This piece was cross-posted in the Huffington Post. It was also co-authored by Joshua Pechthalt and Anthony Thigpenn.

When we think of California, we imagine the state that allowed the three of us to be who we are, a state that gave us the California Dream. For years now, that dream has been quickly slipping away and now it’s in danger of being lost forever.

California is not in crisis; crises are sudden and acute. California is in a chronic, grinding decline and it’s providing a window into America’s tomorrow.  Here we have the richest and poorest, the most diverse population, high technology centers which lead the globe. And yet, here with 38 million people – 20% of the United States – we cannot find a path to leave the bounty that invigorated us for the next generation.

The answer will not come from Sacramento, just as on the national level it cannot come from Washington. It needs to come from all of us. It’s simple: government has a central role in providing the basics of civilization and that costs money.

The first step is admitting that we need more money to pay for our present, much less our future. That’s why it’s time for the 1%, those who benefited the most from our state’s past investments, to invest in our state’s future. Our state needs perhaps $20 billion a year in new revenue to assure that kids grow up to lead. That will take time, but for now, we see a clear path to $6 billion or so a year that would at the very least restore a large portion of the most recent cuts to education, healthcare, safety and transportation. All it takes is the 1% chipping in and paying more income tax.

Warren Buffett said it best: “If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further. But I think that people at the high end – people like myself – should be paying a lot more in taxes. We have it better than we’ve ever had it.”

It’s been a brutal decade for most Californians. Our schools, universities, hospitals, roads, and bridges – which used to be the envy of the nation – are in tatters. The unemployment rate hovers around 12%, and Sacramento continues to talk only about what to cut next, perpetuating the downward spiral.  

Students are rightfully disgusted as they take to the streets and create their own Occupy encampments to protest the relentless inflation of tuition at California’s legendary colleges and universities. Working families who dream of providing their children with a higher education watch in horror as costs continue to skyrocket.

A couple of weeks from now, we face a massive $2 billion in additional cuts that will be “triggered” based on a summer budget deal passed on a wishful premise that the economy will get better before it gets worse. On the front lines once again will be children, the elderly, and disabled. The axe will fall on everything from public schools (where California already ranks 47th in per pupil spending) to in-home health care.

A Washington Post-Bloomberg News Poll from last month shows that 68% of all Americans support raising taxes on households with incomes of $250,000 per year and higher. Gov. Brown could also take his cue from the patron saint of fiscally conservative Republicans, former California governor Ronald Reagan, who raised taxes as governor and president numerous times, knowing it was for the good of our state and country.

Should every child in California have access to an excellent, rigorous, free education through college and beyond?  Should they have healthcare to assure that their minds are sharp and their bodies fit? Should they know that at any point after high school, whether they choose college or another path, they can find a good job?  Should they be the sail that lifts our economy to new heights in energy and technology solutions of tomorrow?

Yes.

We believe in our state. We believe in our country. We are patriots of the first order who know that true love of state or country manifests not in slogans, but in deeds that offer a brighter future to the next generation than to ours.

The time has come to say yes to our dreams. The time has come for the 1% to join the fray and help rebuild our state and our country. Let them come forth and pledge with us to invest in tomorrow, starting today.

Joshua Pechthalt is the president of the California Federation of Teachers, representing over 100,000 teachers and education workers. Anthony Thigpenn is president and founder of California Calls, a statewide alliance of 26 community-based organizations who have built a base of 328,000 supporters of a progressive, economic agenda. Rick Jacobs is the founder and chair of the Courage Campaign, a California-based online progressive organizing network of more than 750,000 members around the country.

by Sara Flocks, California Labor Federation

“Proposition 13 set up an unfair and dysfunctional two- tiered system of property taxes. It choked off a source of revenue, and the lack of that revenue has brought California to the edge.” –Kevin Starr, historian and California State Librarian Emeritus

Many Californians would agree with Kevin Starr that our state is teetering on the edge of disaster. Unemployment remains the second highest in the nation, 32 percent of all mortgaged homeowners are underwater, public schools have been cut to the bone and public universities are unaffordable for the middle class.

