All posts by Robert Cruickshank

The Burdens of California Taxation, Real and Imagined

With the state budget again in crisis, tax reform is getting more attention these days. But where some see a structural revenue shortfall and a tax system that burdens the poor more than the rich, some of the usual suspects are trying to use the crisis to push solutions that will accomplish little if any good.

A new study from the California Budget Project shows that California’s tax burden is regressive – the lowest 20% income group pays 11.7% of their income in state and local taxes, whereas the top 1% only pays 7.1%. California’s income tax is highly progressive, but that income tax isn’t as high as it should be on the upper ends – as a result of that and of Prop 13, localities have had to turn to sales taxes to provide for police, fire, and public transportation.

The study also shows that corporate income was FAR larger than personal income during the last economic “recovery” – whereas the median income grew by 11%, corporate profits grew by 557%. Yet most of that corporate income went untaxed, contributing to the burden on lower income Californians.

Finally, the study showed that when all taxes – state and local – were taken into consideration, California ranked 18th in overall tax burden. Our income tax is #3, but our property taxes are #38 – explaining both the unfair burdens and the structural revenue shortfall.

Looking at these numbers one might believe that we need to reform the property tax and find ways to force the wealthy and corporations to contribute their fair share to the running of our state. But to hear Dan Walters tell it, we should do no such thing – instead we should pursue pointlessly “revenue-neutral” reforms that would accomplish little of actual value for Californians. More below.

In today’s SacBee Dan Walters argues “It’s time for a state tax overhaul” – and while the CBP numbers say the same thing, Walters goes in a very different direction than the CBP study would suggest.

Demographic change and various decrees by voters and politicians have transformed what was once a system that was roughly equally apportioned among property, sales and income taxes into one that’s utterly dominated by income taxes. The vast majority of income taxes are paid by a relative handful of high- income Californians whose incomes are increasingly tied to stock market trades and other forms of capital gains, creating boom-and-bust budgetary cycles because the spending side of the budgetary ledger has much less flexibility.

It is true that the state is dependent on income taxes that are volatile. But does Walters propose balancing that out by taxing other forms of wealth, such as capital gains and property?

But taxing real estate is a medieval concept based on the theory that such property equaled wealth. If we’re going to tax wealth, why should we tax land and buildings and exempt other forms of wealth, such as stock holdings and gold coins? It makes no sense.

Calling property taxes a “medieval concept” is flatly absurd. It’s as modern a form of taxation as there is. Most wealth in this state is held in the form of land. The primary source of individual wealth is property. In states such as New York, schools are well-funded because property taxes are kept at a sane and reasonable level. Whereas here in California, property taxes are artificially low, fueling a boom-and-bust real estate cycle and leaving the wealth that has been generated in real estate over the last 30 years untapped by taxation.

If Walters doesn’t want property tax reform, what DOES he think we should be doing?

The income tax system, as noted earlier, is terribly skewed toward high-income taxpayers. Some want to increase that burden, but that would exacerbate the volatility of the budget. Real reform would increase income taxes on middle-income Californians, who tend to get their money from wages, and thus bring more stability to a dangerously unstable system – or reduce the overall income tax burden and put more emphasis on sales and other consumption taxes.

Yet middle-income Californians already pay a larger burden of taxes than their wealthy counterparts – from 8.7% to 10.5% of their income. Any budget solution will necessarily involve getting more revenue from middle-income Californians, but it should also involve getting a lot MORE revenue from upper-income Californians.

And we already have enough emphasis on sales and consumption taxes – which are themselves volatile and decline during a recession. Those taxes help create the regressivity in California’s tax system.

Now, I do support sales tax modernization, as Walters does in his column. And I firmly believe the VLF should be restored to 1998 levels, which Walters ignores. But the primary work of tax reform should be done by eliminating the 2/3 requirement in the legislature and at the ballot box for new taxes; by excluding commercial property from Prop 13 protections; and by increasing taxes on the wealthy and corporations, including but not limited to income taxes. Finally, we should go after the $12 billion in tax loopholes that were created since 1993, most of which favor corporations and were eliminated in the “good times” only to haunt us here in the bad times.

And whereas Walters approvingly quotes Arnold’s call for “revenue-neutral” solutions, it is clear that California needs revenue-adding tax reform. Our schools, our health care, our transportation systems all need massive new investment if we are to maintain economic security and opportunity for all Californians here in the 21st century.

Perhaps the most important tax reform, however, isn’t in the numbers or the brackets or the rates. It’s in the mind. Californians need to start seeing taxes as an investment in their future, in their economic prosperity. A few hundred dollars a year in new taxes per person would generate significant savings to that person, especially if the revenue went to lowering the cost of college, went to hiring new teachers and reducing K-12 class sizes, went to providing alternatives to driving, went to single-payer health care (by far the most significant economic stimulus this state could provide).

