Posts tagged California
Finished!
Jan 17th
I can’t believe it! I just finished the manuscript for Crazifornia, wrapping up the difficult but ultimately very entertaining budget and pensions chapter. Here’s an excerpt:
Hooting and Hollering on the Budget
Californians witness the challenges of running a progressive state every year as the legislature struggles to develop a balanced budget in the face of fundamental fiscal imbalance. The resulting budget is always a work of fiction, projecting more income than will come in, and promising more savings than will ever occur. A mid-year correction is always needed to account for this, but the charade goes on in all seriousness year after year. It’s a tragedy; it’s a comedy; it’s California.
Over 50 state budgets ago, in 1966, the legislature’s top budget leaders and Governor Pat Brown fled Sacramento for Palm Springs to try to sort out yet another horrific California budget mess. Nothing was getting done in soggy, cold Sacramento to fix chronic problem of revenues not covering ever-increasing government expenses, and since Brown would face the voters in November hoping to win a third term, the Democrat was adamant that the budget would be balanced without raising taxes.
Joining the senior legislators in Palm Springs was a young legislative staffer, David Doerr, who felt very lucky to get the chance to travel with the delegation, not so much because it involved a boondoggle trip to the desert, but because he actually hungered to see how California’s budget sausage was made. And see it he did. Ultimately, the budget was balanced on a number of gimmicks, including one that was unusually elegant: a switch to accrual accounting from cash. With the change, all the money due the state could be applied against expenses, no matter how far back it was in the pipeline. With this trick and a few others on the books, Brown was able to face Ronald Reagan in November armed with a balanced budget and no tax increase.
There were plenty of other gimmicks that came out of the Palm Springs session, but one really stuck in Doerr’s mind. Showing his uncanny ability to remember financial matters from the distant past in exquisite detail, Doerr told the tale in a small conference room at the California Taxpayers Association, the wall behind him lined with shelves displaying his 811-page tome, California’s Tax Machine, A History of Taxing and Spending in the Golden State. He spoke in the light, wispy voice of a man who had heard far too many politicians argue far too loudly, and his hair was as white as snow – an expected side effect of being the single Californian who knows the most about the state’s budget-making process.
“After not really getting much of anywhere in the negotiations,” he said, “one of the suggestions that came up, casually, just sort of a throw-away was, ‘Why don’t we just delay paying the state employees by a day so one pay period will go over into the next year?’ At first everyone was quiet and I wondered if they would really do something like that, but then they began to hoot and holler, laughing like this was the craziest thing they ever heard of.”
Doerr, who ultimately spent three decades as chief consultant for the Assembly Revenue and Taxation Committee before becoming the Chief Tax Consultant of the California Taxpayers Association, continued the story: “Jumping forward over 50 years, no one in the legislature hooted or hollered one bit when the idea of shifting one pay period into the next fiscal year came back, this time as a way to balance the 2008-2009 fiscal year budget. The legislature just did it, knowing full well their action would come back to haunt them a year later, when they would have to balance a budget that had one extra payroll period in it.” The subterfuge saved $1.2 billion for the moment – that’s what it cost per payday to pay the state’s bloated payroll.
The 1966 junket to the desert ended up not doing Brown any good, as Ronald Reagan drubbed him by 16 points that November, sweeping all but three counties in the state. And the 2008 roll-over of one payday didn’t help Governor Schwarzenegger either, and he declared upon announcing the inevitable budget revise that May, “We’ve run out of Band-Aids.”
“Gimmicks and band-aids aren’t new,” Doerr said. “There have always been battles over the budget and crazy balancing tricks as long as I’ve been here, and that’s been 50 years, more than one-quarter of the time California’s been a state.”
There’s a lot more good stuff in the chapter and in the book. If you haven’t already, be sure to fill in the box in the upper right, so I can notify you when this baby rolls off the press.