Big business and their Republican allies have repeated the laundry list of why California’s economy is struggling so many times that it is practically written in stone—Taxes, Regulations, Public Employees. These are the unholy trinity that supposedly crashed California’s economy and threatens to smother any business growth in the future.

The facts, however, contradict the well-worn talking points of big business. The Council on State Taxation, a business-friendly group led by CEOs of major corporations, found that California has a moderate tax burden, taking less in taxes from business than many other states, including the sweethearts of the right, Texas and Florida. 

Many experts look at regulations as job creators, in addition to the benefits to public health and worker safety. Roger Noll, co-director of the Program on Regulatory Policy at the Stanford Institute for Economic Policy Research breaks down the GOP’s obsession with regulations:

The effect of regulation on jobs has nothing to do with the mess we’re in. The current rhetoric about regulation killing jobs is nothing more than not letting a good crisis go to waste.

He goes on to state that regulations may affect job distribution, but not the total number of jobs, eliminating the possibility that California’s landmark environmental laws crashed the global economy causing the current recession. 

As for public employees, it requires leaps of logic to understand how laying off thousands of teachers, nurses, home health aides, crossing guards, librarians and public works crews makes the state a better place to do business. California already has the 4th fewest state employees per capita as any other state—even Texas has more state workers per capita than we do! And more than a third (37 percent) of those public employees are at UC or CSU—I doubt laying off professors, economists and business school personnel will please the business community too much. 

That begs the question, then, why is California on the edge? Putting aside the deregulation of Wall Street and their subsequent destruction of the global economy through risky and irresponsible gambling, why is California in such a dismal economic state?

A reporter recently put that question to state historian Kevin Starr.  He traced the beginning of California’s decline to 1978, the year Proposition 13 passed. Prop 13 capped property taxes, limited local governments’ ability to raise revenue and imposed a two-thirds majority to raise revenue.

Prop 13 has had profound negative consequences for California on all levels. Local government is starved of revenue and dependent on the state to keep schools open and local employees on the job. In turn, the budget crunch forces deep cuts to UC, CSU and every public program that impacts the lives of Californians. At the same time, elected officials can’t vote to raise revenue without a supermajority, giving the minority of anti-tax Republicans disproportionate veto power. 

While Prop 13 was seen as a populist measure, corporations have been the true winners. Across the state, the burden of property taxes has shifted radically from corporations to homeowners. A recent report by the California Tax Reform Association (CTRA) cites numbers for all counties showing how homeowners have taken on a significant burden of funding public services, while corporations have shirked paying their fair share.

The report goes on to outline how corporate property owners can exploit a loophole in the law to avoid paying what they really owe in property taxes. The law requires a 50 percent “change of ownership” to trigger reassessment, which corporations conveniently avoid in many transactions. The Bloomberg article describes a number of billion dollar commercial property owners that have avoided paying millions in taxes, including the owners of the luxury hotel the Fairmount Miramar. 

The CTRA summarizes the extent of the problem in their report “System Failure:”

We have found major changes of ownership in major properties which have gone without reassessment. The ones we examined are predominantly those of private equity buyouts, corporate purchases of companies, and bank mergers which have avoided reassessment….We believe that there are many properties, particularly the banks and other commercial properties, which should have been reassessed but have not been….

Not only has Prop 13 starved state and local budgets, caused mass layoffs and created a huge loophole for corporations to shirk paying taxes, but it has also put many new business that WANT to locate in California at a disadvantage. Because of the cap on property at the time it was purchased, property owners, including businesses, pay incredibly different tax rates. So a new business that wants to move into California may locate and have to compete with another business that pays millions of dollars LESS in property taxes than the new business. Some reward for job creation, right? Move to California, create jobs and WHAM pay more than your competitor just because they bought property before Prop 13? That sounds like something free-market business types would oppose!

So what will it take to pull California back from the edge? What can we do to stop our state from falling into an abyss of unemployment, foreclosure, budget cuts and misery? A good first step is to reform the commercial property side of Prop 13. By closing loopholes on “change of ownership” definitions and allowing more reassessment and a higher cap, the state could raise significant amounts of revenue. That would be a good first step to stop the budget hemorrhaging and put California on the road to recovery.

