As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."
Tuesday, September 16, 2008
Yacht Party No More? I Wouldn't Go That Far
A lot of rider bills worked their way into last night's marathon budget session, some of them pernicious (high-tech workers will be happy to know that the Legislature just cancelled their overtime). But one of them should at least cause the state to take a minute to rejoice. The yacht tax loophole is dead and buried. Well, partially.
In one of the symbolic gestures of Monday night's budget debate, lawmakers agreed to close the so-called "yacht tax" loophole.
Under current law, owners of luxury vehicles, like yachts or private aircraft, only had to keep their purchases out of California for 90 days after buying them to avoid state taxes.
That has allowed owners of such crafts to escape taxes to the tune of $21 million annually, according to the nonpartisan Legislative Analyst's Office.
The new proposal, included in a budget trailer bill, would increase to one year the time that a purchase would have to remain out of state lines to escape taxation.
That's not nearly good enough, actually, there shouldn't be any amount of time that you could leave a product out of state to avoid sales tax. If I can't do it with toothpaste, rich people shouldn't be able to do it with yachts.
Anyway, they're still the Yacht Party, as evidenced by their budget vision, which is cruel and unyielding. And we will soon have a chance to make this extremely clear by putting the options before the voters. The budget that was passed will require the voters to weigh in just to get it enacted. The provisions on the rainy-day fund and the borrowing against future lottery revenue (which is dumb, dumb, dumb) need voter sign-off. So we could see a special election as early as January, though probably in March at the same time as the LA mayoral election. I don't know if there would be time to piggy-back 2/3 or the SEIU proposal or anything else onto that, but I hope so.
• As I noted at Calitics, Dennis Morris, a resident in San Luis Obispo County, got his ballot, saw that no Democrat was running in the 15th Senate District, and did something about it:
And so today he is mounting a last-minute write-in campaign to get his name on the November Ballot. From the SLO County Dems:
"The San Luis Obispo County Democratic Party endorsed Dennis Morris on May 14th in his write-in bid to run against Republican Abel Maldonado for the 15th Senatorial District which includes all of San Luis Obispo County as well as parts of several neighboring counties. The Party is urging all Democrats in San Luis Obispo County and elsewhere in the 15th Senatorial District to WRITE-IN "Dennis Morris" for that office on their JUNE 3rd BALLOT" [...]
This is crucially important. With the possible demise of the Denham recall and an unopposed Maldonado seat, Democrats were missing out on two of their best opportunities to achieve a 2/3 majority in the State Senate. Morris' bid at least provides the opportunity for a real race in one of them. Don Perata allegedly prevented top local Dems from running in this race. But this is a people-powered action that could actually be more impactful.
• So Arnold wanted to have a yacht party yesterday - at a time when his budget dropped the closure of the loophole that lets yacht owners avoid sales tax. So after his appearance got some publicity, the coward skipped out:
I waited, and waited, and waited, but Gov. Arnold Schwarzenegger didn’t show today at the St. Francis Yacht Club in San Francisco’s Marina District for an event unveiling a hybrid pleasure-boat engine [...]
But although Frauscher’s public relations firm had insisted Wednesday, Thursday and through much of this morning that Schwarzenegger had been confirmed to attend — and that the event had been moved from Thursday to Friday to accommodate his schedule — there was no governor. He was in San Francisco, apparently meeting with a certain newspaper’s editorial board, but he didn’t make the yacht event (though many reporters did, with most splitting as soon as it appeared he wouldn’t show).
• San Francisco is leading at the forefront of the electric car movement, investing heavily in charging infrastructure. Mayor Newsom actually had an E-car back when he was on the Board of Supervisors IIRC.
• It looks like Mark Leno is cruising to victory in his challenge of Carole Migden in SD-03. Mark's a really good guy and a transformative progressive; this is good news.
• Lost amid the budget wrangling is the fact that college fees are going up again for Cal State students, with UC likely to follow. California used to have the best education system in the world. Remember those times?
• As our warehousing of human beings continues, a California man who was shipped off to Mississippi has died in prison, reportedly of "asthma," which is, you know, often treatable. What a shame.
OK, this is pretty hilarious. Remember when Larry Dodge, the guy who was going to retire the California Yacht Party's entire debt, threatened to withhold three million bucks unless the party overhauled its inept operations? Well, I guess he got his answer, because now he's starting up his own organization outside the party.
