All posts by Brian Leubitz

Marriage Equality

Prop 8 Hearings in 9th Circuit Today

9th Circuit panel will hear arguments on releasing the videos and overturning Judge Walker’s decision based on gay bias

by Brian Leubitz

UPDATE: KQED Public Radio intends to livestream audio of the hearing at www.kqednews.org  and www.kqed.org/news/

In just a few hours, Olson and Boies will be back in action, this time on two motions.  First, Plaintiffs’ lead co-counsel Theodore B. Olson will present the oral argument advocating for the release of the trial tapes at 2:30pm PT.  (Court release here) Plaintiffs’ lead co-counsel David Boies will present the oral argument regarding Proponents’ motion to vacate judgment at 3:30pm PT. I’m hoping to be on hand for those, but I expect competition for those seats to be a little tough. You can also check out the Prop 8 Trial Tracker for live coverage if I’m not able to make it.

If the appellate court does not block the video tape release, and there isn’t an emergency Supreme Court intervention, expect the courts to release those tapes shortly.

The motion to vacate is that silly one about Judge Walker not being able to rule fairly on the issue because he is gay.  Judge Ware dismissed it curtly, and as I have written on several occasions (including here and here), it should receive pretty short shrift.  The Prop 8 team is essentially arguing that minorities can not rule on civil rights cases that remotely affect them.  I’m wondering if they would have the temerity to argue that a female judge couldn’t decide a gender case, or an African-American judge couldn’t decide a racial discrimination case.  It should be, and likely will be, rejected almost out of hand.

More updates on this later today.

2:45: I’m at the court now, where the Prop8ers are presenting their case regarding the video. There basic argument is that they are very injured, and that the code of civil procedure trumps the common law right to access materials from the trial.

Judge2: you had two witnesses? Didnt they go on tv?

See my twitter feed for more updates.

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As Middle Class Dwindles, Corporations Continue To Pay Low Tax Rates

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Two new reports shed light on income inequality and who is paying for California’s government

by Brian Leubitz

It is probably just happenstance that these two reports came out on top of each other, but it weaves a narrative that has been out there for years.  The middle class is hurting, and the corporations, who need and require a strong middle class of consumers, is doing little to help.  In fact, they are actively working to strangle their own customers.

First, let’s start with our shrinking middle class.  The Public Policy Institute of California is out with a new report focusing on California’s increasing income inequality.  The statistics on the middle class from the report fairly summarize what has happened to our economy over the past thirty years.  In 1980, 60 percent of California families were middle income. By 2010, 47.9 percent of Californians lived in families considered middle income, after adjusting for the state’s cost of living. These are families with incomes between $44,000 and $155,000.  

Now, that’s a pretty broad swath of income levels, and it could be argued that a family earning $44,000 isn’t really middle class, but bright lines are always difficult in situations like these.  But the underlying truth remains the same, California’s (and the nation’s) middle class is disappearing.

California has always been somewhat exceptional, however. And such is the case for income inequality.  As a state, we tend to have a richer top income bracket and poorer bottom income bracket.  During the so-called Great Recession, income levels of the bottom 10% of earners fell more than 21 percent between 2007 and 2010. While the top 10% didn’t increase their fortunes, they only fell 5%. The gap between California’s upper- and lower-income families-which has been larger than in the rest of the nation for decades-grew twice as wide as it was in 1980. High-income families earn nearly $12 for every $1 earned by the lowest income families.

While this is going on, corporations are maintaining pay ratios of CEO to average workers of somewhere in the neighborhood of 200 to 1.  Unfortunately, not all of their customers, you know, the average worker, are doing so well.  Many of these customers are slipping further behind and finding that the California social safety net wasn’t really that robust after all.  But, losing their customer base still isn’t enough to get the Chamber of Commerce on board with tax increases or helping to fix our state’s economic situation.  After, all, it’s a pretty sweet deal they get now; many major California corporations pay little to no taxes:

California’s major corporations have rung up hundreds of billions of dollars in profits in recent years, but have paid only a few percentage points of those profits in income taxes here and in other states, according to a new nationwide study by several liberal organizations.

