California Editorial Roundup

April 2

The Orange County Register on tax hikes to fund road repairs:

Gov. Brown’s package of tax hikes to fund road repairs is tough medicine to take, but we might just have to take it, at least in part.

We certainly can’t let California’s freeways, roads and bridges become even more run-down or unsafe. Something must be done, but it must be done in a prudent fashion.

Brown and Democratic legislative leaders have proposed $5.2 billion a year in additional gas taxes and car fees to fix the state’s lackluster roads. Over the next decade, $15 billion would go to local road repairs, and the same amount to state highway repairs, plus $4 billion for bridge and culverts, $5.5 billion to improve trade corridors and major commuting corridors, and $7.5 billion to improve local public transportation.

The proposal would increase the base excise tax on gasoline by 12 cents per gallon, from 18 cents to 30 cents. A separate price-based excise tax on gasoline would rise from 11.8 cents to 17.23 cents and would be indexed to inflation to rise in future years. A new fee on vehicles would average $48 per year, based on the value of the car. Drivers of electric cars would pay an annual $100 fee.

That’s a steep price for drivers and truckers. But, here’s the thing: It’s been 23 years since gas taxes were raised, and if the tax had been indexed to inflation, it would be higher now than the governor’s proposal will make it. Inflation and more efficient cars have meant that money for road maintenance has fallen far behind the deterioration of our roadways, and we see - and feel - the results every time we drive. The administration claims each California driver now spends about $700 a year in vehicle repairs caused by rough roads.

The package includes a constitutional amendment to be passed by voters to require that all the money is spent as promised. That’s a nod to the fact that Sacramento has for years diverted transportation tax revenue, including truck weight fees, to other purposes. This proposal includes $706 million in loan repayments from the General Fund. There would also be an inspector general to ensure that Caltrans and other agencies use the money efficiently.

Those steps are good, but we need to see another: The Legislature must put a 10-year sunset on the whole package of taxes. Any such taxes should be reviewed periodically, and quick advancements in transportation technology make it even more important in this case. Hyperloop, self-driving cars and other innovations are on the horizon.

Of course, we’d like to see Brown forced to give up his high-speed rail plan and divert the money to real transportation needs. That would make this package a win for everyone.

These tax hikes are essentially user fees, and that’s better than the typical approach to taxes in the state. And paying as we go is better than borrowing.

Of course, there are serious downsides, too.

Drivers’ pocketbooks will be hit, especially poorer drivers with long commutes. Higher diesel prices will be passed along to consumers.

Politically, we’re irked that state leaders have ignored this basic need so very long while spending our taxes on less vital priorities. We can point to all kinds of bad spending decisions through the years at the state level, but that doesn’t make our roads any smoother.

If we let our roads and highways keep deteriorating, our economy eventually will fall into a sinkhole.

Undoubtedly, state taxes are too high, but we need our transportation infrastructure fixed. The governor and his party ought to show good faith and find ways to reduce taxes and spending in other areas of government and prioritize the budget (which is at or near all-time highs) without consistently going back to the public for more money.

Unfortunately, this is a case where we have to swallow hard and pay for the time that’s been lost and the money that’s been spent elsewhere. If voters do not like it, they should vote accordingly during election season.

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March 4

The Sacramento Bee on equal pay for women:

California has one of the toughest pay equity laws in the nation. Working mothers, in particular, can be grateful to be in one of the few states offering job-protected paid family leave.

Yet as the average working woman in California celebrated Equal Pay Day on Tuesday, it was with the understanding that the guy in the next cubicle was about 16 percentage points more equal. Women here earn an average of 84 cents for every dollar men earn - not much better than the 80-cent national figure.

Contributing to the problem is a huge gap in state law that should have been addressed years ago in California. Only businesses with 50 or more employees have to hold the jobs of new parents who take maternity or paternity leave to bond with a new child. That’s a start, sure, but businesses that size employ only a fraction of the work force.

Meanwhile, all private sector workers here kick in for the paid family leave program, regardless of the size of their employers. A small automatic payroll deduction is tacked onto the state disability insurance fund for wage replacement.

So though paid family leave is supposed to be available to all, and though all ante up for the program, not all can take it in practice. As a result, a lot of women, forced to choose between doing right by a child and alienating an employer, quit.

This isn’t OK. It takes bread from the tables of families, disrupts women’s earnings and sidelines valuable labor. Most women work; it’s immoral to pretend otherwise.