A who's who group of California Republicans will announce on Wednesday the formation of a new political organization whose mission will be to recruit and elect GOP candidates to statewide office in California.
The group will be chaired by Larry Dodge, the wealthy Republican donor who has been unhappy with the organization of the California Republican Party accusing the party of lacking "professional management."
Former California GOP Chairman Duf Sundheim will serve as executive director of the group, which is calling itself California Republicans Aligned for Tomorrow (CRAFT).
This is a party defined by giving tax breaks to yacht owners, and so its richest donors build a new group called CRAFT... which is another word for yacht. You can't make up this stuff, folks.
The Yacht Party's richest members have such little faith in their party organization that they decide to build a new one, in the fleeting hope that somehow THAT was the problem, and not a set of policies that Californians almost unilaterally reject.
I must say that the Courage Campaign must be flattered over this imitation, the difference of course being that they are committed to empowering members from the bottom up, while CRAFT sounds pretty top-down to me. In fact, it's unclear that this is anything but a money-laundering organization that can be more flexible than the state party. All the same players are involved.
Among those set to announce the group's formation on a Wednesday conference call include both GOP legislative leaders, Assemblyman Mike Villines and Sen. Dave Cogdill, Party chairman Ron Nehring, former Gov. Pete Wilson, Rep. David Dreier, the chair of the California Republican congressional delegation, freshman Rep. Kevin McCarthy and Assemblywoman Sharon Runner.
Six old white guys and one old white guy (George Runner)'s wife. CRAFT diversity fever - catch it!
In the spirit of comity, I'll offer one word of advice: don't kick off your conference call by noting how much your candidates totally suck.
The new group notes that since 1994, Republicans have won only four of 24 possible statewide elections in California.
Conservative Ideology Is Saving The Luxury Yacht Parking Industry
This is really kind of priceless. So the Assembly caucuses are having their legislative retreats this week. The Assembly Democrats are meeting at the UC Davis Medical Center. The Assembly Republicans have booked out this hotel. In addition to the many amenities at the Le Rivage Hotel, they offer:
Marina - Offers luxury yacht parking, long term and short term
Whether it's welfare queen Tom McClintock grabbing $300,000 in tax-free per diem payments even though he lives a short commute from the capital, or Jeff Denham pretending to decline pay raises while accepting them a few months after everyone stops paying attention, or Assembly Republicans making sure their retreat has luxury yacht parking, the contrast between the party of the people and the party of self-enrichment is striking. The Yacht Party detests runaway spending unless it's spent on them.
So as expected, Assembly Republicans killed a bill that would bring California in line with every other oil-extracting state and charge obscenely rich oil companies for taking our natural resources out of the ground.
With gasoline prices soaring, legislation to slap the oil industry with higher taxes died in the Assembly late Wednesday in the latest party-line battle over the state's beleaguered budget.
Republicans killed the two-pronged oil tax proposed by Assembly Speaker Fabian Núñez, which they considered a threat to the state's economy as well as political gamesmanship meant more for public relations than problem solving.
In turn, Núñez said at a news conference before the vote that the GOP could not continue to push "knee-jerk, no-tax rhetoric" without coming to grips with its effect on schools and other public services.
Speaker Núñez is in a tough spot, faced with a recalcitrant Yacht & Oil Party who is wedded to failed ideology. The best he can do is to continue to offer these proposals, argue forcefully for them, and hold the opposition accountable for their votes in November. On a blogger conference call earlier today, the Speaker talked about PTA members from red districts coming to the Capitol to protest these extreme education cuts. The Yacht & Oil Party will absolutely face a backlash if they keep this up. Democrats are making the differences clear, and that's the best we can hope for at the moment.
Another thing - what exactly is up with this argument from the Yacht & Oil Party that the Speaker timed his proposal to coincide with layoff notices from school districts? I didn't realize that POLITICS was out of bounds in the political arena. Of course it coincided; the only way you get people in this state to pay attention to what's happening in Sacramento is by taking advantage of opportunities to show the stark philosophical differences. Saying that "you're not allowed to tell people the consequences of our policies" is a loser argument for a loser party.