The compilation of corporate profits and state taxes … covered 265 of the Fortune 500 corporations that reported profits for three straight years, 2008-2010, including 33 based in California. Nationwide, the 265 firms had a combined $1.33 trillion in profits during the three-year period but on average, paid just 3 percent of those earnings in state corporate income taxes.

The 33 California corporations’ tax bills ranged from minus-1.5 percent (McKesson Corp.) to 8 percent (Apple). The California corporation with the largest profits during the period, Wells Fargo Bank at $49.7 billion, paid $344 million or 0.7 percent in state taxes. Second-place Intel Corp., with $23.3 billion in profits paid no state income taxes, the study found.(SacBee)

Now, all this isn’t to say that these companies did not pay taxes, after all, their shareholders paid capital gains taxes on any realized profits, and their employees paid taxes, and so on.  Nor did they do anything illegal.  They followed the letter of the law, which was largely written by their corporate lobbyists, but it is the law of the land nonetheless.  It isn’t really a California issue either, it is an issue of how we are going to fund state governments and balancing our priorities.

Our tax laws are generally a good way of offering incentives to taxpayers, but there is such thing as over incentivizing as well.  As we look at overhauling our tax code, which seems to be coming up at all levels of government, we need to ensure that both the federal and state governments have the resources they need to provide their services.

And as we are seeing with the increasing income inequality, those services are going to be more necessary than ever.

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Paycheck Deception Qualifies for November Ballot

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Measure would cripple California’s left

by Brian Leubitz

Back in the Special election in 2005, Gov. Schwarzenegger and his cronies tossed a series of stink bombs onto the ballot.  But for today’s purposes we are looking directly at Prop 75, titled “Union Dues – Political Contributions.”  Basically, it required that unions get written permission, every year, before they can use union dues for political contributions.  In other words, it went right at the heart of the Democratic coalition.  That went down, but not before it picked up almost 47% of the vote.

Fast forward to today, where we have an even more odious measure, both in consequence and sheep’s clothing:

The fight over unions using members’ dues to fund political spending is headed back to the ballot next year.

A proposed initiative to block unions and corporations from using automatic payroll deductions for political purposes has made the cut to go in front of voters next November, the secretary of state announced today.. The measure, backed by GOP groups, also bans labor unions, corporations and, in some cases, contractors doing business with state government, from making contributions to candidate-controlled committees. (SacBee)

This is basically the same thing, except this time it completely eliminates the use of dues money for political campaigns.  This means candidates and initiatives.  No written permission will allow those expenditures if this passes, so this one is quite a bit more powerful.

But to cover that up a bit, they added in a bit about “corporations.”  You know, corporations won’t be able to spend money on candidates.  Sounds great, but in reality, corporations don’t really focus money on candidate-controlled committees these days anyway. They go straight to IEs, where they can choose how the money gets spent while giving unlimited sums.  

And when is the last time that corporate contributions came from payroll deductions.  The idea is simply ludicrous and a total non sequitur.  Corporate money comes from the corporate treasury itself, not from the employees.  This money is coming from shareholders, not employees, so payroll deductions are not even applicable in that case.

Expect to see much interest in this one.  Leaders from business organizations, even supposedly moderate groups, such as the the Bay Area Council, have jumped all over this.  They don’t like unions, and are happy to do whatever they can to get rid of their influence in politics.  And this will do exactly that.

CORRECTION: The Bay Area Council has come to no official position on this measure, rather they endorsed the Governor’s three measures in 2005. I apologize for my imprecision in the previous paragraph.

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Our Initiative Process: It’s F&$*$D

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The Daily Show takes on California’s initiative system

by Brian Leubitz

I’m not going to surprise anybody on this blog when I say that the initiative process is well and truly screwed.  It leaves us with the people voting on a minority’s rights, voting for contradictory measures, and a wealth of confusion.  But with the Daily Show taking aim at the mess that is now, unfortunately, Hiram Johnson’s legacy, perhaps the word will get out a bit more broadly.