That will be a while longer, since I have four dedicated editors marking up the manuscript. They’re making some really great suggestions, so I’ll be doing a fair amount of rewriting before I can claim, finally, that it’s ready for the publisher. I’m still on target for a May publishing date.
Hugh Hewitt Praises Crazifornia
Jan 9th
I sent a copy of the almost-completed Crazifornia manuscript to radio talk show host, blogger, author and columnist Hugh Hewitt for his review and comment. Gotta say I’m pretty pleased with the result:
Anyone who is concerned about California’s future or who fears that California’s maladies will spread to their state should read Crazifornia. Laer Pearce, who I’ve known as a public affairs pro for as long as I’ve lived in California, has written the most insightful and entertaining book I’ve ever read on the genesis, depth and – surprisingly – deep funniness of California’s perilous condition. Thankfully, this isn’t a boring tome touting the next ultimately futile formula for supposedly fixing all that ails California. Rather, it’s a story book, full of one astonishing tale after another about what really goes on in California, and why, and what it means to you. In the end, you’ll learn a great deal and enjoy it a great deal.
Hugh was the first person I met with when I came up with the Crazifornia concept. He supported me then and I’m glad to see he’s become even more supportive after reading the manuscript. It will be out in a few months – use the sign-up box in the top right to request an update when it’s available.
Brown Wants New Anti-Business Super-Agency
Jan 6th
Governor Brown’s proposed 2012-2013 budget – rushed out yesterday after a staffer inadvertently published it – includes what we’d expect from a liberal democrat governor … and more.
Sure, it’s got more spending (7 to 9 percent more, depending on who’s crunching) and class warfare (higher taxes on the “wealthy,” defined as $250,000 and up). But its real surprise is buried deep down: a new super-agency charged with making life even more miserable for California businesses … if such a thing can be fathomed.
The Daily Caller picked up my column on the budget and the new super-agency this a.m. It’s worth reading the whole thing – and I hope you do, because they count clicks! – but here’s the relevant material on the new super-agency:
Brown is calling for the creation of the Business and Consumer Services Agency, a new mega-agency that apparently will “service” businesses in the way male farm animals “service” female ones. The agency will combine habitually anti-business departments handling consumer affairs, “fair” employment and various business licensing and inspection functions, and into this fetid anti-business environment drop “the newly restructured Department of Business Oversight.”
Restructured from what? The department doesn’t currently exist, so it appears that Brown is creating an entirely new arm of government, surrounding it with anti-business zealots and charging it with increasing the amount of oversight of California businesses that are already suffering from too much oversight.
What lunacy is this? The five and a half companies a week that are leaving California are sending the clearest possible signal that California is death to business, but Brown still proposes to make things worse. Meanwhile, his budget barely tweaks public employee pensions and keeps the California High Speed Boondoggle Rail Commission alive and spending.
Oh … I’d better explain that picture of Brer Fox and Brer Rabbit. It’s about this, the column’s conclusion:
In reality, though, the governor’s proposed budget means virtually nothing. Even as Brown was announcing it, a judge ruled unconstitutional the health care cuts the governor had proposed in his budget last year. Then the Democratic Senate leader lined up against it, pledging to fight proposed cuts to social services. And of course, the state employee unions and their armies of lawyers and lobbyists are busy today planning their campaigns to force Brown into more spending and more taxes — which is sort of like forcing Brer Rabbit into the briar patch, where he’s right at home.
Bureaucrats Censoring Sea Level Rise
Dec 1st
In Crazifornia, I make the point that the state is no longer a democracy, having been converted – without the people’s consent – into a technocracy. Here’s a bit of that from the manuscript:
Perhaps most to blame for the demise of California is the legislature’s determination to dodge accountability for its Progressive actions. To do this, it has turned California into a technocracy, transferring the real power from the people and the electeds to technical experts – well, supposedly expert – in the state’s many large and powerful regulatory agencies, commissions and boards.