The method of tax reform counts, but so does the underlying concept: we need to do a better job taxing wealth, and a better job showing Californians the value of investment in public services.

Jack O’Connell on Budget Cuts and Education’s Future

Superintendent of Public Instruction Jack O’Connell has a post at the California Progress Report on the declining number of students in teacher credential programs in California:

Since 2001-02, the state has reduced the number of underprepared teachers in the classroom by 25,000. California, the Center for the Future of Teaching and Learning reported, “…seemed to be on the right track toward building a teacher development system with the capacity to produce an adequate supply of teachers and deliver them to schools where they were needed most.”

So while we’re improving the quality of the teachers in the field, what about the supply of future teachers: those students in college today who are considering teaching as a profession? Unfortunately, the picture isn’t so bright….

For example, the Center for the Future of Teaching and Learning recently looked at the number of enrollees in teacher preparation programs since the state’s last fiscal crisis in 2003. The Center reports the following: “During the 2002-03 school year, colleges enrolled 74,203 candidates in preparation programs. The next year, that number dropped to 67,595 and the following year (2004-05) the numbers declined further to 64,753, a loss of 10,000 teacher candidates in two years. Similarly, the numbers of teaching credentials awarded dropped from 27,000 in 2004 to 22,400 in 2006.”

O’Connell could be a bit clearer here on the causes of the decline. As a result of the last budget crisis, the CSU system – which handles the bulk of teacher training in California – was hit with hundreds of millions of budget cuts, and a significant increase in student fees for professional education programs. Most students entering these programs already carry significant debt loads from their undergraduate years, and the stagnant pay for California’s teachers often makes it difficult for young people to repay these loans – especially when you add in our state’s high cost of living.

O’Connell does an excellent job of explaining how the current education budget cuts might dissuade future teachers:

This year California once again faces a budget crisis with potential cuts to education of $4.8 billion dollars. Undergraduates or those students already in teacher credential programs are thinking twice about their career choice. They are aware of the 14,000 pink slips just sent to teachers to prepare them for potential layoffs. They are well aware of the “last-hired, first-fired” rule and they ask themselves, “Do I want to pursue a career that is so unstable that I will face potential layoffs year after year?”

If we don’t find a way to stabilize our funding to schools, California may soon be facing another crisis: classrooms full of students with no teachers at the head of the class.

This is already beginning to take place. Between myself and my sister, who teaches 5th grade in Orange County, we know nearly a dozen people who are in their first years of teaching or in a credential program. Many of them have expressed regret about entering the teaching profession, especially as they worry about whether or not they’ll have a job this fall. A friend of ours who came to visit on spring break a couple weeks ago, currently a substitute teacher in Santa Ana, told me she was happy she had an accounting background, and said she thought it would be better for her to pursue an accounting degree instead of a teaching credential.

Not only will the teacher firings discourage new teachers from entering the profession, but further higher ed cuts will have the same effect. The CSU system is facing another hundred million dollar budget cut, which will certainly result in higher student fees. Thanks to the global credit crunch, however, it is now becoming much more difficult to take out student loans – meaning even fewer students will be able to pursue the necessary education for a teaching career.

Californians have to ask themselves what they really care about. A state that prefers to fire 20,000 teachers and place teacher training out of the reach of interested young people is not a state that values education. Teachers have already carried much of the burden of public education for the last 30 years. But without more financial support, and without the ability to have a secure career, one of the state’s most valuable professions is in very serious jeopardy.

The Truth About Republicans, Taxes and Economic Growth

Here in the dog days of April, as the state awaits the governor’s May Revise, frustration seems to be setting in over the budget. The real political battles will begin in earnest after the May Revise, but the jockeying for position has been going on for some time, including in the state’s media. Unsurprisingly, the media wants to spin the budget crisis as a failure of all Sacramento politicians, when in fact the current impasse is the responsibility of one group alone: the Republicans.

As an article in today’s Sac Bee would have us believe, there is “scant support for budget changes.” But a deeper look shows that while Democrats have already proposed budget fixes, such as closing the yacht loophole and creating an oil severance tax (as exists in nearly every other state), it is the Republicans alone that have blocked meaningful budget action.

And why have they done so? Republicans want us to believe that any revenue solution is economically damaging:

However, Sen. Dave Cogdill of Modesto, the GOP’s incoming leader, said the state should not take away credits at a time when the economy is struggling.

Other ideas that have yet to gain traction would raise income taxes on high-wage earners or amend Proposition 13 to assess businesses in the same way as residential property. The latter, known as “split-roll” property tax, would require that commercial and industrial properties be reassessed more regularly, bringing the state an estimated $3 billion annually.

