Economic Updates

Briefing – John Cox – Candidate for CA Governor

Vision

Macro: Supports individual liberty, limited government and the right to privacy.

Identification:  See himself as a Jack Kemp Republican.  Reminder: Jack Kemp was a leader who cared about the poor, who wanted to make the GOP attractive to minorities and working-class voters, who never went negative and regularly worked across party lines.  Kemp insisted growth was the key to economic strength and national unity. Robust growth would help everyone rise—rich, middle class and poor.

On Record:  “I believe that’s our best hope for putting our state back on the road to financial accountability, to getting government off the backs of the small businesses that create jobs and, and out of the pockets of those who today must often choose between buying groceries or filling their tank to get to work.

Biography

Personal:  He is a businessman from the south side of Chicago who paid his own way through college and law school.  In 1981, he founded John H. Cox and Associates Ltd, a law firm specializing in corporate law and tax planning. In 1985, he founded Cox Financial Group Ltd., which specializes in investment counseling, income tax planning, retirement planning, and asset protection. In 1995, he founded Equity Property Management, a real estate management firm specializing in apartment rental property. His business is now a $200 million enterprise with almost 100 employes.  He has four daughters and lives with his wife Sarah in San Diego where they are active in and attend Nativity Catholic Church.

Civic Engagement:  He is as board member for San Diego United Service Organization and founded an organization that repairs the homes of low-income seniors and individuals with disabilities.

Political:  He has run for public office three times. He ran for president in 2008. While living in Illinois he ran for the House and twice for the senate. Cox lost all of his races in addition to losing the race for Cook County recorder of deeds.  Since moving to California in 2011, he has also sponsored six initiatives, none of which qualified for the ballot. Five of them were for his pet proposal, which would expand the Legislature a hundred-fold by subdividing existing legislative districts, which have 500,000 residents and 1 million, respectively, into smaller districts.  Cox has the endorsement of several republican politicians including Newt Gingrich and Donald Trump.

His Assessment of CA’s top Challenges:

• CA has too many taxes and the state income tax is extremely high
• CA’s cost of living is too high & is unfriendly to business
• CA’s poverty rate is too high
• CA’s unfunded public pension liability and has a high public retiree health care liability

His Views on Key Issues that Impact CA’s Economy, Job Creation & Quality of Life:

State Budget

On Record:  When asked about Jerry Brown’s state budget: “It spends a lot of money… it comes out of the pocket of people in CA…and that is true with the gas tax… These guys are running around saying they’ve got a surplus, tell me again why they needed 5 million dollars more with the gas tax?… These politicians are spending and don’t care what people do. Government doesn’t exist to take surplus… efficiency and cost effectiveness are alien terms to our political class… they should of been working on that instead of raising the gas tax…I’m going to have a priority of using our money efficiently, wisely.”  He argues that much of the state budget is made up of labor costs that can be cut, “I think all wages are too high because they’re driving people out of the state,” he said. “But we have to pay them so workers can afford housing.”

Level Setting: ​ ​CA state government is reaching its first $200-billion spending plan​ -​ $138.6​ – billion ​for the general fund, the government’s main checking account; $57.1 billion for special funds, largely for safety net and transportation programs; and $3.9 billion for bond debt​.  That totals $199.6 billion​. The general fund goes four places: K-12 schools, higher education, corrections, and health and welfare. Everything else is ​minuscule, except pensions – see below. ​Though, state spending plummeted during the Great Recession, falling from $138 billion in 2007 to $117 billion in 2009.​  During his tenure Governor ​Brown ​has been known for being a good steward of the state’s resources by keeping Democratic spending in check​, ​he ​inherit​ed​ a $27-billion budget deficit and turn​ed​ it into a $9-billion surplus​, but he also raised income taxes astronomically on the wealthy. ​ First Prop 30 and its extension – Prop 55.  The state’s rainy day fund now tops $16 billion. Were these higher taxes really ​necessary in the rebounding economy​?​​ ​Two, state spending under Brown has risen from roughly $131 billion to $200 billion, 53​ percent​ in eight years.​ When the current budget was signed last year, it was pegged at $183 billion. In only six months, it grew by more than $5 billion. ​ ​

