The enactment of Prop. 13 in 1978 prohibited commercial and residential property taxes from rising as property values rose. Curiously (actually not so curiously), it did not prohibit them from falling should values fall. And as property values crater year-over-year in the housing implosion, homeowners and businesses have the ability to reassess. They have every right to do so under the law. But this is going to bankrupt California cities.
Assessors in Los Angeles, Riverside and San Bernardino counties are forecasting the first drops in property tax collections in more than a decade, presaging reduced revenues for many cash-strapped local governments.
Until now, property tax revenues had been a relatively stable source of money for cities amid a recession that has dramatically reduced sales tax intake, particularly from car dealers.
Even with the decline in home values, the property tax base in five Southland counties grew last year thanks to continuing sales and the completion of construction begun during the 2003-2006 building boom. But assessors in those counties said they have reduced the value of more than half a million properties and expect to make deeper cuts to their rolls by the summer.
This is bad news for local governments that have been relying on property tax proceeds to help make up the shortfall from reduced incomes and spending in their areas. Already, cities and counties across California have been freezing jobs, imposing work furloughs and pay cuts, postponing repairs and reducing some public services.
The reason Prop. 13 is such a disaster is that property taxes are a stable revenue source no matter what the economic climate. Unless a massive housing bubble bursts and prices collapse. Just to show you how big this is, the county assessor in Los Angeles is predicting a 1% decline in the property tax base. That comes out to ELEVEN BILLION DOLLARS. The drop in San Bernardino County, one of the ground zero sites of the housing crisis, is predicted to be much greater, nearly 6%. I can only imagine what the number is in the Central Valley, which lawmakers want declared an economic disaster area.
When you keep in mind that property taxes fund a great deal of municipal education, you can see what a major problem this is. And without structural change, not one that's fixable.
Substantial cutbacks in water deliveries from the delta to Central Valley farms will severely reduce the region's income, employment, revenues and farm acreage, according to a new report from the University of California's Giannini Foundation of Agricultural Economics.
The report projects potential economic impacts for 2009 as the state grapples with its third drought in the last 30 years...
Based on projected allocations, Central Valley farmers could sustain revenue losses from $1.2 billion to $1.6 billion this year, depending on their ability to increase groundwater pumping.
Across the valley, towns are already seeing some of the worst unemployment in the country, with rates three and four times the national average, as well as reported increases in all manner of social ills: drug use, excessive drinking and rises in hunger and domestic violence.
With fewer checks to cash, even check-cashing businesses have failed, as have thrift stores, ice cream parlors and hardware shops. The state has put the 2008 drought losses at more than $300 million, and economists predict that this year's losses could swell past $2 billion, with as many as 80,000 jobs lost.
"People are saying, 'Are you a third world country?' " said Robert Silva, the mayor of Mendota, which has a 35 percent unemployment rate, up from the more typical seasonal average of about 20 percent. "My community is dying on the vine."
This is a double whammy hitting the Central Valley. They have been the hardest-hit region in the entire country, perhaps the entire world, by the housing bust. The economic crisis alone leads to reduced demand for farm products, but the drought is going to make a bad situation much, much worse.
The Central Valley is at the leading edge of the 21st century crisis, brought about by California's overdependence on debt and sprawl. As I've explained before, the "debt" is not merely financial - California has lived beyond its natural resource means for some time, overpumping water to slake the thirst of new suburbs AND to water the fields to feed the suburban consumer.
This is much the same problem that hit the Dust Bowl in the 1930s. 50 years of farming the marginal lands of the Great Plains eroded the topsoil, creating an environmental catastrophe at the very moment that a collapse in farm prices and wages led to a massive foreclosure wave. The place they headed to escape the crisis was the Central Valley.
Some farmers would like to just keep pumping the water, and cut off fish (which are already in severe distress) or cities (which are already facing mandatory rationing), and others believe a Peripheral Canal is the solution. But if this is the leading edge of climate change, those solutions will be the deck chairs on the proverbial Titanic.