Jerry talks anti-tax doctrinaires with CalBuzz.

by Brian Leubitz

The Republicans and the Democrats, at least in the venue I know best, California, have a very different relationship with their respective bases.  The Democrats raise money from their activist base, gets volunteers, and then generally ignores them.  The Republicans, well, it is a very different story.  Sure they get money and volunteers, but the tail wags the dog.  The right wing activists of the Republican party controls them.

As a long-time blogger, I suppose I have a bigger megaphone than most.  However, I have nowhere near the power (nor earning power) of Jon Fleischman, my right-wing counterpart at the FlashReport.  He says something, and all of a sudden, legislators are looking around to make sure that they didn’t cross him. Me, well, sometimes I get an “attaboy” when I am of some use, but let’s just say that Calitics isn’t lucrative, and that nobody is calling me a horseman of anything but the cartoon variety http://1.bp.blogspot.com/_dj0Q…

So, it is interesting, that, in an interview with CalBuzz, Governor Brown called out the Republican base as the proverbial tale wagging the Republican party.

Invoking the infamous symbols of Conquest, War, Famine and Death from the Book of Revelation, the former seminarian identified the anti-tax fearsome foursome to whom the Republicans submit as 1) DC anti-tax crusader Grover Norquist; 2) Jon Coupal of the Howard Jarvis Taxpayers Association; 3) LA radio spewers John Kobylt and Ken Champiou and 4) FlashReport, GOP operative Jon Fleischman’s right-wing blog.

“It’s emotionally quite wrenching for any of the Republicans to embrace anything opposed by the Four Horsemen of the Tax Apocalypse,” Gov. Gandalf told Calbuzz. “If that group, or even maybe any one or two of them, invoke the dreaded ‘t’ word, they do cower.”

Of course, this is really nothing new.  If you’ve taken a bit of time to really consider the California right-wing over the past two decades, it doesn’t take a PhD in political science to see their slide from pragmatic dealmakers to ideological extremists.  Jerry likely knew this before he retook the Horseshoe, but perhaps the breadth and depth of this takeover took him by surprise.

To be honest, in many ways, the right-wing has more power over the Democratic Party than the left-wing base.  Under the 2/3 rule, revenue legislation must be tailored to hold all of the conservative Democrats. Nobody can take a walk, even if we did have the 2/3 Democratic chambers that we have been lusting after for so long.

Fleischman has a post today excoriating former Senate minority leader Dave Cogdill for agreeing to temporary sales tax increases.  He states, and perhaps daydreams, of what California would have looked like if we had a 2011 budget in 2009.  And the thing is for Fleischman, perhaps the world may have looked slightly better.

But that is only if you are doing well.  After all, California (and the US in general) is a great place for those who are doing well financially.  But ask those Californians who are alive today because they got a helping hand from state services, and you would see a very different picture of that 2009 vs 2011 budget debate.

Of course, the fact that the Rich need the state is hardly reported. But California without the economic engines that are the UCs, CSUs and the community colleges is a markedly different (and worse off) state.  A California without the public infrastructure is a worse off state.  We all need the public goods that only the state can provide efficiently. Denying that might be convenient for the Right, but it is devastating for California.

(I’ll be on KPFK at 8:40 Tuesday morning to talk about HJTA and the GOP. – promoted by Brian Leubitz)

Anti-Tax organization makes CA GOP a wholly-owned subsidiary

by Brian Leubitz

It won’t be saying anything new about my opinions on Prop 13 today.  No, my loathing for an initiative that set the state, and the nation really, on a drug binge of selfishness and greed has not changed.  The sad state of the current generation of American voters, who have become the first Americans to cast off concerns for their children or the next generation at all, in search of a few extra bucks in their BofA statements hasn’t changed.

No, this is more about the state of the legacy of Howard Jarvis.  He has succeeded in a way that would probably even shock him.  With the 2/3 majority, his organization, the Howard Jarvis Taxpayers Association can now wield an unprecedented level of authority.  In fact, recent events lead George Skelton to point the finger for the death of Gov. Brown’s jobs tax reform on HJTA and their new leader, Jon Coupal:

Brown and his advisors kept hearing from Republican senators that they sort of liked the governor’s proposal – thought it basically good policy – but wouldn’t sign on unless Coupal did.