Plan:  Cox said business executives are best suited to lead states because they bring a bottom-line mind-set to government that career politicians don’t.  He frequently mentions that 18 states have governors who came from the business world. As a point of reference the most successful governors — such as Hogan (MD) and Baker (MA) — have charted a middle-of-the-road course on fiscal matters and tried to steer clear of social issues, according to John Weingart, director of the Center on the American Governor at Rutgers University.  And, much like what ideally happens in the business world, both try to see common ground in the interest of getting a deal done, and they’ve tried to work with their (Democratic-controlled) legislatures. FYI – In the past Cox has weighed in with Tea Party comments on social issues. Though he has more recently mitigated some of those stances, with Trump’s endorsement this could go either way.

Taxes

On Record: “I don’t understand why Florida and Texas are able to operate without an income tax. And we have the highest in the nation. Not only that, by the way, we have the highest sales taxes. The highest gas taxes. And people tell me, by the way, oh but our property taxes are much lower, well I beg to differ and he says the state needs to overhaul its tax system.”  Though be states that the regulations in CA are way, way worse than the tax bite.

Level Setting​:  ​The biggest problem with California tax system is that it was designed for a retail economy that no longer dominates. CA’s economy is largely service based and that basically isn’t taxed. (L.A.’s economy is now 90 percent service oriented)  To make up for it, state income taxes are some of the highest in the nation – CA gets half its revenue from its top 1 percent of earners, its top rate is 13.3 percent and 70 percent of the state’s general fund is supported by CA’s PIT and 40 percent of the PIT can be attributed to a little more than 70,000 tax payers. That tax revenue is volatile and unreliable because it’s tied largely to capital gains. Those capital gains dwindle during a recession.  And the need to feed the CA’s general fund continues to grow – when Jerry Brown began his first governorship in 1975, California’s general fund budget was under $10 billion and the 2018-19 state budget is now more than $130 billion ($190 with special funds.)

Plan:  He believes CA relies too heavily on taxes paid by the wealthy and says he wants to see the income tax significantly reduced, along with matching reductions in spending. Cox also wants to overturn the gas tax increase and vehicle license fee hike that passed last year.  He argues that the state could make up the difference by running the government in a “more efficient manner.” The state will pay for tax cuts by cutting public school administrative spending, making the California Transportation Agency operate more efficiently, and tackling other areas of mismanagement, which he calls “low hanging fruit.”

Workforce Development

On Record:  “I would argue that the state just operated just fine with you know having 20 percent of our workforce slashed…So I don’t think this state has a revenue problem…It has a spending problem.  It has a waste and corruption problem, and if you think about it, it’s because of the incentives. The public unions have a huge say in what goes on. What politician in Sacramento is going to stand up today, and say by gum we need to cut our workforce 5, 10, 20 percent.”

Level Setting:  While the elimination of or substantial changes to occupational categories is not reflected in our region’s currently low unemployment rate, the consensus among workforce experts is that these dramatic changes are on the horizon and will lead to structural unemployment if unaddressed.  Workforce development institutions (workforce development boards, higher education, etc.) will need to be rewired to support a new world in which frequent reskilling during the course of one’s career is the new norm. They will need to be outcome driven, clearly demonstrating that their programs lead to high job placement rates.  Government funded workforce development programs totals $6.5 billion in the state of California, with roughly one-third coming from federal sources and two-thirds from the state General Fund. Despite significant spending, it is unclear how effectively these programs are leading to meaningful outcomes for individuals and employers, i.e. job placement rates, average earnings per placement, average program cost placement, employer satisfaction, etc.  Program impact measurements are critical to prioritize programs with strong results and to eliminate programs with limited impact. ​ ​The apprenticeship system will need to be strengthened to address critical labor shortages in middle skill occupations. This earn and learn approach is a pathway to living wage jobs with zero debt. Currently, California has 82,000 registered apprentices, primarily in the building trades. There is untapped opportunity to expand this model in new industries such as healthcare and information technology.

