Governor looks to secure two Republican votes for tax changes

by Brian Leubitz

Well, step one for Jerry Brown is complete, as he got 2 Republican votes in the Assembly, but the job is far from complete.

The Democratic governor’s revised tax plan raises about $1 billion in corporate taxes, mostly from out-of-state companies, and redirects that money toward tax breaks for California businesses and individuals.

He enlisted two Assembly Republicans to support the package, but he still must find votes from at least two reluctant Senate Republicans for his plan. The Legislature is scheduled to close its regular session tonight.

Brown and lawmakers hailed the plan as a jobs creator, though they offered few projections on its economic stimulus impact. Brown was joined at a news conference by GOP Assemblymen Nathan Fletcher and Cameron Smyth, who voted Thursday evening to put the legislation, Assembly Bill 1X 40, over the top in the lower house. The measure passed on a 54-10 vote, with the bare minimum for the needed two-thirds majority. (SacBee)

Sen. Dutton is apparently not ok with taxes being raised on anybody, even if the taxes are just being shifted.  Apparently taxes on any one person can only go down in the world of Sen Dutton, and then proceeded to call for a special session to review the measure beyond Friday.  Because then, you know, he could stall it forever and make sure nothing happens.  That’s kind of his deal, don’t you know.

The likely targets for this measure will be Sen. Cannella, maybe Sen. Aanestad, and whomever else Jerry can drag along for the ride.  2 votes is doable, but certainly will take much arm twisting.

Governor aims to pass a tax reform measure before close of session

by Brian Leubitz

The Governor has been itching to get some sort of job plan going. Unfortunately, many of his ideas require a 2/3 vote, and Sacramento Republicans, like their counterparts in DC, seem more intent on blocking Democratic initiatives than getting anything done.

But this isn’t even a measure that is increasing taxes:

Brown last month proposed eliminating a corporate tax benefit that allows companies to pick the less-expensive of two tax formulas when calculating tax liability. He proposed using the money, about $1 billion, to fund a sales tax exemption for purchases of manufacturing equipment, and he proposed expanding an employer tax credit.

Even before Brown announced the plan, Republicans criticized it and Democrats acknowledged it was not likely to pass. The change would require a two-thirds vote in the Legislature, and Republicans blocked a similar proposal in budget talks with Brown earlier this year.

“Any time you have legislation, it’s the work of more than one hand,” Brown said at the biotech company Gen-Probe Inc. “There are some Republicans that are already on board, and there’s active discussion by those individuals with other legislators of that party. So, I’m reasonably optimistic we’re going to get something by the end of the week. It will reshape itself as it goes through the legislative process.”(SacBee)

Of course, the Republicans talk about “job creators” like somehow being rich equals creating jobs.  Corporations aren’t creating jobs, but Brown is trying to do something to spur spending.  Anything.  The elective tax structure hasn’t really shown to be a boon for anything but corporate treasuries, and creates no real incentive to create jobs in California.

Meanwhile, the Republicans moan about job creation, and then won’t do anything to create jobs. Color me shocked.

By Jakada Imani

Ella Baker Center for Human Rights

We’ve heard it before – “the green economy is here” and “green jobs are on the way!” At the Ella Baker Center, we put time, energy, and money into building training programs and promoting the idea of the “new,” green economy. Just a few years later, the economy crashed and green jobs became fewer and farther between than anticipated.

Now, more than ever, jobs of any kind are hard to find. But a weak economy doesn’t make the bad air any less harmful, or the energy bills we pay any more affordable. In a sustainable, healthy economy, people shouldn’t have to settle for grey jobs. Fortunately, Jerry Brown has a plan to fight unemployment and put more Californians to work fixing up houses and apartments to reduce energy consumption- the renewal and reform of the Public Goods Charge.

