4 percent of votes.

The funding of “regional water management groups” is not done through a grant funding application.  Instead, the approval of the “composition of an Integrated Regional Water Management” region into the Department of Water Resources grant program is required.

Regional Water Management Groups

SBX2 1 provided a definition of a water management plan, a definition of an eligible region, and program guidelines.  This law defined a “regional water management group” as that having an adopted water management plan.  A water management group can participate by means of a joint powers authority agreement, a memorandum of understanding, or any other written agreement.

SBX2 1 specifically targeted revenue sharing with disadvantaged communities:

Section 10534: “[I]dentifies communities in the region and takes the water-related needs of those communities into consideration.”

Section 10541 (b): “To the extent feasible, each state agency shall provide outreach to disadvantage communities to promote access to and participation in meetings.”

Section 10541 (e, 6): “Identification and consideration of the water-related needs of disadvantaged communities in the area within the boundaries of the plan.”

Section 10541 (g, 12):  “The guidelines shall require an integrated regional water management plan include a public process and an opportunity to participate in plan development and implementation for:  disadvantaged community members and representatives, including environmental justice organizations, neighborhood councils, and social justice organization.”

Section 83002 (b, 10): “[T]he sum of fifty million dollars (shall be allocated) to the State Department of Public Health for grants to small community drinking water system infrastructure improvements and related action to meet safe drinking water standards.  First priority for these funds shall be given to disadvantaged or severely disadvantaged communities lacking resources to provide safe drinking water to residents.”

Section 83002 (B,II, c): “[T]he department shall allocate not less than 10 percent to facilitate and support the participation of disadvantaged communities in integrated regional water management planning.”

Regional water quality management groups could be said to be one of the reasons why five water bonds totaling $15.4 billion produced no new sources of water or reservoirs for water storage.  The goal of water bonds passed from 2000 to 2008 was wealth redistribution, not the redistribution of water from nature to fish, farmers and cities.

Stealth Prop. 31

Once widely disclosed, the above revenue sharing provisions certainly would set off a political firestorm.

Certainly, this wasn’t disclosed to the voters when the above-described water bonds were put on the ballot.

Nevertheless, SBX2 1 creates a moral hazard of providing an incentive for migration to rural areas, where there is no permitted, safe drinking water. It creates a de facto, “will serve,” water-on-demand requirement that runs against water conservation goals.  While Los Angeles suburbs are under surveillance by water police, rural migrant enclaves can demand water at the suburbs’ expense.

SBX2 1 is instructive to all those conservative communities that believe they can get environmental laws relaxed and welfare laws tightened in their region.  What SBX2 1 indicates is that the only laws that will be relaxed are zoning, subdivision, and public health laws to further the goals of “equity” and wealth distribution.

The message for suburbs is: if you want your public transit project or performance budgeting for welfare programs, you will have to accept brand new luxury “affordable” housing, or relaxed qualification rules for welfare. It would be the demise of “home rule” and rule by dictate from Sacramento. Many conservatives can’t seem to understand this realpolitik.

SBX2 1 indicates that, once enacted, Prop. 31’s “Strategic Action Plan” committees could be funded from a variety of revenue sources, including future state bond issues that have not yet even been conceived.

Kurtz writes that followers of Saul Alinsky’s radical political tactics

“pride themselves on finding unexpected ways to pressure politicos by researching obscure statutes and bureaucratic practices that nobody pays much attention to.  This is especially easy to do on the local level. Organizing cities and a few relatively impoverished ring suburbs also makes it possible to create a movement without even attempting to recruit more conservative rural and suburban voters…Starting locally gave Alinsky stealth when he wanted it and extracted maximum leverage from minimal organizational effort.”

It is not hysteria or speculation that Prop. 31 is a regional tax-sharing scheme.   If passed by the voters, Prop. 31 would be SBX2 1 on steroids.

By Katy Grimes

With all of the focus on the November ballot initiatives to raise taxes, Proposition 31 seems to have quietly avoided heavy scrutiny in the main stream media thus far. But this initiative is a wolf in sheep’s clothing, pretending to be much-needed reform.