Plan:  ?

Housing

On Record:  In regard to rent control: “Price controls never, ever work.”  “Rather than raising costs, the best way to lower our cost of living is liberating California’s powerful economy by reducing the regulations on construction, fostering a competitive marketplace of products and labor, removing harmful rent-control policies, reforming CEQA and finally putting an end to corruption and cronyism in Sacramento.”  On homelessness – “I believe the first step to helping those forced into homelessness because of California’s unaffordability is to reduce the daily costs like the gas tax and then get our housing costs (down) by removing unnecessary barriers to building new housing.” He also blames the state’s homeless problem on the high cost of prison operations: “We can’t afford to keep people in jail, so we’re releasing them to the streets.”

Level Setting: Only twice since 1954 — the year the state building industry began tracking permits — have developers built more than 300,000 homes in a year. The highest year on record is 1963, when 322,018 home permits were issued. To reach 500,000 homes in a year, the state would need to replicate its largest production in modern history plus an additional 178,000 homes, a number the state has surpassed just three times in the past 27 years.

Plan:  Has a goal for developers to build 3 million new homes over the next decade. He wants the state to reduce regulations on builders, including replacing its primary environmental law governing development, the California Environmental Quality Act, with a less comprehensive measure. He does not think that the state should force cities to allow more development to ease the housing shortage. He says that some urban areas will have to allow for more, denser development, but he does not think the state should be imposing those requirements. He opposes SB 827 (Density Bill: Sen. Scott Wiener (D-San Francisco), which he calls a “top-down, one-size-fits-all state edict.”  Cox also wants to allow CA’ to be able to take the property tax benefits they receive under Proposition 13 with them when they move. He believes the state should engage in public-private partnerships with charities and nonprofits to provide assistance to homeless Californians.

K-12 Education

On Record:  “There’s too much bureaucracy in the schools, with not enough money going into the classroom.” “it is a cruel joke and unsatisfactory to tell parents who currently send their child to a failing school that we are working on long-term fixes. … If the local school is a failed disaster, let parents send their child to a school that works, whether it is a public, private, parochial or charter.”  arguing that the Republican Party should support school choice and home-schooling.

Level Setting: Despite their differences, all the candidates know that improvements are needed for California education. With $54 billion of its $183 billion budget going toward education at all levels, the state could reasonably be described as the nation’s largest school district, only with a university system attached.  ​There ​are ​unknown ​questions about how K-12 education will evolve​. A recent Public Policy Institute of California​ ​study said that the state could continue giving school districts broad flexibility in using state funds to meet local needs and priorities, or it could make targeted spending programs common once more.  ​As to teachers, ​seventy-five percent of school districts report difficulties when it comes to retaining and recruiting teachers, particularly in special education and STEM classes. One quarter to one-third of all new teachers quit within five year​s and ​C​A​ is in the bottom 10 states in per-pupil investment​ and​ student outcomes on standardized tests based upon the Common Core have flatlined​ – ​in 2017, 49​ percent​ passed the English exam, compared with 48​ percent​ in 2016. In math, 38​ percent​ of students met or exceeded the state’s standard, compared with 37% last year.

Plan:  He says the “ultimate goal” of his education policy would be to increase the number of charter schools in the state. He has called for a full investigative review of the state school system to find and fix inefficiencies  For closing the achievement gap: He says the state should allow more charter schools to open, provide vouchers to families that want to send their kids to private schools, and facilitate more homeschooling if necessary. “Competition is why I get up every single day wanting to be better than the next guy, and that competition is not available in our education system.”

Higher Education

On Record:  “California has to make the UC and state college and university systems affordable for students, so they don’t have to either drop out or leave with a degree and a huge debt” and “University costs are mostly salaries and benefits, and we can’t afford to pay a professor to just teach one class…We have to make (higher education) more available by cutting costs, and that means making the most of your employees.”

