Preserve the Full Deductibility of State and Local Taxes

Russell Goldsmith’s writes “For the 141 million Americans who live and work in the nine states with the highest state and local taxes, the debate in the fiscal cliff negotiations whether to raise revenue for the federal government by raising tax rates versus limiting tax deductions is an important issue – especially regarding deductions for state and local taxes.

The way to generate more federal tax dollars should not be by limiting the deductibility of state and local taxes.

2012 The Year Of The Big Lie

2012 was a banner year for campaigns of misinformation, which is striking as many say we are living in the Age of Information.  How can people lie so boldly when there are so many ways to check the facts?  Why do so many refuse to believe the truth regardless of the science and evidence presented?

Whether it be political, health-related, science-related (global warming) or a disaster, we have experienced lies that would not quit no matter how often refuted or proven untrue.  There are reasons why people lie from narcissism, self-delusion, egomania, trying to spare others from the “hurt” of the truth, etc.  Politicians are prone to lying says Jim Taylor, Ph.D. in “Six Reasons Why Politicians Believe They Can Lie,” (Psychology Today, September 24, 2012), because, “Ultimately, politicians lie because … the cost/benefit ratio for lying is in their favor.  Politicians run this calculation when they create or shift a damaging narrative, attack an opponent, or respond to indefensible claims against them.  So politicians lie when they believe that dishonesty is the best policy for getting elected.”

In awarding Mitt Romney the award for the “2012 Lie of the Year,” Politifact pointed out in this case, the lie told about Jeep moving jobs to China, may have backfired on Romney.  Politifact said, “A flood of negative press coverage rained down on the Romney campaign, and he failed to turn the tide in Ohio, the most important state in the presidential election.”  The organization also points out how even though Jeep refuted the lie, the lie continued to pick up steam by being turned into a TV ad, which increased the outcry.  The more the pushback, however, the more Romney’s supporters held fast to the lie as it reinforced their world view.

Understanding how the mind works can be helpful in why lying works more often than not, even with the ability to easily check facts.  In “Diss Information:  Is There a Way to Stop Popular Falsehoods from Morphing into ‘Facts’?” by Carrie Arnold (Scientific American, October 4, 2012), she says, “Psychologists call this reaction belief perseverance:  maintaining your original opinions in the face of overwhelming data that contradicts your beliefs.”  Another form of this is known as confirmation bias, where people tend to screen out information that conflicts with their beliefs and believe information that is consistent with their beliefs.  Says Arnold, “Accepting a statement also requires less cognitive effort than rejecting it.  Misinformation is a human problem, not a liberal or conservative one.”

Given the decline in critical thinking coupled with the inundation of data, it is easy to see how discerning the truth is difficult for some.  Throw in the speed at which “news” travels and we can see how minds can be made up before the real facts are known.  If information is currency, let’s hope that people decide in 2013 to try to be more open-minded, not form opinions until the facts are known and embrace that in a fast-paced world, new information is continually developed that might require a different mindset.  Here’s to all of us focusing on building our critical thinking skills so we can be better citizens and community members.


While economic development planning done at local levels within the Bay Area is important, it may not be as productive or effective in maximizing growth and job creation as approaching the region as a single economic unit, according to a first-of-its-kind study released this week by the Bay Area Council Economic Institute, on which Cynthia Murray, NBLC’s President/CEO, serves on the Executive Committee.

Chief Economist Jon Haveman presented the study at a meeting of the regional Joint Policy Committee. The study, which was funded through a public private partnership that includes North Bay Leadership Council, finds that the Bay Area is highly interconnected economically, with a highly mobile workforce whose decisions about where to live and work may not be at all related to local economic development strategies designed to create jobs or provide housing in a particular community. Indeed, those individual strategies may be at odds with each other. According to the report, “a cooperative and coordinated approach to job creation would take into consideration the benefits to the region as a whole of job creation in a specific location, likely increasing the returns from economic development efforts throughout the entire region.”

The study also addressed the notion that Bay Area job creation has much of anything to do with companies coming here or leaving. What the study finds is that start-up companies are the biggest driver of job growth, accounting for 55 percent of job creation. Expansion by existing companies accounts for 42.6 percent of job creation, while just 2.3 percent of new jobs come from businesses moving into the area. Similarly, companies leaving the Bay Area account for just 3.7 percent of job losses, while the death of existing businesses accounts for 66 percent of job losses. This could be a lesson for those outside the region or California who think there’s much to gain from trying to recruit or lure businesses away.