The Governor recently proposed a plan that puts the small surcharge most Californians already see on our monthly electricity bills to good, green use. His plan would direct the Public Goods Charge to fund jobs, projects and research reducing energy consumption, pollution, and our dependence on oil and coal. Set to expire at the end of 2011, the Public Goods Charge fund has been re-worked to invest directly in jobs for our communities and energy savings in our homes. In fact, Governor Brown’s plan calls for every dime to be spent maximizing job creation, both immediately and in years to come.

Of this large fund, the lion’s share- $250 million a year- is dedicated to energy retrofits of houses and apartments, with a requirement that at least 25% of the money be spent in low-income communities. This money would immediately go to work providing energy efficiency in our neighborhoods, while employing people from our neighborhoods. Many of us literally cannot afford to miss out on this tremendous investment.

California is known for innovation and leadership on economic and environmental issues, and this plan is no exception. The second-largest category of spending, $150 million a year, is to be dedicated to research and development of new technologies and businesses. This includes incentives for home and business owners to install solar power on their roofs. When our community buildings and neighbors’ homes become power plants, dollars are kept in the neighborhood while pollution is kept out of the air. It’s a true win-win, with the added bonus of creating jobs installing and maintaining these new, green energy sources.

The strength of the Governor’s plan is clearly not just “clean energy” but “economic energy,” a true example of what’s possible when policies connect people most in need of jobs with the work that most needs to get done. Imagine 100 breadwinners employed retrofitting homes, now able to buy their kids school supplies and groceries. At the same time, their hours of work are helping their neighbors live a healthier, more energy-efficient life. Like an electric charge, the money transfers and flows from one source to the next, powering everything in its path.

Too often we are told that we must choose between jobs and the environment. This is a false choice. An economy that promotes the health of the planet as well as their workers is better for everyone. Growing a strong green economy is the best way out of California’s unemployment crisis. It is essential for people of color and low-income communities to be a part of that recovery. And an essential first step is to renew the Public Goods Charge.

Join me in calling on our State leadership to act quickly and renew the Public Goods Charge – a great example of a solution to address California’s problems of poverty and pollution at the same time.

Several potential reforms wait on deck

by Brian Leubitz

It is still bill passing season up in Sacramento, and electoral reform is always a popular subject of conversation. Sen. Mark DeSaulnier passed an eminently reasonable reform to the initiative process:

Senate Bill 448, by Democratic Sen. Mark DeSaulnier, would require that paid solicitors working to qualify initiatives, recalls or referendums for the ballot wear badges stating in “no smaller than 30-point font print” that they are a paid signature gatherer.

The state Senate today approved amendments to the measure, which had previously passed both houses, on a 24-14 vote. The lower house had stripped a provision that would have also required identification badges for those working as a “volunteer signature gatherer.” (SacBee)

SB 448 would be a nice simple reform of the system that would let voters know who exactly they are talking to.  The downside is relatively minimal, so let’s hope that Gov. Brown goes ahead and signs this one.

But there are other changes still lingering around the Capitol.  While we have tried in vain for several years to get some form of same-day registration, we’ve been entirely unsuccessful so far.  This year seems to be headed in the same direction as SB 641, a relatively modest same-day registration bill, looks to tango with the dreaded Suspense File for bills requiring appropriations.  The pricetag is relatively small, pegged at between 300 and 600 thousand dollars, but that’s enough for some monkey business.

SB 641 is scheduled to come to the Appropriations Committee on August 25, so we may learn more about the future of Ron Calderon’s bill between now and then.

$4B of anticipated revenue now looks unlikely to materialize

by Brian Leubitz

The budget was always something of a hope and prayer exercise.  Well, with today’s cash figures from Controller Chiang’s office, you better start praying harder:

“While July’s revenues performed remarkably similar to last year’s, they still did not meet the budget’s projections,” said Chiang. “While we hope for better news in the months ahead, every drop in revenues puts us closer to the drastic trigger cuts that could be imposed next year.”

Income taxes were above projections by $89 million (2.9 percent) in July. But sales taxes were down $139.4 million (-12.5 percent), and corporate taxes were down $69.5 million (-19.3 percent) in the same month.