Level Setting: The 3 percent funding increases Brown proposed for the state’s four-year university systems in the 2018-19 budget will not generate enough money to avert tuition increases or expand their enrollment capacity. Newsom has opposed tuition increases as a member of the UC Board of Regents.  Both systems last year hiked tuition for the first time in six years, and the UC and CSU boards of trustees did not approve planned tuition increases this year, though UC did raise tuition on out of state students. A recent Public Policy Institute of California study indicated that the state’s higher education system is not keeping up with the changing economy.  According to that study, “in 2030, if current trends persist, 38 percent of jobs will require at least a bachelor’s degree. But population and education trends suggest that only 33 percent of working-age adults in California will have bachelor’s degrees by 2030 — a shortfall of 1.1 million college graduates.” ​ ​The California Community College System is a critical gateway to living wage jobs or transfer to 4-year universities. Last year, the Board of Governors adopted a new vision with specific goals that include increasing by at least 20 percent a year the number of students earning an associate degree, credential, certificate or specific skill set and increasing transfers to UC and CSU by 35 percent a year.

Plan:  As governor, he says that he will study the issue, but blames high tuition costs on “easy financing.” Believes cost-cutting measures should include looking at professor’s’ course loads to ensure colleges and universities are getting the most out of their employees.

HealthCare

On Record:  In regard to single payer health care: “Why stop at healthcare? Why not have single payer food?”  In a 2017 opinion piece for the Orange County Register, titled “Health care for all? More like how to destroy California,” Cox said the only way implementing state-sponsored universal healthcare could work “is to drastically cut payments to hospitals, doctors and drug companies — or put the doctors, nurses and hospitals on the state payroll, which will drive many of our doctors to pack up and leave.”  In regard to helping undocumented immigrants with healthcare: “I don’t believe in giving benefits to people who have broken the law to come to the country.”

Level Setting​:  ​California currently spends roughly $400 billion per year on health care, according to a Sacramento Bee analysis of national health expenditure data from the Centers for Medicare and Medicaid, projections by state health care analysts and independent health economists. Half of that comes from taxpayers, in the form of federal and state funding for Medi-Cal, the health insurance program for the poor, Medicare for people 65 and older and Covered California premium subsidies. Most of the rest is in the commercial market, with more than 15 million Californians covered through their employers.  Annual spending is expected to rise due to soaring out of pocket costs and fewer affordable coverage options. According to the nonpartisan Legislative Analyst’s Office, creating a single-payer system would cost $400 billion per year. California taxpayers would have to pay for at least $200 billion of that amount in new taxes, while no longer paying for healthcare premiums, co-pays, and insurance deductibles.

Plan:  Cox is opposed to implementing a state-run single-payer healthcare system and he also believes the state should make it easier to compel mentally ill people to receive psychiatric treatment against their will. He says he will consult with experts on how to ensure that those suffering from mental illness receive the treatment they need while respecting civil liberties. He also said that the local officials should more strictly enforce vagrancy laws.

State Pension Reform

On Record:  “Well the first thing we have to do is growth. I mean the one thing we can’t do at this juncture is tell people who are 50 years old that we’re not going to give them their pensions. I mean fortunately or unfortunately Mr. Villaraigosa was in the Assembly as you know when they increased the accrual from 2 to 3 percent. Right?  That was the beginning of the end, they did it for public safety but then everybody wanted it. So for the last 20 years or so people have been counting on the idea that they’re going to get 30 you know, years and 90 percent of their salary. Right? You can’t tell somebody who is 51 years old that they’re not going to get that so…I think that’s a real problem.  I’m going on record as supporting what Jerry Brown is doing… But we need some more change, I mean we’ve got to, you know, we’ve got to lengthen out retirement ages, especially for younger people. I mean you obviously can’t do that for someone who is 52 years old.”

