Southwest CA Legislative Council on ballot props

As you are aware, the California Association of Realtors does not take positions on ballot propositions that are not real estate related. On the November 2 ballot are a plethora of propositions but none that are deemed RE Related – so no official CAR position statements.

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However, if you are curious, the Southwest California Legislative Council, a business advocacy group composed of business & civic leaders from the Temecula, Murrieta, Lake Elsinore & Wildomar Chambers of Commerce (and of which SRCAR is a founding partner), has considered each propositions during the past few months and has published the following positions:

Proposition 19 – Oppose: Legalization & Taxation of Marijuana.

Prop 19 allows people 21 years and older to possess, cultivate or transport marijuana for personal use while permitting local governments to regulate and tax commercial production and sale of marijuana to people 21 years and older. Hotly debated, proponents claim this bill would bring billions into our state coffers and eliminate or greatly reduce the hold of organized crime, especially narco-trafficantes, from a legal and regulated market. Opponents simply don’t want it legalized.

Proposition 20 – Support: Voters FIRST Act for Congress

Prop 20 extends the responsibilities of the Citizens Redistricting Commission and gives the commission the authority to draw boundaries for the United States Congressional Districts.

Proposition 21 – Oppose: Annual Vehicle License Surcharge to Fund State Parks

Prop 21 establishes an $18 annual state vehicle license surcharge and grants free admission to all state parks to surcharged vehicles and requires deposit of surcharge revenue in new trust fund for parks. There is no nexus – we would all pay a vehicle license tax to support parks.

Proposition 22 – Support: Local Taxpayers, Public Safety & Transportation Act

Prop 22 would prohibit the State from taking, borrowing or re-directing local taxpayer funds dedicated to public safety, emergency response or other vital local government services. Further, the act would protect vital, dedicaed transportation and public funds from state raids.

Proposition 23 – Support: Suspension of AB32 the global climate initiative bill

Also known as the California Jobs Initiative, Prop 23 would delay the implementation and operation of AB32 until California unemployment rate returns to the levels that existed when the bill was passed, 5.5% or less, for four consecutive quarters.

Proposition 24 – Oppose: Repeal of Corporate Tax Breaks

Prop 24 would repeal several corporate tax reforms that are slated to go into effect in 2010 and 2012. The corporate tax reforms were approved by the legislature and signed into law by Gov. Schwarzenegger in February 2009 as part of the budget agreement. Democrats got their tax increases as a result but now want to renege on the corporate reform portion of the deal.

Proposition 25 – Oppose: Legislative Vote Requirement for Passage of State Budget

Prop 25 changes the legislative vote requirement necessary to pass the state budget from 2/3 to s simple majority. The only check & balance we have in this state is 2 Republican votes keeping Democrats from simply raising taxes every time they overspend. This bill further states that if the legislature fails to pass a budget by June 15, all members of the legislature would permanently forfeit any reimbursement for salary and expenses until the budget is passed. Not nearly enough incentive to forgo our slim safeguard of 2/3 requirement.

Proposition 26 – Support: Legislative Vote Requirement for State Levies & Charges

Prop 26 increases legislative vote requirements to 2/3 for state levies and charges with limited exceptions, and for certain taxes currently subject only to majority vote.

Proposition 27 – Oppose: Eliminate State Commission on Redistricting

Prop 27 voids Prop 20 by eliminating the 14 member public redistricting commission and it’s authority and places the authority to set boundaries back with elected representatives responsible for setting their own districts. This gerrymandering approach has resulted in the fact that since 2000 just 1 single legislative seat in Sacramento has changed parties and is responsible for much of the gridlock and dysfunction we are experiencing today.

As always, we encourage you to do your own research and draw your own conclusions about what is best for you and our  state. These suggestions are the result of considerable debate by a 15 member board of local business and civic leaders and represent the consensus of that body, not necessarily the individual opinion of each member.

Remember – I’m a Realtor® and I VOTE. Make YOUR voice heard on November 2.

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Proposition 23 needs your vote.

As you know,CAR does not take ballot positions on issues they deem ‘not real estate related.’ However, I will be posting information from our local legislative business partners regarding the upcoming propositions. Meanwhile, here’s a position paper representing a minority business coalition that pretty much sums up the arguments for and against Prop 23.

Proposition 23 Is Needed to Save Jobs

By Earl Cooper
President/CEO of the Black Business Association

The African American business community has long been wary of California’s global warming law (AB 32) because of its potential negative impact on small businesses in the state.  A large percentage of African American-owned businesses fall into precisely that category.

Unfortunately, our instincts have proven correct.  The independent Legislative Analyst has determined that AB 32 will increase energy costs and result in lost jobs.  The California Air Resources Board (CARB) itself has acknowledged that small businesses will be hit disproportionately hard since they typically spend a larger percentage of their budgets on utilities and fuel.

That’s why the Black Business Association, and African American organizations across the state, strongly support Proposition 23.  By temporarily suspending the state’s costly global warming law, Yes on 23 will save small businesses and families from the electricity, gasoline and natural gas cost increases that would occur if this flawed law were implemented.

Yes on 23 will also save jobs – more than one million of them – by keeping energy costs down.  With 2.3 million people out of work in this state, we need to do everything we can to save jobs.  That’s why we are proud to join with other organizations such as the California Small Business Association, California Hispanic Chambers of Commerce and National Federation of Independent Business in support of Proposition 23.

There is also growing support for Proposition 23 from cities and counties because according to the Legislative Analyst Yes on 23 will save local governments from the higher energy costs the global warming law would impose.  According to the Legislative Analyst, Proposition 23 also would improve the economy, which will help local governments facing budget problems.

And a recent study found that Yes on 23 would save the City of Los Angeles nearly $200 million per year.  Sacramento County would save over $70 million per year and the City of San Diego would save over $50 million per year.

These local government benefits mean that cities and counties will have more funds available to pay for vital public safety services such as law enforcement and fire protection.  It’s not surprising that the California State Firefighters’ Association and the Los Angeles Police Protective League are among the public safety organizations supporting Proposition 23.

And this is important: while global warming is a serious issue, we need to understand what California can and cannot do to influence it.  According to CARB, California can’t solve global warming all by itself, and in fact can’t even make a difference in worldwide global warming emissions.  So what California small businesses and consumers are left with are higher energy costs and no measurable climate change benefits.

Equally important is the fact that Proposition 23 won’t in any way weaken or roll back any of the numerous clean air and water laws that protect our communities from smog-forming or other emissions that pose a risk to the environment or public health.

That’s why Proposition 23 just makes sense. It will save jobs that are in dire need right now, and keep down energy costs for small business, while maintaining existing laws that are vital for protecting the environment and public health.

Now more than ever, we need Proposition 23.

Proposition 16 – The Biggest Lie on the Ballot.

We’ve all been absolutely bombarded by election ads this cycle. Even people who are into that sort of thing are tired of the bombast and we’ve still got a week to go.