John Burton, who can make many a sailor blush, surprises even the Daily Show’s John Oliver with both his language and his feeling about the initiative system.  As Chairman Burton puts it: “It’s It’s F&$*$D.”  And a quick note to our esteemed leader, we’re not boycotting Amazon anymore. In fact, you can buy one of the exciting Kindle Fire devices and I get a referral fee.  Of course, if you’d prefer to shop at a store that hasn’t tried to skirt sales taxes for several years, you can shop at Barnes and Noble and get one of their competing Nook tablets. Oooh, exciting, either way, you’re helping out Calitics.

Back to the video, MinuteMan crazy dude (and Assemblyman) Tim Donnelly is also featured. But I’ll just let you get to that on your own…

Budget, Jerry Brown

Gov. Brown Releases Open Letter with Revenue Plan, Maintains Approval Rating

Instability looms with budget though

by Brian Leubitz

I was going to make this post about the Governor’s approval numbers, but he just made it a little bit more interesting by releasing an “Open Letter to the People of California.”  Quite auspicious sounding, but what it really is his revenue plan.  Here’s the meat of that plan:

My proposal is straightforward and fair.  It proposes a temporary tax increase on the wealthy, a modest and temporary increase in the sales tax, and guarantees that the new revenues be spent only on education.  Here are the details:

  • Millionaires and high-income earners will pay up to 2% higher income taxes for five years. No family making less than $500,000 a year will see their income taxes rise. In fact, fewer than 2% of California taxpayers will be affected by this increase.
  • There will be a temporary ½ cent increase in the sales tax.  Even with this temporary increase, sales taxes will still be lower than what they were less than six months ago.
  • This initiative dedicates funding only to education and public safety–not on other programs that we simply cannot afford.

    • This initiative will not solve all of our fiscal problems. But it will stop further cuts to education and public safety.

    This is basically what we have heard in the past, a hike on the highest earners along with a sales tax, and all of it dedicated to education and public safety.  Red meat for both parties, a little tough on crime with a little teaching.  Or, in other words, this package seems built from the ground up to win on the ballot.  Polling numbers show broad opposition to additional education cuts, and without revenues, those are simply inevitable.  While this package probably isn’t exactly what we would draw up in a perfect world, the California system of government is anything but perfect.  His language in this open letter is political-speak not intended for progressives. It is full of statements about how we can’t afford programs (see the quote above) and how awesome it is that are spending levels are at percentages not seen since the seventies.  

    We could pick at the email, his talking points, and the specifics of the proposal.  But Brown and his partners are building something that they think can win at the ballot, represent good policy in the long term, and help us out of the current budget crisis in the short term. It’s not exactly an easy shot to wrap up those three objectives with a nice shiny ribbon.

    And perhaps he has the juice to push the measure across the finish line.  Today’s Field Poll shows the Governor’s approval ratings pretty much right at where he has been for most of his term, in the upper 40s.  The current figure of 47% is down from 49% in September, but still within the margin of error of that survey.  However, his disapprove numbers have continued to creep up as “undecideds” jump off the fence and create a 36% disapprove figure.

    There are a number of reasons why Californians would begin to grow wary of the Governor, but the budget, as ever, looms large.

    “The public is, I think, bracing itself for additional spending cuts, and that’s never a good situation, either for the governor or a state Legislature,” poll director Mark DiCamillo said.

    With state revenue falling below projections, the Brown administration is expected this month to announce highly unpopular, automatic spending cuts in service areas including schools.  Nearly two-thirds of Californians consider the trigger cuts, part of last summer’s budget package, a bad idea, including majorities of Democrats, Republicans and independents, the poll says.(SacBee)

    The trigger cuts were a device of sorts to get a budget done, and from discussions in Sacramento, not a whole lot of people liked them there either.  But they enabled the Legislature to get enough votes from the two Democratic caucuses to pass the odious budget.  However, as the majority budget rules don’t include revenue, we are still faced with the same difficult situation as we had at the beginning of the year: convince a Republican to think beyond the four walls of his own career, or continued austerity. Both Democrat and Republican voters are far from excited on the triggers, but with revenues continuing to fall below projections, they are likely to be triggered early next year.

