Tuesday, September 19, 2017
IN MY OPINION (Column)
California Legislature Abandons Middle Class
By JON COUPAL
Does anyone honestly think that the California Legislature’s complete abandonment of the middle class is unrelated to the state’s highest-in-the-nation poverty rate?
This past week presented a stark contrast in the Golden State. First, the controller reported state tax proceeds from all categories are exceeding budget projections. Specifically, the state brought in almost $9 billion in August, exceeding projections in the state budget by over $340 million. All three of the major sources of state revenue—personal and corporate income tax plus sales tax—were up over last year. While a substantial portion of this uptick in economic activity can be attributed to the Trump recovery, there is no denying that California remains an economic powerhouse in its own right.
However, about the same time as we were getting cheery news about state revenue, the U.S. Census Bureau reported that over 20 percent of Californians live in poverty. The “Supplemental Poverty Measure,” which takes into account California’s absurdly high cost of living, gives us the highest poverty rate in the country while the rest of the nation has shown improvement.
So how is it that the most economically powerful state in the union has a poverty level that would make even Mississippi blush? In large part, the answer lies in California’s toxic mix of crony capitalism with mindless pursuit of progressive policies. And both were on full display in the final week of this year’s legislative session.
Few bills moving through the last hectic hours at the Capitol could be remotely characterized as helping the middle class. For example, Assembly Bill 1250 is a complete sop to labor interests. It would prohibit counties from contracting out for services “customarily” performed by county workers unless 14 complicated requirements are met. This would drive up the costs of county government—ultimately paid by taxpayers—and would hurt nonprofits which provide low cost, effective services to county governments. Fortunately, it appears that AB1250 has been stymied this year but will be pushed into 2018.
On a more grand scale, little compares to the various bills moving through the Legislature to deal with the housing crisis. Special interests have formed a conga line outside the governor’s and legislative offices to get a slice of the public pie (baked, of course, with taxpayer dollars). First, is a massive housing bond. Keep in mind that a $4 billion dollar bond will likely incur $8 billion in taxpayer costs after interest and the cost of bond underwriting (Wall Street loves California debt). Second, labor once again wants any public dollars spent on housing to be subject to costly labor restrictions such as Project Labor Agreements or prevailing wage requirements. Who pays for the higher costs? Why, taxpayers, of course.
Overall, California’s housing policies being pursued are designed to reward special interests rather than increase housing stock in any significant way. It is totally lost on our elected leadership that the best housing policy would be for government to reduce regulations that stand in the way of housing construction rather than increase regulations. One bill, Senate Bill 35, does provide a little relief from burdensome CEQA requirements but it contains 18 separate provisions that developers must meet in order to qualify for the expedited permit process for residential development.
The only bill of which we are aware that would have significantly helped housing affordability was Assembly Bill 1100, co-authored by Assemblymen Phil Chen, R-Brea, and Matthew Harper, R-Huntington Beach, to increase both the current homeowners exemption (which provides homeowners with a scant $70 of annual tax relief) and the renters credit. This proposal would require no new government program nor impose new regulations, which probably explains why it lacked popularity in the Capitol. However, it would have put immediate cash into the pockets of all Californians who have to pay for the roof over their heads. That’s what we call middle-class tax relief.
Middle-class Californians have a choice. Stay in California and continue to be the piñatas for progressives and special interests or bail out to other states. Increasing numbers of California’s middle class are choosing the latter.
In a statement, the university emphasized that the arbitrator in the case concluded that Canin acted improperly and deserved a two-month suspension.
“The university will continue to vigorously support the free and open exchange of ideas on our campus,” the school said. “It is unacceptable to respond with violence to speech with which we disagree.”
School spokesman Jeffrey Cook said the university considers the time that Canin was on paid leave following the assault allegation as fulfilling the two-month suspension.
He said Canin will need to reimburse the school for two months’ compensation.
Christopher Boyle, president of the College Republicans, said his group was disappointed with the result of the arbitration and is considering how to challenge Canin’s reinstatement.
“We consider it an unjust decision,” Boyle said. “It’s definitely not a closed case as far as our organization is concerned.”
The assault accusation against Canin came during an anti-Trump demonstration on campus. The College Republicans were there counter-demonstrating.
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