But one of the loudest and most consistent campaigns is being waged by Pacific Gas & Electric for Proposition 16. And let me tell you there is no more cynical and fraudulent campaign on next weeks ballot than the battle over Prop 16.

PG&E has titled Prop 16 the ‘Taxpayers Right to Vote Act’. That’s a lie. The Proposition is about nothing more than perpetuating PG&E’s utility monopoly and they’ve spent over $40 million to do it. Ask yourself – is any publicly run company really that altruistic that they would spend $40+ million dollars just to save their ratepayers or potential ratepayers some money? No even close. Folks – if they’re willing to spend $40+ million on this bill you know the payback has to be significant. And it is. In a rare moment of candor, one of their own ads claims that municipalities are considering spending $2.5 billion dollars to take over their own utility production. That’s the pot of gold at the end of the rainbow, folks, that $2.5 billion or more over the next several years. If PG&E can do an end-run by bamboozling enough people at the ballot box next week, they won’t have to spend money trying to defeat the matter every time it comes before a city or county in the future. Pure & simple.

You see, PG&E has a monopoly on electrical production in their part of the country. Nobody else like Southern California Edison or San Diego Gas & Electric can set up shop in Northern California. As a result, PG&E’s rates are even more onerous than the other utility companies – about 40% higher per kilowatt hour. So several cities in their jurisdiction have opted to produce their own power over the years and many more are climbing on the bandwagon trying to provide a measure of control and cost savings for their citizens. And while the other utliities are sitting back and taking a more wait-and-see approach, you can bet they are salivating at the prospect of a win as well. No more competition in any part of the state for any utility.

PG&E claims that these municipalities are able to just decide to do this on a whim and spend million of your dollars to do it. Nothing could be further from the truth. If your city decides to spend $50 bucks to improve a piece of roadway or $1 million to acquire a piece of land, it is subject to significant review by at least two commissions before it even gets to a vote of the council. Citizens have input every step of the way and if the project doesn’t pencil out it doesn’t fly. In some cities the public does have a chance to vote on the proposal (requiring a 50% majority) while in other cities it is decided by our elected officials, the council.

PG&E knows full well that if this passes and the voting requirement jumps to 2/3 they will never again be faced with an insurrection by a city or county because it is virtually impossible to muster a 2/3rd majority of public votes. Folks, if your city wanted to give away $20 bills on the street corner, you couldn’t get 2/3 of the voters to approve it. And that’s what PG&E is counting on.

Their ads are a lie – blatant and cynical. Rather than being the pro-consumer advocates they pretend to be, they are anti-consumer in that they would rob city and county governments of the ability to control their own destiny and reduce and control runaway utility costs for their residents. Both the California Association of Realtors and the Southwest California Legislative Council have denounced this fraud being perpetrated on the people by PG&E. The Southwest California Legislative Council is comprised of 4 major cities and Chambers of Commerce in Southwest Riverside County. You might be asking, ‘But Gene, the California Chamber of Commerce is one of the organization supporting this bill. Why would your local Chambers come out in strong opposition?’ I found the answer 2 weeks ago at the California Chamber of Commerce 2010 Business Summit in Sacramento. Prominently displayed as a presenting sponsor of the event was – ta-daaa – PG&E. Yeah, that’s right. Money talks. But PG&E money can’t buy off every local Chamber or association who have their constituents best interests at heart.

So when you go to the polls next Tuesday if you think you’re striking a blow for more accountable government and lower taxes by voting for Proposition 16, think again. This is just another egregious example of big money able to buy enough time to tell you a big lie time and again, hoping you’re not smart enough to see through it. I guess we’ll see next Tuesday if they were right.

Vote NO on Proposition 16.

For more information, please go to: PG&E Ballot Initiative Fact Sheet.

The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly, the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR,  or any local or state government or other mental institution.

CAR & SCLC Offer Recommendations on June 8 Ballot Propositions

Both the California Association of Realtors and the Southwest California Legislative Council have published recommendations for next Tuesday’s election on the various ballot propositions that you will find. The SCLC is in agreement with the positions supported by CAR and has also staked out positions on a couple of the measures that CAR determined to be ‘Not Real Estate Related’. Feel free to use this voter guide to the upcoming elections and please contact me with any questions. I have also included links to both the CAR and SCLC websites for further clarification on why each organization took the position they did.

Neither CAR nor SCLC endorse candidates in local, state or federal  races. However, CAR does support candidates in local and state races and NAR supports federal candidates with direct contributiuons and, in some cases, independent expenditure campaigns.

CAR Ballot Proposition Positions / SCLC Ballot Propositions

Proposition 13 – CAR: Support    SCLC: Support.
Proposition 13 would prohibit tax assessors from re-evaluating new construction for property tax purposes when the new construction is consider earthquake safety improvements. Tax assessors would only be allowed to re-evaluate for property tax purposes after the building has been sold.

Proposition 14 – CAR: Neutral    SCLC: Neutral
Proposition 14 would require that candidates run in a single primary open to all registered voters, with the top two vote-getters meeting in a runoff. This system would take place in the 2012 elections. This Proposition would not affect Presidential and political party leadership positions.

Proposition 15 – CAR: Not Real Estate Related    SCLC: Oppose
This Proposition was placed on the ballot by legislation (AB 583/Hancock). Proposition 15 would institute a pilot program of publicly-financed elections for the office of California Secretary of State. The publicly-financed election would be funded by taxing lobbyists, lobbying firms and lobbyist employers. The Proposition is currently the subject of litigation.

Proposition 16 – CAR: Oppose    SCLC: Oppose
Proposition 16 is a state constitutional amendment, if passed, would require a two-thirds voter approval before local governments can provide electricity service to customers or implement a community choice electricity program using public funds or bonds.

Proposition 17 – CAR Not Real Estate Related    SCLC: Support
Proposition 17 amends Proposition 103, passed by the voters in 1988, to authorize the use of an additional discount on premiums for automobile insurance policies. In particular, the act would allow an insurer to offer a “continuous coverage” discount to new customers who have maintained their coverage while they previously were customers of another insurer.

Southwest California Legislative Council posts June 8 Ballot Positions

Our partners at the Southwest California Legislative Council have posted the following positions on the June 8 ballot measures.

June 1, 2010

Southwest California Legislative Council Takes Action on June 8 Statewide Ballot Measures

The Southwest California Legislative Council (SWCLC) has reviewed and issued positions for the June 2010 statewide election. The following statewide Propositions are only the beginning of what is expected to be a busy election year with many more Propositions expected in November. The SWCLC will continue to be diligent in reviewing each Proposition and the impact each may have on the Southwest California business community.

Proposition 13: Seismic Retrofitting
SWCLC Position: SUPPORT

Proposition 13 would prohibit tax assessors from re-evaluating new construction for property tax purposes when the new construction is consider earthquake safety improvements. Tax assessors would only be allowed to re-evaluate for property tax purposes after the building has been sold.