It is these technocrats who go about imposing the will of the Legislature through obtrusive and costly regulations and fines that were never approved by any elected body. It is they who have the power and authority to force California to meet the lofty, idealistic goals of AB 32, the state’s quixotic cure-all for global warming. Not wanting to be blamed for all the dirty work that necessarily would follow passage of such an unrealistic and idealist bill, the legislature simply followed tradition and assigned the task to unelected technocrats further down the state government hierarchy, resulting in, among other things, California’s recent imposition of the nation’s first state-run carbon cap and trade system, without so much as a motion and second out of the legislature.
Of course, technocrats live pretty much unaccountable lives, so they’re free to choose whatever “techno” suits their fancy. And in California, that means we’re run by technicians in global warming orthodoxy, radical environmentalism and engineered social change. If facts get in the way, they can censor them – as they do with anything that runs counter to the Church of Anthropogenic Global Warming and all the AB 32 protocols that it spawns.
Case in point: SLR. No, silly, not a single-lens reflex camera – it’s sea level rise. If the sea isn’t rising, then the planet isn’t warming, so of course the sea level has to be rising. So state agencies endlessly document sea level rise and project it to go up and up and up – which means they can exert more and more control over the coast. (By “coast,” we really mean “California,” because that’s where you’ll find most of the state’s people, power and money.)
Here’s an example, courtesy of the California Ocean Protection Council (which is lambasted in Crazifornia) purportedly showing what sea level rise will be in Crescent City:
As you can see, the Ocean Protection Council wants you to believe the sea level on California’s north coast is surging up, and will be as much as two feet higher by the end of the century. The trouble is, it won’t be. It will be lower.
It’s got nothing to do with global warming and everything to do with plate techtonics. The plate Crescent City sits on is rising, so effective sea level is dropping. This is no secret, as the feds let us know in this counterpoint provided by the National Oceanographic & Atmospheric Administration:
Yup. Sea level is definitely dropping in Crescent City. But that doesn’t follow the AB 32 dogma and undercuts the technocrats’ grip on power, so in Crazifornia, Crescent City isn’t rising, the ocean is, and the facts are censored so the people can remain blissfully ignorant as the technocrats seize more power and authority.
It’s all just more Progressivism because, you know, the elite technocrats are so much smarter than us and so much better qualified to run our lives, and our government, than we are. Welcome to Crazifornia.
A tip of the Crazifornia hat to Neil Jordan, who provided the charts.
This DUI I Can Understand
Oct 28th
Sometime in the nether-hours of very late night Thursday or very early today, State Finance Director Ana Matosantos was pulled over by one of Sacramento’s finest (and I don’t mean legislators or bureaucrats here) and written up for driving under the influence.
Matosantos was appointed to the thankless Finance Director job by Schwarzenegger and retained by Brown in one of his better moves since taking office. By all accounts she has approached her impossible job of grappling with the state’s $20+ billion deficit with intelligence and aplomb, character traits that were exhibited today when she offered up a quickly rejected letter of resignation, in which she took full responsibility for her actions.
In the strictest since she does have full responsibility, and contrition and penalties are appropriate, but really, is anyone buying that “I take full responsibility for my actions” line? This is the Finance Director of California for crying out loud! Don’t you think the legislature, with its failure to come to grips with the effect its liberal/environmental agenda is having on the state’s finances, is a bit to blame for her needing a drink? And the people of California, who elect spendthrift liberal legislators and pass propositions that make the state financially untenable – didn’t they figuratively pour her another glass? And the bureaucrats, who continue to ratchet up regulations even as the economy ratchets down, shouldn’t a mea culpa be heard from them as well?
I don’t support preferential treatment for anyone who drives drunk, but if ever there was anyone who was entitled to having a very small book thrown at them very lightly, it is Ana Matosantos.
Regulating the Rocket’s Red Glare
Oct 25th
The Daily Caller picked up my latest opinion piece, Regulating the Rocket’s Red Glare, about California’s war against fireworks shows. I’ve written a lot about this phenomenon, and it’s recently taken a turn for the worse with a decision in San Diego that could have statewide ramifications. Here’s the lead:
It should come as no surprise that the leftist legislators and authoritarian bureaucrats who run California are vehemently opposed to fireworks shows. After all, the shows are always fun and usually patriotic.