    Brown’s revenue proposal will help fill in many of those cuts, but won’t kick in until the end of next year. It is far from ideal, but with a recalcitrant Republican caucus it is what we have.  The measure is being submitted to the AG’s office today and will be circulating with plenty of time to get it on the November ballot.

    Read the full “Open Letter to the People of California” over the flip.

    Dear Friends,

    When I became Governor again — 28 years after my last term ended in 1983 — California was facing a $26.6 billion budget deficit. It was the result of years of failing to match spending with tax revenues as budget gimmicks instead of honest budgeting became the norm.

    In January, I proposed a budget that combined deep cuts with a temporary extension of some existing taxes. It was a balanced approach that would have finally closed our budget gap.

    I asked the legislature to enact this plan and to allow you, the people of California, to vote on it.  I believed that you had the right to weigh in on this important choice: should we decently fund our schools or lower our taxes?  I don’t know how you would have voted, but we will never know.  The Republicans refused to provide the four votes needed to put this measure on the ballot.

    Forced to act alone, Democrats went ahead and enacted massive cuts and the first honest on-time budget in a decade. But without the tax extensions, it was simply not possible to eliminate the state’s structural deficit.

    The good news is that our financial condition is much better than a year ago. We cut the ongoing budget deficit by more than half, reduced the state’s workforce by about 5500 positions and cut unnecessary expenses like cell phones and state cars. We actually cut state expenses by over $10 billion.  Spending is now at levels not seen since the seventies.  Our state’s credit rating has moved from “negative” to “stable,” laying the foundation for job creation and a stronger economic recovery.

    Unfortunately, the deep cuts we made came at a huge cost. Schools have been hurt and state funding for our universities has been reduced by 25%.  Support for the elderly and the disabled has fallen to where it was in 1983.  Our courts suffered debilitating reductions.  

    The stark truth is that without new tax revenues, we will have no other choice but to make deeper and more damaging cuts to schools, universities, public safety and our courts.

    That is why I am filing today an initiative with the Attorney General’s office that would generate nearly $7 billion in dedicated funding to protect education and public safety. I am going directly to the voters because I don’t want to get bogged down in partisan gridlock as happened this year. The stakes are too high.

    My proposal is straightforward and fair.  It proposes a temporary tax increase on the wealthy, a modest and temporary increase in the sales tax, and guarantees that the new revenues be spent only on education.  Here are the details:

    Millionaires and high-income earners will pay up to 2% higher income taxes for five years. No family making less than $500,000 a year will see their income taxes rise. In fact, fewer than 2% of California taxpayers will be affected by this increase.  

    There will be a temporary ½ cent increase in the sales tax.  Even with this temporary increase, sales taxes will still be lower than what they were less than six months ago.

    This initiative dedicates funding only to education and public safety–not on other programs that we simply cannot afford.

    This initiative will not solve all of our fiscal problems. But it will stop further cuts to education and public safety.  

    I ask you to join with me to get our state back on track.  

    Jerry Brown

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    Congress, The Presidential Election, and Control of the House

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    Potential for Democratic pickups under new maps

    by Brian Leubitz

    With only a longshot of a federal court challenge remaining, it looks like the new Congressional maps will go into effect for the June “primary” election.  And with that, there is the possibility of a few seats changing hands in the House. Currently, we have 19 Republicans and 34 Democrats, but if Nancy Pelosi is to retake the gavel, she’ll likely need to pick up a few next year.

    In Larry Sabato’s 2012 House ratings (h/t Bee), which are something of an institution among the many prognosticators in the business these days, he thinks there is at least one “likely” pickup for Democrats.

    Who’s that, you ask? Well that would be one Jerry Lewis, the self-dealing walking corruption scandal.  I mean, any Republican has to know it is bad when Andrew Breitbart’s website sends a letter to Speaker Boehner against you.  He’s avoided a couple vigorous challenges in the last few go-rounds.  However, his district has changed since 2010. He now is in a district that went for Obama by 7 points and could end up getting even a smidge crazier if a few incumbents end up jumping around.  At this point, Russ Warner and Renea Wickman are the two Democrats campaigning.