The SWCLC believes this would be a benefit to owners of existing structures that have complied with earthquake retrofitting laws. Proposition 13 would also ensure equal treatment of property owners who incorporate the seismic safety improvements.

Proposition 14: Elections: Open Primaries
SWCLC Position: NEUTRAL

Proposition 14 would require that candidates run in a single primary open to all registered voters, with the top two vote-getters meeting in a runoff. This system would take place in the 2012 elections. This Proposition would not affect Presidential and political party leadership positions.

The SWCLC chose a “Neutral” position due to the belief that more research needs to be done on the Open Primary System. Voters in 2004 defeated a similar Proposition, however other states have similar systems in place which believe to allow candidates to take positions on issues that they feel are right for their constituents without fear of retribution from political parties or special interests.

Proposition 15: California Fair Election Act
SWCLC Position: OPPOSE

This Proposition was placed on the ballot by legislation (AB 583/Hancock). Proposition 15 would institute a pilot program of publicly-financed elections for the office of California Secretary of State. The publically-financed election would be funded by taxing lobbyists, lobbying firms and lobbyist employers. The Proposition is currently the subject of litigation.

The SWCLC has historically opposed tax increases on any single industry. SWCLC believes that even though Proposition 15 is a pilot program aimed at only one particular political office, the ultimate goal would be to spread this effort to other political offices and increase the taxing of the lobby industry to pay for public-financed elections. A similar measure in Vermont was ruled to violate the United States Constitution.

Proposition 16: Taxpayers Right To Vote Act
SWCLC Position: OPPOSE

Proposition 16 is a state constitutional amendment, if passed, would require a two-thirds voter approval before local governments can provide electricity service to customers or implement a community choice electricity program using public funds or bonds.

The SWCLC opposed Proposition 16 due to the potential of other utility companies requiring the same for their respective utilities and for requiring a super-majority vote of residents that may not benefit from a community choice electricity program. The SWCLC feels that local control is best when deciding to enact electricity service due to having greater control of electing local officials and not having a mandated super-majority vote.

Proposition 17: Continuous Coverage Auto Insurance Discount Act
SWCLC Position: SUPPORT

Proposition 17 amends Proposition 103, passed by the voters in 1988, to authorize the use of an additional discount on premiums for automobile insurance policies. In particular, the act would allow an insurer to offer a “continuous coverage” discount to new customers who have maintained their coverage while they previously were customers of another insurer. Continuous coverage is defined to also include applicants who experienced up to a 90-day lapse in coverage in the past five years for any reason other than nonpayment of their insurance premiums.

The SWCLC supports this effort as many other states currently allow a discount for continuous coverage when switching between insurance companies. SWCLC also believes that this type of offer will lead to consumers having access to competitive or lower rates if an insured driver decides to change their insurance company.

Log on to www.SouthwestCA.biz for more information on issues of importance impacting the Southwest California business community.

Founded in 2004, the Southwest California Legislative Council is the regional business advocacy coalition of the
Temecula Valley Chamber of Commerce, Murrieta Chamber of Commerce,

Lake Elsinore Valley Chamber of Commerce and Wildomar Chamber of Commerce.

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Southwest California Legislative Council Announces Position on Bills

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The Southwest California Legislative Council, with whom SRCAR is an advocacy partner, today adopted the following positions on current/pending legislation:

Support – ACA 30 (Jeffries) To abolish the office of Lieutenant Governor.
Self explanatory – this largely ceremonial position requires salary & staff expenses and the duties could be consolidated with the Secretary of State.

Support – AB 1671 (Jeffries) To prevent the Governor from appointing vacancies on the County Board of Supervisors.
A recent example in Riverside County left us without the ability to pass certain bills at the county level while Sacramento played politics with us. Our local positions should not be state appointed.

Support – AB 1672 (Jeffries) To make the California Air Resources Board an elected rather than appointed body.
The CARB is one of the most egregious examples of the lack of accountability on state boards & commissions with the Chair stating publicly that if she had to worry about being elected she would worry about all the jobs cost by their recommendation – but she’s not so she doesn’t.

Oppose – AB 1594 (Huber) To prohibit construction of the peripheral canal.
An attempt to circumvent the wording and intent of the state water coalition recommendation and the Nov, ballot initiative.

Oppose – AB 518 (Lowenthal) Provides incentives for cities and counties to reduce or eliminate free or subsidized parking.
Would prove particularly costly to outlying areas like Southwest County where 60% of our residents commute and are forced to park either at work or when they go shopping.  Unintended consequence is a reduction in people going to the malls reducing revenue to shopowners and downstream job market.


Oppose – SB 657 (Steinberg) Require retail sellers and manufacturers to implement policies to eradicate slavery and human trafficking from their supply chain.
Legislation already exists prohibiting slavery and human trafficking. To expect your local grocery store or hardware store to be able to track it’s products back to their origin and potentially take action against some foreign source is ludicrous. Besides, doesn’t Darrell Steinberg have anything better to worry about – like our state budget?


Oppose – SB 810 (Leno) Single payer health care system
We are in agreement that the state should be the appropriate body to determine this issue – rather than the federal government, but this bill is not the answer and would only increase the debt load of the state.

Founded in 2004, the Southwest California Legislative Council is a regional advocacy coalition of the Temecula Valley Chamber of Commerce, Murrieta Chamber of Commerce, Lake Elsinore Valley Chamber of Commerce and the Wildomar Chamber of Commerce. Its mission is to provide a basis for the four chambers of commerce to act on local, state and federal legislative issues to secure a favorable and profitable business climate for our region.

Stop the RCWD Building Moratorium

In  a recent Community Forum for The Californian, Jack Hoagland, a Director with the Rancho California Water District, posted a piece entitled “What part of ‘water crisis’ escapes understanding?’ In his post, Hoagland details his proposal for Rancho Water to ‘temporarily stop issuing water supply letters (necessary in the approval process for new development) and to stop installing water meters.’

Translation: BUILDING MORATORIUM.

I’m not sure if Hoagland actually believes the specious arguments he puts forward or if the whole scheme is his attempt to shock the community into a response. As he summarizes, “We need action from our development community to pressure the Legislature to resolve the state water issues.”

Perhaps he believes his plan to hold the community hostage is what it will take. Perhaps he hasn’t been aware of, or participated in, the numerous efforts by local businesses (including developers), municipalities and Rancho Water District customers to effect comprehensive change with the legislature through numerous letter writing campaigns and personal visits.

Or perhaps he truly is that out of touch with the community he purports to serve. The ‘if we don’t build it, they won’t come’ philosophy went out of favor during Jerry Brown’s last term.

What we do not need is an attempt by Rancho Water or any other group to stifle legitimate development in this economic climate. While Hoagland alludes to ‘vacant malls and commercial centers’ and the high residential foreclosure rate, he doesn’t seem to grasp that these have already had a severe dampening effect on development. Considering that demand for new resources is at a virtual standstill due to the housing and commercial meltdown, this call for a moratorium accomplishes no positive purpose. It’s only apparent purpose is to heap insult onto an already severely injured party – namely the citizens, businesses, municipalities and ratepayers of RCWD.