I personally believe it's important to maintain agriculture as an industry in California. But we need to find a way to make it sustainable. Continuing the methods of the past is no longer an option, as the Steinbeckian scenes now unfolding in the Central Valley should make clear to us all.
According to Darrell Steinberg there'll be a budget vote next week. Thanks for leaving the cone of silence to let us know, pal! In the meantime:
• The judge who allowed furloughs for state workers to go through is saying that the order does not necessarily apply to employees of Constitutional officers. Jon Ortiz discusses the ramifications at The State Worker. The first furlough day, by the way, is set for tomorrow.
• The editorial board revolt in the Central Valley, hard-hit by the economic crisis, continues. The Merced Sun-Star is unusually blunt: "Why should Democrats negotiate if Republicans refuse to budge?" And the Stockton Record is actually calling on its readers to take action in a way I've rarely seen from a local newspaper. Something is different.
• The UC Board of Regents approved an overhaul of the admissions process. President Yudof hopes that the changes will increase socioeconomic diversity, thus increasing other sorts of diversity.
• This is an incredible story about ACORN saving a couple's home from foreclosure in Oakland. While the Feds do little to stop foreclosures, community organizing is making things happen. But they're destroying the fabric of our electoral system!!! /peak wingnut
• The May Day lawsuits, stemming from police brutality and tear gassing after a pro-immigration rally, have finally been settled, to the tune of $13 million dollars.
(From our Lt. Governor... - promoted by Brian Leubitz)
In early January I proposed an accelerated medical education program at the University of California Merced designed to prepare high quality doctors and nurses for rewarding careers in the Central Valley. Yesterday at the UC Regents' meeting, UC President Mark Yudof committed to establishing a first class undergraduate medical education program at UC Merced, and he promised to continue the planning process for post-graduate medical education at the campus. The President's important commitment could be the important first step toward the accelerated medical school program I envision.
A medical program in the region will help address the serious health care problems of the San Joaquin Valley, home to the state's highest rates of childhood asthma and premature birth. A serious shortage of medical services exists in the Valley; there are 31 percent fewer primary care doctors, 51 percent fewer specialists, and fewer nurses than California as a whole. An estimated $845 million dollars is lost annually in the region when Central Valley patients drive out of the area to receive medical care.
Democratic legislative leaders are in Washington today arguing for increased stimulus money for California. I've been arguing that this is required for some time, and hopefully it will be done in such a way that a) it can be applied to the General Fund deficit (so far Arnold has not asked for budget relief in that way) and b) it can be used without up-front money that will be matched, because the cash crisis limits our ability to do that.
However, there is something else that the Obama Administration can do right away to help the bottom line of the state and its citizens, and that is deal with the crisis in the housing market here. It's no secret that California is one of the hardest-hit states by foreclosures; in Stanislaus County, for example, 9 percent of all houses and condos in the county have been foreclosed upon, a staggering figure. That's almost $4 billion dollars worth of foreclosures in Stanislaus alone. In larger counties like San Bernardino and Riverside, you can see how this foreclosure crisis affects new housing starts (there are a glut of cheaper foreclosed homes on the market) and thusly unemployment figures.
Only four years ago, Riverside and nearby San Bernardino, often called the Inland Empire, were California's economic powerhouse, accounting for more than a fifth of the state's new jobs. Today, unemployment reigns in the sprawling region east of Los Angeles. The 9.5 percent jobless rate in the two counties matches Detroit's as the highest of any major metropolitan area in the U.S.
Although there was a surge in construction employment in the U.S., and about a 50% increase in California (as a percent of total employment), construction employment doubled (as a percent of total employment) in the Inland Empire [...]
With the housing bust, the percent construction employment has declined sharply and the unemployment rate has risen to almost 10%. Is it any surprise that jobless rate in the Inland Empire matches Detroit's as the highest of any major metropolitan area in the U.S.?