The study identified high housing costs, a cacophony of state, local and regional business regulations and a shortage of qualified workers as among the biggest obstacles to job growth.

And contrary to some perceptions of growth in the Bay Area, the study finds that the rate of new home construction has slowed to a relative trickle over the past 30 years, a trend that may be the biggest culprit for the region’s high housing costs.

It’s a fascinating examination of the region’s economic dynamics, and concludes with several recommendations that a public private partnership between the business community and regional planning agencies could provide a strong platform for the development of a regional economic strategy. To read the study, visit A Regional Economic Assessment of the San Francisco Bay Area.

NBLC is pleased to have played a leadership role in getting the California Community College Student Success Act of 2012 signed into law!

The California Community College Student Success Act of 2012  has been signed by Governor Brown into law. The Governor’s signature puts student success at community colleges front and center and makes students, the colleges and the state all accountable for that success. This major victory for students, similar to the passage of legislation in 2010, gives us hope that despite this fiscally constrained environment, students can effectively and efficiently get through community college and be ready for the workforce.

SB 1456, the Student Success Act authored by Senator Alan Lowenthal, contains common sense reforms. Under the bill, ALL students will receive the guidance they need to be successful through required orientation and education plans. In a historic move toward equity, colleges will be required to publicly report progress of all students broken down by race and socio-economic status. And, finally, students will have to maintain satisfactory academic performance in order to be eligible for fee waivers.

NBLC looks forward to monitoring the ongoing implementation to help ensure that the process is equitable, meaningful, and prompt.

Business Coalition is Being Heard on SCS at MTC, ABAG

An Article by Bob Glover, Executive Director, BIA Bay Area
The Sustainable Communities Strategy being crafted by regional regulators to align Bay Area land-use and transportation plans with the region’s state-mandated climate protection targets was in need of a reality check.But two important developments in recent weeks signal the concerns of the region’s broad business community are being heard.On July 19, the Metropolitan Transportation Commission and Association of Bay Area Governments, the agencies responsible for the Sustainable Communities Strategy, or SCS, voted to adopt a Business Coalition-backed alternative to be studied along with the proposed SCS during California Environmental Quality Act (CEQA) review of the proposal.

Then, on August 17, MTC announced that it would hire a private sector real estate consultant to independently assess the economic feasibility of the proposed SCS—specifically, its principle policy prescription that 80 percent of all future residential construction should be confined to Priority Development Areas, or PDAs. The PDAs, numbering about 200 across the region, are infill and other urbanized sites that have been deemed by local governments as potentially suitable for transit-oriented development. Combined, they account for approximately four percent of the region’s buildable land.

An independent assessment of the practicality and feasibility of directing 80 percent of all future investment into these areas has been a priority of the Business Coalition and was first requested back in May.

To read the rest of the story …

Fighting for CEQA Reform

CEQA Reform has been a key initiative of North Bay Leadership Council. This year, in an effort to achieve meaningful CEQA reform, NBLC has joined a Coalition of like-minded business groups from across the state that are working to do just that. Business surveys have put CEQA reform in the top issues needed to improve the business climate in California. The legislative session closes at the end of August with legislators moving legislation in a mad rush to beat the deadline.  During this mad rush, we remain hopeful about the legislature achieving genuine CEQA reform, focused on fixing the legal abuses of CEQA, including transparency and standing issues, as well as better integrating CEQA with existing environmental and planning laws.   
This Coalition has been pushing hard on achieving a solution, and the letter below was sent to every member of the California Assembly and Senate. As this situation progresses, we will keep you abreast of important news around this effort and ask for your help.

August 20, 2012

To: Governor Jerry Brown
Senate President Darrell Steinberg
Assembly Speaker John Perez
Senate Republican Leader Bob Huff
Assembly Republican Leader Connie Conway

Re: CEQA Modernization

We have been encouraged by recent comments from the Governor and Legislative leaders expressing your support for some form of CEQA reform. As a coalition of labor, schools, hospitals, clean technology companies, local government and business, we support efforts to modernize CEQA and commend you for taking on this vitally important issue.

We believe it is possible to accomplish responsible, thoughtful CEQA reforms that preserve the original intent of the law – environmental protection – while stamping out certain abuses of the law brought for non-environmental reasons.

We reject the notion promoted by some that any and all CEQA modernization attempts are automatically an attack on the environment. This all-or-nothing posturing is what is preventing California from moving forward with environmental protection policies that foster – instead of inhibit – responsible job creation, economic growth and community renewal that are critical to achieving the dual goals of responsible growth and economic prosperity.