Yet with our residential housing market carrying an active inventory of just over 1 month, the need for additional housing stock will become apparent before long. Similarly with the lack of funding mechanisms currently available for commercial development, only well conceived and funded projects are going forward, the rest are waiting until the current glut of available space is reduced. At a time when everybody from our President to our Governor to our city leaders understand the need to create job opportunities to return our economy to a more robust footing, Rancho Water is proposing to literally turn off the spigot on the cities efforts to attract new jobs to our region.  This is counter-productive at best, idiotically negligent at worst.

We are joined in our efforts by the Cities of Temecula and Murrieta, by our County Supervisor, the Southwest California Legislative Council, The Murrieta Temecula Group, the Building Industry Association and other business and advocacy groups throughout Southwest California.

If you agree that the last slap our community needs right now is a building moratorium, please join me at a public hearing at 6 p.m. on November 9th at the Rancho Water District board room at 42135 Winchester Ave in Temecula (Winchester West of Diaz). Hoagland claims he would like to ‘hear our ideas and views’. Let’s make sure he does – politely and concise.

In addition to our SRCAR email campaign, our partners at the Southwest California Legislative Council have also instituted a letter writing campaign which you can participate in by clicking below.

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Temecula Valley Legislative Summit – Follow the Water.

leg dayOn a day when, ironically, the Obama administration summoned state officials and interest groups to a lecture from the Colorado Cowboy Hat about California water issues, the Temecula Valley Chamber of Commerce presented its  comprehensive ‘2009 Legislative Summit’. If the giant water spigot overshadowing everything was too subtle for you, the fact that the only two speakers this year were Tim Quinn, Executive Director of the Association of California Water Agencies (ACWA); and Assemblyman Kevin Jeffries, who was recently appointed to the (bi)-partisan, joint committee charged with producing a workable bill to resolve the states current water crisis should have tipped you to the subject.

Moderated once again by the Sacramento Bee‘s longtime political columnist Dan Walters, the event brought out the areas business and civic leaders for some discussion of water, infrastructure, taxation and other issues affecting our state. Walters led off the panel referring to this years motto for the event, California, Looking Forward. He applauded the decision to look forward – because looking back is ‘just too depressing’. He noted California’s Boom & Bust history saying it’s almost like ‘we’re addicted to it’.

They were in general consensus that something will be done legislatively to address the issue, maybe soon. They’re just not sure what it will look like. One segment of our legislature believes we should continue to address the issue through conservation measures and higher user fees while another segment agrees with conservation but insists on infrastructure improvements for long term reliability. Guess which side’s in the minority.

I’ve written on the Delta Region (Follow the Water Tour) and followed the water trail from the Oroville Dam to my spigot in Murrieta courtesy of the MWD. A recurring but new theme is emerging – the concept of an ‘alternative conveyance’. Defeated as a solution in 1982, the recent actual drought, coupled with severe regulatory drought has brought the system to it’s knee and the despised ‘peripheral canal’ has morphed into the ‘alternative conveyance’. But as Quinn said “It’s a very different political climate than it was in 1982.” In Sacramento ‘money is the lubricant for true water change. Every interest group comes with a price tag.‘ And they say lobbyists day are numbered! .

dan waltersThe ‘alternative conveyance’ could take the form of a 44 mile long river around the Delta, a hardened canal through the Delta or a tunnel under the Delta. Each alternative has it’s pro’s & con’s, but they’re all better than what we have today. Whichever it turns out to be will come with a high price tag – some of which will certainly be borne by ratepayers (you & me). The reward for this is a reliable supply of water to the breadbasket farmers of the Central Valley and enough to keep the deserts of Southern California Green (you & me).  Arguing that water is not so much a partisan issue as a regional issue, they nevertheless succumbed to the reality of politics. Central Valley Farmers (current unemployment rate – 40+%) represented by Democratic Legislators are being increasingly vocal and it’s got some Democrats scrambling to save their seats.

kevin jeffriesSimilarly, some environmental groups are coming on board as they understand the need to preserve the Delta. The 100 year old hand made peat-moss dykes keeping the region arable are in critical condition. Susceptible to earthquake, fire, flood and sabotage, the Delta is a fragile and unnatural ecosystem. It will require a major effort to preserve and will likely still involve some ‘loss’ of land to the estuarial condition that existed until a century and a half ago when the levee & dyke system was introduced to the region. First developed as subsistence farming for small communities, the region is not considered to be a high-producing agricultural mecca – it costs the state more to keep it farm-able than the farms actually produce every year.

Still more strange bedfellows involves a schism between the dwindling ranks of trade unions (workers) and groups like the SEIU, CTA and Prison Workers Unions (public employees unions). The public unions don’t really care one way or the other on the water issue. They are following the money. They know that if California launches the kind of effort necessary to truly address the matter, it will take potential bond money out of the same general fund they’re trying to tap.Besides having 70% of the earmarks already in the budget, they want access to more and infrastructure will compete for the few funds that are available in the shrinking pit that is our state economy.

tim quinnThe best hoped for outcome in the water wars, it appears, would be for the legislature to get out of they way and allow the state to proceed with the recommendation of the Bay Area Conservation Committee. This group has been meeting for the past 3 years or so and has formulated a series of, what appear to be, pretty sound proposals.Certainly better than the proposals considered by the (bi) partisan Joint Water Committee, currently meeting in Sac.

Why is it so many real solutions to problems begin with the words – ‘Well, if we could just get the legislature out of the way…’

Moving on to other areas, Walters bragged about what a real success it has been to go from a quarterly annual budget meltdown to one that will probably at least last until the first of the year before it unravels. “Only in Sacramento is that considered a success”.  He also related a recent meeting with the Governor of Montana during his (Walters) recent vacation tour of the west. With all the major issues confronting us, the governors first comment was ‘Boy, what about that Mike Duval.’ Kind of keeps our perception in perspective.

The panel also talked about other aging infrastructure like the state’s highway system , our tax system and Nancy Pelosi. Our roads are rated 2nd worst in the nation (only New Jersey scores lower). We haven’t invested significantly in our roadways & bridges since the late 70’s, when Jerry Brown decided if we don’t build it, they won’t come. As our population soars past 38 million heading toward 50 million by 2030, that theory doesn’t seeem to be holding much credence these days. We have twice as many cars on the road today as we did in 1982 but we still take in the same amount in gas tax. Why is this? Because cars are so much more fuel efficient today that we have twice as many on the road to produce the same revenue for repairs. Yet another unintended consequence of well-intentioned legislation.

Assemblyman Jeffries had the last word admitting that “we are in a mess. The only way we can sustain a recovery is to put people back to work.” He noted that the legislature ‘has either failed to prioritize its expenditures or has prioritized badly handing out money to every interest group with it’s hand out. US! We continue to reward our politicians who consistently bring home the pork for us by re-electing them, while criticizing the pork laden coffers of others.’ “The only way we can take control back is for each of us to get engaged.” He was preaching to the choir.