Cogdill dismissed all as non-starters.

“We should help the general fund by stimulating the economy and be a more beneficial partner with industry, rather than stifling them,” Cogdill said.

But whose economy is stimulated by revenue cuts? Who actually sees this so-called economic growth? And who suffers from the spending cuts that are forced by the revenue cuts? A closer look at the overall situation shows that the Republicans’ claims are nonsense. Tax cuts provide economic growth for a wealthy few, but cause economic distress for pretty much everyone else – especially when those tax cuts come at the expense of education. More below.

Earlier this week I discussed Steve Lopez’ extraordinary column in the LA Times about how his daughter’s school has asked parents to fundraise to keep teachers on salary. The column sparked a dramatic reader response, which Lopez discusses in today’s column:

Tokofsky said he warned district leaders there should have been a parcel tax on the ballot this year to cover massive slashing by Sacramento — Gov. Arnold Schwarzenegger has proposed a $4.8-billion fleecing of the state’s children — but no one had “the guts” to tell the public the truth.

And what is that truth?

The truth is that political leaders love lying to us about what a civil society costs. They’re even willing to trade our children’s futures for their political futures, and California is now plummeting toward the bottom tiers in funding per pupil in the United States.

Though it might be hard for Sacramento’s pols to understand, sometimes you’ve got to find the courage to tell yacht owners you’re closing their tax loopholes, tell drivers there’s a stiff price to pay for a break on the car tax, or do what Reagan and Wilson did, and raise taxes temporarily to avoid draconian cuts.

Darrin James, a teacher in Santa Ana, said teachers could be laid off by the hundreds in his district.

How exactly is laying off 20,000 teachers – for starters – going to produce economic growth? As we enter a recession, that’s 20,000 fewer people paying a mortgage, eating out at a restaurant, shopping at a mall.

More importantly, the long-term economic damage of these education cuts is incalculable. California businesses need educated workers if they are to survive. If they can’t find those workers here they’ll relocate to a state where education funding is taken seriously, or they’ll leave the country.

If middle-class parents have to dip into their own pockets to pay for teachers, that’s less money they have available to spend and keep the economy afloat. If lower-income parents must do the same, and find their health care benefits cut out of existence, then the economy will suffer as well.

The only people who benefit from these tax and spending cuts are those who are already so wealthy that they are insulated from its effects – those who can afford to send their kids to private school, or who can afford to live in a school district with a high property tax base like Carmel, or Beverly Hills, or Woodside.

It is THOSE folks whose economic growth is being protected by the Republicans. Education and health care cuts make California less competitive and leave fewer dollars in most Californians’ pockets, but they enrich those already wealthy.

This isn’t a speculative argument. All we need to do is look around us. Since California’s tax cut mania began in 1978 we have witnessed a generation of inequality, characterized by a growing divide between low-income and high-income earners and the evaporation of the middle-income strata. Here in the 2000s California has slashed taxes even further, and yet the state’s working families are further behind than ever before. 30 years of tax cuts have produced economic growth for those at the top, and produced slow but steady immiseration for everybody else.

As the legacy of California’s 20th century liberalism fades, this will become even worse. The only thing that has allowed any semblance of economic growth in the state for the last 30 years has been Pat Brown’s legacy of massive investment in public education and public infrastructure. The companies that employed Californians over the last 30 years benefited not from 1980s and 1990s tax cuts but 1960s spending on colleges, which produced the entrepreneurs and workers that kept those companies at the forefront of the American economy. They relied on 1960s-era infrastructure, from freeways to aqueducts to BART, to operate. Without renewed investment in schools and infrastructure, and now health care as well, California’s economy will sputter. And we have new issues, such as a climate and energy crisis, to contend with.

Steve Lopez was absolutely right to say that “political leaders love lying to us about what a civil society costs. They’re even willing to trade our children’s futures for their political futures.” But he should have been specific. It is Republicans who are lying to us about these things. It is Republicans who are asking us to trade our children’s future for their immediate political future.

What Republicans are ultimately asking us to do is trade our economic future for aristocracy. To open our wallets so that the wealthy don’t have to open theirs.

The only way that this situation will change is if the public steps up and forces the Republicans to climb down. That activism is already starting to emerge. But it is going to need our support and assistance. The stakes are enormous, but with public mobilization, we can win this fight and provide a viable economic future for this state. And without that mobilization, we will lose that fight, and become a state defined by aristocracy.

Student Activism Emerges To Protect Public Education While Arnold Favors Private Schools

What began in Alameda last month is now beginning to spread around the state. As their future is taken from them by a Yacht Party determined to protect wealth and aristocracy through crippling education cuts, California students are beginning to fight back. In rallies that are unfolding across the state, they are speaking out for opportunity, for education, for democracy.