“If Jarvis gives us a pass, we’ll be there,” is how one Brown intimate described the Republican feedback. “Coupal was the entryway.”

*** **** ***

Under Brown’s proposal, the assemblyman (Fletcher) added, “The people who stood to benefit were the working poor and small businesses, and they don’t have a powerful lobby. We were taking on some very powerful interests.”

In the end, the most powerful interest was the tobacco lobby. Cigarette companies prosper greatly from the current loophole. Their lobbyists swarmed all over legislators during the session’s final two days.

“It’s unbelievable,” Brown said in a Friday night statement, “that so many politicians in Sacramento would choose to protect cigarette makers and out-of-state corporations to the detriment of California jobs.” (LA Times)

But, alas, the cigarette companies have a lot of sway with both HJTA and with the GOP. Of course the order of those two organizations seems a little meaningless, as Republican legislators are now saying that they have to get approval from one dude with a membership list and a blog.

In the end, this all leads back to the stink of money.  Corporations do what they have to do to save money, and that means fighting for tax breaks on the back of the middle class.  But there once was a day that we could dream of legislators who could stand up to moneyed interest.  However in the day of multi-million dollar legislative races and the constant efforts to move up and over, perhaps that is too much to ask.

In looooong session, Jerry Brown is unable to muster 2 GOP votes

by Brian Leubitz

If you are like me, and follow a lot of Capitol reporters on twitter, you will see a slew of tweets ending around 2AM last night.  That would be because that is when the Senate finally closed its day and finished up this Legislative session.

But through all that, Brown’s big last-minute goal went down in the Senate:

Gov. Jerry Brown’s corporate tax package failed to clear the state Senate in the final hours of the legislative session.

The plan, contained in Senate Bill 116, fell five votes short of passage, by a final tally of 22-15.

The Democratic governor had proposed changing a corporate tax formula to require that multi-state companies calculate their tax liability based on the portion of sales in California. The roughly $1 billion expected to be raised annually through the change, mostly from out-of-state companies, would have been directed to specific tax breaks, including a sales tax exemption on manufacturing equipment. (SacBee)

The Governor wasn’t even able to hold all the Democrats and one (I’m trying to figure out who) actually voted no.  The question now for Brown is how he gets anything done with a Republican minority that understands their one (and only) power to block revenue legislation.  But, of course, even if the Senate is 2/3 Democrats next year, we now know that is no guarantee of anything.

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.

Sen. Steinberg raises idea of granting tax authority to local governments

by Brian Leubitz

With all the realignment talk running around, granting additional taxation authority to local governments hasn’t been immune.  In fact, Sen. Steinberg has addressed the idea a couple of times.  However, the current proposal seems more fully considered to a particular government sector.

Senate Bill 791 would allow local transportation agencies to seek voter approval for a “regional transportation congestion reduction charge” on gasoline or diesel. The bill language, introduced in the form of amendments to existing legislation last week, would also allow a new vehicle registration charge on electric vehicles. Revenues raised by the fees, which would require approval of a majority of voters in the impacted region, would fund transit proposals developed by the local transportation planning agencies to reduce vehicle congestion.

The Sacramento Democrat called the bill an effort to create a “local option” for funding transit projects, saying it is “very consistent with the work that we’ve done this year on bringing services closer to the people” through realignment of state and local functions. (SacBee)

Now, at first blush this seems to be an indicator of nothing good.  The only reason such a proposal is necessary is that our state government is essentially unworkable.  And, in fact, that is the motivation behind much of realignment.  The supermajority requirements have done a number on Sacramento, and the only remaining solution is to recreate tiny little fiefdoms.  It is regrettable, but given the circumstances, not an unreasonable path for Steinberg and the Legislative Democrats.

We are essentially at the point that the state is better off without coordination, and, from a functional standpoint, that is a poor use of resources.  But from a where we are standpoint, any taxing authority that can be reasonably achieved seems like a good idea.