Take Action! Support ACA 8 today.

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It’s been seven months since Assemblymember Kevin Jeffries (R-Lake Elsinore) introduced ACA 8. This bill would prohibit the Legislature from voting on bills without giving the public 72 hour notice of the content and an opportunity to comment. The bill goes on to require that ALL bills be available in print for at least 24 hours prior to a Legislative vote. You can read the full bill here: ACA 8

But so far, ACA 8 has yet to receive its first hearing. “I find it ironic that a bill that would put an end to back room deals is being held hostage in a back room somewhere,” says Jeffries. “So much for open and transparent government.”

A 72 hour notice of an issue that comes before the Legislature seems only fair. Local Governments and municipalities must adhere to this requirement as established in the Brown Act. Is it not reasonable to expect at least the same high standards from our state leadership?  Yet as we witnessed during the recent budget debates, agendas are set in secret, deals are made by the Big 5 (also in secret), and entire tax & spend sections of the budget are literally laid on Legislators desks as they are being asked to vote on them.

Is it any wonder our state is on the state it’s in?

If the majority controlled Legislature truly desires transparency and accountability, they will pass this bill. Unfortunately 53rd District Assemblymember Ted Lieu, who Chairs the Assembly Rules Committee, has seen fit to stall this bill in his committee for months now. Having spoken with Lieu recently on some housing issues, I believe he is a man of honor and integrity who may just need a little reminder that this important bill is languishing in his committee.

Please add your voice of concern to the Chair and the members of the Rules Committee. One click sends an email to all the committee members adding your support to ACA 8. Thank you.

I Support ACA 8 (Jeffries)

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By the way, when you have completed this you’ll get auto-responders from the Rules Committee Members attesting to how swamped they are and encouraging you to go directly to their website to send your email. Don’t be confused – they get ALL their Legislative emails but if you go to their website they’ll ask for your zip code and then tell you they don’t want to hear from you because you aren’t in their district. They’d really rather not hear from anybody but telling you that would be too blatant.

Open Our Hospital NOW!

As you may be aware from recent articles, the newly expanded Rancho Springs Medical Center has not been able to open due to some bureaucratic BS. The $53 million, 72,000 SqFt center has been completed since the end of last year and staffed since January. Yet the two state agencies that are responsible for licensing and certification have been playing politics with the health of Southwest California Citizens.

To classify this as disgraceful behavior would be an understatement.

If you’ve read some of the recent media reports, you know that they are claiming compliance issues as their rationale for not approving the opening – however, many of the situations they cite are directly related to the overcrowding of the existing facility and would no longer be an issue with the expansion into the new facilities. By the way, the new facility offers

  • nearly 30 private emergency rooms – no more stacking emergency patients ion halls awaiting treatment.
  • a womans care center – including south County’s first neo-natal intensive care unit (NICU). No more emergency flights of our areas babies to Loma Linda and beyond.
  • 2 neo-natal surgical suites
  • allows for expansion of beds in the current facility – no more waiting in the ER halls for days for a bed to become available or shipping local patients out of area to hospitals with beds.
I could go on and on about how much this facility is needed and how stupid that it is not open. I could also point out some of the behind-the-scenes political games played by the unions and others to try to force the hospital administration to jump through hoops – but right now we need YOUR help. Please click on the link below to have your voice heard and let these bureaucrats know that our lives are not pawns for their cheap political stunts. OPEN OUR HOSPITAL NOW!

hos[pital

A Conversation with Lake Elsinore Mayor Magee

The Lake Elsinore Valley Chamber of Commerce presented ‘A Conversation with Mayor Bob Magee’ on March 19 in the Diamond Club at Storm Stadium.

The Mayor detailed a positive and optimistic summary of Lake Elsinore today. He stressed the job growth and new businesses in the area, new restaurants, auto dealers and retail stores. There is fresh development in and around the city as they look to capitalize on their unique aquatic attraction. They’ve also just opened the first golf course in 80 years – The Links at Summerly. The Mayor said that while the city coffers are off by some 16% this year, the City is  financially stable – no threats there either.

Following his overview, the Mayor answered questions from the audience addressing everything from lake front development to city street paving projects. He also addressed his concerns with the threatened recall of one council member, hoping that the City would not be subject to either the cost – estimated at anywhere from $30,000 to $60,000 dollars, or the time it would waste.

SCLC Chair Roger Ziemer also provided a brief overview of current negotiations to get the newly expanded Rancho Springs Medical Center open. If the state certification committee refuses to take positive action, SCLC, SRCAR and others will be launching a campaign aimed at bringing this travesty to the Governors attention. Of course he’s heard about it but he hasn’t HEARD about it from a few thousand people impacted by this in the Temecula Valley.

Mayor Magee also talked about the Thunder in the Channel this weekend when the Lake will play drag strip for the NJBA Drag Boat Racing Series. There are several tournaments coming up at The Links, The Storm host opening night on April 9th, and to find out more of the good things happening in Lake Elsinore, just tap the logo below.


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Prop 1F – SCLC Summary

You may be aware that the Southwest Riverside County Association of Realtors has been a supporting Partner of the Southwest California Legislative Council since its inception. The SCLC, a coalition of Southwest California Chambers of Commerce, Legislative Representatives and business representatives – advocate on behalf of Southwest County Businesses. Each of you, as working Realtors, is the owner of your own business. The SCLC has proven to be an effective lobbyist for local concerns and we have a great dialogue with our local Legislators.

Today the SCLC posted recommendations on the Proposition votes upcoming in May. CAR has not yet taken positions on the ballot propositions and, since they are not primarily real estate related, they may not.

This is the summary of Prop 1E. The committee took a position to ‘support’ Prop 1E.

Proposition 1F – Elected Officials’ Salaries

Summary

  1. Proposition 1F amends the State Constitution to prevent the California Citizens Compensation Commission from increasing the annual salaries of State elected officials when the state General Fund is expected to end the year with a deficit.

Background

  1. Proposition 112, approved by voters in June 1990, amended the State Constitution to create the California Citizens Compensation Commission.
  1. The commission includes seven members appointed by the Governor, none of whom can be a current or former state officer or state employee.
  1. The commission establishes the annual salary, as well as medical insurance and other benefits, for the following elected state officials:
    1. The Legislature (120 Members).
    2. The Governor.
    3. The Lieutenant Governor.
    4. The Attorney General.
    5. The Controller.
    6. The Insurance Commissioner.
    7. The Secretary of State.
    8. The Superintendent of Public Instruction.
    9. The Treasurer.
    10. The Board of Equalization (4 Members).
  1. While the commission has control over most pay and benefits received by these state officials, there are certain exceptions.
  1. For xample, Members of the Legislature are eligible to receive per diem payments to cover lodging, meals, and other expenses for each day of attendance at legislative sessions.
  1. The commission considers the following factors when adjusting the annual salary and benefits of state officials:
    1. How much time is required to perform official duties, functions, and services.
    2. The annual salary and benefits for other elected and appointed officials in California with similar responsibilities, including judicial and private-sector officials.
    3. The responsibility and scope of authority of the state official.
  1. Currently, the Constitution does not list the financial condition of the state as a factor the commission must consider when setting the pay and benefits of these officials.
  1. Since 2005, legislators have had their pay increased three separate times.
  1. California’s legislators are among the highest paid in the nation, some earning more than $130,000 a year in salary and daily per diems.