Level Setting:  The pension burden on public treasuries, retiree costs will increasingly devour state and local tax dollars that should be funding government services such as education, healthcare and wildfire fighting. It was revealed last year that the cost of retiree benefits in Los Angeles amounts to roughly 20 percent of the city’s general fund, which pays for basic services such as police and parks. In 2002, the cost was less than 5 percent. The state’s two biggest public pension systems are badly underfunded. They’re also the largest and second-largest public pension funds in the country. They’re the California Public Employees’ Retirement System, or CalPERS, and the teachers’ pension fund, CalSTRS. CalPERS has unfunded liabilities — benefits promised compared with anticipated funding — of $136 billion. For CalSTRS, the projected red ink is $87 billion. That’s based on 2016 data, the latest available.  If you total up the unfunded liabilities of all state and local public pension systems in California, the projected debt comes to around $333 billion. But that’s a conservative figure based on official reports. It could be up over $1 trillion. California’s first major statewide attempt to reform pensions was the PEPRA (Public Employee Pension Reform Act) legislation, which took effect on January 1st, 2013. This legislation reduced pension benefit formulas and increased required employee contributions, but for the most part only affected employees hired after January 1st, 2013. The reason PEPRA didn’t significantly affect current employees was due to the so-called “California Rule,” a legal argument that interprets state and federal constitutional law to, in effect, prohibit changes to pension benefits for employees already working. CA’s high court is currently reviewing a case that may soften or eliminate the California rule. If the California Supreme Court does dramatically clarify the California Rule, enabling pension benefit formulas to be altered for future work, it will only adjust the legal parameters in the fight over pensions in favor of reformers. After such a ruling there would still be a need for follow on legislation or ballot initiatives to actually make those changes.

Plan: He suggests that the state might increase the retirement age and limit the ability of public employees to collect multiple government jobs. He says state and local governments should be allowed to modify the contracted future benefits of current employees.

Economic Development

On Record:  “I’ve proposed building three million homes over the last 10 years. Next 10 years. I think that will supply a huge amount of growth, it will also supply, I think, a solution to the housing crisis. I mean we have got to streamline regulation we’ve got a modified CEQA, we’ve got to get the homes built because the only way to bring down the cost of homes is more supply. And subsidies are only going to help a few people; we’re not going to be able to do it with subsidies.  We’ve got to get more supply that will provide a lot of economic growth. You know, I mean homes…you get carpenters, plumbers, electricians, concrete, lumber, roofing, you know you get a whole… you know chain reaction when you build a home…So that provides I think a lot of economic growth. I don’t favor top-down. I favor local control. Because I believe in growth. Because the corporate tax cut was the right thing to do, we had businesses leaving this country. We had inversions going on because the tax rates in other countries were so much lower than ours. We also had a two and a half to three trillion dollars in cash that Apple and Google and a whole bunch of companies were leaving overseas that had to be brought back. It’s now… I believe that is being brought back. See, I believe in growth. I believe investment goes where it’s treated well, and if your tax rates are too high, it’s not going to be in this country so the only way to get growth is with investment. There’s no other way to get growth…Growth is going to take care of a lot of the deficit if we got spending cuts.”

Level Setting:  In 2011 Lt. Governor Newsom set a great baseline when he released a Plan on Economic Development (Great Plan, largely ignored by Governor Brown). It was a great plan than and still is a great plan today. He focused on the following eight pillars:

Water

On Record:  California’s water resource problems also need to be resolved, but not by a pork-filled public works project like the proposed delta tunnel.”  And “We’ve gotta balance the human need for water against the need to preserve natural fisheries,” He has referred to the Delta water tunnels project as a “boondoggle.”  He ​supports Proposition 3, saying it​ offers “the opportunity to build dramatically more storage and provide clean water.”