Nobody is calling on the federal government to prop up a sick housing market that will not see a broad recovery for a while. But foreclosures have a disruptive effect on the greater economy. They hurt property values, they hurt banks, and they hurt employment. The crisis is only slated to grow if nothing is done, with homeowners of every income class affected. And so foreclosure aid would be a major boost to California, and it can be done both quickly and effectively. By pledging that $100 billion from the TARP program will go to limit foreclosures, Obama has already begun this effort. Ted Lieu thinks that the Obama Administration understands the nature of the problem. (over)
Something for the legislature to read while they're on LOCKDOWN.
• We're in a special session of the legislature, separate from their normal work. So while the Yacht Party stonewalls and both sides bicker, they are making $173 a day for the privilege, with the current total at $128,000 and counting. Good work if you can get it.
• Stockton, Merced and Modesto were dead last nationally in home prices, with homes in all three metro areas losing at least 30% of their value in the first nine months of the year. The Central Valley is just getting buried. If you want to know where the rest of the state (and the nation) is headed, look there.
• The state's Healthy Families program, California's contribution to S-CHIP, was on the verge of becoming extinct until First 5 provided a $16 million dollar cash infusion, allowing their enrollment to remain open through the end of the fiscal year in June. This is of course one of the programs on the Yacht Party's chopping block. Because who likes healthy kids?
Today's GOP is a very different party, a hard-line group of self-insulated ideologues, more like a political cult than like an inclusive party that stretches its core principles to be inviting to people at or beyond that core.
Couldn't have said it better myself.
• SD-26: Mark Ridley-Thomas, now an LA County Supervisor, has endorsed Assemblymember Curren Price to fill his seat in the upcoming special election, the primary of which is scheduled for March 24. Price is expected to be challenged by Assemblymember Mike Davis. Either of them winning would trigger ANOTHER special election for their vacant Assembly seat. And on and on.
• CA-31: Ben Smith is reporting that Xavier Becerra will turn down the position of US Trade Representative. When there was a two-week lull after the rumor leaked with no announcement, I figured as much. All the more reason for Hilda Solis to run for Governor, as the Vice-Chair of the House Dem caucus won't be opening up.
We might have mentioned something about the budget crisis in California, but it's not the only thing that's trying to push California into the ocean. For example, this whole water (or lack thereof) issue seems to be exploding on us:
The Lake Tahoe Basin snowpack on Thursday was only 2 percent of average for the date. The situation is similar to last year, when the Tahoe Basin snowpack was only 1 percent of normal on the same date. (cbs5.com)
As a skier and an overall big fan of the Tahoe region, this hits me hard in a somewhat selfish sense. But in a larger sense, this is a disaster. If we don't get some serious snow this season, our reservoirs will get to dangerous levels. There will be strict water rationing across the state. You hear that folks...not just brown lawns, but moving to the yellow mellow alert level. You might as well cut it with the bright green lawns and the hosing off the sidewalks now.
We've been living in something of a glory era for rain in California over the last 125 years. Are we returning to our drier past or is this a short burst of the desert days? Is this climate change here to stay? Who knows, but one thing is clear. This is more than just a disastrous winter sports season, this is a full-fledged crisis. We risk the sight of houses falling into the ocean and the growing risk of cutting off water for crops in the Central Valley.
Welcome new legislators, you're going to love this job.
The unemployment statistics for October at the state level were released today, and as it turns out California lost the third-most jobs in the nation at 26,400. Only Washington and Florida lost more. This puts the unemployment rate in the state at 8.2%. This is a 2.5% increase from one year ago, the largest year-over-year increase since 1982, the last major recession. Worse, in regions of the Central Valley, that number is much higher. Unemployment in Fresno County is 11.2%. In San Joaquin County, 11.1%. In Merced County, 11.7%. In Tulare County, 11.8%. And in Stanislaus County, 11.8%. Those are desperate numbers.
The loss of income tax revenue along with the dip in property taxes thanks to cascading foreclosures is leading more cities to the brink of bankruptcy.
Now two more California cities - Rio Vista and Isleton - are considering bankruptcy protection as an option as they face large budget shortfalls and staggering debt.