There is growing confusion about ballot title and summaries on California’s ballot initiatives. It’s almost impossible to know how to vote on something. A “no” vote may mean “yes,” and visa versa, given the way the California Attorney General’s office plays fast and loose with writing the titles and summaries of ballot measures.

This is the case with Proposition 31 –what’s up is down, and what appears to be reform, is not. Equally disturbing is how so many of the state’s newspapers are jumping on board this phony “reform” measure. Even the California Republican Party officially endorsed Prop. 31.

However, most voters have grown suspicious  of anything claiming to offer “good government”  reforms.

Proposition 31

Proposition 31 would establish a two-year state budget, instead of the current annual budget cycle. It would prohibit the Legislature from creating expenditures of more than $25 million without first providing a source of the funding.

Prop. 31 would allow the governor to unilaterally make budget cuts if the Legislature fails to make necessary cuts, and would require the establishment of performance goals for budget items, as well as performance reviews of all state programs.

Prop. 31 would require the publication of all bills at least three days prior to a vote by the Legislature. It would give counties the power to alter state statutes or regulations related to spending unless the state Legislature or a state agency vetoed those changes within 60 days.

This “budget reform” initiative is intended to bring more transparency to the budgeting process, according to proponents.

So far, this sounds pretty good, right?

Dig a little deeper; the list of backers of Prop. 31 should raise everyone’s hackles.

Prop. 31 is both a new law and state constitutional amendment. It is sponsored by California Forward, a political action group which claims that it wants to “transform our state government through citizen-driven solutions to provide better representation, smarter budgeting and fiscal management, and high quality public services so all Californians have the opportunity to be safe, healthy and prosperous in the global economy.”

California Forward was created by “California Common Cause, the Center for Governmental Studies, the New California Network and the Commonwealth Club of California’s Voices of Reform Project at the urging of the California Endowment, the Evelyn and Walter Haas Jr. Fund, The William and Flora Hewlett Foundation, The James Irvine Foundation, and The David and Lucile Packard Foundation,” according to Ballotpedia.

Nicolas Berggruen, a European billionaire born and raised in Paris, France, has provided more than $1.5 million to the Prop. 31 Campaign. Interestingly, Berggruen is registered as a Democrat in Florida, and has provided the funding behind the Think Long Committee for California. He is also the founder and president of Berggruen Holdings and the president and chairman of the Nicolas Berggruen Institute.

Merger of wealth and politics

Earlier this year, California Forward and the Think Long Committee for California merged to form the ultimate elite group of former politicians and impertinent billionaires.

“The lineup of the two groups is a who’s-who of Capitol politicians who apparently just didn’t get enough of the place while in power: Former Assembly Speaker Willie Brown; recalled Gov. Gray Davis and his replacement, Arnold Schwarzenegger; Sunne Wright McPeak, former Contra Costa supervisor and former secretary of the California Business, Transportation, and Housing Agency; another former Assembly Speaker, Fred Keeley;  former California Secretary of State Bruce McPherson; and another former assembly speaker, Bob Hertzberg,” I wrote in Bored Billionaire Groups Merge.

“These politicians joined forces with billionaire financier Nicolas Berggruen; union boss Bob Balgenorth, president of the State Building & Construction Trades Council of California, AFL-CIO; and ueber-wealthy foundations such as the Evelyn and Walter Haas, Jr. Fund, the William and Flora Hewlett Foundation, the James Irvine Foundation and the David and Lucile Packard Foundation.”

As the founder of the Council for the Future of Europe, Berggruen supports “fiscal federalism and coordinated economic policy” to rescue the European Union from its debts–just the policy needed to fix California’s budget ills.

Real reform

“California needs a top- to-bottom overhaul that connects political decision-making to its unique social and economic reality and creates cause-and-effect accountability for those we elect to office,” said Sacramento Bee political columnist Dan Walters. “Proposition 31 is akin to giving someone with a flesh-eating infection an aspirin to relieve the pain momentarily when the patient truly needs radical surgery or powerful drugs to stop the infection.”

While the California Republican Party has endorsed Prop. 31, many Republicans are not supportive.

The East Bay Tea Party warns that Prop. 31 “amends the California Constitution and creates a ‘Super’ Council that will oversee all levels of government. Corruption cannot be fixed by adding a new layer of bureaucrats.”