"Our state and its people cannot prosper in the 21st century if we force our schools to live on a fiscal starvation diet," Garamendi said Thursday at Sacramento City College.
However, in doing so my Republican colleagues in the State Assembly decided that while they were prepared to cut education funding and health care for the poor, they just couldn’t stomach closing the yacht tax loophole. Too painful, apparently, to the Thurston Howell IIIs of the world. So they refused to provide the 2/3 vote necessary to close the yacht tax loophole. In doing so they robbed the poor to help subsidize tax avoidance by rich yacht owners. Are those the values we want reflected in our state budget? Those aren’t my values, that’s for sure.
State Superintendent of Public Instruction Jack O'Connell will hold a morning news conference to urge California students not to walk out in protest of the cuts.
If we need students in the streets for the Yacht Party to get the message, so be it.
Judy Lin at the SacBee took a look at the Yacht Party's bankrupt arguments about how we simply have to enable tax evasion or poor people are going to starve.
"The immigrant who sprays fiberglass on a boat will lose his job. The small-business owner who installs avionics on an airplane will lose his business," state Sen. Dennis Hollingsworth of Temecula told GOP members during a Feb. 15 floor debate. "Those are the people who are going to be affected by this. It's not the rich."
You know, never does a day go by that the Yacht Party doesn't show its deep respect and concern for immigrants. Somehow, though, I have the sneaking suspicion that they're being, what do I call it, completely disingenuous. The Legislative Analyst has correctly described this as tax evasion, the Governor has correctly described this as tax evasion, even the TAX EVADERS have correctly described this as legalized tax evasion.
Chuck Lenert, 57, of Sacramento saved nearly $30,000 in taxes when he bought a used 58-foot Kha Shing motorboat near Victoria, Canada, three years ago. It came with a docking slip in Canada, he said, so it was cheaper to leave it there and pay an attorney $2,500 to ensure his tax status was in order with the state.
"I was just following the rules of the state of California, so why should I pay sales tax?" Lenert said. "I wasn't trying to do anything but follow the law."
For a year, Lenert, who sells hardware for a living, would travel every few weeks with his family and friends and take the $376,000 vessel, named Knots and Bolts, around the waters off Vancouver Island to catch crabs, salmon, oysters and shrimp. After a year, he moved the boat to Washington state.
"I would say that the 90-day guys are more cheaters," said Lenert, who has since brought the boat down to Sacramento. "I had a bona fide use."
Not that it should even be a question, but contrary to the Yacht Party's protestations, actually making yacht owners pay their sales tax would have no material effect on sales whatsoever.
The analyst's report found that a longer exemption period had little impact on manufacturers and sellers because their products sell nationwide.
Tim DeMartini, owner of DeMartini RV in Grass Valley, said the length of the exemption doesn't affect his business because two-thirds of his orders come from outside California. The average 40-foot big diesel, he said, sells for $150,000.
"It won't make that much difference to us," DeMartini said, adding that the impact might be greater for the buyer.
Due to this "conflicting" information, Yacht Party members are just so gosh darn confused about the issue that they'd rather just walk away from it, which has the added benefit of, you know, saving Commodore Ackerman's yacht tax.
"I haven't been able to conclude which argument makes the most sense," said Assemblyman Roger Niello, R-Fair Oaks, who abstained from the vote.
As for Dan Walters' predictable media "he said, she said" argument, I think there's a slight difference between yacht owners avoiding sales tax and income tax credits for children for working-class families. Call me nuts.
California Yachting Association Call-a-Thon: Day 2
Yesterday we got almost a thousand views of this video message from the California Yachting Association, and we shut down the California Republican Party's phone linestwo days before their state convention. But I'm not certain that the CRP got the message yet. They need to hear from us again today.
916.448.9496. Please call. Operators are standing by!
In all seriousness, this visibility campaign is of a piece with some contemporaneous attempts at legislative activism. Yesterday seniors and the disabled descended on the Capitol to protest cuts to the In-Home Supportive Services (IHSS) program. Low-income community groups are organizing against what they believe is an insufficient state cap-and-trade program that would allow polluting industries to buy the rights to continue to pollute (I'm not sure if I totally agree with them, but it's an interesting article). This entire year is going to require this kind of activism if we want to wind up with a state government that doesn't dismantle its public education system, make health care less accessible and preserve tax avoidance strategies for the wealthy like evading the sales tax on yachts. These people have to be watched, vigilantly, and through that sunshine will come eventual change, whether they accede to it themselves (unlikely) or we go ahead and take their seats away (likely if we work our butts off).