While experts caution against ringing the alarm bells just yet, they do say tough economic times could push municipalities already on the brink over the edge.
"I think it's quite possible municipal bankruptcies could become somewhat more common but will still be very rare," said Jason Dickerson, budget and policy analyst at the state's Legislative Analyst's Office. "There are more municipalities that will look at what it means."
We need a massive fiscal stimulus as soon as humanly possible. And that needs to include aid to state and local governments, particularly here in California. We are right on the edge.
Sacramento, California - September 11, 2008 - Grammy Award winning native American flutist, Mary Youngblood, will be performing and Dr. Bill Durston will be speaking at a special Durston for Congress gathering on Thursday, September 11, from 7-9 PM at the home of Bill and Nancy Myers, 10300 Sheldon Road, in Elk Grove.
Media representatives and all members of the public who are concerned about the "war on terror" are invited. Refreshments will be served. The event will be held outdoors, so bring a folding chair or blanket to sit on. Call Bill or Nancy Myers at 916-689-6943 to RSVP.
Dr. Bill Durston is the Democratic candidate for Congress in California's 3rd Congressional District. Dr. Durston is a decorated Marine Vietnam combat veteran and an emergency physician. For more information about the Durston for Congress campaign, call 916-622-VOTE (8683) or go to the Durston for Congress website.
Dr. Bill Durston's complete Special Comment on today's sobering anniversary is below the fold:
Democrats in Yolo County are fired up and ready to go. They met last night at the historic Palms Playhouse in Winters for a rally sponsored by the Western Yolo County Democratic Club.
Over 100 people came out to listen and cheer as guest speaker CDP Chairman Art Torres, along with candidates Lois Wolk (SD-05), Mariko Yamada (AD-08), and Jeff Morris (CA-02), talked about "Why Rural Families are Voting Democratic - Taking Back Red California."
Oh, and the old-time music and the free spaghetti dinner weren't exactly deal-breakers either.
The speaking schedule was full. In addition to the politicians, there were local food and farm activists, as well as local organizers like Claire Black-Slotton, the executive director of Yolo United, and Ryan Loney, the Northern California Field Director of Students for Barack Obama and an Obama delegate to the Denver convention.
The story of the 2008 election is going to be the epic collapse of the Republican Party in traditional strongholds.
The Republican Party, which overtook Valley Democrats in voter registration totals eight years ago, is losing ground for the first time in at least a decade.
After peaking just ahead of the 2004 presidential election, Republican registration numbers are down in Fresno, Tulare, Kings, Madera, Mariposa and Merced counties.
The GOP's decline is most obvious in Fresno County, where the losses have turned into an avalanche, even as the party gears up its efforts to keep the White House in GOP hands by electing Arizona Sen. John McCain as president.
The most recent voter registration numbers show the Democrats are closing the gap and are now fewer than 9,000 voters behind the Republicans.
At the peak in 2004, GOP registrations were ahead by more than 23,500 voters.
This will obviously help in AD-30, where Fran Florez is facing Danny Gilmore to keep Nicole Parra's seat in Democratic hands. But this is a nationwide and statewide shift that is generational in nature.
In Riverside County, Republicans have lost close to 34,000 voters since October 2004; in Orange County, an 18 percentage point Republican Party lead in 2004 is now at 14 percentage points.
Bob Mulholland, campaign adviser to the California Democratic Party, points out that Democrats picked up almost 75% of the more than 411,000 new voter registrations statewide between voter-registration reports filed Jan. 22 and May 19.
During that same time, close to 21% of new registrations were decline-to-state. Republicans picked up just 3.6% of the new voters.
I think that in particular, failed conservative policies have most adversely impacted Republican areas. The collapsing home market as a result of "inmates running the asylum" in the lending markets has hit the exurbs hard. Job loss is most keenly affecting the areas where jobs are newer to arrive. And of course high energy prices hurt those with long commutes. The exurbs, the fast-growing counties, the greatest strength for Republicans in 2004, are massively turning to the Democrats. That leaves Democrats with a noticeably bigger tent, and we have to recognize that as an issue moving forward, but for now, this cratering of Republican numbers is truly a sight, as stark a picture as it was right after Watergate in 1974.