Arguments in Support

  1. Proposition 1F would prevent the commission from approving pay increases for state officials in certain cases when the state General Fund is expected to end the year with a deficit further adding to the deficit.

Arguments in Opposition

  1. According to Pete Stahl, who submitted the ballot argument against Proposition 1F, compared to how much executives are large companies typically earn, the salary paid to state legislators is “a terrific bargain” and it is false to believe that legislators are influenced by how much they make, rather than by their underlying political beliefs.

Supporting

California Chamber of Commerce

California Fire Chiefs Association

California Police Chiefs Association

Central California Hispanic Chamber of Commerce

Former Assembly Speaker Pro Tempore Fred Keeley

Former Secretary of State Bill Jones

National Tax Limitation Committee

The California Taxpayers Association

Southwest California Legislative Council

Opposing

Prop 1E – SCLC Summary

You may be aware that the Southwest Riverside County Association of Realtors has been a supporting Partner of the Southwest California Legislative Council since its inception. The SCLC, a coalition of Southwest California Chambers of Commerce, Legislative Representatives and business representatives – advocate on behalf of Southwest County Businesses. Each of you, as working Realtors, is the owner of your own business. The SCLC has proven to be an effective lobbyist for local concerns and we have a great dialogue with our local Legislators.

Today the SCLC posted recommendations on the Proposition votes upcoming in May. CAR has not yet taken positions on the ballot propositions and, since they are not primarily real estate related, they may not.

This is the summary of Prop 1E. The committee took a position to ‘oppose’ Prop 1E.

Proposition 1E – Mental Health Funding Budget

Summary

  1. Proposition 1E temporarily redirects funds from the Mental Health Services Act to fund children’s health programs that are at risk of elimination due to the budget crisis, including health care screening, diagnosis and treatment.

Background

  1. In November 2004, California voters approved Proposition 63, also known as the Mental Health Services Act.
  1. Proposition 63 provides state funding for certain new or expanded mental health programs through a personal income tax surcharge of 1 percent on the portion of a taxpayer’s taxable income in excess of $1 million.
  1. Revenues generated by the surcharge are dedicated to the support of specified mental health programs and, with some exceptions, are not appropriated by the Legislature through the annual budget act.
  1. Full-year annual Proposition 63 revenues to date have ranged from about $900 million to $1.5 billion, and could vary significantly in the future.
  1. The Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Program is federally mandated program that requires states to provide a broad range of screening, diagnosis, and medically necessary treatment services—including mental health services—to Medi-Cal beneficiaries under age 21.
  1. Department of Mental Health (DMH) administers the mental health services required under the EPSDT program generally through county contracts.
  1. These services include group and individual counseling and assistance in stabilizing children and young adults who experience a mental health crisis.
  1. Total expenditures for EPSDT specialty mental health services now exceed $1 billion annually. The federal government provides about one-half of the funding, with most of the remaining cost borne by the state and a small portion borne by the counties.
  1. Proposition 1E allows for the temporary redirection of some Proposition 63 (2004) funds to support EPSDT mental health services.
    1. Specifically, $226.7 million in Proposition 63 funds would be redirected in 2009 – 2010, and between $226.7 million and $234 million would be redirected in 2010 – 2011, to support EPSDT.

Arguments in Support

  1. In effect, these Proposition 63 revenues would be used to offset state costs that would otherwise be borne by the General Fund, thereby achieving savings to help address the state’s current budgetary problem.

Arguments in Opposition

  1. Some Proposition 63 funds are used to draw down federal matching funds through the Medi-Cal Program. Thus, the redirection of Proposition 63 funds proposed in Proposition 1E could result in a decrease in federal financial support.

Supporting

California Chamber of Commerce

California Fire Chiefs Association

California Police Chiefs Association

Central California Hispanic Chamber of Commerce

Former Assembly Speaker Pro Tempore Fred Keeley

Former Secretary of State Bill Jones

National Tax Limitation Committee

The California Taxpayers Association

Opposing

Southwest California Legislative Council

Prop 1D – SCLC Summary

You may be aware that the Southwest Riverside County Association of Realtors has been a supporting Partner of the Southwest California Legislative Council since its inception. The SCLC, a coalition of Southwest California Chambers of Commerce, Legislative Representatives and business representatives – advocate on behalf of Southwest County Businesses. Each of you, as working Realtors, is the owner of your own business. The SCLC has proven to be an effective lobbyist for local concerns and we have a great dialogue with our local Legislators.

Today the SCLC posted recommendations on the Proposition votes upcoming in May. CAR has not yet taken positions on the ballot propositions and, since they are not primarily real estate related, they may not.

This is the summary of Prop 1D. The committee took a position to ‘oppose’ Prop 1D.

Proposition 1D – Children’s Services Funding

Summary

  1. Proposition 1D temporarily redirects a portion of excess funds from a voter-approved tobacco tax, Proposition 10 (1998).

  1. Proposition 1D would achieve state savings of up to $608 million in 2009 – 2010 and $268 million annually from 2010 – 2011 through 2013 – 2014.

Background

  1. Proposition 10, otherwise known as the California Children and Families Act, was enacted by the voters of California in the November 1998 election.

  1. The Act created the California Children and Families Program (now commonly known as the First 5 program) to expand early development programs for children up to age five.

  1. The First 5 program is funded by revenues from a state excise tax on cigarettes (50 cents per pack) and other tobacco products.

  1. Proposition 1D amends the California Children and Families Act to temporarily allow Proposition 10 revenues to be used to fund other state health and human services programs for children up to age five.

  1. In effect, these Proposition 10 (1998) revenues would be used to offset existing state General Fund costs, thereby achieving savings to help address the state’s current budgetary problem.

  1. Proposition 1D achieves state General Fund savings in two ways:
    1. By redirecting up to $340 million of available unspent reserves held by the state commission as of July 1, 2009.
    2. By temporarily redirecting a portion of future Proposition 10 revenues. Specifically, from 2009 – 2010 through 2013 – 2014, Proposition 1C would divert annually $268 million in Proposition 10 funds. Of the redirected funds, $54 million would come from state commission funds and $214 million from local commission funds. During these five years, the redirected funds would be subject to appropriation by the Legislature.

Arguments in Support

  1. These redirected funds will be used to pay for children’s health and social services and to prevent deep cuts to kids’ healthcare and other programs. Only a portion of the tobacco tax funds will be redirected, so existing programs currently funded by this revenue are protected.