And on April 18 and April 21, they are poised to make the loudest statement yet against the destruction of education in California.

More on that below. But first, how is Arnold responding to the crisis in public education? The governor, whose own children attend private schools, made a fundraising visit to St. Margaret’s Episcopal School in San Juan Capistrano yesterday at the request of Mimi Walters, GOP assemblywoman and parent of two St. Margaret’s students. He was met by over 200 protestors who denounced Arnold’s education cuts:

Chanting “Save our schools” and “Shame on you,” about 200 teachers, students and parents from across South County lined the narrow sidewalks in front of a Mexican restaurant Thursday afternoon, protesting Arnold Schwarzenegger’s proposed education cuts as the governor rolled up for a fundraiser.

Sheriff’s deputies on foot and motorcycle ordered protesters to stay off the private driveway of El Adobe de Capistrano restaurant in the moments leading up to the governor’s 6:15 p.m. arrival. Schwarzenegger entered the downtown San Juan Capistrano eatery through a side entrance and did not address the protesters.

Schwarzenegger’s communications director, Matt David, told reporters the governor “wishes he could be outside with these protesters” and that he applauded their efforts.

“This is the last thing he wants to do,” said David, explaining that the governor hoped to work with lawmakers to find a different solution to the state’s budget crisis. “He understands how important it is to fund education.”

Of course, nobody forced Arnold to propose a $4 billion cut to K-12 funding. And he can reverse those cuts in his May revise. But he will get his chance to join these protestors over the next week, as California students are about to unleash an unprecedented wave of activism to stop Arnold and his attacks on public education.

The tone was set earlier this week at Mission Viejo High School, where 4,000 people rallied to oppose the education cuts:

Tuesday’s rally – one in a series of protests that have been staged on street corners and at Orange County schools in recent weeks – was primarily intended to give students an opportunity voice their views on the budget crisis in front of a microphone. The one-hour event was spearheaded by the Saddleback Valley Inter-Council of Students, a group of 21 student leaders from the district’s five high schools.

“Budget cuts should not punish students and the future of this state,” Kaitlyn Spore, student representative to the district Board of Education and a Mission Viejo High senior, told the crowd. “It is our hope that we can send a strong message to the governor that education must be a priority.”

These protests are about to get much larger. Two coalitions are organizing statewide protest actions next week – K-12 students will rally in Sacramento and across the state on April 18, and college students will do the same on April 21.

The April 18 Day of Action is being called Right to Learn and is organized by Youth Noise, a group that has been working to organize young Californians around a variety of issues. Trey Csar, the coordinator of the Right to Learn Day of Action, told me that their goal is to empower students to become activists, not just on April 18 but over the long-term period. The rallies are designed to mobilize students and build coalitions that can survive over the coming months, especially the summer break.

Right to Learn is modeling itself on the successful Step It Up climate action movement. Crowdsourcing is the driving principle, where students at high schools across the state will initiate activism, plan their own actions, and use the internet to share their experiences with other students across the state.

Alongside the April 18 movement, Students for California is organizing several mass rallies around the state on April 21, centered on a protest march in Sacramento from Raley Field to the State Capitol. There will also be marches in Santa Barbara, LA, Riverside, San Diego, and even Arcata. Josh Franco, who is coordinating the April 21 events, told me that his model is the immigrant rights protests from spring 2006 – a large display of student power, it is hoped, will spark political awareness among other students and show state legislators the depth of public anger at the proposed cuts.

If the Republicans are going to be broken, and if a 2/3 vote for a sane and responsible budget that doesn’t cut education is going to be attained, it will take public activism of this sort. California’s students are not going to take the destruction of their future quietly. Let’s hope their activism next week is a success, and that it is but the beginning of a statewide, mass movement to reverse these cuts.

The Slow and Steady Privatization of Public Education

Steve Lopez has an extraordinary column in today’s LA Times about a meeting at the Silver Lake school where his daughter is about to start kindergarten:

The auditorium was packed; the mood somber. About 200 parents had come to hear what everyone knew would be disturbing news. An anticipated $180,000 budget shortfall might well cost three critically important Ivanhoe educators their positions at the school, though they might be transferred elsewhere.

The parents group at the school had summoned families to tell them the news. And to present an alternative: a public education that would no longer be free.

Get out your checkbooks, parents were told. All those wrapping-paper sales and pancake fundraisers wouldn’t be enough. We could either pony up some hard cash, or see Ivanhoe’s standing as one of L.A. Unified’s best schools threatened….