I spent two dollars making this video hitting the state Republican Party on the yacht loophole, and now there's anecdotal evidence that we got the CRP to turn off their phones, two days before their annual convention!
I got vm and then was transferred to an extension that had no vm. But I'm sending them an email. They can't get rid of me that easily!
Great idea, dday. We need to band together all over the country to fight these corrupt, incompetent politicians who are giving away our tax dollars to their cronies.
Two bucks, and a few hours of online organizing. And the Republican Party in California turned off their phones.
And really I'm the least successful one out there. At Blue Indiana Thomas is launching an effort to get John McCain kicked off the state primary ballot because he didn't get the required amount of signatures:
Now, I'm originally from the 4th District, so curiosity led me to check out who had made it (and by how much) in my old stomping ground. To my surprise, I noticed that John McCain -- the presumptive front-runner for the GOP nomination -- was just a little short in a few districts, including my precious 4th, despite the fact that Attorney General Steve Carter had already turned in their petitions. I made a few phone calls, and one by one I found out that the McCain camp had got the job done across the state.
Except in the 4th District.
In the 4th District, they are short.
By my latest count, they turned in 496 signatures for the 4th, and the latest IED report for this morning shows them with only 491.
So this afternoon, I filed a challenge with the Secretary of State's office to keep John McCain off of the ballot. You can check it out here. (I'll have a .pdf version up when I get back to Bloomington this evening.)
Early voting starts today in Texas. In Waller County, a primarily rural county about 60 miles outside Houston, the county made the decision to offer only one early voting location: at the County Courthouse in Hempstead, TX, the county seat.
Prairie View A&M students organized to protest the decision, because they felt it hindered their ability to vote. For background, Prairie View A&M is one of Texas' historically Black universities. It has a very different demographic feel than the rest of the county. There has been a long history of dispute over what the students feel is disenfranchisement. There was a lot of outrage in 2006, when students felt they were unfairly denied the right to vote when their registrations somehow did not get processed [...]
1000 students, along with an additional 1000 friends and supporters, are this morning walking the 7.3 miles between Prairie View and Hempstead in order to vote today. According to the piece I saw on the news (there's no video up, so I can't link to it), the students plan to all vote today. There are only 2 machines available at the courthouse for early voting, so they hope to tie them up all day and into the night.
Incredible. And you're going to see organizing efforts like this all the way through to November.
As Sara Robinson explains (and I can't recommend that link enough), we are poised for a historical moment. Michelle Obama expressed her pride about what's happening right now because it's something different and new. People are engaged in their politics again, and they're using all kinds of new organizing strategies to turn that engagement into positive action. I hope it doesn't end up hitting a brick wall. But there's a feeling of unstoppable force going on right now. When you step away from the candidate wars it's really impressive what's happening out there.
The situation in California is pretty simple; you have a Republican governor who isn't as "post-partisan" as advertised, a Democratic majority that is prone to compromising, and a Republican minority that is batshit insane. Out here we grow our Republicans as anti-tax economic conservatives, with a splash of anti-immigrant rhetoric thrown in. We have a fiscal crisis that is only getting worse, with a budget deficit nearing $16 billion dollars. All of the tricky borrow-and-spend games that Schwarzenegger has played over the years are catching up to him, showing him to actually be a worse fiscal steward than his predecessor Gray Davis. He's consistently touted a cuts-only approach to solving the budget gap, with no revenue additions or tax fairness whatsoever. This despite the fact that the state is perpetually in a state of financial disaster dating back to the property tax revolt of 1978; we simply don't bring in enough money to cover the vital services needed for a functional society. There's also this problem that any tax increases require a 2/3 majority, so a tiny sliver of the Legislature can block the desires of the many. As a result the state is falling into the toilet.
