Flap’s California Morning Collection: October 26, 2011


Hollywood, California

The California Legislature is not in session today.

California Governor Jerry Brown will announce proposed changes to public employee pensions tomorrow.

Gov. Jerry Brown will give lawmakers his plan for pension changes on Thursday, the governor said in a letter to legislators this afternoon, though it remains unclear what Brown will propose.

“Given the paramount importance of pensions to both taxpayers and public employees, it is absolutely critical that we carefully examine our current assumptions and practices,” Brown said in a letter to Sen. Gloria Negrete McLeod, D-Chino, and Assemblyman Warren Furutani, D-Gardena. “We have to do our best to make sure that we have a system that is fair and truly sustainable over the long time horizon that our pension and health systems require.”

The Democratic governor has said for weeks that he would propose pension changes this fall. He recently said some of them will require a constitutional amendment and a vote of the people.

In Southern California, public employee pension reform comes to the forefront.

California’s public pension debate moves to the south state, where a new legislative committee will look at recent changes and options for fiscal stability.

Sen. Gloria Negrete McLeod of Chino and Assemblyman Warren Furutani of Gardena, both Democrats, are chairing the informational hearing, which runs from 10 a.m. to 1 p.m. at Carson City Council Chambers.

Several union representatives and lobbyists are among the scheduled speakers at today’s hearing. They include Yvonne Walker, president of SEIU Local 1000; Rich Brandt, president of Long Beach Firefighters; and Dave Low, executive director of the California School Employees Association.

Also listed are representatives of CDF Firefighters, California Association of Highway Patrolmen, California State Association of Counties, California Special Districts Association, SEIU California, the State Association of County Retirement Systems, AFSCME California, the Los Angeles County Employees Retirement Association, the California Teachers Association and the Association of California School Administrators.

Other perspectives will come from Desi Rodrigues of the Department of Personnel Administration, Santa Monica city manager Rod Gould, Ann Boynton of California Public Employees’ Retirement System and Ed Derman of California State Teachers’ Retirement System.

The hearing will be streamed live on the city of Carson’s website, http://ci.carson.ca.us/content/livebroadcast.asp. Members of the group Californians for Retirement Security will hold a news conference outside City Hall at 9:15 a.m. before the hearing starts.

On to today’s headlines:

Death penalty ban could go to voters

California voters have consistently supported the death penalty, and even in 1986 tossed out a state Supreme Court justice who opposed it.

But foes of capital punishment sense the tide may be turning as they prepare to begin gathering signatures on a proposed initiative that seeks to replace the death penalty with life in prison without the possibility of parole.

In San Diego County, backers of the ballot proposal will unveil their campaign plans today. Supporters include the American Civil Liberties Union, the Office of Social Ministry for the Catholic Diocese, NAACP and some retired judges.

They plan to urge voters to rethink the death penalty by arguing it’s a drain on the state budget, takes between 25 to 30 years to carry out and runs the risk of executing the innocent.

Statewide, organizers must gather slightly more than 500,000 signatures of registered voters by March 18 to qualify the initiative for the November 2012 ballot.

“The death penalty serves no useful purpose. It is not a deterrent and it is horrendously expensive,” said retired Los Angeles County District Attorney Gil Garcetti, whose office prosecuted dozens of capital cases when he was there.

Most rank-and-file police and district attorneys remain adamant that the death penalty is a deterrent and provides some measure of closure for families of victims. Advocates for victims rights seethe at the thought of not carrying out the ultimate penalty.

“We can’t put a price on justice,” argued Cory Salzillo, who represents a coalition of district attorneys opposed to eliminating the death penalty.

Dan Walters: Financial facts don’t back anti-Proposition 13 propaganda

It’s an article of faith – indeed, blind faith – among those on California’s political left that the passage of Proposition 13 in 1978 began the state’s downward spiral.