Pay $25, if that’s all you can afford, Herman said. But he pointed up to a screen encouraging parents to dig a little deeper. Those three jobs can be saved, he said, if 80 parents contribute $250 apiece, 75 contribute $500, 50 fork over $1,000, 20 give $2,000 and six bust the bank with $5,000 contributions.

Four other L.A. Unified schools have already gone this route, Herman said, citing Canyon, Wonderland Avenue, Carpenter Avenue and Mar Vista.

We’ve heard of schools holding bake sales to pay for books and materials, but never have I heard of schools fundraising to retain teachers. It’s a shocking sign of just how dire the situation facing public education has become in our state, where parents hoping that their children will receive a good education must now open their wallets to ensure it.

Lopez goes on to mention that LA Unified is expecting even worse budget problems in the coming years – $100 million this year, but perhaps as much as $350 million in the next two years. And Lopez rightly points out that not every school can fundraise:

At nearby Micheltorena Street School, where more than 90% of the students qualify for free or reduced-price meals, the principal told me that of course she can’t match that kind of parental support. She’s hoping that given the greater needs of her students, she’ll be spared harsh cuts. But like other principals, she doesn’t yet know how bad the news will be.

What is going on here is the slow and steady privatization of public education in California. Turning education from something provided to every child free of charge to something provided to those children whose parents are lucky enough to be able to afford the cost.

And if you can’t afford the cost? The implication is clear – your child will sit in a classroom of 35 students, probably won’t learn a whole lot, won’t have a very bright future.

How is this any different from a tax increase? The Vehicle License Fee would, if restored to 1998 levels, eliminate the need for any education cuts at a cost of $150 per driver. Whereas the families at Lopez’ Ivanhoe Elementary are being asked to contribute hundreds or even thousands of dollars to keep teachers in the classroom.

Lopez reports that most parents are willing to pony up for the fundraiser, for the sake of their kids. And that suggests public support for new taxes for education, instead of school-by-school fundraisers, would be popular with state voters. The alternative is the erosion of the critical promise of free education to all of our state’s children. As Lopez so well points out:

when will we ever stop playing this shell game in which politicians rise to power promising prosperity without pain, even as working folks and retirees pay through the nose?

It’s an excellent question, Steve.

The Yacht Party Campaign Strategy: No New Taxes, Screw Everyone Else

Republican candidates for the open seats in November are already beginning to push their ads out. In SD-33, Assemblywoman and proud Yacht Party member Mimi Walters is putting out this ad, cosponsored by the Howard Jarvis Taxpayers Association. The ad is a ringing defense of the ruinous anti-tax politics that have brought California to its knees. The copy, in case you don’t feel like clicking on the “Red County” link:

Send a Tax-Fighter to the State Senate! Republican Assemblywoman Mimi Walters, Endorsed by the Howard Jarvis Taxpayers Association

“Taxpayers know Mimi Walters is the stand-up conservative [irony: the picture next to this shows Mimi sitting down] we can trust to protect taxpayers and private property rights. Mimi is one of our best friends in the state legislature and one of the strongest voices in Sacramento for common sense budgets and smaller government. We need to keep her working for California’s taxpayers.” Jon Coupal, President, HJTA

Tax-fighter Mimi Walters is working to:

-Protect Prop 13

-Stop tax increases

-Enact a state government spending limit

-Protect the 2/3 vote requirement for budgets and taxes

-Stop gas tax increases

So there it is, Mimi Walters is planning to run a virulently anti-tax campaign aimed at winning over the oh-so-crucial Howard Jarvis and Club for Growth crowd. Meanwhile, schools in SD-33, such as in Aliso Viejo, are facing crippling teacher layoffs and visitors are being discouraged from south county beaches thanks to a lifeguard shortage.

Mimi Walters’ makes it clear who her constituents are, and who they are not. It shows that she, like most of the Republican legislative candidates, believes that any level of suffering and economic damage is acceptable so long as not one red cent in taxes is raised. I’m sure the parents who live in SD-33 and worry about their children’s education will be pleased to hear it.

This sort of radical go-down-with-the-ship tactic shows two important things. One, at a time when the state GOP is starved for funds, Republican candidates are going to have little choice but to accept funds from extremist groups like Howard Jarvis. Second, that means Republicans have no choice but to take a far-right line that is not in touch with the state’s voters when dealing with the budget, and that is going to open up opportunities for Democrats.

The Democratic candidate in SD-33 is Gary Pritchard. He’s going to have an uphill battle no matter what, but if Mimi Walters is going to run as an anti-tax zealot happy to see her constituents suffer in crowded classrooms and on crowded freeways, then it gives him an invaluable opening.

Is Arnold Coming Around on Revenue?

It’s been a few weeks since I wrote about this, but surely you all still remember my insistence that what California faces is a structural revenue shortfall – that our budget problems are the cause of a long-term inability to raise enough money to pay for our basic services, and not with how we spend that money.