For years, Sen. Hannah-Beth Jackson, D-Santa Barbara, has tried to shrink the small business loophole. The California Chamber of Commerce for years has labeled her efforts “job killers.”

The Chamber is off base. Last year, they got Gov. Jerry Brown to veto a Jackson bill on this with a last-minute claim that it opened small businesses to frivolous litigation; in fact, state fair employment disputes can be kept out of court via mediation.

Jackson’s current bill, Senate Bill 63, would lower the threshold for job protected family leave to businesses with 20 or more employees - a size so feasible that even the Small Business Majority, which represents some 3.6 million small businesses in the state, supports it.

State lawmakers should pass this doable fix, and Brown should sign it. California should be more equal than this.

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April 3

The Fresno Bee on doing away with the state Board of Equalization:

We have said many times that the state Board of Equalization should be sent to the scrap heap.

We did so most recently in 2010, when Bloomberg BNA’s Daily Tax Report detailed how elected members of the Board of Equalization had a pattern of deciding complex cases in favor of certain campaign contributors.

Former board member Bill Leonard was quoted in the investigative series saying that after he cast votes helping taxpayers: “I’d get cookies, I’d get flowers, I’d get campaign checks.”

We wish that the Board of Equalization had cleaned up its act over the last seven years. It hasn’t, and that’s why we renew our call for California to get rid of this anachronistic vestige of the 19th century.

Moreover, the board completed its original mission - equalizing taxes among counties - long ago.

The Board of Equalization serves as a politician’s sinecure. Four board members won seats after they were termed out of the Legislature. It’s also a swamp. Too often, corporations seeking multimillion-dollar breaks on their taxes find ways to slip money into board members’ coffers and evade restrictions on campaign donations.

We return to the slimy subject of the Board of Equalization because a Department of Finance audit, detailed recently by The Sacramento Bee’s Adam Ashton, found that the board is unable to explain how it misallocated tens of millions of dollars in tax revenue.

Remember: This is a board that is supposed to be staffed by green-eyeshade types who understand math and guard our tax money.

In the 1990s, Gov. Pete Wilson, facing budget deficits, sought to merge the board with the Franchise Tax Board. Gov. Arnold Schwarzenegger took office in 2003 promising to blow up the boxes, and took aim at the tax boards. And yet the Board of Equalization survives because many legislators, thinking about the next election, hesitate to abolish an office that pays $142,577 a year.

In the board’s defense, no current member faces criminal charges. But the Department of Finance audit found that board members Jerome Horton, a Los Angeles-area Democrat, and Diane Harkey, an Orange County Republican, misused staff members. Horton and Harkey denounce the audit.

Horton has been down this crooked path before. The Sacramento Bee reported last year that he used $118,000 in tax money to decorate his Sacramento office with designer furniture.

Board of Equalization member Fiona Ma, a San Francisco Democrat who smartly is distancing herself from the mess, is urging Gov. Jerry Brown to appoint a trustee to manage the Board of Equalization.

State Controller Betty Yee, who by virtue of her office is the fifth board member, wants the Board of Equalization’s responsibilities reduced to presiding over property tax appeals and a few other duties. Her proposal would strip it of virtually all other authority it has accumulated over the decades, cutting its oversight of sales taxes, use taxes and more than 30 other revenue-generating programs.

Brown and the Legislature would have no shortage of suggestions for how to restructure the board, if they chose to engage in the effort. But experts have been offering restructuring suggestions for decades. And little, if anything, has changed for the better.

The Board of Equalization simply needs to disappear.

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April 2

San Francisco Chronicle on reforming the state’s bail system:

California’s justice system has an inequality problem that is so obvious, so glaring, that a wide-ranging coalition of legal advocates - from civil liberties organizations to the California chief justice - have come together to change it.

It’s the bail system.

The idea behind the cash bail system was that a defendant awaiting trial who had given the court a large sum of his or her money would be less likely to skip town.

It may sound sensible, but in practice, California’s approach to bail has exacerbated economic inequality and created a two-tiered system of justice before defendants even face their trial.

The median bail amount in California is $50,000. Meanwhile, a recent survey by the U.S. Federal Reserve found that 46 percent of Americans couldn’t afford even a $400 emergency expense.

So in a state like California, which has the nation’s highest poverty rate by some measures, what that has meant is that wealthy defendants have been able to buy their way out of jail before trial - and everyone else has not.