    But, there is one other large factor out there that Tony Quinn brings up today at Fox and Hounds:

    December’s Field Poll on the 2012 presidential contest, which shows President Obama leading Mitt Romney by 10 points and Newt Gingrich by 20 points, also gives us a few clues about the outcome of next year’s congressional races.  The survey suggests that if Romney heads the GOP ticket, Republicans might do all right in the congressional contests; if Gingrich heads the ticket, they could take a bath.

    That is because federal races have now become nationalized, and California voters may be less likely to split their tickets between president and congress than they were in the past.  California had very few hotly contested congressional races under the gerrymandered plan in effect for the past decade.  The 11th Congressional District that covered parts of the East Bay and San Joaquin County was the only one to change hands; Democratic Rep. Jerry McNerney won it by ousting a Republican incumbent in 2006.

    A Gingrich nomination could result in another Obama blowout similar to 2008 numbers.  With these new maps, that could very easily end up with another seat or two in the Democratic column.  And with the very real possibility of control of the House being determined by a few seats on either side, it could make a very big difference across the country.

    So, you know, Go Newt!?!?

    Budget

    Legislators Must Make Office Budgets Public

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    Court rules that Assembly Must Turn Over Records

    by Brian Leubitz

    Asm. Anthony Portantino has had his run-ins with Assembly leadership. Many of them, some of which resulted in getting tossed in one of the so-called “doghouses” and getting his office budget cut.  The spat got really nasty when the Rules Committee demanded a rather large cut from his office and accused him of overspending.  Portantino then took it upon himself to release his budget records and demanded that the rest of the Assembly do the same.

    That was a few months back, and since then the Senate has released most of their records but the Assembly is holding back. Perhaps it is part of the Portantino feud, or perhaps it is just to be consistent with years past.  Nonetheless, a Sacramento judge issued a tentative ruling yesterday ordering the Assembly to release the records.

    Earlier this year, Assembly administrators had claimed that the records were confidential under provisions in the Legislature Open Records Act that exempt “preliminary drafts, notes or legislative memoranda” and “correspondence of and to individual members of the Legislature and their staff.”

    On Thursday, Frawley said the Assembly “improperly withheld” the records and chided the lower-house for its “somewhat ironic” view of the open-records law, with legislative lawyers arguing for “a narrow interpretation that significantly restricts the public’s right to inspect legislative records.”

    “The records requested by the news organizations indisputably contain information relating to the conduct of the public’s business,” Frawley wrote. “The records all reflect how Assembly money is budgeted and spent, which is critical to an understanding of the Legislature’s operations.”

    The judge strongly rejected the Assembly’s argument that the records qualified as confidential “correspondence” under the open-records law.(LA Times)

    Tentative rulings are rarely changed, and the Assembly has apparently seen that it really isn’t worth the PR hit to continue this fight, at least for now.  Yesterday they announced that they won’t be protesting the ruling at the hearing with the Judge.  However, they can still appeal, but again that is hardly without risks.  The longer this goes on, the more (negative) attention it gets.  And with an approval rating hovering around 10%, that’s really the last thing the Legislature needs.

    While we might not get the records right away, expect to see them fairly soon. Heck, who knows, maybe some interesting information is hiding out in those budgets.

    Uncategorized

    Obama Still Safe in California

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    President doing fine in head-to-head matchups

    by Brian Leubitz

    Barack Obama’s luster has worn off even here in California, with only 45% inclined to re-elect and 44% looking for somebody new.  The problem with that is the somebodies trying to run against the president seem far less attractive with a name attached.  In a new Field Poll, President Obama leads Mitt Romney 50-40 and Gingrich 55-35.

    On the Republican front, yesterday’s field poll shows Romney barely edging Gingrich 26-23.  After the top two, the numbers drop off dramatically to Cain at 9% and Ron Paul at 5%.  Perry, Bachmann, Santorum, and Huntsman pull in 3% or less.

    There are some other numbers in todya’s poll that show a continued lack of enthusiasm for the President’s campaign.  

    “The good news for the president is once you put him up against a real live Republican, he doesn’t look so bad,” said Field Poll Director Mark DiCamillo.