Obviously such a shortfall can only be closed through new revenues – and yes, that means new taxes. Californians need to finally understand that tax cuts are not a freebie – they come with enormous costs, and that the high price of higher education, their lack of mass transit options, their lack of affordable health care, and the looming K-12 disaster with 20,000 fired teachers are just some of those costs. 30 years of tax cuts have produced social inequality and a lack of opportunity, and only new taxes can reverse those trends.

So it’s welcome to hear that Arnold is hinting new taxes might be necessary. As reported in yesterday’s Mercury News:

Facing the worst fiscal crisis of his political career, the Republican governor in recent months has signaled in increasingly frank language that he would consider new taxes as part of a compromise to close an $8 billion deficit.

To be sure, he’s never declared: “Let’s raise taxes.” But more and more, he’s saying he is at least open to discussing it.

“I made it very clear my proposal” does not call for raising taxes, Schwarzenegger said at one of several appearances around the state last month addressing the budget. “But I’m not the only one that is running the Capitol. I’m not the only one that is running the state of California.”

Legislators, he added, are also involved in budgeting. And in the process of finding a compromise with the governor, higher taxes might enter the picture.

“I said and I made it very clear that everything is on the table,” Schwarzenegger said…

…Since then, the governor has struck a more compromising tone, suggesting that ideas such as closing tax loopholes, or applying the sales tax to services currently not subjected to it – such as, say, haircuts and legal advice – should be on the table….

Some experts say it reflects a battle between two identities – one, the anti-tax conservative and self-proclaimed disciple of free-market economist Milton Friedman; the other the political realist trying to fix the state’s daunting fiscal problem and dealing with a Democrat-controlled Legislature that resists his vision.

It’s not surprising that the Merc points to Arnold’s affinity for Milton Friedman – I’ve written before about how Arnold’s budget plans are a kind of California shock doctrine. But it is also interesting that Arnold is gingerly exploring the path of new revenues as a possible solution.

Sales tax modernization in particular has been identified by groups like the California Tax Reform Association as a valuable method of raising billions in new revenues, as the current sales tax is more appropriate to the 1960s than the 2000s in what it covers.

It might be too much to ask Arnold to revisit the Vehicle License Fee cut, which the California Budget Project estimated cost the state a whopping $6.1 billion for the current fiscal year – more than enough to wipe out the proposed education, parks, and health care cuts, all at the cost of about $150/year per person.

Of course, Arnold’s new willingness to support taxes – such as it is – runs into the stubborn opposition of the Yacht Party – Republican legislators who prefer to protect tax loopholes for the wealthy instead of doing their jobs and helping the state meet its public services obligations. These legislators are hell-bent on preventing any new taxes from being passed, and Arnold’s support for new taxes would likely just cause them to dig in even more deeply.

All this suggests that the battle over the budget will not be won in the halls of the Capitol, but in the court of public opinion. Californians are going to have to step in and play the decisive role here, most likely by telling the Yacht Party where to stick it. In that sense Arnold’s willingness to back new taxes is a big plus, as one of the few things Arnold is good for is mobilizing popular support for policies. Polls already show that Californians support Democrats on the budget, and with Arnold on their side, Dems might just be able to isolate the Yacht Party.

How exactly that isolation occurs will be key. Republicans will either have to fold under threat of losing their seats in the November election (a successful Denham recall would be very useful here) or we may have to go to the November ballot itself with a tax package, bypassing the Republicans. Either way, mobilizing the public to oppose the Republicans and support revenue solutions is the only way we will resolve this crisis.

The Defender of LA’s Homeowner Aristocracy

Marc Haefele has an excellent, and troubling, op-ed in today’s LA Times on Zev Yaroslavsky: “LA’s anti-density warrior”. It is a portrait of one of Southern California’s most powerful politicians who, apparently, fights urban density for its own sake. Although it is the Republicans that I have labeled as the chief defenders of the “homeowner aristocracy” – those particular homeowners who seek to preserve their property values and obsolete concepts of the urban landscape at the expense of everyone else – Supervisor Yaroslavsky shows that it doesn’t take a conservative to help lock out the mass of Californians from their dreams of economic security:

Yaroslavsky flatly denies that there’s any good in the city’s turn to greater density to create more affordable housing. Before cheering neighborhood councils and homeowner associations, he argues that greater density will destroy the ambience of neighborhoods and fill the pockets of developers but will do nothing to add to the city’s housing stock. Recently, he took Times columnist Steve Lopez on a city tour to point out what Yaroslavsky considers overdevelopment eyesores.

