July 2012 archive

Jul 31 2012

AD-38: Scott Wilk and Edward Headington Face Off at Unscripted Luncheon

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Democrat Edward Headington (L) and Republican Scott Wilk (R)

Looks like the November general election season has already started and it is not even Labor Day.

It’s an unscripted opportunity for local business leaders to question the two candidates who are vying to become the Santa Clarita Valley’s next representative in the California Assembly: Democrat Edward Headington and Republican Scott Wilk will be the special guests at the Valley Industry Association’s August luncheon.

“No scripts, no questions off limits,” said VIA CEO/President Kathy Norris. “This is a great opportunity for our business community to get to know both candidates as the November election approaches. It’s an important election for our community and I know we’ll have some great questions for them both to answer.”

Wilk and Headington will each have an opportunity to present comments about their candidacies, and will field questions directly from the floor. Jason Schaff, executive editor of The Signal newspaper, will serve as moderator.

The winner of the Headington-Wilk race in November will replace veteran Assemblyman Cameron Smyth, who is leaving office after this year due to term limits.

The luncheon is scheduled 11:45 a.m. Tuesday, August 21, at the Valencia Country Club, 27330 Tourney Road, Valencia, and reservations are required.

Reservations can be made by calling the VIA office at (661) 294-8088, or through the VIA website: https://www.via.org/Calendar/EventDetails.aspx?id=202

If you want to check it out, I am positive the luncheon will not disappoint.

By the way, Scott Wilk is a heavy favorite to win this “safe” Republican California Assembly district this fall.

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Jul 31 2012

Mad Max 2: The Road Warrior Meets California

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Sadly, Professor Victor Davis Hanson makes the case for California.

George Miller’s 1981 post-apocalyptic film The Road Warrior envisioned an impoverished world of the future. Tribal groups fought over what remained of a destroyed Western world of law, technology, and mass production. Survival went to the fittest — or at least those who could best scrounge together the artifacts of a long gone society somewhat resembling the present West.

In the case of the Australian film, the culprit for the detribalization of the Outback was some sort of global war or perhaps nuclear holocaust that had destroyed the social fabric. Survivors were left with a memory of modern appetites but without the ability to reproduce the means to satisfy them:  in short, a sort of Procopius’s description of Gothic Italy circa AD 540.

Sometimes, and in some places, in California I think we have nearly descended into Miller’s dark vision — especially the juxtaposition of occasional high technology with premodern notions of law and security. The state deficit is at $16 billion. Stockton went bankrupt; Fresno is rumored to be next. Unemployment stays over 10% and in the Central Valley is more like 15%. Seven out of the last eleven new Californians went on Medicaid, which is about broke. A third of the nation’s welfare recipients are in California. In many areas, 40% of Central Valley high school students do not graduate — and do not work, if the latest crisis in finding $10 an hour agricultural workers is any indication. And so on.

Our culprit out here was not the Bomb (and remember, Hiroshima looks a lot better today than does Detroit, despite the inverse in 1945). The condition is instead brought on by a perfect storm of events that have shred the veneer of sophisticated civilization. Add up the causes. One was the destruction of the California rural middle class. Manufacturing jobs, small family farms, and new businesses disappeared due to globalization, high taxes, and new regulations. A pyramidal society followed of a few absentee land barons and corporate grandees, and a mass of those on entitlements or working for government or employed at low-skilled service jobs. The guy with a viable 60 acres of almonds ceased to exist.

California has many problems.

But, first and foremost is the housing crisis which many decades in the making, has deluded California homeowners that government spending largess is acceptable.

As housing prices skyrocketed, Californians income rose proportionately and as long as more and more folks flocked to California, bidding up the prices, all was right with the world. You see California housing prices since World War II had ALWAYS risen.

Accordingly, the State of California and local governments (city, county, special park districts, etc.) were happy to spend the ever increasing revenues.

And, as government grew and regulations sprouted anew, some businesses left, but who cared?

But, the housing bubble burst.

Who could REALLY afford a Santa Monica home which was built for $20K in the 1950’s and which was now $1.5 million, with a $1.2 million mortgage?

Businesses and jobs left. Productive people retired – others moved to Colorado or Arizona pre-retirement.

State of California budgets ran structural deficits for years, but California borrowed and used accounting gimmicks to push the debt further into the future. Local governments used 1940’s base redevelopment law to “steal” from the state and the schools for their own pet projects, like Civic Auditoriums and Sports Facilities.

The State soon discovered the redevelopment law exploits and Governor Jerry Brown ended the charade.