As you evaluate CEQA reforms, we urge you to consider the following principles:

1. Modernize CEQA to Integrate Updated Environmental and Planning Laws

  • When the California Environmental Quality Act (CEQA) was enacted 40 years ago, the wide array of local, state and federal environmental and land use regulations that are now on the books didn’t exist. CEQA was essentially it.
  • In the 40 years since, Congress and the Legislature have adopted more than 120 laws to protect environmental quality in many of the same topical areas required to be independently mitigated under CEQA, including laws like the Clean Air Act, Clean Water Act, Endangered Species Act, GHG emissions reduction standards, SB 375 and more.
  • Despite these stringent environmental laws and local planning requirements, public and private projects throughout the state are commonly challenged under CEQA even when a project meets all other environmental standards of existing laws.
  • Many lawsuits are brought or threatened for non-environmental reasons and often times these lawsuits seek to halt environmentally desirable projects like clean power, infill and transit. CEQA is even working at odds with – instead of in concert with – important environmental laws like SB 375 and AB 32.
  • CEQA should continue to serve as the state environmental law for environmental impacts not regulated by standards set forth in other environmental and planning laws adopted since 1970.
  • However, where a federal, state or local environmental or land use law has been enacted to achieve environmental protection objectives (e.g., air and wetlands protections, etc.), CEQA review documents like EIRs should focus on fostering informed debate (including public notice and comment) by the public and decision makers about how applicable environmental standards reduce project impacts.
  • State agencies, local governments and other lead agencies should continue to retain full authority to reject projects, or to condition project approvals and impose additional mitigation measures, consistent with their full authority under law other than CEQA.

2. Eliminate CEQA Duplication

  • As originally enacted, CEQA did not require further analysis of projects that already complied with CEQA-certified plans such as General Plans. But a 1987 court decision dramatically changed CEQA’s application.
  • We should return CEQA to its original intent and not require duplicative CEQA review for projects that comply with approved plans for which an environmental impact report (EIR) has already been completed – particularly since existing laws also require both plans and projects to comply with our stringent environmental standards.
  • Local governments and other lead agencies should continue to retain full authority to reject projects or to condition project approvals and impose additional mitigation measures, consistent with their full authority under law other than CEQA.

3. Focus CEQA Litigation on Compliance with Environmental and Planning Laws

  • CEQA lawsuits should focus on compliance with CEQA’s procedural and substantive requirements, including adequate notice, adequate disclosure, adequate mitigation of environmental effects not regulated by other environmental or planning law, adequate consideration of alternatives to avoid unmitigated significant adverse impacts.
  • CEQA lawsuits should not be used to challenge adopted environmental standards, or to endlessly re-challenge approved plans by challenging projects that comply with plans.
  • Environmental and other public advocacy efforts to enact environmental protection laws should not be affected by any CEQA reform, and refocusing CEQA on how compliance with standards and plans will reduce impacts can also inform advocacy efforts to revisit standards or plans.
  • Finally, “real” environmental lawsuits – seeking to enforce true environmental objectives – can still be pursued against agencies that fail to make regulatory or permitting decisions in compliance with standards and plans. However, the current system of broad brush CEQA lawsuits that can be filed by any party for any purpose to challenge any or all environmental attributes of projects that comply with standards and plans are an outdated artifact of the “anything goes” environment of 1970, which now hinders both environmental improvement and economic recovery.

California is and can remain a leader in environmental stewardship, while at the same time promoting responsible investments in schools, clean technology, roads, mass transit, hospitals, infill development, housing, businesses and new jobs.

We look forward to working with you on this effort.

North Bay Leadership Council
California Alliance for Jobs
Silicon Valley Leadership Group
Bay Area Council
California’s Coalition for Adequate School Housing
California Hospital Association
Transportation California
Southern California Association of Governments
AGC California
Los Angeles County Economic Development Corporation
Los Angeles County Business Federation
Los Angeles Area Chamber of Commerce
Valley Industry & Commerce Association
Orange County Business Council
San Gabriel Valley Economic Partnership
Central California Council
California Building Industry Association
San Francisco Chamber of Commerce
California Business Properties Association
Long Beach Area Chamber of Commerce
California Retailers Association
California Business Roundtable

NBLC’s push to pass SB 1456 – the Student Success Act of 2012 has borne fruit

NBLC’s push to pass SB 1456 – the Student Success Act of 2012 (Lowenthal) has borne fruit.  The bill passed the State Assembly Appropriations Committee today.  The bill now goes to the full Assembly for a vote.  If it passes, it is on to the Governor’s desk in September. 