Before voters limited property taxes, they say, California was a paradise of well-financed public services, but since then has evolved into something like Mississippi, in which a tiny, selfish overclass oppresses a burgeoning, mostly nonwhite underclass.

Indeed, one leftish critic titled his book, “Paradise Lost.”

The anti-Proposition 13 propaganda always becomes louder when the economy is in recession and government budgets face big deficits, as they do now. It found an outlet in a recent Bloomberg wire service article that, in effect, blamed Proposition 13 for everything awry in California.

The problem with the anti-Proposition 13 hypothesis, however, is that financial facts don’t support it.

Let’s begin at the beginning.

In 1977-78, according to the State Board of Equalization, schools and local governments collected $10.3 billion in property taxes. The amount plummeted to $4.9 billion in 1978-79 as Proposition 13 cut the average property tax rate by more than half.

By 2010-11, however, property tax collections had risen to precisely 10 times as much – $49 billion per year – due to new construction and re-evaluation of existing property, even though the property tax rate was fixed at slightly over 1 percent.

During that same 33-year period, state general fund revenue, principally sales and income taxes, increased sevenfold – scarcely two-thirds the property tax revenue growth rate.

Incidentally, inflation and population growth combined were about 400 percent during that same period, less than half the expansion in property taxes.

Obviously, the assertion that Proposition 13 has been an unconscionable barrier to revenue growth doesn’t hold up. But what about the oft-voiced argument that our property taxes are out of whack with those of other states?

According to Tax Foundation data, California’s property tax burden is the nation’s 15th highest as a proportion of homeowners’ personal income at 3.59 percent, well above the national average of 3.03 percent. The reason: California’s below-average property tax rate is more than offset by its above-average property values.

Herdt: A new look at taxing business property

Among advocates for public schools, universities, parks and other state services that have been the victims of substantial state spending reductions, a hunt is on these days for a tax increase that would both generate the substantial revenue needed to prevent further cuts and also be able to win the support of economically battered California voters.

There are very few likely candidates.

Polling shows there is no public appetite to restore the broad-based temporary increases in sales and income taxes that expired this year.

So the search is on for a tax proposal that voters would deem reasonable.

Given this environment, it was inevitable that attention would turn to an issue that has successfully been kept under the rug for more than 30 years: a property tax system that provides greater benefits to business properties than to homeowners and has led to a gradual shift in the property tax burden onto homeowners and away from office buildings, shopping centers and industrial complexes.

Thus, the idea of a so-called “split roll” property tax — a system that would treat business properties differently from residences — is beginning to elbow its way into the discussion.

Los Angeles Mayor Antonio Villaraigosa jump-started the conversation in August when he suggested business property taxes might be revisited as part of a “grand bargain” of reform designed to rescue California’s deteriorating public institutions.

The issue was sufficiently elevated that last week, at its annual meeting with county assessors, the Board of Equalization sponsored a roundtable discussion at the Capitol that featured, among others, California Tax Reform Association Executive Director Lenny Goldberg and Ventura County Assessor Dan Goodwin.

The association last year released a study, based on data from the Board of Equalization and county assessors, that found a substantial shift of the property tax burden has transpired in virtually every county since passage of Proposition 13 in 1978. In Los Angeles County in the mid-’70s, for instance, residential properties accounted for 53 percent of all property taxes; today the figure is 69 percent.

The traditional explanation has been that, since Proposition 13 allows for the value of property subject to taxation to be reset only upon resale, businesses turn over less frequently than homes. The association’s report says that explanation “does not quite explain the phenomenon.”

Goldberg says the shift is largely the result of “a loophole-ridden” system that has allowed business properties to change ownership through complex transactions designed to avoid triggering a reassessment.

The association report cites reams of anecdotal evidence documenting changes in business ownership that escaped tax reassessment, but Goodwin thinks Goldberg and other reformers may be overstating the situation.

The California GOP’s Latino Voter Problem

Enjoy your morning!


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