It is a portrait of a politician playing to the homeowner aristocracy, despite the complete absurdity of the position that density has no place in providing the affordable housing the region so desperately needs. More below.

Last summer, spurred by several developments in Los Angeles, I wrote Redefining the California Dream for the 21st Century, where I explained that the 20th century California dream, based on suburban sprawl, was dying, why urban density was the only path to economic security for most Californians in the 21st century, and how a “homeowner aristocracy” was emerging to fight this in the delusional hope of hanging on to the 20th century vision.

The gist of the argument is that due to rising fuel costs and declining fuel supplies, folks are going to need to live close to where they work and shop, where they can commute without having to get in a car. This means more people will want to live in urban centers, and that will mean a need for affordable housing, which we are already witnessing. But density provides not just affordable housing but affordable living – with lower fuel costs and the more efficient use of resources that comes with urban living, working Californians can have a hope of economic security – of the California Dream that has driven our state for decades.

None of this is new knowledge. We’ve known since the 1970s that California needs an urban density strategy. The governor at the time, Jerry Brown, recently returned to that theme in his speech to the California Democratic Party Convention last weekend, describing this as “elegant density”.

But neither is Zev Yaroslavsky’s anti-density politics new. He came to political prominence in the late 1970s and early 1980s as a defender of “neighborhoods” on the prosperous Westside from various kinds of development. He has been one of the most dogged opponents of the proposed “Subway-to-the-Sea” and in 2000 helped author and pass an ordinance preventing the MTA from using sales tax money to build it.

His current fight against density is broadly-based, but has zeroed in on SB 1818, a 2005 law that makes it easier to construct new density projects as long as they contain a specific proportion of low or moderate income housing. To Yaroslavsky this approach “doesn’t take into account the individuality of neighborhoods.”

But there is nothing that says a neighborhood will lose its individuality if it grows more dense, and certainly nothing that says neighborhoods never change over time. What he is really saying is that density upends the 1950s model of detached single-family homes and single-story strip-mall commercial centers – which is of course the point, because that 1950s model no longer works for most people:

About 62% of the city’s inhabitants rent, and the monthly payment for a typical one-bedroom unit is more than $1,400, according to city housing statistics. That’s unaffordable to anyone making under $50,000 a year, given the rule of thumb that a tenant should spend no more than 30% of his or her income on rent. The housing meltdown has made matters worse, as foreclosures push former homeowners into a rental market with a 2.5% vacancy rate.

And as jobs become harder to find, it’s going to add even more pressure to this housing crunch. Ed Reyes, who represents the 1st District on the LA City Council, described to Haefele what conditions were like for most of those lower-income workers who managed to find a place to live in the urban center:

This density can be found on the 500 block of South Berendo Street in Pico-Union, in Reyes’ district. One of the buildings on the block contains 40 units and is 80 years old. Its pale blue exterior paint only partly hides rotting woodwork underneath. A 400-square-foot unit in this building can cost $900 a month. The apartment I recently visited had three double beds; the sink and refrigerator were in the living room. Considering the apartment offered 50 or 60 square feet a person at full occupancy, it was neat and clean, but irremediably run down.

“This is what we call invisible density,” Jaime Rojas of the Latino Urban Forum said. “To say that it doesn’t exist is wrong.” Hundreds of thousands of people live in such apartments in L.A.

And for every person living in a dilapidated building like this, there is another low-income worker who had to move to Ontario, or Palmdale, or Norwalk, and fight traffic and rising gas prices to make it to work. LA’s working core, the people who keep the city alive and prosperous, are in need of new density to make a living. So why should homeowner aristocrats and their political defenders try and stop them?

Reyes sees the rising anti-density fervor in the city as veiled opposition to finding suitable affordable-housing sites outside low-income ghettos.

That would not surprise me. Opposition to urban density in California has usually taken on a mixed race and class character, where mostly white and well-off homeowners fight against density that they worry will bring a “lower element” into the neighborhood.

The article closes by showing how out of touch Yaroslavsky is with the politics of affordable housing:

“There are funds available,” he replied, citing federal block grant money and county money that originates from such federal agencies as the Department of Housing and Urban Development. Such funding, however, has been scarce since the dawn of the Bush administration. Nonprofit housing groups say it started disappearing in the Reagan years.

Yaroslavsky didn’t seem to know this.

In other words, Yaroslavsky is still playing the same game in the late 2000s that he was in the 1970s and the 1980s, despite fundamentally changed conditions and an even more staggering need for dense, affordable housing. At precisely the moment when LA’s future can be secured by turning to a new density, which in turn would secure the future of its working population, those few who benefited from the late 20th century policies of sprawl and cars are working to protect what they have – even if it means nobody else can enjoy economic security.

