California Governor Wins the Blame Game

Brown began with a proposal to put a measure on the ballot to extend the 2009 tax increases on income taxes, sales taxes and the vehicle license fee. It was a gamble. Voters rejected a similar tax measure in 2009. Most GOP lawmakers have signed no-new-taxes pledges. Even Brown didn't dare campaign on today's tax plan -- and he's a Democrat.

Then came the bargaining. Republicans say that Brown wouldn't give on spending dear to the public-employee unions that helped elect him. The Brownies say that the Party of No kept heaping new terms onto their wish list so that negotiators never could get to yes.

Senate Republican Leader Bob Dutton told me he thinks Brown could have picked off two GOP senators if Brown had agreed to GOP proposals for pension reform, a spending cap and regulatory reform. But Brown would not give on applying pension reforms to current as well as future employees, and he wanted too loose of a spending cap.

Brown spokesman Gil Duran said he would not comment on "specifics on negotiating points," but insisted there were "multiple deal breakers." One of the five GOP senators who talked to Brown confirmed as much.

Democrats were pushing to eliminate the corporate "single sales factor" -- which Brown dubbed a "billion-dollar tax break to giant companies that keep jobs out of California."

You see, the 2009 budget deal included a provision that allowed corporations to decide whether to pay taxes based on their California business on sales within the state or a pre-2009 formula that was bad for some businesses.

State Sen. Kevin de Leon, D-Los Angeles, argues the 2009 deal was poorly drafted. He wrote a bill to take away corporations' ability to choose their tax poison. His bill would produce about $1 billion annually. According to the bipartisan Legislative Analyst's Office, de Leon's bill would create 40,000 jobs.

Joe Justin, chief of staff for Sen. Bill Emmerson, R-Hemet, told me that the Democrats' insistence on raising taxes by $1 billion was a deal breaker: "We were never going to vote for tax increases, and that bill was key to it."

Also, Republicans complain bitterly that every time a handful of GOP lawmakers stick out their necks to get their stuff into a budget compromise, the Democrats whack them out in the next budget deal.

It is on the issue of redevelopment where Republicans look the worst. Brown wanted to terminate redevelopment agencies and funnel their $1.7 billion revenue into more useful purposes. Chris Norby of Fullerton was the only Assembly Republican to vote against what he calls "the most wasteful," fraudulent and abusive arm of government.

All sides fumbled. Republicans failed to compromise, and they failed to let voters bring clarity on state spending. Democrats kept arguing for letting the voters decide -- but only on taxes, not pension reform or spending.

With polls indicating that the Brown ballot measure would tank, state pols in both parties had little incentive to push for a deal that couldn't win.

It's true. It's probably the same "Republicans" that fought the eminent domain initiatives. HERE is the bill (SB 77) with recorded votes.

From the WSJ (Steve Greenhut - who vigourously fought for Prop 90):

(SNIP)

Because city governments have become so dependent on these agencies diverting revenue to them from the state, the pushback against the governor's plan has been powerful. "This is the wrong time to move away from job creation," said Los Angeles Mayor Antonio Villaraigosa. Sacramento Mayor Kevin Johnson recently called redevelopment projects "magical things." Others, like San Jose Mayor Chuck Reed, have warned that shuttering the agencies will hurt economic recovery.

These mayors may have the rhetoric down, but a new report from state Controller John Chiang explains why the governor is intent on closing these agencies. The report portrays them as a source of waste and governmental abuse—not a generator of jobs and economic growth. Among his audit of 18 agencies, Mr. Chiang found that Palm Desert's redevelopment agency proposed to eliminate so-called blight by spending nearly $17 million on revamping a municipal golf club that remains one of the nation's premier golfing locales.

In the 12 years I've spent reporting on this issue, I've seen an agency attempt to bulldoze an entire residential neighborhood and transfer the land to a theme-park developer. I've witnessed agencies declare eminent domain against churches—which pay few taxes—in order to sell the property at a deep discount to big-box stores that promise to keep city coffers flush.

(SNIP)

Unfortunately, most Republicans have been mum, and many are even defending the agencies. For instance, Sen. Bob Huff, a Republican from the San Gabriel Valley, has echoed the California Redevelopment Association's line that "Redevelopment is one of the few tools to promote economic development." Other Republicans champion redevelopment as a local-control issue, preferring to see the dollars in the hands of city politicians rather than Sacramento lawmakers.

While economic development and local control are crucial issues, it's hard to understand why any Republican would believe that a regime of government planning and subsidy is the best way to achieve those goals. They should be standing up against the abuses of property rights and the fiscal irresponsibility inherent in the redevelopment process and championing market-based alternatives to urban improvement—even if it means defending a proposal from a Democratic governor they often disagree with.

More Greenhut, from the OC Register

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