    Still, DiCamillo said the poll’s finding that one-third of voters surveyed feel “very strongly” inclined not to vote for Obama, compared with the 26 percent who feel “very strongly” about casting a vote in his favor, is an “ominous” sign for the president. (SacBee)

    Now, I don’t think that anybody seriously thinks California will be in play. After all, if that is the case, things will be looking remarkably bad.  However, Obama has used the state as a resource for money and field purposes.  A continued lack of enthusiasm could put a dent in both those categories.

    Oh, and there is the fact that we’ll have a number of important ballot measures (see the previous post) in November to take care of here in California. Exporting resources might be harder than ever for the President, which might have a bigger impact on the race than a single poll.  However, I have a pretty strong suspicion that the Democratic base might get a little more enthused when presented with the stark choice of President Obama and the GOP nominee. The differences, while perhaps not as great as we would like them to be, are still quite visible.  California Democrats will certainly do there fair share.

    Budget, Jerry Brown

    Coming Soon to a Ballot Near You: Brown’s Tax Plan

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    Governor aims to increase highest tax bracket and sales tax for a limited time

    by Brian Leubitz

    If nothing else, Gov. Brown is ambitious this go-round.  While his pension plan is slowly simmering in the Legislature, he knows that we really can’t continue to function with cuts-only budgets.  With the impending decision by Director of Finance Ana Matosantos on whether to pull the triggers in the last budget deal, we are looking at billions more of holes in the budget to fill. (And at this point, the only question that is out there is how much of the triggers will be pulled.)

    Brown has mentioned that he will be bringing something to the ballot in terms of revenue, but it seems that there is serious movement on it now.  He’s been meeting with labor and his supporters too work on a plan that they can agree to get on the November ballot.

    In the latest proposed fix for California’s fiscal crisis, Gov. Jerry Brown is expected to announce a multibillion-dollar tax initiative in the coming days, asking voters to raise levies on upper-income earners and increase the state’s sales tax by half a cent.

    The levies would expire at the end of 2016, said sources with direct knowledge of the plan. The governor’s office has been fine-tuning the tax measure for weeks with its labor allies. It hopes to file language with the attorney general’s office as early as Friday so it can start gathering the signatures needed to place the measure on the November 2012 ballot.(LA Times)

    The plan would buy four-five years of time in order to both reset the budget and hope that the economy recovers.  Over the past six months there have been a raft of proposals being discussed from various organizations, and the most sure way to losing on all of them is having more than one tax measure on the ballot.  If this does hit the streets fairly soon as anticipated, other potential measures will probably die quietly.

    Until we see the details on this measure, I’ll reserve full judgment.  I do not like the inclusion of sales taxes, one of the most regressive taxes, but they do seem to be the most likely to pass.  Other than taxing the 1% that is.  Expect further details by next week at the latest.

    Uncategorized

    Jean Quan Recall Petitions Set to Hit the Streets

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    Two groups will be gathering signatures

    by Brian Leubitz

    Jean Quan’s problems certainly aren’t limited to Occupy Oakland, but it may well be the impetus to her recall.  It is really hard to defend her handling of the situation, and even some of her most dedicated supporters are inching for the exit.  After going through the process, the signature forms are about to hit the streets:

    The petitions to recall embattled Oakland Mayor Jean Quan have been all but cleared for takeoff and could be on the streets by next week.

    Once Quan’s opponents make a few minor wording changes, they’ll have 160 days to collect the 19,800 signatures needed to qualify the measure for the ballot, said City Clerk LaTonda Simmons.(SF Chronicle)

    Now, because there are two separate organizations gathering signatures, there could very well be a bit of friction.  Gene Hazzard, who first filed the recall paperwork, gets to officially submit the signatures.  The other organization that recently cropped up will have to trust him to actually turn in the completed signatures.  However, at this time a settlement without recall seems like a pretty vague, amorphous, and unlikely situation.

    It is never easy to collect the necessary signatures, but Quan has all the textbook markers of vulnerability to a recall.  Look for those petitions popping up all over Oakland soon.