And against them they are. The California Coastal Commission has led the charge with a multi-year assault on the Sea World theme park in San Diego, which blasts fireworks over Mission Bay every night. That effort shipwrecked on the rocks of Sea World’s considerable political clout and even more considerable legal budget, so the Commission looked for a more vulnerable, less wealthy target.
It found that in the Fourth of July fireworks show put on by local business owners in the tiny, picturesque hamlet of Gualala on the northern California coast.
Please click through to read the entire piece here.
CalWatchdog on Crazifornia’s Regulatory Reform Charade
Oct 24th
CalWatchdog recently picked up my column on the charade of regulatory reform in California, which points out how recent efforts to reform the California Environmental Quality Act are limited, complicated and indicative of just how crazily over-regulated California has become. Here’s the lead:
California Gov. Jerry Brown may try to make political hay out of his recent signing of three “regulatory reform” bills into law. But the bills (AB 900, SB 292 and SB 226) really serve best to illustrate just how grossly over-regulated California has become.
Take AB 900, for example. Please. It specifies certain types of projects that can qualify for expedited processing under the onerous, labyrinthine California Environmental Quality Act (CEQA). But — no surprise — it’s really more complicated than that. It’s more like it designates projects that can attempt to get through CEQA easily, but the reforms themselves are complicated and, worse, they’re untested by California’s green-leaning courts.
Among projects eligible for supposedly expedited processing under AB 900 are infill projects that are highly energy efficient. Never mind that vacant hulks of these sorts of projects clog the California cityscape, unrented and unloved. The California dream remains a suburban one of back yards and cars. And despite what urban planners and environmental activists preach, we’re not yet ready to emulate New Yorkers and Inside-the-Beltway folks and live in cramped high-rises by train stations. Does AB 900 make it easier to process suburban subdivisions? Oh, please. Do you have to ask?
Read the rest of the post – and some very interesting comments about the effect of over-regulation on California’s dairy farmers – here
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Crazifornia Scores Big at Daily Caller
Oct 24th
My recent op/ed on California’s passage of the nation’s first state-run cap-and-tax program proved very popular with readers at The Daily Caller – to date, 76 readers have recommended it, 41 have tweeted it, 5 have shared it on Linked In and 44 have posted comments. As expected with the Daily Caller’s audience, most of the comments are favorable, informed and even witty, like this one that starts with a quote pulled from the op/ed:
“AB 32, the state’s crusade to save the planet from the scourge of greenhouse gases”
Should read: “The scourge of unicorns and leprechauns” as there’s as much science behind it.
Mary Nichols, one of the most dangerous women in America, looked out into the packed California Air Resources Board (CARB) hearing room late Thursday after an eight-hour hearing and declared, “We’ve done something important.”
Nichols is the chair of CARB and therefore the person most responsible for implementing the California Global Warming Solutions Act, AB 32, the state’s crusade to save the planet from the scourge of greenhouse gases. A former assistant administrator of EPA under President Clinton, Nichols now controls multiple programs designed to penalize conventional energy sources to the benefit of not-yet-competitive alternative sources. She has already forced the toughest diesel engine standards in the country onto California — standards that will cost the state’s battered trucking industry $12 billion — and Thursday she trumped that by ushering in the biggest playing field-leveler yet, the nation’s first state-run carbon cap-and-trade program.
California, in going where no other state or the federal government has dared to tread, certainly has done something important, but just what “important” means is a question for the historians.
Read the rest of the piece here.
Regulatory “reform” shows how in need of reform California is
Oct 12th
Governor Brown may try to make political hay out of signing three “regulatory reform” bills into law, but the bills (AB 900, SB 292 and SB 226) really serve best to illustrate just how grossly over-regulated California has become.