Twice in the past week, Republicans have blocked the one policy on which Schwarzenegger and the Democrats agreed on: fixing a loophole that allows yacht owners to avoid paying their sales tax. Let's go back over that. This is not a tax increase. This is making sure that people who purchase yachts pay the same fee that any person pays when they buy any other item. It's funny how the loopholes are never for purchases at the 99 Cent store, isn't it? Yet the Republicans saved the loophole once, got pilloried for it in the press, and promptly blocked it again, and in the most craven way possible. 16 Republicans just took a little walk and opted out of the vote rather than be on the record as down with yacht owners over the sick or the elderly.
Yacht buyers will continue to benefit from a loophole that allows them to avoid sales tax on their boats, after Republicans in the Assembly blocked an effort to close it Tuesday.
Closing the tax loophole -- "sloophole" as it has come to be known by Democrats -- takes a two-thirds majority vote in each house of the Legislature, which requires some Republicans to get on board. Not enough of them did Tuesday, so on a 47-18 vote by the 80-member Assembly, the move to scuttle the tax benefit failed.
Last week, lawmakers voted to cut schools, healthcare and welfare programs by $2 billion.
"It is unconscionable to cut education and welfare while not closing this loophole," said Assembly Budget Committee Chairman John Laird (D-Santa Cruz). "Everyone needs to be part of a budget solution, including yacht owners."
Political experts call this a "gift." You have the Republican Party prioritizing the interests of yacht owners. Is there any better expression of the conservative movement in our new Gilded Age? It's worthless to even list their tired arguments (rich people would leave the state! We'll bankrupt the yacht business! Uh, no.), but it's crucial to understand why the Republicans think they can get away with this. The problem is two-fold. The first, as Dave Johnson notes, is that the political culture in California is painfully thin.
It is generally understood that the average citizen has been fed enough unanswered anti-tax and anti-government propaganda that they reflexively oppose taxes. (The operative word there is "unanswered.") But this is a very different thing. This is a special exclusion, just for rich people, that one way or another has to be made up for by the rest of us! Why aren't the people of California more upset about this?
The only conclusion I can reach is that the Republicans understand that regular people are not going to find out about this! And they may well be correct. Yes, the story was in a few newspapers, but really, who reads newspapers? This is not how large numbers of regular people get their information about politics in California. They get some of it from TV news, but I really fear that most people in California get their information about the issues facing the state from ads that run during prime-time television shows. And I think that conservatives understand this, while progressives/liberals do not quite "get it."
For example, if regular people were accurately informed about California issue, then people would understand that most of the factors that were used as justifications for recalling Governor Gray Davis are today almost the same with Governor Schwarzenegger. One big difference I see is that the energy companies are not running an ad campaign blaming Governor Schwarzenegger for anything, they way they ran ads blaming Governor Davis for the energy-company-created energy shortage back then.
There's a second problem that Johnson misses; the group with the most incentive to actually fight back against this is the California Democratic Party. But they're staff with a bunch of part-time consultants; two of them are heading up this new pro-Hillary 527. So we have a nation-state of 38 million people, almost no state media, and an opposition party that is pretty content with its legislative majorities and doesn't have the manpower to do much of anything else.
This really frustrates me. We actually have the opportunity in 2008 to get very close to 2/3 majorities in both chambers of the Legislature, and considering that the top of the ticket will be bringing in all these new voters, it's a very realizable goal. But you have to make the Republicans pay for this kind of stuff.
In true "we are the change we've been looking for" fashion, I put together a short message from the California Yachting Association thanking the state GOP for saving their tax loophole. The total budget for the ad was about $2.00 worth of gas:
The California Republican Party's phone number is 916.448.9496. You should call them, tell them you're a yacht owner, and thank them for sticking up for them instead of those lucky duckie poor people or children or the sick.
My point is that it's unbelievably easy to put Republicans in a corner on this type of stuff. And there's a great deal of value in framing your opponent early and often. Literally nobody knows about the type of shenanigans the Republicans here are pulling, like the "sloophole". We need to give a nudge to the state party and let them know that there are very simple ways to get this message out. A cable buy or radio ads can be very effective. So could showing up at every event with a Republican for the next year in a boat captain's hat and giant cigarette holder and blue blazer and making a big stink out of the state GOP's love for yacht owners. (their state convention is at the Hyatt Embarcadero in San Francisco this weekend, if anyone wants to have some fun). If it takes a grassroots strategy, so be it. But without informing voters about this kind of nonsense, and holding them accountable, nothing will get done. We can elect as many transformative post-partisans as we want.
