Contributors
Bill Leonard - Contributor

Bill Leonard is a Member of the State Board of Equalization

A Week Under the Dome
This week: Get to work, Surviving Bustamante, Riordan good choice...
[Bill Leonard] 11/22/03

Let's Get to Work

Governor Schwarzenegger‘s inaugural address was inspiring and refreshing.
Although he did offer some policy specifics (roll back the car tax, fix
workers' comp, repeal S.B. 60), he used most of his words to hearken to
the values that unite us as Californians. He is correct that his election
represented the people‚s veto of politics as usual and that in order to do
that we must “overcome political habits of the past.” In the spirit of
his call for a “miracle of Sacramento” based on cooperation, goodwill and
new ideas, I offer five suggestions for immediate action. The full
version of these can be read in the latest issue of California Political
Review. In brief, they are:

1. Tell California how big the deficit really is. Governor Arnold
Schwarzenegger should make clear the full size of the gap between what we
are spending and what we are taking in so the public fully understands the
extent of the problem Davis left us.

2. Sell government assets. The state owns thousands of acres of land it
is not using. The state owns millions of dollars of assets that could be
sold to private parties. For example, there is no reason for the
government to own student housing. The full list of surplus properties
should be reviewed. These sales could be used to offset the current
deficit spending while spending cuts are being identified.

3. Eliminate vacant positions and stop hiring. Davis's 2001 hiring freeze
did not keep the state from adding more employees until quite recently.
Davis's version of a hiring freeze was loaded with exemptions. The new
Governor should not grant exemptions except for very special circumstances
where all other options fail.

4. Enact Constitutional fiscal reforms. I would add my vote for a new
Constitutional spending limit. I particularly like the idea of indexing
spending to no more than inflation and population growth.

5. Use a trimmer to fulfill Davis's promises; use an axe for the rest. It
is almost certainly too late to accomplish fully the layoffs the current
budget mandates, but the new Governor should start doing what he can
immediately. Governor Schwarzenegger will have to look beyond trimming to
the elimination of entire categories of state spending. That alone will
achieve the multi-billion dollar correction that truly balancing the
budget will require. The magnitude of the deficit makes such reductions
more politically feasible than ever before.

Surviving Bustamante

When Secretary of State Kevin Shelley certified the results of the recall
election on Friday, November 14th he made a point of saying that Gray
Davis would still be Governor until Arnold Schwarzenegger took the oath of
office today. However, the recall law says that the office is vacant as
soon as the results are certified; therefore, Gray Davis ceased to be
Governor on Friday. Schwarzenegger could have taken the oath that day,
but he chose to wait until today. The Constitution provides that the Lt.
Governor shall become acting Governor whenever the Governor is absent.
So, did we just survive the Bustamante administration?

Taking It to the People

Governor-elect Schwarzenegger appeared this weekend at our Republican
Leadership conference and showed us his enthusiasm for bringing people
together to solve the state's problems, improve the economy and shake
things up in Sacramento. He can and will go over the heads of the
Legislature to appeal to the people to adopt real reforms and he is
excited about going on the road to achieve this. Legislators, watch out!

Insurance in the Aftermath

As the victims of the Southern California wildfires begin the recovery and
rebuilding process, they are learning many lessons that can benefit the
rest of us before we are hit by disaster ourselves. Most of them are only
reading their insurance policies for the first time, and most are
surprised by what they find, and do not find, in those policies. To avoid
unpleasant surprises at an already stressful time, I encourage you to
consider the following.

First, update your insurance agent about any changes you have made to your
home. If you have done a major room addition, enclosed a patio or added a
deck, your policy needs to be updated. Even if you have done something as
simple as put in new flooring, you need to know that wood floors will cost
much more to replace than your old carpet. Second, if you have a home
older than ten years, make sure you upgrade your policy to cover current
building codes. For example, the new concrete tile roofing costs about
three times as much as composite shingles, but your insurance policy may
not pay that difference and you cannot rebuild using old, lower standards,
meaning you will be paying the difference out of pocket. Third, consider
whether you need building extension coverage. For example, neither a
detached garage nor fencing is covered fully. Most policies will pay 10%
of coverage toward such construction, but you may not be able to rebuild a
two-car garage for that amount.

You also need to give a lot of thought to what is in that garage. Any
motorized vehicle, from your car to your boat or wave runners to your
child‚s dirt bike, must have its own insurance policy. If you are
restoring a classic vehicle, make sure your agent knows about it, too.
Check also your coverage limits for jewelry, computers, firearms or any
collectibles. When the fire comes racing quickly toward your home, you do
not have time to save everything that is important to you, but knowing
that you have appropriate insurance can give you some peace of mind should
disaster strike.

TAX CORNER

Flat Tax Approved (in Iraq)

"Tax reform has come to Iraq. 'The highest individual and corporate income
tax rates for 2004 and subsequent years shall not exceed 15 percent,' says
a directive from administrator Paul Bremer. Saddam Hussein's top rate was
an onerous 45%, higher than even the Democratic presidential candidates
propose in their tax-hike plans. 'It's extremely good news,' says Grover
Norquist of Americans for Tax Reform. 'It might be a hint to the rest of
us.' Still on Norquist's to-do list: Renaming Baghdad International
Airport after Ronald Reagan." - James Taranto, Best of the Web, 11/3/03

If its good enough for Iraq, can California be far behind?

Customer Satisfaction

One of my highest priorities at the BoE is to make sure that taxpayers are
treated well by BoE employees. I have complained here about some of the
outrageous behavior that a handful of employees have engaged in, but the
vast majority of BoE staff go out of their way to provide good customer
service and treat taxpayers properly. Even in an era of budget cuts and
staff reductions, the "How are we doing?" cards that are available to
taxpayers in all BoE offices showed increased satisfaction. The 2002-2003
tally showed a decrease in negative comments from 2001-2002. I commend
our employees who are doing more with less, and I encourage any taxpayer
who has comments about how BoE staff has treated them to fill out the card
or get in touch with me directly.

ISSUE FOCUS

Riordan Hire a Good One

The appointment of former Los Angeles mayor Richard Riordan as Governor
Schwarzenegger’s new Education Secretary is a great choice. Riordan has
been engaged in education issues for many years, including as a high
profile supporter of English instruction for all California school
children. He is a supporter of teachers and believes administrators have
been rewarded at their expense. Moreover, Schwarzenegger has said that he
wants to cut many of the strings that go along with the money schools
receive so that local educators are able to deal with what they perceive
as their greatest needs. Riordan is a perfect fit for accomplishing this.
I wish him the highest success.

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