Arguments in Opposition

  1. The reduction in state and local First 5 commission funding could result in other costs to the state and local agencies (primarily counties and schools). This would occur to the extent that some children and families rely on other health and human services programs instead of those now provided under First 5.

Supporting

California Chamber of Commerce

California Fire Chiefs Association

California Police Chiefs Association

Central California Hispanic Chamber of Commerce

Former Assembly Speaker Pro Tempore Fred Keeley

Former Secretary of State Bill Jones

National Tax Limitation Committee

The California Taxpayers Association

Opposing

Southwest California Legislative Council

Prop 1C – SCLC Summary

You may be aware that the Southwest Riverside County Association of Realtors has been a supporting Partner of the Southwest California Legislative Council since its inception. The SCLC, a coalition of Southwest California Chambers of Commerce, Legislative Representatives and business representatives – advocate on behalf of Southwest County Businesses. Each of you, as working Realtors, is the owner of your own business. The SCLC has proven to be an effective lobbyist for local concerns and we have a great dialogue with our local Legislators.

Today the SCLC posted recommendations on the Proposition votes upcoming in May. CAR has not yet taken positions on the ballot propositions and, since they are not primarily real estate related, they may not.

This is the summary of Prop 1C. The committee took a position to ‘oppose’ Prop 1C.

Proposition 1C – Lottery Modernization Act

Summary

  1. Proposition 1C will allow the State to immediately borrow $5 billion from future protected State Lottery revenue in order to balance the current State Budget deficit.

Background

  1. The California State Lottery has not been changed since it was first put into place by voters in 1984.

  1. Proposition 1C will modernize the Lottery, allowing it to update games and operations to reflect the best practices of other U.S. state lotteries.

  1. Proposition 1C will allow the Lottery to take steps including:

    1. Removing arcane rules that lower ticket sales.
    2. Increasing the number of prizes to players.
    3. Allowing the lottery to make long-term investments in new equipment.

  1. Proposition 1C protects current levels of lottery funding for public education and enacts new accountability standards including independent audits and public reports.

  1. Proposition 1C also maintains ownership of the Lottery with the State of California, and poses no risk to taxpayers.

  1. Proposition 1C makes major changes to the 1984 voter initiative that created the California Lottery.

  1. These changes could increase lottery ticket sales and allow the state to borrow $5 billion in the 2009 – 2010 fiscal year from future lottery profits.

    1. The type of state borrowing allowed under Proposition 1C involves selling an asset to investors through a bond transaction.
    2. The asset—in this case, future lottery profits—then pays back the investors, with interest, over time.
    3. Through this borrowing, the state can receive benefit from future lottery profits “upfront”—by converting a stream of future annual payments into a large, “lump sum” amount realized now.
    4. This type of borrowing—referred to as securitization—is somewhat different from most other types of state borrowing in that it involves no legal commitment to use General Fund tax revenues to pay investors.

  1. In addition to borrowing this $5 billion, the state also could borrow more from lottery profits in future years.

  1. Under Proposition 1C, lottery profits now dedicated to schools and colleges would be used to pay back the borrowing.

  1. Proposition 1C would increase state payments to education from the state General Fund to make up for the loss of these lottery payments.

  1. According to the Legislative Analyst’s Office (LAO), each Californian currently spends an average of $83 each year on lottery tickets—considerably less than the average resident of other states with a lottery.

    1. There are probably many reasons why this is so, including the other entertainment and gambling options available for residents here.
    2. California’s relatively low lottery prize payouts (about 50 cents in prizes for every dollar spent on lottery tickets) likely also contributes to the lottery’s relatively weak sales.
    3. Higher prize payouts appear to attract more players and greater spending for lottery tickets.
    4. For example, the Massachusetts State Lottery—one of the leading lotteries in sales per resident—returns over 70 percent of its funds to players as prizes.
    5. Based on the evidence from other states, the LAO concludes that if voters approve this measure, sales and profits of the California Lottery could grow significantly compared to how much they would grow under existing law.
    6. This growth could result in future lottery sales being somewhere between 30 percent and 80 percent higher.
    7. The amount of sales and profit growth would depend on how California consumers react to the products offered by the lottery in the future.
    8. In addition, the lottery’s financial performance would depend on many decisions made by the commission and lottery staff.
    9. They would decide, among other things, the level of lottery prize payouts, how lottery games will be marketed to the public, and how lottery retailers throughout California will be encouraged to sell lottery tickets.

  1. The Legislature also would be able to pass additional changes to the lottery law to further increase lottery profits.

Arguments in Support

  1. This must needed Proposition will secure $5 billion towards paying down the budget deficit. Other alternatives if not passed would include the legislature seeking to raise more taxes and/or cutting more programs that have already been reduced.

Arguments in Opposition

  1. Proposition 1C is just one of the crucial reforms needed in order to meet the funding requirements for balancing the state budget. Borrowing from future lottery revenue may start a dangerous precedent in other years of decline if other Propositions are not passed.

Supporting

California Chamber of Commerce

California Fire Chiefs Association

California Police Chiefs Association

Central California Hispanic Chamber of Commerce

Former Assembly Speaker Pro Tempore Fred Keeley

Former Secretary of State Bill Jones

National Tax Limitation Committee


Opposing

Southwest California Legislative Council

Proposition 1B – SCLC Summary

You may be aware that the Southwest Riverside County Association of Realtors has been a supporting Partner of the Southwest California Legislative Council since its inception. The SCLC, a coalition of Southwest California Chambers of Commerce, Legislative Representatives and business representatives – advocate on behalf of Southwest County Businesses. Each of you, as working Realtors, is the owner of your own business. The SCLC has proven to be an effective lobbyist for local concerns and we have a great dialogue with our local Legislators.

Today the SCLC posted recommendations on the Proposition votes upcoming in May. CAR has not yet taken positions on the ballot propositions and, since they are not primarily real estate related, they may not.

This is the summary of Prop 1B. The council took a position to ‘oppose’ Prop 1B.

Special Election: May 19, 2009 Ballot Propositions 1A – 1F

Presentation

Jeremy Madison Harris

Legislative Counsel

Proposition 1B – Education Funding. Payment Plan

Summary

  1. Proposition 1B will modify some of the terms of Proposition 98 (1988) that allows the state to free up money from this ballot initiative created fund for education.

  1. Proposition 1B ensures that schools receive $9.3 billion over time, starting with fiscal year 2011 – 2012.

  1. Payments to schools will come out of the newly created Budget Stabilization Fund as outlined in Proposition 1A.

  1. The funding guarantees in Proposition 1B is contingent upon Proposition 1A also passing.

Background

  1. Proposition 98 (1988) and modified in 1990, requires a minimum percentage of the state budget to be spent on K – 12 education and community colleges (also known as K – 14 education).

