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Posts Tagged ‘Fred Keeley’



Red-Blue Clash Emerges in 21st Century Commission

Monday, July 13th, 2009

fred keeley_0102The Commission on the 21st Century Economy, headed by Schwarzenegger pal and Republican bigwig Gerald Parsky, has been developing a plan to overhaul California’s tax system that includes flattening personal income tax rates and broadening the sales tax, as loyal Calbuzz readers know.

Instead of achieving the consensus sought by Parsky,  however, the commission faces an ideological (and factual) conflict at its meeting in San Francisco on Thursday, as liberal members are now proposing an alternative plan. Their draft proposal, among other things, rejects as too regressive a flat income tax system, and also suggests amendments to Proposition 13.

The commission’s Blue Wing (as in blue state/red state) is questioning underlying assumptions of the Red Wing flat-taxers, like: 1) Is California actually unfriendly to business? 2) Are jobs and businesses actually fleeing California? 3) Does improving competitiveness demand elimination of the progressive tax system and the sales tax?

The introduction of the Blue Plan has already raised partisan political hackles between appointees of the Republican governor and those of Democratic legislative leaders.

Former GOP Assembly Speaker Curt Pringle, in a letter obtained by Calbuzz, accused former Democratic Assemblyman Fred Keeley, one of the leaders of the liberal wing of  “crafting a plan in private” and end running commission procedures with “an 11th hour presentation.”

“Why shouldn’t every commissioner gather their respective philosophical mates and assemble and submit competing plans in the weeks and even the months ahead,” Pringle said.

But Keeley, now the Treasurer of Santa Cruz County, insisted he has honored commission procedures, and has been raising similar issues in meetings since March.

boskinThe conservative Red Wing, led by Parsky and Michael Boskin of Stanford, previously had hoped that their plan was on track for recommendations to flatten and simplify the income tax, eliminate the business tax and create a net receipts tax, like a European value added tax, to replace the sales tax.

But after the elements of that idea – which became known as the Red Plan — were well-publicized and thoroughly examined by the commission’s staff, the liberal wing on the commission, led by Keeley and Christopher Edley, dean of the Boalt Hall School of Law, came forth with an alternate Blue Plan.

Still in draft form, their plan would:
— Require that all state revenues that are 5% or higher than Department of Finance estimates be placed in a rainy day reserve fund.
— Make no change to personal income taxes, but reallocate capital gains tax revenue, with one-third going to the General Fund; one-third to debt and retirement fund payments; and one-third to the reserve fund
— Reduce the sales tax by 2% and expand it to cover, not just goods, but also a wide variety of services.
— Reduce the rate of the corporations tax, but broaden its base by restricting deductions on business losses and rolling back tax breaks for companies that operate outside California
— Subject the controversial business net receipts, or value-added, tax to further study.
— Adopt a pollution surtax on carbon-based fuels
— Amend Prop. 13 elements of the California Constitution to allow local governments (cities and counties) to increase existing local sales tax by up to 1.50% (or any .25% fraction thereof) by a majority vote of its electorate, instead of the currently required two-thirds,.
— Amend Prop. 13 to change the non-residential property tax rate from 1% to 1.50%, effective upon change of ownership, essentially establishing a “split roll” assessment system.

The Blues also would require display of all tax expenditures – special tax breaks, credits, deductions and exemptions – in the governor’s budget, and require them to sunset in no more than five years.

At this Thursday’s meeting at UCSF, the Blue Wing will ask that their proposals be given the same thorough analytical treatment that the Red Wing proposals have received and then be considered at the July 22nd meeting at UCLA.

The Blue Wing rebellion was first reported by Dan Walters of the Sac B-, who suggested the commission is headed for deadlock. That’s certainly possible, given the stark differences in world view commissioners have, but Keeley, for one, isn’t so sure.

He believes the commission can come up with a compromise, Purple Plan that combines elements of the two approaches.

It wouldn’t include a flat tax on income, but it might mitigate some of the brackets and could easily address capital gains. And while it might not replace the sales tax with a net receipts tax (which Michigan has had trouble predicting), it might lower the sales tax rate and broaden its application to services, as many other states have done.

“It depends how deeply people want to hold onto their ideology versus producing a game-changing product,” Keeley said.