Community colleges are the economic engine of the California economy as they educate and train the bulk of our state’s workforce.  Our Community Colleges have over 2.6 million students currently enrolled in the 112 colleges across our state.  They play a critical role in meeting the need for post-secondary education leading to certificates, and two and four year degrees.  California’s future is dependent upon its colleges producing enough college graduates with the skills required to fill the jobs generated in our state. 

But, by any measure, community college completion rates are unacceptable. A study by the Institute for Higher Education Leadership & Policy found that only 3 in 10 students earned a certificate, degree, or transferred to a four year college after six years. These rates were even lower for Black and Latino students.

SB 1456 has the potential to greatly improve community college completion, taking critical student support strategies that have long been proven to work in helping students reach their college goals—most of which can be implemented through the use and reprioritization of existing resources—and adopting them system wide.  In a resource-starved environment, SB 1456 is exactly the type of innovative reform that can help promote successful student outcomes.
Specifically, SB 1456 will:

  • Ensure that all community college students receive orientation, assessment, and education planning services at the beginning of their educational journey.
  • Target campus resources to support innovative models for delivering critical student support services such as expanding peer counseling and utilizing paraprofessional academic advisors.
  • Incentivize student progress by more closely aligning Board of Governors’ Fee Waiver requirements with federal aid standards.
  • Increase transparency and help close the achievement gap by requiring campuses receiving student success funds to post a scorecard measuring their progress by ethnicity, age, gender, socio-economic status, and disability.

Another Bright Spot! Middle Class Wealth: It’s Not as Bad as It Looks

In the Brookings post, “Middle Class Wealth: It’s Not as Bad as It Looks,” Opinion, July 5, 2102, it debunks the gloomy view that the middle class are in the worst shape in decades.  It says, “The Census Bureau released its latest data on wealth, updating earlier figures from 2005 to 2010. The numbers confirm findings from a Federal Reserve Board survey showing unprecedented declines in the net worth of the typical American household. Viewed in context, however, the wealth levels of middle-class Americans are in better shape than these dramatic figures would suggest, though they have not improved markedly over several decades.”

Explaining what is really happening, the post states, “In some sense the recent drop in wealth is a mirage, because it reflects the reversal of wealth increases that themselves were illusory. For the vast majority of families, “wealth” essentially means, “home equity”. And the relatively high wealth levels of the mid-2000s reflected the inflation of the housing bubble. The bursting of the bubble exposed the wealth gains as having been unreal and produced the sizable declines in net worth revealed in the government data. How illusory were the earlier wealth gains? In 1998, home prices were right in line with the cost of rental housing by historical standards. By early 2006, they had increased 70 to 90 percent more than rents had. Correspondingly, median non-financial assets increased 41 percent from 1998 to 2007, while median financial assets rose just 1 percent. Only now are home prices approaching the historical norm again relative to rents.”

An interesting point is the measurement of wealth levels does not include “public and private commitments that most Americans can count on to meet their needs in old age.” If  “the present value of Social Security benefits were included in the definition of wealth, median net worth for adults under age 65 in 2010 would be at least four times higher than indicated by the standard definitions of net worth used by the Census Bureau and the Fed. And this adjustment would still exclude the value that future Medicare benefits will have for most retirees, as well as the value of traditional pensions and retiree health benefits provided by employers.”

A final point made is that as people age, their wealth tends to increase.  And while we have not seen “sizable improvements in the wealth levels of the middle class…over the long run, things are not getting worse.”  And sometimes, things not getting worse is very good news.

Keep California Green and Golden with CEQA reforms

By George Deukmejian, Pete Wilson & Gray Davis

From The San Diego Union-Tribune, LLC. An MLIM LLC Company
July 12, 2012

Californians are unique- independent, optimistic, innovative, entrepreneurial and self-confident. These characteristics, evident during the Gold Rush, are just as common today in communities up and down California, from the Silicon Valley, to Los Angeles, to San Diego. This entrepreneurial spirit has fueled hundreds of thousands of small businesses throughout our state and created millions of jobs. It’s what makes California the Golden State and why we are the eighth 1argest economy in the world.