So could you take a minute and call the California Republican Party for me?
Pro-Yacht-Tax-Evasion Republicans Fighting Hard For Their Welfare Money
Apparently the Republicans in the California legislature are balking at fixing a loophole that allows yacht owners to evade taxes on their purchase. Yachts. I mean it's perfect. This is what we face in California, the Republican Party is just the wingnuttiest of the wingnutty. They demand welfare checks for rich people. I mean that's what it is.
This is why getting a 2/3 requirement is so crucial. We need to end this nonsense so a small and insane minority can hijack the entire state.
Seriously, it'd be $50,000 well-spent by the Speaker to run a couple radio ads in Sacramento to highlight Republicans who voted to allow rich people to save money on their yachts. If he asked me, I'D chip in to hear see that. Hell, I'd work pro bono on it if they wanted to turn them in to TV ads. And I have a voice for radio (and a face, too).
I'm about working with the legislative leadership in Sacramento to make Republicans pay for this. There isn't a "pro-yacht-loophole" faction out there that would mollify this. Every Republican in the state would take heat from their constituents over this.
It's time to start thinking strategically. And since the party largely votes as a block, it's time to start holding every single Republican accountable for the actions of their majority.
This morning, in a matter of minutes, the State Senate and State Assembly will ratify the emergency cuts which will "ensure the state will have enough cash to get through the fiscal year."
While the cuts are not nearly as severe as what was requested by the Governor, and of course this only impacts the current fiscal year and not the projected $14.5 billion dollar deficit, it offers something of a template, one would assume, for how the future budget problems will be approached. There's a very good summary of what will be affected by the California Budget Project here (PDF). Some of it is creative accounting, a small sliver of it closes tax loopholes like Dick Ackerman's yacht loophole (and even Republicans voted for that), but a good deal of it will manifest themselves in a reduction of needed services. I guess the best you can say is "it could have been worse," and at least one tiny loophole (worth about $5 million this year and $21 million in 2008-09) was closed.
Republicans acknowledged in today’s hearings that these were painful cuts being made. Both Republicans and Democrats spoke with passion about many of these cuts—sometimes expressing hopes that when next year budget is adopted that some of the cuts can be reversed. The need for speed was acknowledged by all, as California is in danger of running out of funds to pay ongoing expenses.
It was a "back-against-the-wall" solution, and it shows. We now have several months until the deadline for the next budget. That needs to be addressed in a manner where cuts-only solutions are not forced by circumstance.
Apparently the first concrete proposal on the California budget has cleared the Senate Budget Committee, and this isn't meeting halfway, this isn't a program of tax fairness, it's actually mostly cuts.
The Senate Budget Committee, meeting late Wednesday, approved a $1 billion package of emergency cuts to education and other services aimed at preventing the state from running out of cash.
Republicans, saying they had inadequate time for review, did not vote on the package, which cleared the committee with nine Democratic votes. The full Senate is expected to consider the actions Friday.
This is the first in what is expected to be a number of measures on the budget. This one, closing the $800 million dollar gap in the current fiscal year, had to be executed before the Feb. 23 deadline for the fiscal emergency that the Governor called at the beginning of the year.
The numbers are bleak. $500 million is coming out of education. Medi-Cal payments to providers will be reduced by 10%, which will directly impact patients with longer wait times in emergency rooms and diminished access. And a good deal of other social spending programs will see their budgets frozen.
There weren't ALL cuts, though. Dick Ackerman's precious yacht tax is scheduled for the chopping block.
Democrats also voted to abolish the so-called "yacht tax," a loophole that allows purchasers of boats, motor homes and airplanes to take possession outside the state's boundaries and avoid California sales taxes if they leave it out of state for a specified period.
The committee's Democratic chairwoman, Sen. Denise Ducheny, said that for all the cuts under consideration, "wealthy people who can buy yachts should pay the proper sales tax."
But that's the only silver lining, it appears.
The decline of California as a national leader is greased by unfortunate measures like this, which are not the result of bold leadership but foolish priorities and an obsession with antitax rhetoric that leaves the state in a perpetual fiscal hole. New leadership might alter this a little bit, but really this is about the Democratic caucus rejecting Republican spin and recognizing the structural needs to move the state into the 21st century and ditch its 19th-century budget constraints.
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