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

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 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.

By Wayne Lusvardi

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.

Prop. 31 is a combined new law and state constitutional amendment sponsored by the California Forward political action group.  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 College of vocation schools in California and is a registered Democrat in Florida.  He founded the Council for the Future of Europe, which has proposed “fiscal federalism and coordinated economic policy” to rescue the European Union from its debts.

Regionalism Will SAP Revenues from Suburbs to Cities

Urbanologist Wendell Cox writes that “regionalism” is an emerging policy of the Obama administration, as described in Stanley Kurtz’s new book, “Spreading the Wealth: How Obama is Robbing the Suburbs to Pay for the Cities.” Kurtz is a social anthropologist from Harvard.

Prop. 31 will not result in new regionalized governments. Rather, it will end up in what Cox calls “fiscal regionalism” run by a committee.  The tax-sharing facets of Prop. 31 are:

1. “Granting counties, cities, and schools the authority to develop, through a public process, a Community Strategic Action Plan for advancing community priorities that they cannot achieve by themselves.”
2. “Granting local governments that approve an Action Plan the ability to identify state statutes or regulations that impede progress and a process for crafting a local rule for achieving a state requirement.”
3. “Providing some state funds as an incentive to local governments to develop Action Plans.”
4. “Implement the budget reforms herein using existing resources currently dedicated to the budget processes of the State and its political subdivisions without significant additional funds. Further, establish the Performance and Accountability Trust Fund from existing tax bases and revenues. No provision herein shall require an increase in any taxes or modification of any tax rate or base.”

According to Cox, regionalization strategies are “aimed at transferring tax funding from suburban local governments to larger core area governments.”  The Prop. 31 version of regionalization would not amalgamate city, county, special district and school district governments. Nor would it create new taxes. But it could authorize the state to withhold or divert taxes from local governments unless those governments adopted a “Strategic Action Plan” to distribute the revenues from the suburbs to the large urban cities.

In essence, a Strategic Action Plan, or SAP for short, would sap the wealth out of suburbs. SAPS might also sap the bond ratings from suburban communities.

Governor Would Become “Emergency” Czar

Probably one of the most controversial provisions of Prop. 31 would grant the governor the power to cut or eliminate any existing program during a “fiscal emergency.”  In essence, the governor could usurp local government decisions on where to spend state funds.

Budgets for local public schools, community colleges or cities could be cut at the whim of the governor and the funds diverted elsewhere.  The governor could conceivably use new emergency powers to divert state funds to his choice of regional Strategic Action Plans.

Why Democrats and Unions Oppose Prop. 31

Public unions have historically been concerned about granting the governor broader emergency powers.  On July 11, 1999, the Gov. Gray Davis administration called legislative committee chairpersons to inform them that the governor intended to direct the outcomes of selected funding bills without consulting their authors or the legislature.  The leaders of the legislature at that time — Assembly Speaker Antonio Villaraigosa, D-Los Angeles and Senate President Pro Tem John Burton, D-San Francisco — called Davis’ actions a “totally improper intrusion into the legislative process.” The concern was that Davis was going to kill a bill sought by labor unions to increase workers’ compensation benefits.

This explains why the Democratic Party is currently opposed to Prop. 31 giving the governor emergency powers over the budget. Also, any consolidation or revenue sharing arrangement of local governments might lead to the heads of local unions losing their jobs if absorbed into a larger union.

Why Republican Party Wrongly Endorses Prop. 31

Oddly, the California Republican Party supports Prop. 31. This is because Prop. 31 is being misleadingly advertised as a government budgetary efficiency measure.  But a two-year budget and performance budgeting do not need the approval of voters to be implemented.

Budget analyst John Decker in his book, “California in the Balance: Why Budgets Matter,” draws on an example from the Schwarzenegger administration to explain why a voter initiative is not needed for Prop. 31, except for the tax sharing provisions:

“Amid much fanfare the year after his election, Governor Schwarzenegger announced the results of a year long internal effort to find efficiencies in government known as the California Performance Review.  Though most of the recommendations made could be implemented administratively, few were actually taken in the form proposed.”