Yaroslavsky’s LA is dead. It’s time he acknowledged it, and that the city moved on into a more prosperous and equitable – and dense – future.

SD-12 Denham Recall: Will Anna Caballero Jump In?

Today’s Salinas Californian reports Anna Caballero has said she “may” enter the race to replace Jeff Denham should he be recalled:

Assemblywoman Anna Caballero, D-Salinas, said Thursday that she may jump into the race to replace Sen. Jeff Denham, R-Merced, if he is recalled by voters.

Caballero had indicated she wouldn’t enter the race, but said she’s reconsidering because of calls from Democratic activists in the San Joaquin Valley, part of the sprawling 12th Senate District.

“These are cold calls, from people that I don’t know,” she said.

It would be quite interesting to know who is making these calls. Caballero might well be a strong candidate – before taking her seat in the Assembly she was the Mayor of Salinas, and has a good organizing presence in the Salinas Valley. Of course, most of the district is over in the San Joaquin Valley – hence these calls.

Caballero’s profile is also VERY similar to the other potential candidate, former Assemblyman Simón Salinas:

Caballero joins Monterey County Supervisor Simón Salinas as a possible candidate. Salinas again said Thursday that he is considering whether to enter the contest, which will go before voters at the time of the June 3 primary.

“Frankly, it comes down to (whether) we can get enough resources to get our message out,” Salinas said. “It is such a big geographical area.”

The filing deadline for candidates in the hurry-up election is 5 p.m. Saturday.

As Randy Bayne explained yesterday, Salinas was believed to already be planning a run at Denham’s seat in the 2010 election – which, if successful, would let him stay in the seat until 2018. But if he took Denham’s place through the recall, he’d have to step down in 2014. Caballero, on the other hand, is only in her first term in the Assembly, and could presumably return there in 2014 if she chose.

Again, the filing deadline is Saturday at 5pm, and I’ll bring you updates as I get them.

Anti-Denham Ad Hits the Airwaves

[UPDATE by Dave] I just want to add right at the top so he can see it that Denham flak Kevin Spillane is a worthless hack, and his little press release he wrote about me based on a recent blog post couldn’t be more distorted and wrong.  The media is buying in to his stupid hissy fit, apparently unarmed with any institutional memory that goes back to 2003, that any recall election against a Republican is an abuse of power.  Grow some cajones, Kevin, and defend your candidate instead of inventing a boogeyman in the most hypocritical way possible.  There will be a Democratic candidate, he’ll come from the Central Valley, and he’ll be a damn sight better than the unthinking automaton rubber stamp Jeff Denham turned out to be.  If you can’t defend your candidate you’ll lose.  Period.

Lots of news today on the Denham recall, including Randy Bayne’s pessimistic view over in the recent diaries list. And here is some more: two new ads backing the recall are going to begin airing locally, paid for by the CDP. The TV ad is called “Sleeping”:

The ad copy, courtesy of FDR at the California Progress Report:

We sent Jeff Denham to Sacramento.

So how did he wind up with jet lag?

He spent thousands on travel – while the Senate was in session.

Airline tickets. Trips to Vegas. And a Sedona spa.

When he does show up, he’s sleepwalking.

Denham held up the budget, hurting our schools

Denham said he wasn’t taking raises – then secretly raised his pay by 20 percent.

The Fresno Bee called it “not quite honest.”

Don’t you deserve better?

Vote yes on the recall

A radio ad will also be aired – the copy of it, also provided by FDR, is over the flip.

The radio ad is titled “Travel”:

WOMAN: The MGM grand? Sedona?

I thought we sent Jeff Denham to Sacramento.

MAN: Wait a minute. The MGM is in Vegas.

WOMAN: Well, Denham has been racking up the frequent flier miles.

MAN: To Vegas and Sedona?

WOMAN: uh hm — to the number one “Destination Spa.” www.enchantmentresort.com

MAN: Sounds like a free vacation.

WOMAN: More like a recipe for jetlag. When Denham finally makes it to Sacramento, he’s practically sleepwalking.

MAN: What do you mean?

WOMAN: He held up the budget, hurting our schools. And remember how he said he wouldn’t take pay raises?

MAN: Oh, you don’t mean —

WOMAN: You guessed it. Denham secretly raised his pay – three times – when he thought no one was looking. The Fresno Bee called it “not quite honest.”

MAN: Well that’s an understatement.

WOMAN: And that’s why I’m voting yes on the recall. After all, don’t we deserve better?

Sure, these ads are hard-hitting, but I’m also not sure they alone will do the trick of successfully recalling Denham. Seems to me the much more necessary task is to identify him with the crippling schools cuts that so many in his district are faced with. Making him look to be a dishonest, lazy politician is but a start to the much broader framing effort that needs to happen here.