And, it is important to notice that California Forward rather awkwardly avoided pointing out in its official ballot argument in favor of it that Prop. 31 will socialize state revenue sharing. Tax sharing governments are not accountable to the taxpayers of jurisdiction with which they share taxes.

Tax sharing is a banal sounding term, but actually means central government-collected, locally-shared taxes, and is nothing more than Senior English Semantics, covering for “redistribution.”

My CalWatchDog.com colleague Wayne Lusvardi warned of this in “Proposition 31 would regionalize state revenue sharing“: “Despite regionalization failing miserably in the European Union, California is proposing to adopt it as a tax-sharing policy for distributing state funds to local governments if voters approve Proposition 31 on the November ballot.”

Others warn that Prop. 31 adopts parts of the United Nation’s Agenda 21.

“It calls for the institutionalization of the UN Agenda 21 ‘3 E’s’:

* Economy: Private/Public Partnerships and Project Labor Agreements will replace free markets;

* Equity: Social and Environmental Justice and the redistribution of wealth will be mandatory instead of Equal Justice;

* Environment: Climate Change, Species, Habitat and false science will be used as an excuse to regulate and control the citizens of California,” explained the Halfway to Concord blog.

“The ‘Super’ Council will measure the ‘Performance and Accountability’ of every government entity against the UN Agenda 21 3 E’s. The Council will have the ultimate power to make or stop a local jurisdiction from doing anything based on this proposition.”

Opposition to Prop. 31

Ballotpedia reports that the opponents to Prop. 31 are mostly labor unions, along with the California Democratic Party. But their opposition isn’t quite the same as the Tea Party’s.

The arguments against Proposition 31 in the state’s official voter guide were submitted by:

*Sarah Rose, the chief executive officer of the California League of Conservation Voters.

*Joshua Pechthalt, the president of the California Federation of Teachers.

*Ron Cottingham, the president of the Peace Officers Research Association of California.

*Anthony Wright,  the executive director of Health Access California.

*Lacy Barnes, the senior vice-president of the California Federation of Teachers.

*Lenny Goldberg, the executive director of the California Tax Reform Association.

Other opponents include the California Democratic Party, and:

The Public Policy Institute of California just published a statewide survey that found when voters read the ballot title and label of Prop. 31, “25 percent of likely voters say they would vote yes, 42 percent would vote no, and 32 percent are undecided.”

PPIC found, “The proposition does not have majority support in any party, demographic, or regional group. Many likely voters across groups do not know how they will vote on Proposition 31. Twenty-nine percent of likely voters say the outcome is very important to them.”

There are many things about Prop. 31 to dislike, including the many exemptions. Prop. 31 exempts the state’s growing and unchecked bond debt, and the exponential growth of existing state programs.

As Prop. 31 opponent Health Access pointed out, “Prop 31 would enshrine all of its 8,000+ words (longer than the U.S. Constitution) into the California Constitution — unable to be changed without another vote of the people. Even the unobjectionable parts of Prop 31 (a two year budget cycle, for example) shouldn’t be in the Constitution, written in stone for a generation or more.”

By Wayne Lusvardi

On Wednesday at the Pacific Club in Newport Beach, I participated in a debate sponsored by the Orange County Lincoln Club on Proposition 31 on the Nov. 6 ballot. I took the “No” side.

Prop. 31 is called “The Government Performance and Accountability Act.”  It would offer a number of government efficiency reforms in exchange for allowing the creation of local miniature regional governments, called Strategic Action Plans, run by unelected committees. SAPs purportedly would allow cities to relax environmental and labor laws to undertake regional public projects and programs.

My debate opponent was Todd Priest, a well respected limited-government Republican who works for Curt Pringle Associates, a public relations firm specializing in government affairs and land use.  Pringle is the former mayor of Anaheim and former chairman of the California High Speed Rail Authority.  He also was a board member of the Orange County Transportation Commission.

Trying to convince limited-government Republicans that they should oppose a ballot initiative that promised to grant regulatory relief for public transit and social service projects was a challenging task.  But my past experience as an administrator of Housing and Urban Development revenue sharing programs for Los Angeles County gave me a perspective on the “silent” coercive aspects of Prop. 31.