Local governments can form “joint powers authorities” in California without Prop. 31 and make their own decisions about revenue sharing.  In an email to this writer about Prop. 31, Wendell Cox stated: “State law permits Joint Powers Authorities and this is all that is needed.”

Tea Party Rightly Opposes Prop. 31 Despite Paranoia

The proponents of Prop. 31 may say that the Tea Party and those opposed to fiscal regionalism are over-reacting to its provisions.  But why are the proponents trying so hard to sell Prop. 31 as a budget reform and government performance measure with little mention of its tax-sharing provisions?

The East Bay Tea Party has more accurately perceived the dangers with Prop. 31 as the creation of a “super” layer of government that cannot be held accountable by local government elections.  Unfortunately, the paranoid Tea Party also fears that Prop. 31 would measure the “performance and accountability” of local governments by United Nations Agenda 21.

No doubt this sort of paranoia reflects the powerlessness and political marginalization of the Tea Party’s members in California. But such paranoia gives the opponents of the Tea Party reasons to discount them as “wing nuts” not to be taken seriously.

California Forward Hides Tax Sharing Part of Prop. 31

California Forward is selling Prop. 31 to the public as “trustworthy, accountable for results, cost-effective, transparent, focused on results, cooperative, closer to the people, supportive of regional job generation, willing to listen, thrifty and prudent.” The touted provisions of Prop. 31 call for a “two-year budget cycle” and for “performance budgeting.” Prop. 31 is officially titled “The Government Performance and Accountability Act.

California Forward makes no mention in its filing or in its official ballot argument in favor of it that Prop. 31 will socialize state revenue sharing.  And the analysis of the California Legislative Analyst is so neutral and narrowly focused that it is does not help the public understand the importance of the tax-sharing aspects. The ballot arguments in favor and against Prop. 31 also ignore that it would socialize local government taxes by regions.

Commentariat Mislead About Prop. 31

It is amazing that California’s journalistic commentariat has, thus far, only been concerned that Prop. 31:

* Is a Trojan horse that would result in “tweaking” environmental regulations;

* Prescribes an “aspirin” instead of “surgery”;

* Is a “virtuous budget reform package that falls short;” but

* Would “restore our state to greatness.”

Wendell Cox is one of the few that has caught the magnitude of the problem of regionalism to our democratic form of government when he wrote, “[D]emocracy is a timeless value. If people lose control of their governments to special interests, then democracy is lost, though the word will still be invoked.”

In an email, Cox further wrote:

“In general, the idea of tax sharing is negative. This breaks the connection between local governments and taxpayers, as tax sharing governments are, by definition, not accountable to the taxpayers of jurisdiction with which they share taxes. Milton Friedman was right in saying something to the effect that people are more careful about with their own money than they are with other people’s money. This would be a very bad step for California, which already is suffering significant ill effects from insufficient fiscal responsibility.” 

Prop. 31 is Ripe for Abuse 

Safires’ Political Dictionary defines “tax sharing” as “collection of revenues by the (state) government, returned directly to the (local) governments without (state) control of expenditures.”  Prop. 31 would go beyond merely returning tax revenues to local governments without controls and conditions attached.  It would be prone to abuse for funding political cronies and political earmarks.

When former President Clinton proposed a form of revenue sharing in an economic stimulus bill, Republicans described it as political pork and successfully blocked it.  But in the California Legislature, the Republican Party no longer has any blocking power.  Prop. 31 would be prone to abuse because there are few checks and balances anymore in California’s new “Fusion Party.”

History indicates bureaucratic agencies have a way of not ending up as policy makers intended. There is no way of knowing whether Prop. 31 would end up as some form of “Tennessee Valley Authority” that would usurp local governments and would be self-perpetuating without any sunset provisions.

Voters on both sides of the political spectrum should be concerned about the implications of Prop. 31.