The big drought has Californians worried. There are major controversies over Governor Jerry Brown's order to cut water consumption by 25 percent, not to mention some furious to-and-froing on climate change and demands for tax hikes and tax cuts. Nevertheless, Brown has the approval of nearly 60 percent of California voters in the new Field Poll. Perhaps more important, only 26 percent disapprove of his performance, a drop from earlier in the year. Only three times before in his long career has his job disapproval rating been lower.
Not surprisingly, 75 percent of Democrats -- Brown made a cameo appearance at the uneventful state Democratic convention just after issuing his annual "May Revise" of the state budget -- approve of Brown's performance as governor. With just 13 percent of Dems disapproving. More strikingly, 37 percent of Republicans approve of Brown's performance as governor, too, nearly as many as approved of the last Republican governor, Arnold Schwarzenegger, in the final Public Policy Institute of California (PPIC) poll at the end of 2010. (Which was an improvement for the Governator, whose overall rating in PPIC and Field had dipped to the low 20s in the summer of 2010 before its final 32 percent.)
That's not to say that Californians aren't concerned about how things are going, especially with respect to the new era of limits on water. But Brown has pursued a course of conservation and supply on water. Before he ever issued his executive order which looks to make that quaint anachronism of the 18th century English aristocracy known as the lawn a thing of the past in this naturally mostly arid state, he pushed major programs to move water from the water-rich portions of the north to the south and to build more water storage.
Brown caught some heavy criticism for not including agriculture -- already hard-hit the past few years by the drought -- in his executive order requiring a 25 percent reduction in consumption below 2013 levels. The criticism had no impact on his popularity.
Now the other shoe is dropping, with the administration pushing for agreements with ag users who by century-old state law have a right to water to cut usage by about the same amount.
Agriculture uses about 80 percent of the state's water. (Fracking, incidentally, was a drop in the bucket last year using little more than 500 households worth of water. ) The ag usage had led some to imagine that the drought would be solved by, say, eliminating almond growing, thus enabling people to go on flooding their lawns and swimming pools to their heart's content.
Uh-uh. The drought is very severe. Drought-like conditions are likely to be at least chronic as the greenhouse era goes forward. And the state continues to grow.
Already at 38.7 million, California will grow to 40 million people by the time Brown is term-limited out of the governorship in January 2019. That's twice as many Californians as there were the first time he was governor.
Lawns consume at least half of residential water in California, much of which is naturally desert. It ain't England. A more creative landscape architecture than the green rectangle, along with some drought-tolerant plants, is what's called for going forward.
Ironically, given the reality of climate change and the obvious arrival of the greenhouse era, the Chamber of Commerce and some other business interests are whining about the success of the state's cap-and-trade market on greenhouse gas emissions. The version of the landmark AB 32 legislation signed in 2006 by then Governor Arnold Schwarzenegger created this market flexibility allowing businesses to make transfer payments to fund mitigation of greenhouse gas emissions in lieu of meeting their cutback requirements by curtailing their own emissions.
Complainers claim it is a tax, which it clearly is not since they are not required to pay; they can meet their obligations simply cutting emissions. They also claim they didn't realize that such payments would be taking place. Which is nonsense. The market component was clearly the alternative to an across-the-board command-and-control regulatory scheme. And it's a major reason why a lot of these folks pushed for a Schwarzenegger veto of AB 32.
Brown, not incidentally, in advance of the year-end UN climate summit in Paris, has accelerated California's greenhouse gas cutback target to 40 percent below 1990 levels by the year 2030 and has just signed new agreements with the states of Oregon, Washington and Vermont, as well as the provinces of British Columbia and Ontario in Canada, the states of Baja California and Jalisco in Mexico, Wales in the UK, and states and provinces in Brazil, Germany, and Spain.
Speaking of real taxes, with state revenues booming, Brown is getting pressed by an ideologically varied cast of characters both to raise taxes and cut taxes.
California revenues are, according to the Legislative Analyst's Office, running billions of dollars above Brown administration forecasts.
But there can always be a big downturn, as we saw so dramatically with the dot-com bust and the great global recession. Which is why Schwarzenegger and then Brown, who made the major final adjustments needed to win, pushed successfully for a big state rainy day fund. On top of that, Brown not surprisingly would prefer to have a budget surplus.
With California going the furthest of any big state to fully implement Obamacare, one-third of Californians are eligible for Medi-Cal. And costs can increase for this expansive social democratic program.
Meanwhile, Brown's Prop 30 tax hike of November 2012 starts sunsetting late in his final term. Many want to extend Prop 30, primarily a surcharge on high-income Californians with a minor sales tax hike. Brown is not so eager.
Others prefer to go after the corporate-friendly part of venerable Prop 13, splitting the roll between the sacrosanct property tax protection for single-family homes and decades-long un-reappraised business property.
Billionaire Tom Steyer also has an idea for an oil extraction tax; a similar initiative bankrolled by billionaire Steve Bing was defeated in 2006.
These proposals come from the spending lobby -- unions, welfare advocates, education advocates, and environmentalists. There are also more complicated ideas from some of what has become the state's professional reform lobby.
New state Senator Bob Hertzberg, the former state Assembly speaker and LA mayoral candidate who was one of our Gary Hart for President volunteers, is the legislative champion of this approach. It includes an expansion of the base of the sales tax to include some services and perhaps additional products.
And, fatefully, it includes cutting the income tax rate for high-income Californians and big corporations.
Brown notes pithily that that would be a big problem, especially with the sales tax expanding for most Californians.
Intriguingly, the idea of cutting taxes for the rich and corporations has become a staple of the professional reformers. The rationale is that the current system is too dependent on the incomes of the rich and that expanding the tax base will smooth out relative extremes of revenue.
Which could certainly be done, however, without cutting taxes for the rich.
The idea first cropped up in reform mode with Schwarzenegger's Commission on the 21st Century Economy, chaired by equity fund operator Gerald Parsky. Parsky, a perfectly amiable fellow I've been to dinner with, was George W. Bush's man in California.
He got into the investment business after serving as assistant secretary of the Treasury in the Nixon and Ford administrations, where he became close to the Saudis. In the private sector, he was a facilitator for Saudi and other foreign investment in the US.
I told proverbial high personages in the Schwarzenegger administration that I wouldn't be writing about the commission's report given that it featured what seemed a clear political non-starter. Which cutting taxes for the rich and big corporations of course proved to be.
It was a non-starter with the Think Long Committee, the massively-funded reform exercise a few years back which went nowhere, as I warned a few leaders of the effort the morning their report came out. It also didn't go anywhere when Hertzberg headed up another reform outfit, California Forward.
Critics naturally point out the obvious, that these reform ventures are funded by very wealthy folks and then come up with reforms that would cut their taxes.
But the tax cut for the rich and corporations idea is a perennial in professional reform circles. So is the outcome.
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