Likewise, California is often referred to as more of a “state of mind “than a state.  A place where great weather, geography and natural beauty combine to provide a re1axed and fulfilling lifestyle.  Because of this, Californians also share a strong environmental consciousness – one that has helped to make our state the greenest in the country and a world leader in environmental policy. This too is part of who we are.

From these two parts of our collective personality comes a unique challenge – keeping California both “green” and “golden.” Doing this requires reason and understanding that both goals are coequal priorities for Californians. This certainly means protecting our environment. However, it also means a willingness to relentlessly advance smart reforms of environmental1aws, business regulations, or policies that unnecessarily disrupt the reasonable balance between being “green” and “golden”

As three former California governors with firsthand experience managing this dynamic, we believe that one of our state’s oldest environmental1aws, the California Environmental Quality Act (CEQA), is in need of modernization

Adopted in 1970, CEQA provides a process for government to evaluate and mitigate adverse environmental impacts from projects and programs. While CEQA’s original intent must remain intact, now is the time to end reckless abuses of this important 1aw; abuses  that are threatening California’s economic vitality, costing jobs,  and are wasting valuable taxpayer dol1ars.

Ending these abuses means modernizing CEQA with smart reforms such as requiring petitioners to disclose their economic interests, adding certainty to the CEQA timeline, avoiding duplicative CEQA reviews, lessening opportunities for litigation and de1ay and updating CEQA so that it better integrates and coordinates numerous environmental protection mandates.

Today, CEQA 1awsuits are frequently filed only to extract concessions not re1ated to the environment, or for the purpose of opposing a project for reasons having nothing to do with environmental protection For example, in Los Angeles, a company that owns several student housing buildings near USC filed a CEQA 1awsuit against another developer in an attempt to stop them from building a competing project in the area.

Frivolous CEQA lawsuits also cost taxpayers real dollars. Recently, the San Diego Association of Governments was the first region in the nation to complete a new long-term regional growth and transportation plan that would reduce greenhouse gas emissions and pollution After two years of extensive collaboration which generated
4,000 public comments, the plan was adopted. Preserving over half of the region’s land as open space, the plan will create more than 35,000 jobs and generate an additional $4.4 billion in economic activity. Unfortunately, before the ink was even dry, local anti-growth groups filed a CEQA lawsuit putting t:1M “smart growth” blueprint at risk, and unquestionably delaying, if not costing, jobs.

Also in San Diego, in response to multiple lawsuits filed by the Coastal Environmental Rights Foundation,  a judge ruled that an annual fireworks display in La Jolla Cove and other community events in urban parks require a CEQA study. Arguably this decision has the effect of broadening CEQA’s reach and opening the door for other temporary events, like charity walks, street fuirs and concerts in the park to be pulled into the costly and litigious morass of CEQA review.

Sadly, these are but a small fraction of the examples of abusive CEQA litigation, where costly delays and settlements have had very little to do with true environmental protection

There has been a lot of talk about the need to confront CEQA litigation abuse, but unfortunately it’s been mostly talk. Inaction is no longer an option, as there is simply too nruch at risk for both our economy and our environment. We must tackle the important issue now. By applying reason along with well-established California characteristics of innovation, self-confidence, and environmental and economic leadership, we can indeed modernize CEQA, end frivolous litigation abuse,  and restore the necessary balance so that our state can remain both “green” and “golden.” As Californians, anything less is simply not acceptable.

Deukmejian, Wilson and Davis, former governors of California, are members of  the Southern California Leadership Council, a nonpartisan, nonprofit  public policy partnership.

Upholding of the ACA brings much need Certainty

NBLC welcomes the decision by the Supreme Court on the Affordable Care Act.  It is a relief to have some of the uncertainty removed about implementing this law, so that employers may now better plan for their organization’s future.  While we acknowledge and applaud this effort to contain the crippling cost of health care, NBLC recognized that there is still much to be done to contain costs and improve the value of the health care system.  The ACA puts us on a better path that will allow millions of people to obtain health care regardless of pre-existing conditions and/or inability to afford insurance.  A healthier  population will help our economy grow and our workforce to be more productive.  NBLC now turns it focus on successful implementation, especially in ensuring the California Health Benefits Exchange, a new marketplace launching in 2014 for businesses and consumers to purchase health insurance, fulfills its purpose of providing a competitive marketplace.  Health insurance premiums increased about 113 percent over the past 10 years, fueling the demand for reform.  NBLC hopes that the ACA leads to more predictable and affordable costs, puts the U.S. on a more globally competitive footing, and results in better quality health care for all Americans.