Unfotunately, we need to exceed projections by quite a few bucks every month to get to the hopeful goal of $4b of “additional revenue.”  With this latest setback, we are down $538.8 million from where we need to be to avoid the triggers.

And at this point, we can’t even get enough money from new sources soon enough if we thought we could pass a ballot measure.  The next election, in June, comes at the end of the fiscal year, too late to really help.

Of course, those triggered cuts would further devastate the California economy, our schools and our services.  Unless we get that revenue soon, this fiscal year could be a lot bleaker than we thought.

Governor claims reform too “dramatic”

by Brian Leubitz

Last week, Justine Sarver wrote about SB 168, a fairly simple reform that would ban paying initiative signature gatherers per signature.  As Justine noted, the reform would reduce the risk of signature fraud and offer more secure employment with a living wage.  However, yesterday Governor Brown vetoed the bill:

Brown wasn’t swayed: “This is a dramatic change to a long established democratic process in California,” he wrote. “I am not persuaded that the unintended consequences won’t be worse than the abuse the bill aims to prevent.”

Corbett, in a statement, said she was disappointed in the veto. “Direct democracy can only work if voters know what they are signing and voting upon,” she said. “This law has proved to be an effective remedy in other states to help prevent fraud without making it more difficult to put initiatives on the ballot.” (SacBee)

Hopefully the bill will come back in some form or fashion.  As it stands now, the process needs some “dramatic” change.

Budget Cuts May Get Stalled at the Waiver Request

by Brian Leubitz

The nasty budget that the Governor just signed included some MediCal cuts.  Unfortunately for the legislators and the Governor, and perhaps fortunately for some Medi-Cal recipients, the cuts must be cleared by the federal government in order to continue receiving important federal funds.  The problem is that the cuts are really far too deep, if allowed to proceed, Medi-Cal recipients would find it even more difficult to find a doctor that accepts Medi-Cal and get the services they need.  In other words, it puts lives of Californians at risk.

But that’s not the only issue, as there is always something to the political side of Medicaid.  If it were a simple matter of acceptable cuts, this batch would probably not fit the definitions.  But, in an article entitled “Liberal governor’s request for Medicaid cuts puts Democrats in tough spot”, the Hill points out that the administration might want to avoid poking Jerry Brown in the eye.  Of course, you’ll need to take the Hill with a big grain of salt, as they called Jerry Brown a “liberal Governor.”  You know, the guy who slashed our budget, that man is out of control with his liberal-ness.

But I digress from the point:

President Obama and congressional Democrats have been put in a tough spot by California Gov. Jerry Brown’s (D) request to cut Medicaid spending by 10 percent.

Brown says he needs to make the cuts to the state Medicaid program, known as Medi-Cal, to ease his state’s severe budget woes. But advocates say cuts of that size would be devastating to California’s most vulnerable residents.

The federal Centers for Medicare and Medicaid Services (CMS) – and, by extension, the White House – must choose between helping a Democratic governor who has been a leader on healthcare reform and signing off on a policy that advocates say would be devastating to people with disabilities.

CMS also has to weigh the potential fallout from the decision, because giving California carte blanche to make Medicaid cuts could open the floodgates for other states to make similar requests. (The Hill)

In other words, this cut would ripple not only through California, but far beyond. Other states, seeing a chance to cut a big line item that they aren’t so fond of anyway, will come knocking on the federal doors.  As goes California, so goes the nation, or something like that.

But if Jerry Brown is the “liberal” here, well, might as well be Dennis Cardoza on the other side:

“If the proposed cuts in the Medi-Cal rate go through,” Cardoza recently wrote to CMS Administrator Donald Berwick, “I am deeply concerned that [some] providers [of services for the disabled] will have no option other than to close their facilities.”

We risk losing many group facilities with these cuts. We risk losing many doctors with these cuts.  Pharmacies may stop taking MediCal soon too.  One more thing to consider: children with MediCal actually have a lower access to medical care than uninsured children.

Cutting Medi-Cal more at this time just means that this problem gets worse.