Level Setting:  C​A’s​ developed water supply, water that is produced or brought into a water system through the efforts of people, comes from three main sources: (1) Snow melt from the Sierra Nevada (2) Local groundwater, and (3) Imported water from the Colorado River basin. The state’s developed water supply is consumed by three main users: Agriculture (62%), the Environment (22%) and Urban (16%). Approximately 75 percent of the state’s precipitation occurs in Northern California and two‐thirds of all precipitation and snow pack melt off occurs in the northern Sacramento Valley watershed. In 2017, when cracks appeared in the Oroville Dam’s spillway, more than 180,000 Californians faced the prospect of floods. The emergency came a few years after Californians had overwhelmingly approved Proposition 1, a ballot measure to spend $7.1 billion on water-storage projects. In the drought-stricken Golden State, where runoff from rain and snowmelt races uselessly into the Pacific Ocean, the proposition won wide support, with voters approving it, two-to-one. But four years after passage, the state water commission has yet to assign a dime of funding for storage.  Nevertheless, the C​A​ Water Commission has finally announced its plans to fund new projects with the money from Proposition 1. Many Californians were surprised to learn that the proposition’s fine print stipulated that only a third of the money was ever intended to fund water storage. The rest is earmarked for other projects, ranging from habitat restoration to levee upgrades. Neither the commission nor most of the applicant agencies offer clarity as to how much additional storage the projects will add to California’s normal water supplies in an average year.​ Even in times of drought, California’s natural and human-made arteries run with the nation’s cleanest, most accessible water. So fundamental is the stuff to the state’s identity and to its residents’ daily lives that CA law recognizes a human right to “safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.” Yet the taps in hundreds of communities produce only toxic brown fluid because years of environmental degradation have contaminated parts of the water table, and because extreme poverty has blocked residents and their leaders from upgrading their water infrastructure or from connecting to the systems of their neighbors. That means that many thousands of Californians can’t brush their teeth or take a shower, much less drink a glass of water from the tap, without risking sickness. It’s a Third World problem in the world’s fifth-largest economy.

Plan:  ?

Sustainability

On record:  I like clean air, I like clean water. What I’d like to see is a balance. That’s I think what is missing from the debate. We’ve also got to have humans live, too. You know people have to get jobs. People have to be able to drive cars. People have to be able to afford gasoline. So I’d like to see more of a balance. We’re on our way because of cap and trade to $5 a gallon gasoline.  That’s going to put, especially with the housing costs, that’s going to put a lot of people out. I mean it’s going to mean the difference between being able to make it and not. And so I think that’s what’s missing in this whole climate change debate is an analysis of the risk versus the rewards. We’re making people pay $4 a gallon gasoline in the name of climate change. And then we don’t manage the forest well enough that when we get a Santa Ana we get incredible destruction by the way, of homes and death.  He says the question of how climate change will affect California and how to approach it is “above my pay grade. I’m not a climatologist.”

Level Setting:  Last week, the American Energy Society published the following: “Texas produces more than double the amount of wind and solar electricity than California and about 25​ percent​ of all natural gas in the country; C​A​’s retail electricity rates are 89​ percent​ higher than Texas.”​  ​Feedback from investors in sustainable businesses and projects: This is bad on many levels, mainly for those of us fighting this fight. I would think it is also awful for Democrats who think they are supporting a pro-green agenda. Good intentions are not enough. There are many reasons for this, many of which I am sure I don’t fully appreciate, but our view is that some states (North Carolina and South Carolina) permit solar at scale since the state legislatures have opened them up via PURPA (a Federal Law).  Other states (Texas, Virginia) are open to solar since they have open markets and permit consumer choice. CA has neither.

Plan:  There’s a lot of factors that cause the climate to change and we ought to deal with them. And frankly we ought, listen, if it’s an existential thing, let’s keep cleaning the air, I mean I’m all for it, I’m all for cleaning the air but let’s do it in a way that’s reasonable. By the way, I’ve also read some people that suggest that global warming may in fact be beneficial. In terms of crop yields and other things like that. So I mean you know, let’s get a full discussion of it. Let’s get a full solution to these things. You know, I don’t think it’s a province of ideologues. It should be scientific.