  1. Creates $9.3 billion “Supplemental Education” obligation that requires the state to make a total of $9.3 billion in supplemental payments to K-14 education.
    1. The payments would be made in annual installments, beginning in 2011 – 2012.
    2. They would become part of the base budget when calculating the following year’s Proposition 98 minimum guarantee.

  1. The funding mechanism for making the supplemental payments established in Proposition 1B is provided in Proposition 1A.

  1. Proposition 1A establishes a Supplemental Education Payment Account and requires the state to annually deposit 1.5 percent of General Fund revenues into the account, beginning in 2011 – 2012.

  1. These funds would be put into the account annually until the entire $9.3 billion in supplemental payments had been provided.

  1. If Proposition 1A is not approved by the voters, the provisions of this measure would not go into effect, and there would be no obligation to make $9.3 billion in supplemental payments.

Arguments in Support

  1. The education fund will receive the extra $9.3 billion if both Proposition 1A and 1B pass ensuring a repayment to the fund in order to allow the State of California to balance the budget now.

Arguments in Opposition

  1. Proposition 98 (1998) was passed by the voters in order to prevent the decreasing of the education fund and to keep California’s education system operating at its best capabilities.

Supporting

California Chamber of Commerce

California Fire Chiefs Association

California Police Chiefs Association

California Teachers Association

Central California Hispanic Chamber of Commerce

Former Assembly Speaker Pro Tempore Fred Keeley

Former Secretary of State Bill Jones

National Tax Limitation Committee


Opposing

Southwest California Legislative Council

Prop 1A – Southwest California Legislative Council summary

You may be aware that the Southwest Riverside County Association of Realtors has been a supporting Partner of the Southwest California Legislative Council since its inception. The SCLC, a coalition of Southwest California Chambers of Commerce, Legislative Representatives and business representatives – advocate on behalf of Southwest County Businesses. Each of you, as working Realtors, is the owner of your own business. The SCLC has proven to be an effective lobbyist for local concerns and we have a great dialogue with our local Legislators.

Today the SCLC posted recommendations on the Proposition votes upcoming in May. CAR has not yet taken positions on the ballot propositions and, since they are not primarily real estate related, they may not.

This is the summary of Prop 1A. The committee took a position to ‘oppose’ Prop 1A.

Special Election: May 19, 2009 Ballot Propositions 1A – 1F

Presentation

Jeremy Madison Harris

Legislative Counsel

Proposition 1A – “Rainy Day” Budget Stabilization Fund

Summary

  1. Proposition 1A aims to stabilize long-term budget spending by limiting spending based on 10-year revenue trends. It also creates a Budget Stabilization Fund, better known as a “Rainy Day” fund, forcing the State of California to save when the economy is prospering and therefore can be used when the economy declines.

Background

If Proposition 1A passes, tax increases approved in the State Budget signed by the Governor in February 2009, would be extended for one or two additional years depending on a particular tax increase.

  1. The following tax increase extensions will only go into effect if Proposition 1A passes:
    1. The sales tax increase of 1 % would be extended for one year through 2011 – 2012.
    2. The Vehicle License Fee (VLF) tax increase would be extended for two years through 2012 – 2013.
    3. The personal income tax-related increases would be extended for two more years, through the 2012 tax year.
  1. It is estimated that State tax revenues would increase by about $16 billion from 2010 – 2011 through 2012 – 2013.
  1. If Proposition 1A does not pass, beginning April 1, 2009, the:
    1. State sales and use tax will still increase by 1% as mandated by law and will expire fiscal year 2010-2011.
    2. VLF will increase on May 19, 2009 and will expire fiscal year 2010 – 2011.
    3. Personal income tax would set to expire after the 2011 tax year.
  1. Places a “spending cap” on state spending based on the previous 10 year revenue trend.
  1. Proposition 1A increases savings in the Budget Stabilization Fund from 5% to 12.5% of General Fund revenues. 
  1. Proposition 58 (2004) which created the Budget Stabilization Account/Budget Stabilization Fund would be renamed the Budget Stabilization Fund under Proposition 1A.
  1. The Budget Stabilization Fund will require:
    1. Each year, 3 percent of estimated General Fund state revenues are transferred into the BSF.
    2. The Governor, however, can stop the transfer in any year by issuing an executive order.

For instance, the transfer this year was stopped due to the state’s budget problems.

    1. Similarly, it is expected that the transfers will be suspended over the next few years as the state continues to face budget problems.
    2. In addition, the annual transfers are not made once the balance of the Budget Stabilization Fund reaches a specified “target”—the higher amount of $8 billion or 5 percent of revenues (currently about $5 billion).
    3. By passing a law, the state can transfer funds out of the Budget Stabilization Fund and use the funds for any purpose. (Currently, this is accomplished through the annual budget act, which allows transfers out of the Budget Stabilization Fund each year.)
  1. Under Proposition 1A, money can only be taken out of the Budget Stabilization Fund when there is a true budget deficit or an emergency.
  1. Circumstances in which the Governor may stop a transfer to the rainy-day fund would be limited.
    1. Beginning in the 201112 fiscal year, the Governor could only stop a rainy-day fund transfer in years when the state did not have enough revenues to pay for state spending equal to the prior year’s level of spending grown for changes in population and inflation.
  1. Once the Budget Stabilization Fund reaches 12.5% any revenue above and beyond this can only be spent on one-time expenditures, such as infrastructure projects or to pay off other debts.
  1. Proposition 1A is tied to Proposition 1B, a promise to fund education at $9.3billion beginning in 2011-2012 fiscal year.
  1. If Proposition 1B also passes, the state would divert 1.5 percent of annual General Fund revenues beginning in 2011 – 2012 to make supplemental payments for education.
  1. These payments would be made until a total of $9.3 billion had been spent, likely in five or six years. These payments cannot be suspended.

Arguments in Support

  1. Proposition 1A will prevent the peaks and valleys that result in tax increases and deep cuts to schools, public safety and other vital services duet to a mandated spending cap.
  1. It will now provide for funding stability for key services like education, public safety, and healthcare.

Arguments in Opposition

  1. A spending cap may limit what Government can pay for including the expansion of crucial funding for public programs and services such as education and public safety.
  1. The overall strategy included Proposition 1A, which is tied to Proposition 1B, is a promise to schools that they will receive $9.3 billion beginning in 2011 – 2012. This was to discourage teachers unions from opposing the spending limit.

Supporting

California Chamber of Commerce

California Fire Chiefs Association

California Police Chiefs Association

California Senior Advocates League

Central California Hispanic Chamber of Commerce

Former Assembly Speaker Pro Tempore Fred Keeley

Former Secretary of State Bill Jones

Los Angeles Sheriff Lee Baca

National Tax Limitation Committee

The California Taxpayers Association

Opposing

Howard Jarvis Taxpayers Association

Southwest California Legislative Council

Some of the rationale to oppose:

    • The very notion of ‘temporary’ taxes
    • The myth of a true and enforceable spending cap
    • Still doesn’t oblige the state to address some core issues