Considering all of the rural areas and dirt-poor urban centers in the country, you have to be a little surprised that Jim Costa's Central Valley district is the worst in the country for quality of life.
Poverty, poor health and low graduation rates have put the San Joaquin Valley's 20th Congressional District dead last in a new national scorecard that ranks the well-being of residents.
Even notoriously grim Appalachia fares better than the congressional district that sweeps in Fresno, Kings and Kern counties, the study made public Wednesday shows. The assessment of health, education and income ranks the district 436th out of 436 districts nationwide.
CA-20 has the lowest rate of college graduates in the country, just 6.5%. The median annual salary is just $16,767, and life expectancy is 4.5 years lower than in rich, high well-being areas like the Upper East Side of Manhattan. It's an appalling set of numbers.
We know the challenges in this district. Factory-style farming has lowered the air quality and increased the public health risks. As income inequality stratifies, places like the Central Valley get left behind, even more so in a California with a 6.9% unemployment rate. A lack of development into 21st-century jobs causes a brain drain, and higher energy prices cripple rural America.
And there's a residual benefit. A dirt-poor district is a district that doesn't vote heavily or pay much attention to politics, paradoxically so since they need to the most. And so we get Representatives like Jim Costa, whose district has the lowest participation rates in the entire state. Which means he can vote the wrong way on issues like FISA or war funding and not get much feedback about it from a constituency that's struggling to survive. In this context, his desire to return federal funds to the district or improve quality of life would seem to be low, at best. It's a vicious circle: poverty breeds inattention, inattention breeds bad lawmakers, bad lawmakers have trouble improving poverty.
We need less legislators like Jim Costa who seem more interested in pleasing their corporate contributors than the suffering citizens in their own districts. The problem is how to reach a low-information constituency, and how to make that connection, that sustained political power and engagement is vital if we want to end poverty and build the post-carbon, post-agrarian economy that would lift up whole regions like the Central Valley.
On June 3, I talked to Assembly womanNicole Parra in San Francisco. Nothing too important really, just a friendly, hi, I'm Brian, the evil blogger kind of thing. She was in town to support Asm. Mark Leno for Senate. It was all very cordial, despite the fact that she's made noises about thinking the Republican candidate for her seat, she's termed out, was better than the Democratic candidate, Fran Florez. By the way, I can't seem to find a website for Fran Florez...strange.
You see, the Florez family and the Parra family have something of a grudge match going on in the Central Valley. State Sen. Dean Florez campaigned against Parra's father for a county supervisor seat way back when, and Nicole is still smartin' from that.
Well, today we hear that Parra is having a presser with a "Republican party official." I honestly have no clue what this is about. Will she officially endorse Danny Gilmore, the Republican candidate? Will she switch parties? Vow to not vote for the budget?
Who knows? We'll let you know when we hear something.
UPDATE 2: Her statement, along with those of Republican former Asm. George Plesci and Republican Congressman Kevin McCarthy over the flip. I guess Parra was a bit tentative about doing anything drastic due to her concerns about her future career plans (lobbying gig perhaps?). Either way, a joint statement with two Republicans won't be all that helpful if she plans on running for anything else in the "Democrat Party."
This past Thursday evening, nearly 100 Democratic activists got together to kick off the Yolo County Democratic Central Committee's 2008 Campaign - Yolo United! With the primary season over, we are now uniting to make sure that all of our energy is focused on getting Democrats elected to every seat that represents Yolo County.
We were fortunate to have three of Yolo County's delegates to the Democratic Convention with us, all of them ready to join together to make sure that we elect Democrats to every local, state, and Federal position on the ballot.
Don Gibson (Clinton delegate), Martha Beetley (Obama delegate), and Ryan Loney (Obama delegate) will be representing us in Denver in August.
Join me below the fold to learn more about the Yolo United Campaign.