Now, many California cities are struggling to pay their bills and many either have or are contemplating bankruptcy. No more shuffling of redevelopment money to balance the city budgets.

But, the cities also struggle from more than redevelopment largess. Sweetheart deals with their public employee unions, including the Firefighters and Police have driven their budgets upside down. City managers and other city leaders lined their own pockets while police and firefighter unions helped elect City Councils and County Board of Supervisors who hired their bosses.

Read the rest of Professor Hanson’s post.

How will this Mad Max California resolve?

It may not be an easy ride.

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Jul 31 2012

Flap’s California Blog @ Flap Twitter Updates for 2012-07-31

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Jul 30 2012

Flap’s California Morning Collection: July 30, 2012

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Marina Del Rey, California

Good Monday morning!

The California Legislature is not in session for a summer recess.

The California Assembly has adjourned until August 6, 2012 and the California State Senate is also in adjournment.

The California Assembly’s Daily File is here and the California State Senate’s here.

On to today’s California headlines:

California Democratic Party endorses Jerry Brown tax initiative

The California Democratic Party has made its support of Gov. Jerry Brown’s tax initiative official.

The party’s executive board voted to endorse Proposition 30 at a weekend meeting in Anaheim. The measure would generate an estimated $8.5 billion in revenues assumed in the current state budget by temporarily raising income taxes on high earners and enacting a quarter percent hike in the state sales tax.

The board voted to oppose a rival tax initiative backed by civil rights attorney Molly Munger and the California State PTA. Proposition 38 would raise income taxes on a sliding scale for most Californians, sending the bulk of the revenues to schools and early childhood development programs.

Are public pensions following IRS tax-delay rules?

The IRS is taking a new look at whether public pension systems qualify for tax deferrals, raising questions about nonprofit charter schools in CalSTRS and county systems using “excess” earnings to fund retiree health care.

Taxes on employer-employee contributions to pension systems and their investment earnings can be avoided until retirees are paid. But if the rules are not followed, the IRS can change the tax status and impose fines and penalties.

As public pension funding problems surfaced during the economic downturn, the U.S. Internal Revenue Service began encouraging retirement systems to seek compliance reviews and make voluntary changes.

Some large systems, such as the California State Teachers Retirement System, have not had full tax reviews in recent decades, relying instead on IRS approval of specific issues.

(The giant California Public Employees Retirement System and the University of California Retirement System did not respond to queries last week about the status of their tax compliance reviews.)

Last April, CalSTRS said in a letter to the IRS that a proposed new rule, aimed at excluding non-government employees from public pensions, could make more than 10,000 charter school employees now in CalSTRS ineligible for the retirement system.

Bay Area to Sin City? Las Vegas bullet train backers gamble on record loan

Call it the bachelor or bachelorette party of tomorrow: you and your friends sipping cocktails aboard a futuristic train as it whips travelers across the desert to Las Vegas.

You might have to wait awhile, but it’s not such a long shot. Lost in the fractious debate over California high-speed rail is a separate, little-publicized plan for a second bullet train that would connect the Golden State with Sin City. Private developers are wagering on the Vegas train, hoping the Obama administration in coming weeks provides a record rail loan to kick-start construction on the $8 billion-plus train line that could someday connect to California’s much-debated high-speed railroad near Los Angeles.

The vision for the 150 mph party train is as audacious as the gaudy casinos, shows and night life that attract 1.5 million visits to Vegas from the Bay Area each year. Partyers could pay the equivalent of a pricey plane ticket and step onto the Las Vegas Strip in less than 1 1/2 hours from Southern California.

“Consider the train an extension of Las Vegas,” said project COO Andrew Mack. “We definitely want to create that type of environment where they can sit back and relax.”

California’s newest city withering on fiscal vine

The jagged foothills, withered pastures and a web of horse trails along the Santa Ana River give the state’s newest city a hint of the Wild West. Jurupa Valley’s money troubles, though, are pure modern-day California.

Jurupa Valley may be broke in a year, even though the city is so new that it has no permanent employees, no generous employee pension plan and runs City Hall out of a leased strip-mall storefront next to the Lucky Wok Chinese restaurant.

Without a financial rescue, the city will have to shut its doors, sending the mishmash of Jurupa Valley communities back into the ether of unincorporated Riverside County.Unlike San Bernardino, Stockton and Mammoth Lakes, California cities that have all reached the brink of insolvency in recent weeks, Jurupa Valley’s money troubles are not of its own making. They are Sacramento’s fault.

Enjoy your morning!

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Jul 30 2012

Flap’s California Blog @ Flap Twitter Updates for 2012-07-30

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