It baffles me to watch looters and vandals tear up businesses in the Bay Area and elsewhere this weekend and see the weak leadership from local mayors.
Oakland Mayor Libby Schaff still hasn’t established a curfew despite the carnage to downtown businesses. It took San Jose Mayor Sam Licardo until Sunday to establish a curfew and try to regain control of his downtown streets.
Fortunately, there is an adult in the room—Alameda County Sheriff Greg Ahern who established a county-wide curfew Monday that will run through this week.
Ahern’s decisive step followed an equally important one in San Francisco after looters started attacking Union Square and Market Street retail businesses Saturday night. Mayor London Breed immediately set a curfew and asked Gov. Gavin Newsom to put the state National Guard on standby. The guard already had been dispatched to Los Angeles after Mayor Eric Garcetti asked for help.
What’s stopping these mayors from taking the necessary steps to regain control of their cities? Peaceful protests during the day have been hijacked by criminals bent on destruction.
It was amazing to hear Emeryville Mayor Christian Patz, after vandals broke into about 10 retail stores in the city’s shopping district along Interstate 80. He took pains to assert the right to protest and the need to change without any condemnation of the criminals looting his city’s businesses.
Switching gears to Sacramento, now is the time to watch your wallet. As I wrote last week, the governor’s budget proposal that is now before the Legislature is beyond a worst-case scenario according to the Legislative Analyst and others. Democrats hesitate to cut program so raising taxes—even in these times—is their solution.
Take Kansen Chu, a Democrat from San Jose. He’s proposing a $275 head tax on companies with more than 500 employees. In other words, “tax the rich” and be sure that whatever recovery is even slower. It’s a classic anti-business tax that, if enacted, would provide big companies with yet another reason to move elsewhere.
As companies have learned during these shelter at home times, employees do not need to be in the office to be productive. And the office need not be in San Francisco, on the Peninsula or in Silicon Valley.
Remember when Seattle tried to put a similar tax through, it failed after Amazon opposed it and threatened to leave town.
State Sen. John Moorlach from Orange County wrote an opinion piece for CalMatters laying out a business-friendly approach that is the anti-thesis of Chu’s approach. He would postpone—if not outright kill-- the increase in the minimum wage to $15 plus repeal AB 5 that threatens freelancer workers in a variety of fields ranging from the arts to court reporters to journalists. He would cut taxes, reform worker’s compensation, repeal rent control edicts (he believes rents will fall with decreasing demand) and switch all pensions to shared-risk plans from the current very expensive defined benefits.
He concluded, “California enjoyed a decade of prosperity, but it covered up myriad expensive policy mistakes. Now the covers have been pulled off, revealing the rot underneath.”
For some perspective, consider what former Assemblyman Doug Ose wrote in the CalMatters newsletter last week. He pointed out that the state budget coming out of the Great Recession was $110 million in 2010. The population was about 38 million so the state was spending $2,895 per head.
The pre-COVID 2020-21 budget was proposed at $210 billion for the state’s population of 40 million or $5,250 per head. The population grew 5.2%, the U.S. cost of living rose 19% and the state’s spending soared by 81.3% per capita.
For perspective, consider the 2007-08 budget was $103 billion—it was up $1.8 billion over the prior year and was before the recession hit.
So, perhaps California has a spending problem—not a revenue problem.