Note: I am a volunteer with the Yolo United Campaign.
Hank Shaw of the Stockton Record gives us the lowdown on the Republican Central Valley aristocracy who will be in attendance at the gala:
The new news is that Gov. Arnold Schwarzenegger will be at the party, too, as will a who's who of local Reeps. Congressional candidate Dean Andal will be there, as will his employer Gerry Kamilos. Andal hopes to beat Rep. Jerry McNerney this year, and the man Jerry ousted -- former Rep. Richard Pombo of Tracy -- is supposed to appear at casa de Spanos, too.
Well, at least for another year. The Sac Bee reports that the Assembly Water, Parks and Wildlife Committee, chaired by Yolo County's own Lois Wolk (D- Davis), just killed SB 27 until next year. The bill, sponsored by Sen. Joe Simitian (D-Palo Alto) would have established a committee to build a peripheral canal diverting water around the Sacramento Delta for export south, although it called it a "conveyance" in a modest feat of bureaucratic obscurantism.
As the LA Times reports today, we may be looking at blackouts in So Cal this summer as energy demand outstrips the power capacity of the grid. And as anyone who was around for the great west coast blackout in the summer of '96, what starts cascading in So Cal doesn't necessarily stay there, especially on those hot July/August scorchers that cook us all the way up the Valley. The state's grid manager put it in terms of lacking adequate production:
The state will have 489 megawatts of new generation in time for peak demand in July or August, some of that replacing a 122-megawatt plant that's being retired. Southern California will need to rely on imports from Arizona, Nevada and Mexico, as well as conservation, to avoid blackouts.
Demand probably will increase by 1,000 megawatts this year over last year, Cal-ISO Chief Executive Yakout Mansour said during a conference call. Power demand peaked at 48,615 megawatts in 2007.
Last night the Amador County Democratic Central Committee held their annual fundraiser dinner in Jackson. Even though Republicans outnumber Democrats in Amador (9,378 to 7,161 or about 11%) there was a large and enthusiastic turnout for the event. As you can see, there were probably 125 people in attendance.
Trinity County Supervisor Jeff Morris announced today that his campaign to be the Democratic nominee in this fall's race for the U.S. House of Representatives in California's Second Congressional District has begun earning endorsements from northern California’s elected officials. Just four weeks after announcing his run, Morris has received endorsements from Democratic, Republican, and Independent officials at both the county and regional level, including California State Assemblymember Patty Berg.
Other endorsements from elected officials to date include:
- San Mateo County Supervisor Rich Gordon (current president, California State Association of Counties) - Butte County Supervisor Maureen Kirk - Yolo County Supervisor Mike McGowan - Trinity County Supervisor Roger Jaegel - Trinity County Supervisor Wendy Reiss - Trinity County Supervisor Judy Pflueger - Trinity County Supervisor Howard Freeman - Chico City Council Member Tom NickelTrinity County Supervisor -Former Shasta County Supervisor and CD2 1988 Democratic Nominee Steve Swindeman
"I am honored to have the support of Assemblymember Patty Berg and of my elected colleagues in the second district," said Morris. "Many of these officials have been instrumental in helping us achieve positive changes for Trinity County, and I look forward to working with them in the future, both here and in Washington, to address the challenges faced by all of the counties in the 2nd Congressional District."
Jeff Morris is a Weaverville businessman and entrepreneur who has served Trinity County's Board of Supervisors for the past three years. A 6th-generation descendant of Northern California pioneers with a strong family history of public service, Morris has been a driving force behind Trinity's financial turnaround, helping put the county's only hospital on a new financial footing, spearheading an effort to revise outdated land-use and zoning rules, putting Trinity on a fast track for expansion of rural broadband Internet, and promoting establishment of the Weaverville Community Forest, a sustainable-forestry initiative managed with input from local, timber, and environmental constituencies.
Democrats in Yolo County are fired up and ready to go. They met last night at the historic Palms Playhouse in Winters for a rally sponsored by the Western Yolo County Democratic Club.