CEQA

On Record:  “The trouble with reforming CEQA is that environmental lobbyists who raise tons and tons of money to protect the environment, spread that around Sacramento and it’s very difficult to get that stuff through the Legislature.”  GOP gubernatorial candidate John Cox on Thursday called for reducing regulations and repealing and replacing a longtime state environmental law to decrease income inequality in California.

Level Setting: ​ ​CEQA is California’s statewide environmental protection framework. It requires state and local agencies to give consideration to environmental impacts in regulating public and private activities. With certain exceptions, agency approval of any public or private project which may have “significant impact” on the environment must identify and adopt mitigation measures and feasible alternatives, typically through preparation of an Environmental Impact Report (EIR).The process requires detailed analysis of a broad spectrum of impacts a potential project may have, not only on traditional environmental concerns like air and water quality, biological resources, geological and mineral resources, but also impacts on noise, access to housing and recreation, traffic and even greenhouse gas emissions. ​ ​CEQA’s broad scope, combined with the potentially enormous financial consequences of environmental scrutiny, has proven to be fertile ground for litigation between developers, agencies, and environmental groups. Increasingly, lawsuits are being filed by labor unions, business competitors, and NIMBs, not for the purpose of enhancing environmental protection, but in anticipation that the prospect of increased expenses, uncertainty, and delay will cause projects applicants to abandon or downsize projects, or even more blatantly, to simply “buy off” the challenger. A 2015 report on the problem, from the Los Angeles office of Holland & Knight, an international law firm, concluded that “the largest single target of CEQA lawsuits … are residential projects” and that these projects “overwhelmingly” involve “non-polluting land uses.” Abuse of the law, the report concluded, has many guises, including duplicative lawsuits that hamstring projects for years and NIMBY resistance mounted by Citizens for This or That, local groups with little or no interest in the environmental issues the law was supposed to address.

Plan:  Cox blames CEQA for contributing to the state’s affordable housing shortage and says he would repeal it.

High Speed Rail

On Record: Calls the high speed rail project “a monument to corruption and mismanagement”

Level Setting: ​ ​It’s been eight years since the LAO came out with the report that said the bullet train has no hopes of ever getting adequate financing because it can’t guarantee ridership or revenue under Proposition 1A and yet political leaders offer a pro forma endorsement of it.

Plan:  Cox promises to defund the high speed rail project. He also opposes the state’s delta tunnels project.

Transportation

On Record: “We should begin by repealing Jerry Brown’s massive $52 billion gas tax increase and instituting a full independent audit of CalTrans, the most inefficient and corrupt bureaucracy on the planet.”

Level Setting:  A campaign to roll back California’s new vehicle and gas taxes — and the $52 billion they are expected to generate over the next decade for road repairs and transit upgrades — will be on the November 2018 ballot.  Polls suggests the race would be close. A statewide Public Policy Institute of California survey taken in January found that likely voters were split, with 47 percent favoring a repeal of the tax and 48 percent opposed. The poll found that 61 percent of Republican likely voters supported a repeal, compared to 52 percent of independent voters and 39 percent of Democrats.  In April 2017, without a vote to spare, California lawmakers managed to pass Sen. Jim Beall’s Senate Bill 1, raising gas and diesel taxes and adding an annual vehicle registration fee to repair the state’s crumbling roads and bridges and improve public transit. State transportation authorities already have committed billions of dollars from the new pot of money to highway repairs and traffic-easing projects. And in June, voters will consider a constitutional amendment, Proposition 69, to ensure the Legislature can’t raid the fund for non-transportation purposes.  California drivers whose cars are worth less than $5,000 this year began paying a new $25 annual fee for the transportation fund, while those with vehicles valued between $5,000 and $25,000 — about 40 percent of the state’s drivers — pay $50. Drivers of the highest-end luxury cars pay as much as $175 more. The state also will charge $100 per year, starting in 2020, for electric vehicles. The funding doubled the amount of money available for state and local transportation improvements and if the recall does qualify and pass, Caltrans anticipates that roughly half of our major construction projects could be deleted, downsized or delayed significantly.

Plan:  ?