Washington Post Ranks Calbuzz a Top Political Site in California

Thursday, April 9th, 2009

Less than a month into the mission (and even before our redesign), calbuzz.com was named one of the top three political blogs/sites in California Thursday, by The Washington Post’s “The Fix,” written by that paper’s top blogger, Chris Cillizza.

As the ultimate insider’s insider journalist in Our Nation’s Capitol, Cillizza publishes an annual list of “the best political blog (or blogs) in each of the 50 states.” In his updated list, which appears on the home page of his blog every day, Cillizza put calbuzz in the Golden State’s top tier, joined by our friends at FlashReport and Calitics, both featured in our blogroll.

Cillizza made his selections based on recommendations of readers, which means we got a bunch of support from calbuzzers across the state. We hugely appreciate not only your readership but also the great contributions made by calbuzz contributors from every point on the political spectrum, from Fred Keeley to Dan Schnur, from H.D. Palmer to Jude Barry.

You can see Cillizza’s entire list here. Thanks again for your support.

Fred Keeley: Calbuzzer holds his nose to vote for budget props

Thursday, March 26th, 2009

By Calbuzzer Fred Keeley

The May 19th ballot package is the best bad deal you will get.

Despite the claims to the contrary by the governor and leaders of the Legislature, the packet of ballot measures that implement the February Follies budget is, for the most part, lousy public policy.

The single exception is Proposition 1A, which would create an effective tool for reducing the tremendous volatility in the General Fund portion of the state budget. (Yes, it extends tax increases, but it’s still worth supporting.)

As to the other elements, they are further evidence of the need for profound reform of California’s budgeting system — a system that for decades has failed to produce a budget that reflects the needs and aspirations of most Californians.

When the deal was done, California slipped from 44th to last in the nation in per-pupil spending in K-12 public schools. A severely under-funded public mental health system will be even more threadbare and ineffective. The highly-regarded First Five program for young children will be stalled in its tracks. And the California Lottery, a mockery of a public enterprise if ever there was one, will be further disgraced by becoming, effectively, a credit card.

Why, then, should voters support these measures?

First, it’s the best bad deal that the current system can produce. Under the current budget-making architecture, irreconcilable belief systems are given equal value and left unsettled. For example, it has been reported here and elsewhere that many members of the Republican Caucus in the Assembly and state Senate were urging party members to withhold their votes for the budget in order to drive the state into bankruptcy.

Some people may think that’s utterly irresponsible. But for Republican legislators who believe that “government schools” cannot be made better by increasing funding, but, rather by injecting competition, or that the only way to break the stranglehold of the prison guards union is to contract management of the system to a private firm, to them, California’s fiscal crisis was not about coming up with an 18-month solution: it was about the chance for Republicans to see their belief system become reality.

Second, the few folks who will go to the polls in May will see two measures that contradict their previous messages to budget writers in Sacramento. The First Five and Mental Health “sweeps” will seem offensive in the extreme to those who fought to enact them in the first place. Convincing those folks that it will only get worse if they don’t approve all of the measures on the ballot, will be asking skeptical voters to suspend disbelief.

Third, the Legislative Analysts Office says that the budget deal has already fallen apart. A new projected $8 billion deficit is prepared to come into full bloom before the end of this fiscal year. Additionally, the Department of Finance, in moments of private pondering, sees that as a fairly “happy” deficit projection. Combine that reality with the failure of the May 19th ballot measures, and a new $12-15 billion deficit will present itself to the governor and legislature.

More importantly, the tools for fixing that problem in early June will consist of a bit of borrowing and a ton of budget cuts. The Republicans who saw their chance to prevail in the clash of beliefs in February may well be in the driver’s seat again.

So, if you are a voter who believes that we simply cannot expect high quality public education while we are looking up at Mississippi in terms of per-pupil spending, or if you are a voter who believes that decades of programmatic retrenchment in the areas of health, human services, environmental protection, infrastructure, affordable housing or any of the other policy areas where California has fallen from leadership and grace, then you’ll vote “yes” on each and every ballot measure May 19.

It’s the best bad deal you’re going to get.

Fred Keeley is the elected Treasurer of the County of Santa Cruz, a former member of the California Assembly, a member of the Governor’s Commission on the Economy of the 21st Century, and a member of the Leadership Council of California Forward.