The official CEQA process chart
Take AB 900 for example. Please. It specifies certain types of projects that can qualify for expedited processing under the onerous, labyrinthine California Environmental Quality Act (CEQA). Actually, it will be more like projects that think they qualify for regulatory relief will be free to attempt to get through CEQA easily, but the reforms themselves are complicated and, worse, they’re untested by California’s green-leaning courts.
Among projects eligible for supposedly expedited processing are infill projects that are highly energy efficient. Never mind that vacant hulks of these sorts of projects clog the California cityscape, unrented and unloved. The California dream remains a suburban one of back yards and cars, and despite what urban planners and environmental activists preach, we’re not yet ready to emulate New Yorkers and live in cramped high-rises by train stations. Does AB 900 make it easier to process suburban subdivisions? Oh, please. Do you have to ask?
The bill also gives a special blessing to wind and solar energy projects that will pump intermittent blips of high-priced power into the grid, but turns a cold shoulder on any sort of energy facility – including carbon-free hydro power – that actually can be counted on to consistently provide affordable energy. Green manufacturing also gets a pass – but California is a state that needs jobs desperately, so why should the Solyndras of the world get a break when old-school manufacturing, which actually turns out products that compete in the marketplace, does not?
SB 292 gives a CEQA break to great big projects, as long as they’re football stadiums in downtown Los Angeles. Because, heck, if we steal the Packers from Green Bay we’ll have new green jobs. At least for guys wearing jerseys.
Finally, and probably worst of all, SB 226 lets you sort-of off the CEQA hook if you’re putting solar energy cells on the roof or over the parking lot of an existing building. Or, put another way, California regulators currently can force you to do a costly, time consuming environmental impact report if you want to do what they’re harping at you to do and install solar.
By relieving solar installations from at least some CEQA grief, the bill is actually telling us that up to now, California has treated the savior of our heated-up world, solar energy, as something so nasty and dirty that it requires careful study, deep analysis and endless public comment before the state’s hyper-regulators would let you do something as potentially damaging to the Earth Mother as actually use it.
If these bills represent the best the legislature can do to streamline regulations in California, the armies of lawyers, lobbyists and consultants (myself included) who make a fine living off of trying to tame the state’s regulatory beast have nothing to worry about.
A hat-tip to three members of that army – lawyers at Allen Matkins – for their review of the three bills.
After the Housing Crash, California Homes Still Cost Too Much
Aug 19th
I’m avoiding my neighbor. He’s a real estate appraiser, which means he delivers more bad news than Standard & Poors. Besides, I just don’t want to know what’s happened to the equity of the California dream house we bought 20 years ago. Denial is our friend.
So you’d think with how tanked the California economy is, that housing affordability in the Tarnished State would be increasing, right? Wrong, according to a news release today from the California Building Industry Association:
Housing affordability in California decreased in the second quarter of 2011 as 16 of the state’s 28 metropolitan areas included in the report showed declines, the California Building Industry Association announced today.
On a statewide basis, the HOI found that a family earning the median income could have afforded 61.3 percent of the new and existing homes that were sold during the second quarter of 2011, down from 64.6 percent in the first quarter.
In a normal economy, the guy with the median income would be able to buy 50 percent of the homes on the market, but what’s normal about California’s economy? Primarily to blame for the continuing lack of affordability is the willful ignoring of the recession by California’s regulatory agencies, which continue to manufacture new burdens with an output on a par with what California manufacturers used to achieve … before they fled screaming from the state.
Regulatory over-zealousness inflates the selling prices all over California, with San Francisco being the worst, with a regulatory cost premium of $400,000 per home. Did you expect anything else? Liberalism, after all, costs money. Don’t be surprised, then, to learn that San Mateo and Marin counties, just south and north of San Francisco, respectively, track right behind Nancy Pelosi’s haunting grounds.
I’m covering this topic extensively in the “Worst for Business” chapter of Crazifornia. Good Lord, there’s a lot to write about!