More than 60 percent of the people in our jails are awaiting their trials or sentencing. California taxpayers spend more than $4.5 million every day on the unsentenced jail population.

There are additional costs, too, for those stuck in custody because they couldn’t afford to pay their bail. They suffer major disruptions in their work and family lives that can reinforce the cycle of poverty.

This is inequitable and unjust, and has nothing to do with public safety. (A wealthier defendant isn’t necessarily safer for the public, she’s just wealthier.)

There are ways to scale back the use of bail without compromising public safety, and California needs to try them.

State Assemblyman Rob Bonta, D-Alameda, and state Sen. Robert Hertzberg, D-Van Nuys, have introduced AB42 and SB10. These are companion pieces of legislation that would facilitate the use of evidence-based pretrial assessment tools for judges as an alternative to the cash bail system.

The bills would require certain arrested people to receive pretrial risk assessments, which will be passed on to a magistrate or judge for a decision. Then it’s up to the judge to decide whether the arrested person can be released on his or her own recognizance, with or without certain conditions (like an ankle bracelet, for example).

There are classes of defendants - including those charged with domestic violence, stalking, rape and other violent or serious felonies - who would not be eligible for the assessment procedure.

It may sound like a huge change, but when it comes to reducing the use of cash bail, California is actually late to the party.

State legislatures are taking their cues from states such as Kentucky, which has seen early success with its fledgling assessment program, and cities such as Washington, D.C., where nearly 88 percent of defendants are already being released without cash bail.

Bay Area counties are also in the forefront.

San Francisco has been using a pretrial assessment program on a pilot basis, and the county is expecting a savings from jail usage of at least $3 million per year.

Santa Clara County has been using a risk assessment program to reduce its jail population, and it has saved $33 million in six months - with a 99 percent public safety rate for the defendants released.

Any assessment tool will have to be means-tested and evidence-based, and judges will probably use it cautiously at first. But this is a criminal justice reform that must go forward, and the state Legislature should approve these bills.

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April 4

San Diego Union-Tribune on the state housing crisis:

The headlines about California’s housing crisis just keep coming, and the news is always grim. Last week, Bankrate.com reported the Golden State was the worst in the nation for first-time homebuyers, with the lowest percentage of homes available for sale and mortgage costs nearly double the U.S. average. Bankrate’s analysis pointed out that high rents compounded California’s home-affordability problem by making it difficult for families to save up for down-payments.

The cost of housing is so extreme for poor and ever-more middle-income families that it is distorting their lives. The latest stunning evidence: The story last month that the fastest rising rents in America were in Stockton, where demand is heavy because workers at companies in San Francisco and Silicon Valley are relocating and accepting 150-mile-plus, four-hour-plus commutes. They have no choice - they can’t afford to live where they work.

The crisis this reflects has spurred the introduction of more than 130 bills in the Legislature. Some of the measures are constructive proposals that would make it easier to add housing stock, which is a key goal of Gov. Jerry Brown. But many of the bills repeat failed past strategies, such as building government-subsidized housing that only helps a tiny fraction of those hammered by the cost of shelter.

Now momentum is building behind another failed strategy: rent control. Assemblyman Richard Bloom, D-Santa Monica, has introduced a bill to repeal a 1995 state law - the Costa-Hawkins Rental Housing Act - that limits the scope of local rental control laws. Bloom and his three co-sponsors hope to take away rent-control exemptions for duplexes, condos and single-family homes and to let local-rent control laws cover far more properties than now allowed, including newer housing stock.

“We are at a time in California when, for the first time, the majority of people’s quality of life is diminishing because so much of their income is going to pay for housing,” Bloom told the Sacramento Bee. He’s right. But economists who often quarrel on other issues say not only is Bloom’s approach wrong, it will make the housing problem worse by disincentivizing new construction and encouraging landlords to reduce maintenance. In a 1990 survey of 464 U.S. economists, 93 percent agreed or generally agreed that “a ceiling on rents reduces the quantity and quality of housing available.”

Nothing has changed since 1990. Bloom needs to have a talk with another urban progressive, New York Mayor Bill de Blasio. His city is the rent-control capital of America, with more than 1 million apartments subject to control of a city board. But for those without such protections, New York is one of the least affordable cities in the nation. This is why de Blasio wants to add hundreds of thousands of new housing units. He’s grasped the obvious: Rent control is no solution to a housing crisis caused by a housing shortage. Adding housing is.