Prop. 31 is Co-Optation, Not Deregulation

I addressed what I believe is political naiveté that Republican cities would be able to exempt themselves from labor and environmental laws and be able to have their fair share of state gasoline taxes, property taxes and vehicle license fees without any strings attached. After all, I was asked, why couldn’t two prosperous Republican suburbs form a SAP and then exempt themselves from the regulations they didn’t like?  Forming a SAP supposedly was completely voluntary. But that is not how revenue sharing works.

I explained that a Democratic state Legislature would not allow a SAP to be a mini-legislature that could make its own rules. Nor would it allow a SAP to grant itself a share of local revenue that normally flows through the state Legislature without any strings attached. What Republicans apparently believe is that they would be granted “waivers” around regulations, just as President Obama granted waivers to unions from Obamacare.

Mandates would be required as a condition of receiving any funds. Remember the issue of “mandates” that arose during the U.S. Supreme Court case decision regarding Obamacare?  It is likely the Legislature would only grant waivers formed in Democratic cities or where unions controlled the SAP committees.

SAPs would be like invading Republican territories and putting a Democratic fox in every Republican henhouse. Prop. 31 would be co-optation, not deregulation. Co-optation is assimilation to “take, or win over into a larger or established group such as a fledging Labor Party being coopted by the Socialist Party.” It is a tactic right out of Saul Alinsky’s book Rules for Radicals.

SAPs would be a Democratic take over of Republican constituencies. Limited-government Republicans are only looking at Prop. 31 through the lens of regulatory relief.  And they have a fantasy that there would be no strings attached to revenue sharing.  They are completely blind to the co-optation aspect.

As Stanley Kurtz of National Review wrote to me in an email regarding the Republican fantasy of deregulation offered under Prop. 31:

“I can understand Republicans thinking this, not only because it’s a natural fantasy, but because this is what all the liberal groups and editorialists who oppose Prop. 31 say themselves.  They warn that the proposition is a bad idea because SAPs will get to evade important environmental laws.  That naturally makes Republicans think it will actually happen. Well, it will to a degree, but only for favored, urban-based SAPs, in my view.” 

“Neither side quite grasps that the whole exemption idea is designed as a lure to force local revenue sharing to save failing cities.  It’s like when Obama gives a waiver on Obamacare only to his favored union allies, or when he grants waivers on No Child Left Behind only to states that sign up for his Common Core program.  You only get the waiver if you do what he says.” 

SAPs Not Needed to Pool Funds

Another aspect that arose during the debate was the notion that a SAP was needed in order to pool state, local and federal funds for regional projects. It was stated that existing Joint Powers Authorities in California only allow the pooling of local funds.  This is a complete misunderstanding.

A Joint Powers Authority is an agency “whereby two or more local governments, or utility or transport districts can operate collectively” to undertake projects or programs that cut across political boundaries.

The California Government Code Sections 6500 to 6536 already contain provisions for Joint Powers Authorities to pool state, local, and federal funds.

The Anaheim Regional Transportation Intermodal Center is an example of a joint-powers authority that pools state, local and federal funds for a regional transit project.

When completed, the $184.2 million ARTIC project is a public transportation hub for buses, taxis and other forms of public and private transit.  It may form a station stop for the future California high-speed rail project.

ARTIC is being undertaken by the Southern California Regional Rail Authority, a Joint Powers Authority.  It is composed of the Los Angeles Metropolitan Transit Authority, the Ventura County Transportation Commission, the Orange County Transportation Authority, the San Bernardino Associated Governments  and the Riverside County Transportation Commission.

The funding for the ARTIC project pools funding from local bond measures, state transportation improvement funds and federal funding, as follows:

ARTIC CONSTRUCTION FUNDING SOURCES 

Clearly, this indicates that Strategic Area Plans under Prop. 31 are not necessary to pool various taxes for regional transit projects in California.  Funds from various levels of government for regional projects can already be pooled under the Joint Powers Authority law in California.

In sum, Prop. 31 is political co-optation that would be a death knell for the Republican Party at the local level in California.